Innovation – Small Business Imperative

When I think of innovation, I think of creative people, people that have changed the world with new ways of doing things. In the business world, you’d be hard pressed to find better examples of the success that constant innovation breeds than Microsoft and Apple. And I believe that it is no coincidence that these two massive companies have come to be known as innovation leaders. This is not a matter of their success coming despite the ultra competitive market in which they operate, but because of it. The more competitive the market you operate in, the more you will be forced to innovate in order to survive. It is easy to think that innovation is a trait that belongs exclusively to the huge multinationals like Microsoft and Apple, but you have to remember that both these companies were essentially started in their founders’ garages – they weren’t always big, but they were always innovative. And the competition between them and other early players in the market drove their innovative tendencies even further.

Businesses today face competition on more fronts than ever before. Your competition doesn’t even have to have a point of sale in the same country as you anymore. The internet has enabled almost anyone to chip away at your market share from almost anywhere with just a few thousand dollars worth of software and some clever website design. Innovation has become an imperative for doing business today. But don’t take my word for that. What do Bill Gates and Steve Jobs think of innovation and its importance to a business?

“We are always saying to ourselves, “We have to innovate. We’ve got to come up with that breakthrough.” In fact, the way software works, so long as you are using your existing software, you don’t pay us anything at all. So we’re only paid for breakthroughs.” – Bill Gates

Innovation distinguishes between a leader and a follower. – Steve Jobs

I can hear you saying, “Great for you Bill & Steve, but I don’t have all the money in the world for R&D to come up with the next big thing in my industry”. But innovation requires only one thing – a focus on starting down the path towards innovation, even in the most seemingly mundane areas of your business. According to dictionary.com, innovation simply means the introduction of new things or methods. That means you don’t have to be at the forefront of cutting edge technology, you simply have to come up with something different or a different way of doing things.

I’ve put together a few ideas to get you thinking about how to get started with making innovations in your business that can lead to tangible, sustainable competitive advantage. They are simple, yet profound. It’s not always the “greatest thing since sliced bread” kind of ideas that make the biggest difference in business. Sometimes, it’s simpler ideas that can more quickly and easily be implemented that can have the greatest impact. Before you continue reading, prepare your mind to be open to the possibilities that exist for your business right now – think about things that might be staring you right in the face. You don’t necessarily have to reinvent the wheel, just figure out how to make more people not want to buy wheels from anyone else but you and you’re off to a good start.

Idea #1 – Spread your “unique-ness”.

What is the biggest difference your customers notice about doing business with you as opposed to doing business with your competition? What do your customers LOVE about doing business with you? What are you always being complemented for? Do you have a better product? Do you have a better way of delivering your product? Are you more “user friendly”? Are some types of customers better suited to using your product than your competitor’s? Have you found a niche? Take the answers to these questions and start exploiting your “unique-ness”. Think about what makes you and your business one of a kind, especially if those points of difference would be difficult to duplicate, even if your competition wanted desperately to copy those very aspects. Now, think of how you can apply these aspects of your business or product more widely to all the other aspects of your business, your industry, your people, and your supply chain. You should seek to apply these points of difference across as many areas of your business as possible so that every element of doing business with your company gives you that same competitive advantage over and over again. This is the most basic form of innovation. By taking what is unique about your business and applying it to more and more of your business until practically everything you do is as unique and special as what you have come to be known for, you tap into the most powerful innovation of all – brand innovation. Creating an innovative brand can speak volumes about your business without having to say a word – and it can make your customers into stark raving FANS that don’t want to do business with anyone else, regardless.

Idea #2 – There’s more than one way to skin a cat.

Think about the “inputs” that are relevant to your business. How do you get your product ready to sell? If you’re a manufacturer, what are the component parts of what you build? If you are a service firm, what are the steps involved in delivering your service to the end user? Now think about what your product or service ultimately delivers to your customers. For instance, many people would assume that McDonald’s is in the food business. But let’s face it; even if you are particularly fond of McDonald’s food, it is neither the most nutritious or most satisfying option out there. But McDonalds remains one of the most successful businesses in the world because they consistently deliver not just food, but convenience. It is by being convenient, even more so than other “fast food” outlets, that McDonald’s has maintained its amazing momentum over decades. Once you’ve analysed your business inputs, the “how” of getting your product or service into the hands of your customers, consider them all in light of what you are ultimately delivering that is of value to the people that buy from you. In other words, focus on the outcome for your clients. What are they really buying from you? Can you change or improve your inputs to get your customers what they really want in a way that saves them money, saves them time, or makes their experience even better in some way? If so, do it! We tend to stick with doing things the way we’ve always done them (the same old inputs) instead of exploring ways to make things better through thinking differently about how we deliver the outcomes. Your customers are really only interested in the outcomes your product or service delivers to them. The inputs or the methods you use to deliver those outcomes are usually secondary or even inconsequential to them. Therefore, it makes sense to focus more on how you achieve results and deliver value to your clients than on what specific “formula” you use to get them what they want.

Idea #3 – Get out of the box.

You’ve heard “think outside the box” a million times. But innovators know that in order to generate new thinking, you have to get away from the daily business routine. If you’re having trouble seeing the proverbial forest for the trees, the best solution can often be taking a long hike up the nearest mountain. When I meet with my clients, I try as often as possible to meet with them outside of their offices. This does two things. One, it gets us away from the constant threat of endless interruptions. And two, it always helps to give us a bit of much needed perspective. I don’t know how many business owners I’ve dealt with that are genuinely afraid that their company will collapse in a heap if they so much as go out for a cup of coffee. But time after time, when these same people get outside the four walls of their business, new ideas and clear thoughts about ways to attack problems and take advantage of opportunities begin to flow freely. Innovative thinking rarely occurs when you’re locked in the day to day operation of your business. And there is a great deal of scientific evidence out there today that tells us that being in completely new or novel situations actually causes our brains to rewire themselves in order to attack old problems from new angles. Simply put, it’s always going to be difficult to “think outside the box” when your head is stuck inside it. My standard advice to business owners with regard to strategic planning and long-term vision for their company is to “take five”. As in five days. At least five days each year should be set aside for you to completely avoid the office so you can think only about your strategic direction and longer term plans for growing your business. Anything less than that and you’re really going to struggle to do anything much more than what you’ve “always done”.

Idea #4 – Get out the binoculars.

This is about shifting your focus. Many businesses are forever focussed on the here and now. That’s good to a point, but if you’re only ever thinking about today, you’re not necessarily going to make your decisions on the basis of what is best for the long term sustainability of your business. Large, publicly listed companies often fall into this trap when they make decisions based on what effect they will have on tomorrow’s share price instead of what will deliver the most value for their shareholders over the next 10-20 years. Building a truly sustainable business, one that is environmentally, socially and financially able to withstand the test of time requires long-term thinking. And the long-term viewpoint can lead to innovations that a short-term viewpoint overlooks. Changing your thinking about your business from a “what will we be doing next week or next month” viewpoint to a “what will we be doing in 20 years” viewpoint will focus your attention in many different areas that will frequently lead to improved business sustainability across the board. Think of how differently you would choose stocks to invest in if you were given an investment window of 20 days as opposed to 20 years. One of the key elements to business sustainability is investment. Innovative thinking about how you make key investments in your business can be the difference between success and failure in the long term, but that same innovative thinking can also be the source of significant competitive advantage in the short term. If you’ve been in business for over ten years, it might be useful to ask yourself what you would have done differently starting out in business if you knew then what you knew now. Now take those kinds of scenarios of what you would have changed and project them 20 years into the future. What should you be doing now in order to be ready for “your business v.2030”?

I hope those ideas have given you the appetite for innovation and a few thoughts about where to start. If you’d like to get more ideas about how to better manage your business, prepare it for the future or grow it up to the next level, sign up for my monthly eNews. And if you would like to receive my Top 10 Ways to Start Thinking Innovatively, just write to meĀ  and put Innovative Thinking in the subject line. By the way – it’s all FREE!!!

 

I’ve been a successful advisor to middle market and SME businesses for the past 14 years. Working for some of the world’s leading banks in the United States and Australia, I’ve had the privilege of sharing my expertise with literally hundreds of businesses, becoming a trusted advisor to many of them and helping them all to make their businesses more bankable.

A bankable business is one that can go to any bank assured of being able to secure finance on their preferred terms instead of having to “take it or leave it” by the bank’s conditions. A bankable business is one that isn’t just a “job” for its owners, but a growing, thriving enterprise that is built to last. A bankable business is run by people that are confident and capable of making the tough business decisions necessary to make sure that the business is sustainable over the long term. But too many business owners become overwhelmed and frustrated to the point that they aren’t able to put all the pieces of the puzzle together in order to make their business truly bankable.

That’s why I decided to start my own consulting company dedicated to helping business owners build their businesses and their personal skill levels to enable them to fulfill their aspirations and enjoy a level of satisfaction that, quite frankly, many small business owners fail to achieve on their own.

If you’d like to learn more about the essential skills you need to be successful, contact me today for a no obligation conversation about how I can help you achieve your business goals.