In business, innovation is key. It’s what drives growth, increases productivity and performance, helps you adapt to changing markets, enables you to attract and retain talented people, and ultimately keeps your customers happy and coming back for more.
According to a recent study conducted by global accountancy firm, RSM International, 86% of successful businesses say innovation is a ‘significant’ or ‘considerable’ driving force of their business’ competitive advantage. And 78% say the same when it comes to driving growth.
However, it seems that larger businesses are more likely to innovate than small and medium companies. In the UK, figures from the Department for Business, Energy, and Industrial Strategy show that in the period 2016-18, 49% of large businesses were ‘innovation active’, compared to 38% of SMEs.
So, how can SMEs innovate and take advantage of all the benefits that it brings? Here we look out how to drive innovation in your business.
Redefine your definition of innovation
Innovation can refer to any part of your business. It could be creating new or better products and services, introducing new processes or improving existing systems. It doesn’t have to be groundbreaking – it could just be a different marketing idea or a new process that enables you to ship your goods out faster.
Create a culture of innovation
Business owners who create a place where their employees feel free to bring new ideas to the table are the places that allow creativity and innovation to flourish. Have a suggestion box or an email address where employees can send ideas. Reward staff for suggestions that are adopted by the business and highlight their achievement in a staff newsletter.
Foster a creative atmosphere by having regular brainstorming meetings and teambuilding and training sessions. And always lead by example. Read relevant blogs and articles, attend webinars and conferences and encourage your employees to do the same. At brainstorming sessions, always have some ideas ready yourself.
Look beyond your ‘innovation team’
Having just a small group of people inside your company responsible for innovation could be holding you back. The smaller the group, the harder it is to see the bigger picture and draw on experience from the wider industry. Once you expand your definition of what innovation is you should begin to see that making it a company-wide responsibility can reap more rewards.
Likewise, could you make use of a third-party innovator to widen your company’s outlook and ideas? The RSM International report showed that 62% of businesses used third parties to help them realise their innovation potential.
Seek feedback from your customers
Sometimes the best ideas are the ones just waiting there for you to take. From good old one-to-one conversations to more structured methods like email mailouts and post-purchase surveys, use your customers to garner feedback about what you’re doing well, not so well and what they’d like to see you do.
It’s also worth walking to your suppliers to see if they have any suggestions for improvements.
Experimentation is at the heard of innovation
The old brainstorming saying ‘no idea is a bad idea’ might be overused, but it still holds true. If you’re afraid to take risks, then it’s unlikely your business will succeed at innovation. The RSM International survey showed that 30% of businesses encourage risk taking and experimentation even when it doesn’t work out.
Encourage employees to challenge the status quo. Just because you’ve always done something one way, doesn’t mean that it can’t be changed. And if it doesn’t work, then no problem.
How your business has been affected by the pandemic will likely be influencing your current innovation strategy. You may be focusing purely on the short term – payroll, cash flow, and paying suppliers ? and innovation may fall further down your list of priorities. Or you could have seen an upsurge that has led you to identify flaws in your systems.
The strategies discussed above are easy to implement and can be done alongside your regular business routines. By gradually incorporating them into your business model, you could begin to reap the rewards.