Festo is a Swabian/German family owned business. They employ over 17,000 staff, operate in 63 countries, have a turn-over €2.4bn and spend 7% of their revenue on R&D. The company has over 30,000 products for their B2B customers and over 15% of their revenue over the last three years comes from new products introduced.
The company has got a very structured approach to innovation. Inputs include knowledge and technology, with outputs consisting of new leading edge products and services. The innovation process touches on areas like building & maintaining an innovation culture, competencies, processes, innovation networks. But first and foremost innovation is driven by people. Festo puts a lot of effort into developing its people and creating environments conducive to innovation.
As an example of their innovation processes, Festo uses a sophisticated process to identify new trends and needs, and then translates those into new, often very successful and profitable offerings. They scan relevant publications around innovation. This desktop research gets compiled into an internal innovation newsletter distributed to all relevant teams. This trendscouting is then married up with industry and customer knowledge to develop a ‘future radar’. This constitutes the key input in determining best business opportunities. A prioritisation process then leads to implementation of the best ideas.
To assist with input into this trend pipeline and with implementation, Festo has developed sophisticated international networks around key competencies. Those include internal and external networks. Internally they have developed idea spaces supported by a social platform to collect, rate and prioritise internal ideas. Externally Festo works closely with Universities, PolyTechs and other industrial research organisations to supplement their innovation funnel. Open Innovation plays a prominent role in this process.
Festo is very innovative when it comes to developing and inspiring their employees. They have even started a €5 million prize fund to help young engineers with their leading edge research.
To motivate staff, gain an innovative profile and develop new, innovative products, Festo is known for its work in the field of biomimicry, developing nature-inspired innovations.
The combination of exciting work spaces, innovative work and some of the above programmes have resulted in Festo having little difficulty finding talented new staff.
Author: Martin Knoche, Business Innovation Group at Callaghan Innovation (Stuttgart 6. June 2014)