Many people
think that innovation is an activity that must be treated regardless of
business operations. There are also plenty of managers and small business owners
who believe their businesses are not suitable for innovation. "In a real
business there is no space for experiments," an owner of a small company told
me recently regarding the discussion about the challenge of innovation
management. "Furthermore, I have no resources to innovate," he added.
However, from my point of view, shortage is a major driver of innovation.
It is
important to remove prejudices: it’s not true that innovation always requires a
large financial outlay in technology. After all, innovation is to sell more and
better, to obtain synergies, to improve business processes, to have better
products and services, etc.
As Gary Hamel suggests in his book "What Matters Now", innovation
"requires a complete rethinking of the processes of running a business, ie
the way in which top management plans, defines budgets, organizes, allocates resources,
measures results, hires and pays".
Small
businesses have a key differential advantage in this area: its proximity to the
customer and its deep knowledge of the market provide an excellent starting
point for innovation. For small businesses a problem with a client is an
excellent opportunity to find a new solution that can serve many other clients.
The lack of bureaucracy typical of large organizations, flexibility and
responsiveness to customer needs are the essential breeding ground for
innovation.
But how can
an SME be more innovative within its business?
Rowan Gibson
suggests in his book "Innovation to the Core" that innovation always
comes from a different and fresh view to the context and business. He identifies
four possible attitudes (“The four lenses of innovation”):
1. Challenging orthodoxies: Questioning
deeply held dogmas inside companies and inside industries about what drives
success.
2. Harnessing discontinuities: Spotting
unnoticed patterns of trends that could substantially change the rules of the
game.
3. Leveraging competencies and strategic
assets: Thinking of a company as a portfolio of skills and assets rather
than as a provider of products or services for specific markets.
4. Understanding unarticulated needs:
Learning to live inside the customer’s skin, empathizing with unarticulated
feelings and identifying unmet needs.
This
requires the development of an innovative culture within the company. In
"Winning at Innovation”, Fernando Trias de Bes and Philip Kotler identify some
key ingredients. From all of them, I would point out the importance of senior management
commitment (the momentum of innovation must come from above), lots of
communication (to remove inhibitors such as fear of failure, personnel error,
ridicule or reprisals) and the adoption of a feedback system of success and
failure.
