“Innovation in medium-sized companies – do we have to worry? “asks Sebastian Grimm in his article and based his question on the results of a study: The market research department of the KFW banking group published its current results on all aspects of innovation among German medium-sized companies. The results can be briefly summarized under one sentence: Germany suffers from a lack of innovation. Is that now threatening or are or have the past few years only been characterized by a very high level of innovation that is now returning to normal?
No wonder when you read headlines like: Many banks’ computer systems are complex. Unfortunately, they are often completely out of date and hardly anyone still understands them. At many banks, the retirees now have to answer ( WiWo ) or also in the WiWo : “ Old people in the executive suite make people tired of innovation “. So the article says: This is proven by the Metz case, among other things. The traditional television manufacturer ignored the cheap competition from the Far East and lagged behind in terms of new display technology. Instead, the boss relied on tried and tested: specialist retailers instead of online retailers and premium devices at premium prices. In 2014, the company, of which she was still chairman of the advisory board, had to file for bankruptcy. It is now in Chinese hands.
But why is that so? What has changed significantly and how can companies continue to innovate? This article examines innovations from yesterday and today, from which I try to derive some theses.

Innovation in medium-sized businesses yesterday – optimization and improvement

Even today, many organizations have a strong hierarchical structure and have clear communication structures based on hierarchical relationships. As a result, they are optimized for control, monitoring and coordination (Ahlemann and Urbach).

Many medium-sized companies are quite old and have a long tradition. I already have this in the article Tradition in the middle class something written. This is why these are often still organized according to a certain system – namely Taylorism. But what is Taylorism and how does it bring about innovations?
Here, the working person is viewed solely as a production factor. It is important to optimize the processes from this to optimal productivity. Taylor started from the idea that the worker feels personally satisfied in a completely regulated job and that the efficiency of the employees can be increased on the basis of job evaluations and performance-related pay. In contrast to this is the modern approach of humanizing the world of work ( Wirtschaftslexikon24 ).

A department institutionalizes the functional separation and the resulting groups of experts (source: Niels Pfläging )

The experts described work in parallel in their teams and optimize their product in order, as Taylorism says, to drive the product to absolute perfection. So there is usually no radical innovation, but rather an optimization. We often read that the presentation of the iPhone complains about too much optimization instead of innovation. 12% thinner, 8% lighter – but somehow hardly anyone cares anymore, right?
It seems that customers are tired and optimization no longer brings the WOW factor that they expect. I even found the following example on an automobile manufacturer’s blog: The new luxury limousine is the first car in the world to have an active and individually adjustable fragrance. The scent molecules are not deposited on the textile surfaces of the vehicle or on clothing. The scent impression is subtle, occurs gently and fades away just as gently.
Now you ask yourself: Couldn’t this possibly be over-optimizing? Is this fragrance really an absolute selling point and a groundbreaking function that literally knocks customers off their feet? Hasn’t the automobile been optimized at some point?

Innovation in medium-sized businesses today – radical change and innovation

So in the digital age, customers want breakthrough innovation and radical change. These are often inadequately produced in the Taylorism and the goal of optimization-oriented organization. For this reason, agile companies and a new organizational development have established themselves.
Here Ahlemann and Urbach say: In the future, organizations will be much more networked and project-oriented. Such forms of cooperation support cross-departmental and interdisciplinary initiatives as they are required for the development of innovative products, services, processes and structures.
This change is also reflected in the team structures. Teamwork as we know it today is mostly very plan-oriented, long-term and homogeneous – and therefore optimized for the quality of the work results. Modern teamwork in the sense of the knowledge workplace of the future, on the other hand, is rather speed-oriented, agile and heterogeneous. In addition to the quality goal, the teams are much more focused on creativity and speed (Ahlemann and Urbach).

A cell is functionally integrated or cross-functional – the same functions are in different teams (source: Niels Pfläging )

Many medium-sized companies are already undergoing this change – this has already produced the first great innovations in the first pilot projects. This is how you can find the first digital advice such as Consulting 4.0 and innovation around the Industry 4.0 . You also hear more and more of agile IT service providers . From July 5th, a follow-up article will be available under this link, which will show how such an organizational development can be designed.

Conclusion: It’s not that easy anymore

Fokus der Arbeit 4.0
Innovation yesterday and today – while in the past the focus was often on improving the machine, today it is the real value for people (own illustration)

Innovations are no longer that easy. You now literally have to knock your customers off your feet again and again. Pure optimizations are hardly noticed any more. But how do you bring this out over and over again? It seems to have something to do with the organization. But what exactly this looks like will only be seen in the course of time.
Reading tips :

In summary, Ahlemann and Urbach say: The individual employee in the workplace of the past is career-oriented, loyal and patient. The work motivation is accordingly more of an extrinsic nature. The modern knowledge worker, on the other hand, is much more intrinsically motivated. He can be characterized as hedonistic, individualistic, impatient and willing to change. For the workplace of the future, this means that it should support work in changing, distributed and dynamic team structures both virtually and physically. These include, for example, simple collaboration platforms that are available on different devices, the provision of virtual workstations that are available on every end device, or comprehensive social media systems. So it remains exciting to see what will turn out to be the best model for innovation in medium-sized companies.
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Niels Pfläging (2014). Organization for complexity . Munich: Redline Verlag.

Urbach, N., & Ahlemann, F. (2016). The knowledge workplace of the future: trends, challenges and implications for strategic IT management. HMD – Practice of Business Informatics , 53 (1), 16-28. https://doi.org/10.1365/s40702-015-0192-7


I blog about the influence of digitalization on our working world. For this purpose, I provide content from science in a practical way and show helpful tips from my everyday professional life. I am an executive in an SME and I wrote my doctoral thesis at the University of Erlangen-Nuremberg at the Chair of IT Management.

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