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Business Innovation
Information and Tips for Small Business
Growth
In today's ever-changing and increasingly
competitive marketplace, your business is only as good
as the next great idea. |
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It's a basic fact of
human nature: Over time, most of us lapse into the comfort
zone and lose the creative spark that inspired us to
start a business or create a unique product or service.
Unfortunately, in the business world, lack of innovation
often serves as a death knell. It begins a slow, downward
stagnation that leaves a company vulnerable to a changing
marketplace and more creative competitors.
Long-term success is more than the sum
of business books and professorial theories. It requires
ongoing change in mindset, says Tom Peters, author of Re-imagine!
Business Excellence in a Disruptive Age "Great
products come from people who have an impassioned idea
or get really annoyed by the lack of service on an airplane
or the overall complexity of a computer."
Ignite the Fire
One of the best ways to maintain the creative
spark is to hang out with others who think the same way,
Peters says. For example, employees who are dissatisfied
with the direction of the company may seek out like-minded
individuals and band together to lobby for change. Although
Peters acknowledges that rebels take a risk by speaking
up, he suggests that business owners check their egos
at the door and take complaints, suggestions and ideas
seriously. Outright dismissal, ridicule and acknowledgement
without serious consideration or action can frustrate
and disenfranchise employees.
Stephen Covey, author of bestseller The
Seven Habits of Highly Effective People,
says that great ideas are everywhere and great leaders
constantly find ways to inspire themselves and others.
Business owners must continually find ways to push
people out of their comfort zones and create a stimulating
work environment. It means rethinking and redefining
roles and responsibilities within an organization,
and setting aside time for creative freedom by eliminating
constant emergencies and problems. "You need to
move beyond the present and lay tracks for the future," he
says.
Mind and Matter
Success isn't only about redefining the boundaries
of thought. It also involves some practical considerations.
Access to capital is essential and developing a strong
relationship with a financial institution is paramount.
Solid business knowledge is crucial—whether you
find it at conferences, in books or through old-fashioned
networking. Helping others and receiving assistance from
fellow business leaders can pave the way for success.
Ultimately, Peters says that enthusiasm,
passion and genuine excitement can turn your company
upside down and lead to breakthrough ideas. "A business
does not want to find itself becoming a 'Dilbert' cartoon," he
says. With the right approach, "Innovation and creativity
can become a mainstream part of the culture."
Once you've built a foundation for innovation
and creativity it's time to identify opportunities... |
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Upgrade Your Business Model
When looking for ways to improve business,
small business owners typically turn to short-term
marketing strategies that produce equally short-term
results. Thinking long-term and refining your business
model can provide stronger, more sustained growth.
Running a small business can sometimes
seem like the best of times and the worst of times.
On one hand, you can make decisions and changes quickly,
since there is little bureaucracy to weigh you down.
On the other hand, there's often no formalized structure
for handling processes and tasks, and things can easily
fall through the cracks. When it comes to innovation,
short-term thinking and planning can handicap a small
firm and leave it ill-prepared to deal with the constant
pressures and challenges of the marketplace.
It's essential to build a business model
that supports innovation. But that's easier said than
done, especially with owners and employees who wear
several hats and juggle a myriad of tasks. "The
key is to not fall in love with your current business
model," says Donald W. Mitchell, co-author of The
Ultimate Competitive Advantage, the
Irresistible Growth Enterprise and The 2,000 Percent
Solution. "It's
essential to replace the existing business model with
a better one every three to four years," he says.
'Turbocharge' Innovation
Too often, businesses look for a quick fix
when it comes to innovation, says Chris Trimble, an
adjunct associate professor at the Tuck
School of Business at Dartmouth University. "There
is a school of thought that says if you want to increase
innovation you just turn people loose and let a thousand
flowers bloom," he says.
Unfortunately, innovation usually withers
without structure. "Generally, this approach generates
a lot of enthusiasm and ideas, but it stumbles when
you try to turn ideas into action. No matter how bright
or talented a person is and how much initiative the
person has, there has to be plumbing and processes
in place," Trimble says. Among other things, examine
how you hire and promote; what kind of leadership style
you encourage; your reporting structure and how you
define roles and responsibilities. "Sometimes,
if you change the hardwiring you can change the organization," he
says.
It's also important to seed experiments
and give workgroups room to try new things. In many
cases, "trial and error will yield workable solutions," Mitchell
says. He suggests assigning teams to talk to shareholders
and interview customers about what they like and dislike.
With this approach, you can identify problems as well
as potential solutions. In addition, employees, suppliers,
partners, owners and the general community can provide
valuable input.
With innovation built into your business
culture, it's possible to put it into play on a daily
basis… |
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Make Innovation Count Every Day
Creativity and innovation can carry
your business into the next generation, but how do
you break out of the day-to-day routine and turn everyday
workers into innovators?
When it comes to innovation, there's
one basic truth: Those who blaze the path to new ideas,
products and services belong to the same world as everyone
else. Somehow, they see things differently. However,
becoming a visionary and an innovator doesn't just
happen, especially when there's a diverse group of
employees. It's usually the result of hard work and
ongoing effort. "Innovative organizations build
the skills required to think rigorously about the issues
that face them," says Daniel D. Elash, principal
of Charlottesville, Va.-based consulting firm Syntient.
Dos and Don'ts
According to Elash, several key factors fuel success:
Understand the assumptions that
went into the process you're now looking to change.
- Test those assumptions to determine their
current validity.
- View common situations from multiple perspectives.
- Value thinking, intellectual curiosity and
experimentation.
- Embrace failure as an opportunity to learn.
- Build on the ideas of others.
Just as importantly, he offers a list
of what organizations and individuals should not
do:
- Ridicule ideas.
- Create an environment where people compete
against each other and then ask them to think
and work together.
- Have "the boss" serve as the only
thinker in the building.
- Cling to obsolete knowledge.
- Fail to embrace change as a natural and even
positive aspect of business life.
Elash says to avoid sloppy thinking. "Take
time to think deeply about the context in which a
problem or opportunity is imbedded," he says. "Do
thorough research and gather sufficient intelligence.
Trust your instincts to a point, but don't forget
to look at current reality."
The Big Picture
Innovation requires people to raise their
vision above what they're doing and look at what
they intend to accomplish, Elash adds. "Then
they have to reassess the assumptions that underlie
and support what they are doing now," he says. "Often
circumstances, resources or the requirements for
success have changed." In fact, what works today
can become a barrier to success tomorrow. Information
that offers a strategic advantage now can undermine
a business in the future.
According to Mark P. Rice, Murata
Dean at F.W.
Olin Graduate School of Business, the most innovative
organizations focus their efforts in several areas:
- They train group leaders and create formal
brainstorming groups to stimulate idea generation.
- They introduce review panels and project oversight
boards to keep efforts on track.
- They recruit outsiders, including customers,
suppliers, college students and retired venture
capitalists, to build creative teams and focus
groups.
Moreover, "These organizations
make sure that executives participate in activities
rather than simply talking about them," Rice
says.
Small businesses can use big business
techniques to tap into the full power of innovation …
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Start a 'Department of Innovation'
Boost your innovation efforts with a big
business mentality.
Agility and flexibility are the hallmarks
of a small business. In most cases, it's possible to
outmaneuver corporate giants and adjust to a roller-coaster
marketplace without delays and red tape. However, small
businesses often come up short when it comes to financial
resources and clout. Too often, they simply can't muster
the research and development (R&D) funding or the
marketing reach to achieve success.
However, with a bit of creativity and
innovation, a small company can adopt many of the techniques
that fuel results in big business. "There are ways
to overcome the limitations of tight budgets and limited
resources," says Steven Rogers, director of the
Larry & Carol Levy Institute for Entrepreneurial
Practice at Northwestern
University's Kellogg School of Management in Evanston,
Ill.
Partner Up
One of the most effective techniques is for
a small business to establish a partnership with a local
graduate business school or engineering school. "As
a professor at a business school, I am always looking
for opportunities for my students to help small companies
come up with new product and service ideas," Rogers
says. "Essentially, we become their center for innovation
and they receive this service at no cost. Students receive
academic credit, while perfecting skills that they will
use when they are later hired by corporations or large
consulting firms."
Many universities offer such programs
and it's not always a requirement for the small business
to be located in the local area. A variation on the theme
involves coaching or counseling students on business
cases, marketing presentations and other activities.
Either way, this atmosphere of innovation and creativity
can spark ideas that lead to new products and services.
It can stimulate thinking among business owners and employees
who might otherwise find themselves in a rut.
Rogers also suggests duplicating a university
'innovation model' with employees. At many institutions,
professors who come up with great ideas that lead to
commercial products reap a financial reward, usually
about 25 percent of the net income. "Ultimately,
rewards can serve as a winning situation for everyone," Rogers
says. Other techniques that can prove fruitful include:
idea boxes, designating an innovator of the month or
year and sending employees to a retreat or symposium
where they are encouraged to think outside the proverbial
box.
Encourage Change
Robert B. Tucker, president of The
Innovation Resource, a Santa Barbara, Calif.-based
consulting firm, suggests that small businesses make
room for creative thinkers. While a larger company might
have a department of innovation or a group devoted to
coming up with new ideas, small firms can create a more
informal structure to achieve the same results. "It
isn't about letting people bring their pets to the office
or coddling certain individuals and giving them special
privileges," he says. "It's simply acknowledging
them and creating an environment where they can flourish."
In fact, Tucker points out that roughly
half the population is comfortable "changing the
system" while the other half is more comfortable "perfecting
the system." When an organization connects these
two factions and makes them allies, the innovators
can think up new ideas and devise new products and
services while the "perfectors" can lay the
building blocks for success. For small businesses that
succeed, the sky's the limit. "Growth, competitive
advantage, customer loyalty and, ultimately, prosperity
are the end result," Tucker says.
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