Innovation as a matter close to the heart
The topic of innovation is deeply anchored in the DNA of LAPP. But customer demands are growing and technologies are developing rapidly. "Just like our entire environment, our innovation process had to change," says Georg Stawowy, Member of the Board for Technology and Innovation at LAPP Holding. Time for something new.
By Bernd Müller, freelance journalist for LAPP
Innovation, the creation of something new and the successful marketing of it, has become a hype. No company, no product, no service can manage without the I-word. Ten years ago, the term was much less fashionable. At that time, companies were more focused on issues of lean management and production, i.e. the cost optimization of products and processes. But not everyone who talks about innovation is really innovative, and today the industry is at a point where the wheat separates from the chaff and it shows which companies are actually innovative and which only claim to be so. Innovative is not the one who pours himself into creativity, but the one who creates a new added customer value.
To be fair, a distinction must be made between consumer products and B2B business. Smartphone manufacturers, for example, have to reinvent their products every year because product life cycles are short. The situation is different with connection technology, in which LAPP has been successful for 60 years. Product lifecycles are long, numerous products remain on offer for years. "Our customers do not demand the constant reinvention of the wheel, but the reliable fulfillment of norms, standards and requirements from the application," explains Georg Stawowy, Chief Technology and Innovation Officer at LAPP. LAPP continues to generate a large proportion of its sales with products that existed years and decades ago.
Innovation as a fundamental value
Is innovation therefore irrelevant for LAPP? On the contrary: "Innovation has always been important to us, as proved by our mission statement, which has provided us with orientation for many years", Stawowy emphasizes. "Innovative" is one of four basic values, and in the end it is actually another facet of the value "customer-oriented": For LAPP, generating innovations means understanding the customer, placing them at the center of the service offering and constantly finding new, better solutions for their requirements.
An example of this: In the LAPP catalogue there is a cable that can withstand temperatures of up to 100°C. If a customer now needs exactly this cable, but for temperatures up to 125°C, because they have changed their drive concept, the LAPP engineers will develop a new plastic formula for the cable sheath. In short: the customer gets their cable for higher temperatures. Innovation often means developing a solution for a specific customer problem. "LAPP is positioning itself as a customer understanding company, which distinguishes us from competitors that simply sell catalogue products," says Stawowy. These competitors often do not even know the users of these products, for example, because a ready-to-wear manufacturer is involved or products are sold exclusively through the wholesalers or retailers.
Suit, shirt and shoes in one shop
At LAPP, however, innovation activities do not relate only to individual products but also to the consideration of a portfolio for a customer group. To this end, LAPP applies the principle of the Minimum Viable Portfolio, based on the idea of the Minimum Viable Product. This means the product range that is necessary to be accepted as a supplier. An analogy: Suppose you are invited to a wedding and urgently need a new suit, a matching shirt and, if possible, a tie. So you're looking for a fashion store where you can get a suit, shirt and tie - this is the Minimum Viable Portfolio for you, i.e. the minimum offer a store has to offer so that you consider shopping there. If there are no shirts there, you would have to go to a second store, but you don't have time for that. You don't care that the store also sells handkerchiefs and shoes, because you don't need them at that moment.
What does that mean for LAPP? LAPP's entry into new markets or sectors is always via such a minimum viable portfolio. For example, if you need an ÖLFLEX control cable for your machine, you usually also need connectors and cable glands as well as cable markings. What else? The surprising answer: in the food industry, a plastic cover is often required to cover the connector socket during cleaning processes - and it must be blue and made of a harmless material so that it can be easily recognised if it accidentally falls into the milk tank so that in this case the product is not contaminated. Some suppliers may say that such a product is not worthwhile because sales expectations are too low. This may be true in isolation, but it is LAPP's claim that the customer gets everything from a single source - including a plastic lid in blue.
The pace of innovation increases
Further challenges arise from globalization and the different expectations of customers in different markets - this makes the wheel of innovation turn even faster. The company is able to meet this challenge with its global presence and distributed development resources that understand local customers but are globally networked and coordinated. LAPP is not just waiting for a customer to come up with problems, Stawowy said. "Rather, we are looking in the same way at technological developments that make new solutions possible in the first place. For a long time, LAPP focused less on this technology push than on the market pull, i.e. the demand from customers for incrementally optimized products such as the more temperature-resistant cable. But the self-imposed claim to be a technology leader also includes picking up on important technology trends even before customers ask for the corresponding products. A technology radar and the LAPP Innovation Advisory Board with renowned independent experts are important for identifying and assessing new technical possibilities and their potential.
LAPP has done a lot in recent years in the field of innovation. This has made major changes in innovation management necessary. The company continues to practice the classic stage gate process. An innovation project goes through certain defined maturity phases and at the end of each phase target criteria are checked, and then the gatekeeper decides whether the project should be continued or discontinued. Stage Gate continues to have its raison d'être and functions excellently in the incremental development of products that are part of the core business and where efficiency in development is paramount.
Anchoring the innovation process for transformative topics
But in several recent projects, the Stage Gate process has reached its limits. Two examples are the innovations Cloudmarking and Predictive Maintenance [see "Every dream needs its space" by Guido Ege]. These limits are particularly evident in transformative innovations, i.e. products, solutions or services that lie outside the core business. Above all, Stage Gate is not suitable for radical or even disruptive innovations where the technical solution and the business model are not yet clear at the beginning. However, the number of such innovations is growing, at least for LAPP. In the future, LAPP will increasingly offer solutions for challenges for which there is no established solution yet.
This has two consequences for LAPP: "We have developed a new innovation process for transformative innovations," says Georg Stawowy. This was introduced at the beginning of 2019 and now has to prove itself step by step in everyday life. Creativity and efficiency have to strike a balance. On the other hand, according to Stawowy, the company must work on the culture and understanding of innovation management. "Innovation refers less to products and more to everything we do. We must demand and live creativity, openness and a culture of error. And on the other hand, we must promote discipline, clear leadership and the ability to criticize, so that it does not remain a mere "fail fast", but that a "learn fast" is guaranteed." This attitude is also carried into the company through a new innovation vision.
Ultimately, Stawowy is convinced that innovation must come from within: "We need external knowledge and impulses, and partnerships and cooperations with other companies as well as with scientific institutes are an important component. But core competencies must be developed organically from within the organization. "We do not consider an agile, fast dinghy that has no connection to the “mothership” to be the best way to achieve our goals, because in the end it must be clear: Innovation concerns everyone and must be driven by the breadth of the staff, not just by a small group of thought leaders."