Small Business: To Innovate Is To Survive

Employees are encouraged to innovate. But business owners are obligated to innovate. Borrowing your neighbor’s business idea just does not cut it anymore. You cannot expect to survive if your business is like those generic pearl shakes stands that offer practically the same products as that of the shop next door.

Have an idea? Want to set that into action? Well, once you have executed your idea, you are on your road to innovation.

  1. If there is one motivating factor for innovating, it is the fact that a firm’s survival rate improves when it engages in more innovation and technological activities. Why? Because innovation can improve efficiency (i.e., savings in time, resource, money). And if you improve efficiency, you as a businessman can have higher markups or margins on your product.
  2. Innovating does not necessarily mean reinventing the wheel. A change in or addition of an element in an existing product can do the trick. Back in the 1970s when the computer was still as big as TV sets, people were relying solely on keyboard commands (that is, many only knew the mouse to be a household pest). Xerox already had created its three-button mouse but the problem was that it cost too much for an ordinary consumer to afford. Steve Jobs took that idea, made his own with a one-button mouse—effectively dropping the cost to $15 back then—and launched it on his Macintosh product. And the rest, as they say, is history.
  3. Innovation should be a value within your company. You should not be the only one who believes in innovating. Rather, all your employees should imbibe this culture.

One way of creating this culture is to have a company-wide program that rewards innovation. This will not be easy, though. Programs that dangle a financial reward for innovative ideas could attract a lot of innovation noise. Employees will be proposing even impractical ideas. Management would have to be ready to filter out the chaff from the grain to finally identify those ideas that are viable and have the greatest potentials for the company.

  1. Get your future employees to respect ideas from peers, no matter how superfluous or impractical these can be. The fastest way to kill a creative environment is when peers start criticizing the person for his absurd idea. Tact should be part of the culture. Remind them not to do unto others what they do not want others to do unto them.
  2. Do you have suppliers or clients that are bigger, more established and profitable? Learn from the way they do things, and see what aspect of their process you can adopt for your business. In other words, learn from their best practices.

For example, let assume for now that your company provides party favor products to your client, which is an events organizer. If you know that your client has a database that tracks and monitors the various products delivered to them by their various suppliers, ask yourself if a similar program could help you manage your own inventory. If you are convinced that it would actually save you money, you might want to adopt it for your business.

If you have the resources to implement a, say, earth-moving technology, then by all means go for it! But if you are, like most small businesses with limited resources such as money, taking the baby innovation steps is fine. After all, your primary concern is most probably to make sure your business survives its first three years. Innovating can be your solution to the various roadblocks in your business.

This reminds me of a story shared by a former colleague in India. McDonald’s had just opened its first store in India. First thing they realized was that very few in this country, where cows are held sacred, would eat beef burgers. McDonald’s solution? A veggie McDo burger.

Sometimes, challenges and pain points can drive people to be more creative! Happy innovating!

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