Three Innovation Drivers for Small Businesses

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This is an excerpt from my latest book, Making Open Innovation Work. CLICK THIS LINK FOR FREE DOWNLOAD!

Many people—including those who operate small companies—do not link small business with innovation. Yes, they are entrepreneurial, but this is not necessarily viewed as innovation, as these people tend to think innovation is just for big corporations. Yet, several years ago, when Intuit began sponsoring research that would look at the future of small business, one of the first topics they chose to look at was small business innovation.

Their report, “Research Brief: Defining Small Business Innovation,” states that “the intensity of economic and technological change means few businesses can succeed without continually incorporating new methods. Innovation, once optional for most small businesses, is now mandatory.”

The report goes on to note, however, that many small businesses don’t call what they’re doing innovation. Instead, they use words like “tweak,” “adjust,” “improve,” and “change” to describe how they are continuously improving their product or service in response to market demands. They think of it more in the vein of normal operations than as being innovative. And of course, they are unlikely to have an R&D department or someone who is in charge of innovation.

Yet, as the Intuit report notes, just because small business owners and managers don’t see themselves as innovators doesn’t mean they are not innovating. In fact, small businesses use the market as their innovation lab as they constantly respond to the needs of their customers. As small organizations, they generally have very close relations with customers, enabling them to keep a close watch on changing customer needs.

Intuit uncovered three main drivers of innovation in small business:

• Necessity: No small business can stay alive without constantly changing to meet the shifts in their marketplace. Look back at your product or service or how you operated five years ago or ten years ago and compare that to what you are doing today. You will see that a world of change has occurred in many aspects of your business. So while you may not call what you do innovation, it is still innovation.

• Opportunity: Small businesses know how to strike while the iron is hot when it comes to taking advantage of a new opportunity. With relatively flat organizations, decision making is fast and opportunities are quickly seized upon.

• Ingenuity: Many small businesses are started by people who are frustrated by not being able to find a product or service to meet a need they have. The ingenuity that enables them to fill that need means they have the creativity to support innovation. In addition, while many people can spot a need, it takes a lot of drive and passion to devote yourself to coming up with a new solution to meet that need. This drive and passion are key elements required to be successful at the long, hard slog that innovation often entails.

One more important idea from the Intuit report is their conclusion that innovation is less risky for small businesses than large corporations. “Because of their smaller scale, small businesses can experiment with and implement new approaches faster, easier, and cheaper than large corporations. And unhindered by decision-making bureaucracy and remote decision makers, small businesses can move much more quickly on innovation opportunities.”

If you like this read, then you should download the full book for free: Making Open Innovation Work

Republished with author's permission from original post.

Stefan Lindegaard
Stefan is an author, speaker, facilitator and consultant focusing on open innovation, social media tools and intrapreneurship.

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