Innovations are generally considered to be technological innovations, which have their roots in research in universities and research laboratories. They find their way into the market through large companies or start-ups financed by angel investors and venture capitalists. Most publications on innovation management provide this simplified picture and, as a result, small- and medium-sized enterprises (SMEs), which represent the majority of European firms, are rarely mentioned as a major source of innovation. This book by Claudine Gay, professor at the Université Lumière Lyon 2, and Bérangère L. Szostak, a university professor at the Université de Lorraine, takes the reader on an interesting journey to explain why SMEs can excel in innovation and surprise customers, competitors and value chain partners.

Academics and policy makers have paid little attention to the innovative potential of SMEs. It is only recently that SMEs have been recognized for their high innovation potential and the European Commission is currently implementing specific innovation policies for SMEs. There are several reasons why SMEs have not been in the spotlight for very long: for example, most SMEs work in B2B markets, which are usually hidden from most of us. However, SMEs do not only focus on product innovations: they also gain a competitive advantage by intelligently applying process innovations, organizational innovations, product commercialization innovations and strategic and business model innovations. This book provides an interesting overview of how SMEs innovate, challenging the traditional and narrow vision of innovation and innovation management that has been developed based on observations from universities and large companies.

One of the most challenging aspects of this book is that Professors Gay and Szostak integrate different perspectives and methodological approaches to examine the innovative potential of SMEs. They focus on the role of the entrepreneur, organizational culture and business model innovation in understanding this potential. Second, they focus on employee selfmanagement as a source of innovation and the role of design thinking in managing creativity in small businesses. Last but not least, the role of open innovation for SMEs is highlighted in Chapter 3, which summarizes an interesting and refreshing approach to unlocking the innovation potential of SMEs.

I published two books on open innovation in SMEs in 2017 and 2018 respectively. This book by Professors Gay and Szostak builds on my previous reflections and integrates the search for external knowledge by the management of innovative SMEs. What are the typical advantages and challenges for innovative SMEs?

First of all, the good news for small businesses is that because of their small size, they have the ability to be faster and more adaptable than large companies. Experimentation is the key to innovation, and collaboration with partners helps companies with limited resources to carry out the discovery process on a larger scale. By tapping into open innovation networks, SMEs can change their business models without having the necessary technology in-house. However, while open innovation networks have the potential to make SMEs more profitable, they only work effectively when the value created jointly is significantly higher than the value produced by the companies when they work on their own. And the true value of open innovation lies in the ongoing experimentation process, which produces new and unexpected opportunities for partners. SME managers must therefore develop and maintain such networks of innovation partners in order to improve their own business success.

In addition, personal connections and trust are essential for open innovation partnerships between SMEs, and the entrepreneur who launched the network generally leads the network. The advantage highlighted here is that an SME can activate this network and therefore innovate faster than anyone else in the industry because it knows the capabilities of each partner and can activate these external skills, which leads to faster innovation. The reason? Relationships are based on trust, and trust relationships lead to open and rich collaborations, accelerating innovation in SMEs. The strength and survival of an innovation network also depends on how SMEs manage mutual aid and conflict: SMEs in the network must support partners in difficulty, as they are the weakest link in the chain. Similarly, conflicts between partners undermine cooperation: managers must address them quickly.

However, it must be recognized that this type of collective collaboration is not a natural reflex for many SMEs. Small businesses do not like to involve others in their decisions. The recent acceleration of new collaborative innovation models by large firms can help stimulate new thinking among small companies. As multinationals seek to accelerate their innovation pipeline, opportunities for SMEs to partner in open innovation platforms are increasing. In this sense, two steps seem important for me to highlight.

Because trust is so important, the first step for a small business looking to forge open innovation partnerships is to think about its best customers and suppliers – those with whom it has worked the longest and those in whom it has the most confidence. By discussing ongoing projects with these value chain partners, savvy entrepreneurs can propose solutions to innovation challenges in the medium term, creating a new dimension to the partnership. The second step is to establish relationships with local research institutes or universities, which can help provide the expertise needed to bring new ideas to market. Small businesses should look for such partners. Face-to-face contact with a partner is necessary and this implies an essential proximity. For example, a local university with a good track record of partnering with companies can help SMEs adapt new products, change business models and introduce new technologies.

Innovations do not have to be radical. SMEs can stimulate sales and profits by importing ideas already used in another industry or by innovating the business model. In the solar energy sector, for example, First Solar has boosted sales to consumers by offering them an innovative financing package that requires no cash payment to install a solar panel system on their roof. Instead, the buyers rent the solar panels in combination with a 15-year contract to purchase the electricity produced by the panels. SMEs are very innovative in the development of new business models, so we should not focus simply on technical or product innovations.

To conclude, I would like to remind you that SMEs are the backbone of the European economy, but most of them are not yet innovating or are not fully using their innovation potential. I hope that this book will help SME managers to start their innovation journey. Once the decision is made to choose a new product or business model, SMEs will automatically open up and innovate with partnering organizations because they do not have the necessary internal resources and skills. Managing the partner network is new for SME managers and is the most difficult challenge in their transition to an innovative company. With this in mind, this book is a must read for anyone interested in how to successfully manage the transition to an innovative SME.

Wim VANHAVERBEKE¹

NEOMA Business School

ESADE Business School

One day, Pierre Bellon, founder of Sodexo, who made the company he created a world champion, answered the following question: “What explains Sodexo’s success?” His answer was wonderful in my opinion: “The sum of our successes is slightly greater than the sum of our failures.” An SME manager knows that failure is part of the road to success, and that it is a source of continuous improvement.

Before creating PME Centrale in 2001, I had created my first company in Sydney, which was a kind of first cousin, so to speak. It met the same objective: to pool SME resources to make them stronger and more together. This Australian company did not work. Among the mistakes I made, the most significant was probably the following: I prepared my offer with my partners on the basis of the intuition I had, and once the offer was packaged, after many months, I went to meet prospects. It was a failure... The idea was perceived as excellent, but the SME owners I met were not ready to change: I was thinking too far in advance; the step was too significant to take, etc. So, by creating PME Centrale in France, two years later in 2003, and Qantis in 2018, I proceeded completely differently: I kept my intuition (which was the same!), and I co-constructed the offer with the first members. It was not easy, but it eventually worked, because we adapted the offer to their needs and, little by little, are broadening our scope of proposals. Since then, all Qantis subsidiaries and brands have been created according to the same process. Our customers are at the heart of the innovation process and the creation of new projects. We have also included it in the baseline of the Qantis collaborative platform: “Co-create, Connect, Commit.”

In my opinion, the collaborative phenomenon can become an asset to put up your entrepreneurial sleeve, and a source of permanent innovation for SMEs. In the book Ensemble on va plus loin, which I co-wrote with Antoine Pivot, we describe how to implement this collaborative economy and how it allows managers to develop their companies in collaboration with their stakeholders (customers, suppliers, employees, etc.). Here are three simple principles, taken from the book, to integrate the collaborative economy into an SME.

First principle: put the customer back at the center! It is difficult to create a company, convince its first customers and then recruit its first employees, train them and achieve a certain balance in which profits feed the progressive development of the structure. It is so difficult to reach this moment when everything seems to be working, when customers are satisfied and employees are invested, that the simple idea of rethinking everything to get the machine running again can frighten many people. The problem is that, unconsciously, each company is gradually moving away from the full satisfaction of its customers. Soon, efforts become more limited, innovation is less voluntary, desire less present, etc. In fact, the customer leaves their natural place at the heart of the company to leave it to habits and formulas such as “we’ve always done it this way”.

The collaborative economy challenges these behaviors, because this model consists of building its service with a community of customers. In other words, it is the community that decides, and the company responds to its needs. The interest here is that customers are very often on both sides: they participate in the creation of the service and they consume it. They therefore know how to continuously improve the offer since they play the role of both suppliers and customers. For the company, it is “only necessary to” analyze their behavior and listen to their needs in order to constantly innovate.

Second principle: create a community of trust. The great success of the collaborative economy is that it has won the battle of trust. Its purpose is to enable clients gathered in a community to also provide services to each other, for example carpoolers for BlaBlaCar, companies for PME Centrale and Qantis. In short, “Together we are stronger and we go further”. These communities often existed before these companies, but there was no tool to make it easy and intuitive to connect them. And, of course, offering a simple digital platform is not enough. Moreover, at PME Centrale, we started without a platform. The most important thing was to create the conditions for trust between community members, and between the community and the company. BlaBlaCar, for example, surveyed its users and found that those they trusted most were their friends and family, then just after that, other BlaBlaCar users with a good rating on the platform, and much further away, their own neighbors! In other words, they trust strangers in the same community more than people they encounter every day.

How is that possible? These platforms have endeavored to create a system that values quality and compliance with the commitment made. Almost always via notes that users give each other, and also through video training of new members, charters, etc. At Qantis, it is the team that plays this role by being in permanent contact, in the field, with our stakeholders to verify the quality of our framework agreements and the implementation of our commitment.

Third principle: give meaning and return to common sense. The other success of the collaborative economy is to give or restore meaning. And what better way to promote team management than a shared sense! After all, in the end, customers and employees pursue the same objective: to ensure the permanence of the community with which they identify. The functioning of some cannot be contrary to the functioning of others. If employees and customers identify themselves to the community, it is because their membership in this particular group is meaningful. Let’s mention Airbnb and its dream: “a world where all of us can belong anywhere”... a world where we are at home everywhere. With friends, family, at home... in France as in Tanzania. And that’s the welcome message on the platform: “Welcome home!”

Concerning this third principle, it seems to me that collaborative economy companies have understood it better than others. Their customers know why they consume here and their employees know why they get up every morning. Defining the “why” and not just the “for what” of your company is the way to attract new talent, who particularly need this sense to mobilize, and ultimately to make your business desirable.

On the basis of these three principles, it now seems even more true to me to think of SME innovation in this context of a collaborative economy, because, in my opinion, innovation no longer has quite the same forms and characteristics. Even if the subject of innovation seems to have been largely explored, it seems necessary to return to an issue that is constantly being reinvented in companies, and mainly in our contemporary SMEs.

Gaëtan de SAINTE MARIE

Founding Manager of Qantis and PME Centrale