What Does Innovation Mean for Smaller Business?
I heard a quote the other day by an experienced business associate. In the context of talking about future business opportunities, they announced that “it’s all about innovation at the moment”. This stopped me in my tracks. Why?
Because in many ways they were correct. Innovation is a buzzword that’s on everyone’s lips at the moment. But if it is only all about innovation at the moment then what have we been doing in the years up until now? Were we all just enjoying the pre-recession gravy train ride so much that we didn’t have to be innovative?
No of course we weren’t. You only have to look at Apple and the launch of the iPhone (in 2008 I note) to see that the game changers were innovating long before the credit crunch of the same year came along. To say that it is all about innovation at the moment is a dis-service to all those that have been ‘doing’ innovation and studying it for many years up until now.
The times they are a ‘changin
Despite the buzzwords, the world is certainly changing at a very fast pace and the need for businesses to stay ahead of their competition through innovative practice is becoming more apparent. Here is an excellent visual via Tim Kastelle’s blog that hits you right between the eyes.
This is based on US corporates in the S&P500. Whilst I wouldn’t be surprised if analysis of the UK’s FTSE100 didn’t show similar trends (I am not aware of it having been done?) it still begs the question of what the innovation agenda means for smaller businesses. Here are my observations for you to think about for your small business.
Observation 1. I was lucky enough to listen to Costas Markides talk a few weeks ago. He is a Professor from the London Business School and one of the world’s leading experts on strategic innovation. He was very clear that innovation will only be achieved in an organisation that has in place the culture to support it. In fact, he says, it is small firms that have the skills and competences for discovery in abundance (playful cultures, no bureaucracy, freedom to experiment etc). So think about how you will foster a culture of innovation in your company.
Observation 2. Being innovative does not mean that you have to be the next Skype or invent the next generation of smartphone (referred to as disruptive innovation). It can be much more subtle than that but still have big relative impacts on your business. There are lots of different types of innovation (product, process, organisational, business model, management, marketing etc) so think specifically about where you could make creative change within your company.
Observation 3. I was talking to the Director of a company I have been doing some strategy work with recently. Their business strategy was made up of 3 Strategic Pillars, one of which related to pursuing innovation. When I asked them what specific actions they intended to take forward in order to pursue innovation they were unable to tell me. Unfortunately, saying that you are going to be innovative does not mean that you are. You need to be clear about what actions you will take.
Don’t get too carried away by the word innovation and don’t fret that those around you are innovating whilst you feel like you are struggling to understand what it means. Continue to focus on your core business but recognise that for high growth businesses, innovation is essential.
Think about how you can improve the culture of innovation within your company, where you could make creative change and what actions you will take to encourage innovation and arrive at specific new ideas. Then make them happen.
image credit: andynulmanmarketing
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Richard is an experienced management consultant, having spent most of his career with Deloitte UK and working in a senior management role for Her Majesty’s Treasury. He brings strategic business thinking to ambitious startups and established businesses that are pursuing sustainable high growth, helping them to formulate and execute their ideas through innovative but realistic and coordinated approaches. Richard blogs about a range of business issues at www.fire-london.com and is on Twitter @FireLDN
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