Innovation is a key element of any business, large or small. However, many tend to think of innovation only as the application of new technologies and the application of research and development. Doing things differently, in a better and more profitable way is what innovation in small businesses can be. So what does small business innovation mean?
Drucker (1985) defined innovation as “the means by which the entrepreneur creates new wealth-producing resources or endows existing resources with greater wealth-creating potential”. It means that companies implement a series of changes to gain a competitive advantage over their rivals and the market, as well as increase revenue through these innovations. Before embarking on innovation, small businesses must have the ability to access new information and turn it into knowledge, and create procedures and resources to apply knowledge to seize opportunities.
Small business innovation should be seen as a process that cuts across all components of a business. Changing one thing and expecting the rest to stay the same is expecting the impossible, because innovation brings change throughout the organization. It means human resources, operations, accounts, sales, and all the other key elements in an organization. It can be difficult to implement innovative practices in small businesses, since most of these processes are done by the owners/managers of the business. But it’s not impossible.
There are six stages for the implementation of innovation.
- Definition of strategic intent.
- Looking for ideas and ways.
- Mapping of the development process.
- Application of decision-making processes.
- Execution of the decision.
- Reviewing to learn.
In general, the process of innovating is limited to the business manager doing it unconsciously, looking for a better way to do things or to earn more money. However, if the innovation process is formally implemented, it has a better chance of success.
What can you do to start making innovation a part of your small business strategy? Demystify innovation and what it means for your business by understanding how it can affect and improve your business. Hire a technical advisor or someone who is a specialist in the field in which your business is located. This will provide the necessary guidance on any radical new technology that you might not otherwise be able to formally implement through research and development. Identify industries and fellow entrepreneurs who are like-minded and seek innovation as a key component to the development and sustainability of their businesses. Connect with them and see how working relationships can benefit others while helping your organization grow and seize opportunities you typically can’t achieve on your own.