Business model innovation

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Innovation without drama: How to run two speeds without growing two camps

“We must become more innovative.” — Why innovation still blocks “well-managed” organizations.

contributors

Niels Trapp

Management Consultant, Business Trainer

initiation

“We must become more innovative.” This sentence is now used more frequently in many management teams. But it often sounds like a New Year's resolution and fits right in time. Well intentioned, but in March, he disappeared again between budget rounds, complaints and delivery dates.

The pressure, however, is real. Many institutes (see sources) expect Germany to grow only rather subdued in 2026, if at all. At the same time, bureaucracy, infrastructure issues and uncertainty in the export environment are slowing down. And the shortage of skilled workers remains a tangible investment and implementation factor for companies and thus an ongoing issue for HR departments.

There is something else in your company that I regularly see in medium-sized technology sectors. Some have spent years refining their system for efficiency. Lean, optimized turnaround times, cost control, quality management. The result is impressive. It's just that this system has a blind spot. It is excellent at processing inventory transactions, but bad at discovering.

By the end of this article, you'll know:

Why innovation still blocks “well-managed” organizations
How understanding the Explore and Exploit principles helps you not build a parallel world
What are the three typical conflicts that you should actively mitigate
Which specific management and communication levers work

And yes, it also works without drama. Mostly anyway.

Why “more innovation” almost always sounds like organizational work

Innovation is rarely a problem of ideas. There are enough ideas. Innovation is an implementation problem in a system that is often optimized for stability.

This is also shown by two well-known schools of thought:

Exploration and exploitation as a fundamental area of tension between organizations (James G. March).
ambidexterity, i.e. the ability to do both well at the same time, with appropriate structures and leadership (O'Reilly, Tushman).

Strategiezer and Alexander Osterwalder have translated this logic into “Explore and Exploit” in a very practical way.

If you're just working on Explore, you lose money and credibility. On the other hand, if you only work on the exploit, you lose the future. So this is not a question of philosophy, that is working on the portfolio and on the business model.

The three typical sentences that indicate a system problem

1) “The young generation doesn't want to work at all”

This sentence often comes when expectations clash. Many younger employees prioritize work-life balance more than classic status goals, expect development and meaningful work, and are certainly willing to perform when the framework and leadership are right.

If this results in generation-based warehouse thinking in the company, you lose twice:

the level of experience of the “long-established”
the curiosity and digital self-evident nature of younger people

It is precisely this mixture that is worth its weight in gold for innovation. But only if you do not morally charge conflicts (“they are lazy”), but solve them organizationally (“how do we create cooperation, responsibility and leeway”).

2) “We're too slow”

This feeling is often true in leadership. However, the cause is not a lack of will on the part of employees, but a system that confuses speed with predictability.

Many SMEs have cleaned their processes so cleanly over the years that a deviation feels like a mistake. This is correct in exploit mode. With Explore, it's deadly.

In Explore mode, you need:

Curiosity and hypotheses instead of detailed specifications
short learning cycles instead of perfectly validated business cases
Decisions under uncertainty instead of a culture of completeness

But when both modes are forced into the same rhythm, something very predictable happens. Explore is “normalized” and therefore slowly.

3) “They burn the money that we earn dearly here”

That, too, is not just envy, but a control problem. When innovative work is perceived as an opaque playground, acceptance decreases. If, on the other hand, it is managed as a portfolio with clear decision-making rules, overall trust increases.

A change of perspective helps here: Innovation is not a cost block, but risk management against standstill.

Two speeds in the company, but not two kingdoms please

Explore and exploit differ in almost everything. That is normal.

Exploit stands for existing business:

Efficiency, quality, scale
predictability, processes, KPIs
Avoid risk, reduce variance

Explore stands for new things:

Search, Experiment, Breakthroughs
Learning under uncertainty
Accept risk but limit it in a targeted manner

That is the theory. The practical question is. How do you do both so that it doesn't become “us versus them”?

The answer is: Disconnect where necessary. Connect where it matters. And communicate transparently.

O'Reilly and Tushman describe exactly this pattern. Different units may work differently, but management connects them at senior level through shared priorities and resource allocation.

Four levers that work in medium-sized industrial companies

Lever 1: A visible innovation portfolio instead of gut feeling

When innovation produces conflicts, there is often a lack of a common view of priorities.

A practicable portfolio requires:

clear search fields (e.g. digital services, data-based maintenance, new business models)
a few “bets” with greater leverage
several small experiments with a short run time
unique stop rules

Especially in data-driven industrial ecosystems, the portfolio can be made concrete, because initiatives such as Manufacturing-X set the framework for secure data exchange and new value creation across company borders.

Lever 2: Governance that allows speed and still maintains control

Explore needs a different decision logic as an exploit.

Three decision windows have proven effective:

Weekly: Remove operational barriers, free up small budgets
Monthly: Test learner insights, adjust hypotheses, follow up resources
Quarterly: Rebalight the portfolio, prioritize promising projects, decide on scaling

And in addition, transparent regulatory communication is required. This creates dedicated management of your innovation projects without micromanagement.

Lever 3: Bridges of communication before subcultures emerge

When you set up an innovation group, a subculture quickly emerges. It's not “bad.” It is only dangerous if this new culture cannot be connected later on.

So do two things early:

joint rituals between Explore and Exploit, for example demo days, factory tours, “Show your learning”, Innovation Day
clear communication roles between the two modes, for example product management or business owner, who know and are involved in both worlds

That is more important than the next workshop.

Lever 4: Link innovation to real obligations and create opportunities

2026 is a good year to explain innovation very soberly. Not with buzzwords, but with real duties and opportunities.

Cybersecurity, for example. The EU Cyber Resilience Act is in force and will be fully applicable after transition periods from Q1/2027. For many product families, this already means integrating new requirements over the entire life cycle.

That is a hassle. But it is also an opportunity to make products more robust, to strengthen service models and to use customer trust in their own cyber security as a differentiation.

A quick reality check on “work ethic” in Germany

When motivation is discussed in companies, it is worth taking a look at commitment. Gallup has reported low emotional commitment for years, which can be reflected in “service by prescription.”

That is not an accusation against employees. It is a note for leadership:

Clarity beats appeals.
Sense beats slides.
Development paths beat fruit baskets.

And: Innovative capacity increases when people feel that change is not just extra work, but also a contribution to shaping the future.

A practical process model for the next 90 days

If you want to get the topic off the ground in a pragmatic way in your company, these steps work:

Set search fields: Choose three to five innovation topics that really fit the business.‍
Cut Explore team: Start small. Cross-functional With real decision-making power.‍
Define portfolio and game rules: Budget window, stop rules, expectation management, communication.‍
Start communication formats: Example: An appointment every two weeks where learning and insights become visible.‍
Actively integrate exploit management: Make the owners of the existing business co-owners of the future.

That may sound banal. However, it is surprisingly rarely implemented cleanly.

Conclusion

Innovation is not a department and not a New Year's resolution. Innovation is organizational work and management task.

If you accept Explore and Exploit as two legitimate operating systems in your company and establish them transparently, you avoid the typical culture struggles:

Generations are not pitted against each other
Speed is not confused with chaos
Innovation budget is not devalued as “play money”

In the end, you win what counts in medium-sized companies. Ability to act and be sustainable without jeopardizing the core business.

If you want to set up Explore and Exploit pragmatically in your company, write to me. I offer a compact innovation workshop in which we will specifically plan search fields, game rules and the first 90 days. Book your free initial consultation now!

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