When and where is innovation possible?
In April of this year (2024) we highlighted "An industry leader you've probably never heard of", namely ASML.
We prefaced that post with the Mark Twain quote "During the gold rush its a good time to be in the pick and shovel business" to explain how ASML is in the semiconductor 'shovel business', and why innovation can (and does) happen at any part of the value chain.
We've since received a few requests to highlight more such behind-the-scenes never-heard-of companies. So, today we will comply. But, we will do so with a twist.
This time we will highlight a fairly well-known company. The twist is that this company supplies shovels to the shovel suppliers. 'Turtles all the way down', so to speak.
In the process of doing so, we will highlight more points about corporate-driven innovation.
ZEISS
A decade or two/three ago, one would have assumed that a person would probably have known about lens-maker ZEISS if they were interested in photography, animal watching, hunting, spotting, astronomy etc. Lenses made by ZEISS are well known as excellent choices for the equipment used there.
These days, however, many mobile phones also sport ZEISS lenses and thus many more of us would now recognise the name. They certainly are not as 'unknown' as ASML is.
Heavy Baggage
Carl Zeiss AG (branded as ZEISS) has had a - let's just call it 'interesting' - history. This history, inter alia, includes forced labour during World War II and part of the company being taken over by the Soviet East block after the war.
Old and Decrepit?
Moreover, having been founded in 1846, the company is now almost 200 years old. Yet, after all this time, they are still at the forefront of innovation. You certainly don't have to be a Facebook, Tesla, or Netflix 'young gun' to be an innovation leader. Any organisation can innovate if there is the will to do so, and if the right approaches to achieve outperformance are followed.
Out in the Sticks
ASML is located in the relatively small Dutch town, Veldhoven. Zeiss is also located in a small town: Oberkochen, Germany; east of Stuttgart and South-West of Nuremberg. So, yes, you don't have to be in Silicon Valley to innovate either.
Facts and figures
Zeiss' revenue: 10.1 billion Euro in Fiscal Year 2022/23
The amount they invest annually in R&D: 1.5 billion Euro (15% of revenue)
The amount invested in sales and marketing annually: 1.8 billion Euro (18% of revenue)
Employees: nearly 43 000 (6200 employees (15% of the workforce) are dedicated to the R&D function)
Patents held by the company: 11,300
Shovels for Shovel Factories
Rather than tell the story of how ZEISS supplies mirror-shovels to ASML's semiconductor-shovel business, we'll just point you to this video that does a very good job of telling the story in only 5 minutes (with some ads at the end).
In whatever boring, mundane or seemingly mediocre part of the economy your company is active in, it is possible to outperform all others. All that is needed is the 'correct' Purpose, Vision, Strategy and approach and, possibly also, the right source for, and amount of, guidance.
In fact, if one looks at this YouTube video's title "Without One German Product. Modern Civilization Would Collapse" (which really is a possibility, despite the click-bait nature of the wording), it is clear that our world needs more than just AI and Energy innovation. It needs your innovation too.
Innovation can come from anywhere.
Innovation must come from everywhere.