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Innovation and tradition strengthen family businesses even in times of crisis

April 19, 2023

Maija Worek, researcher at FHWien der WKW shows that companies have the potential to stand their ground even better in times of crisis if they use their knowledge and traditions strategically in the development of innovation.

In a recent issue of KMU Magazin, the family business expert from the Management & Entrepreneurship Study Programs explains that tradition and innovation are not contradictory. Two case studies show a tradition-oriented innovation strategy. The transformation of a clock manufacturer and a telephone cable producer into high-tech companies in the automotive and healthcare sectors. In this way, the two Austrian family-owned companies developed relevant innovations from their long-standing traditions.

Recognize traditions – evaluate knowledge – implement innovations

In order to make strategic use of existing traditions

  • companies must recognize them,
  • evaluate their innovation potential and
  • apply them for further development.

For such a transformation process, Maija Worek outlines exemplary reflection questions.

Asking about the traditions that founded the success to date makes this expertise possible to be used for other applications. For example, the traditional production of telephone cables, in which several thin wires are connected to form a strong cable, has opened up new opportunities in medical technology for the family-owned company. Thanks to the cables’ enormous strength, they are now finding a new field of application in sensitive medical equipment.

A tradition can be evaluated, for example, on the basis of its longevity as well as its importance on the market and among customers. For example, an Austrian watch manufacturer was able to adapt its traditional craft. Their special manufacturing technique for mechanical watches is now used for counters in the automotive industry.

Traditions hold a lot of innovation potential

In order to use traditions to develop innovations, the available resources must be clarified and possible risks assessed. Above all, many family businesses see high costs as the biggest obstacle to the necessary research and development. At the same time, cross-generational knowledge or work techniques handed down from generation to generation could give companies considerable competitive advantages if these traditions were incorporated into the process of innovation development.

Contact: Maija Worek, M.Sc.