An endless list of priorities often relegates “innovation” to the list of buzzwords small business owners read about but can never tackle – something for the well-funded R&D labs at big corporations, not for the entrepreneurs on Main Street.
But innovation is about being competitive and inventive in your approach — and small firms already have everything they need to be a big player in the innovation game.
I grew up in a neighborhood peppered with small businesses, and I was lucky enough to work in one owned by my father. The habitual challenge I observed was that small business owners had little time to think about what should come next.
They knew their economic survival was on the line, so innovation was viewed as a luxury they couldn’t afford. Maintaining “business as usual” was their paramount focus.
However, the survival of those small firms relied on factors that sometimes went unknown until it was too late.
Markets shifted, pushing customers to find new places to spend their incomes. Technology shifted, enabling the latest products to be offered elsewhere. Even demographics shifted, and one group’s position of “firm favorite” could quickly become “has-been.”
These problems ring true for small businesses today, perhaps even more so because of the accelerating pace of change. Consequently, small businesses must innovate as much, if not more, than larger companies. If you’re not thinking ahead, market advantages can disappear overnight.
However, there are opportunities for small businesses. Most have close relationships with their customers, and because of the personal connections they have forged, those customers tend to have a vested, emotional interest in the enterprise’s success. Never underestimate the power of emotion — and take advantage of it to drive innovation.
Use your size to your advantage
You can improve your customer experience in a multitude of ways, but the best innovation delivers value to the market as soon as humanly possible. As a small business owner, you have immediate access to the customer experience and can focus your innovative efforts in their direction right away.
Cross-fertilization is critical to delivering successful innovation, as great ideas generally come from unique (and sometimes unrelated) combinations of sources. Whereas a big company might struggle to gather outside ideas or have trouble sharing knowledge due to departmental silos, a small business doesn’t suffer these impediments.
Owners and managers of small businesses can easily reach beyond their operations and involve customers, friends, and external experts.
Small businesses are also ripe for the process of “open innovation” because it provides access to ideas and resources unavailable inside the organization. Open innovation links different groups together less formally so they can quickly solve complicated problems. You can prototype ideas and experiment with new services in a rapid fashion. This speed-to-market makes small business innovation very powerful.
Here are five more ways to help your business foster innovation.
• Stakeholder mapping helps you find partnering opportunities and areas of critical need. It will show you the “who” and “how” of the people you’re connected to so you can focus.
• Observational analysis shows how customers use your products or services. Seeing how a product is used will tell you more than a survey can. If a product is being used differently than intended, it could open up a range of innovative market opportunities.
• Government initiatives, such as The Challenge or the Small Business Innovation Research Program (SBIR), are designed to fund and enhance small business innovations.
• Greater networking. Increase your innovative impact by tapping into the networks in your community, such as chambers of commerce and charity organizations. Often, your next idea will come from a completely different type of business than your own.
• Test your ideas with nonprofits before taking them to market so you can see how your thinking plays out in real life.