We have already seen that excellent performance with regard to goals, globalization, and closeness to customer is a necessary requirement for becoming a hidden champion. However, in most cases innovation is the foundation for success. Achieving and maintaining world market leadership requires outstanding and continuously innovative performance. The innovations of the hidden champions are in no way restricted to technologies and products; these companies also demonstrate tremendous innovative drive in processes, systems, marketing, and services. Various indicators such as R&D intensity, number of patents, and revenues coming from new products prove that the hidden champions are extremely innovative. How do these midsize companies achieve such innovativeness in spite of their limited resources? In this chapter, we will see that the hidden champions differ from large corporations in the way they handle several key factors for success in innovation.