The challenge of innovation

Many people think that innovation is an activity that must be treated regardless of business operations. There are also plenty of managers and small business owners who believe their businesses are not suitable for innovation. "In a real business there is no space for experiments," an owner of a small company told me recently regarding the discussion about the challenge of innovation management. "Furthermore, I have no resources to innovate," he added. However, from my point of view, shortage is a major driver of innovation.

It is important to remove prejudices: it’s not true that innovation always requires a large financial outlay in technology. After all, innovation is to sell more and better, to obtain synergies, to improve business processes, to have better products and services, etc.

As Gary Hamel suggests in his book "What Matters Now", innovation "requires a complete rethinking of the processes of running a business, ie the way in which top management plans, defines budgets, organizes, allocates resources, measures results, hires and pays".

Small businesses have a key differential advantage in this area: its proximity to the customer and its deep knowledge of the market provide an excellent starting point for innovation. For small businesses a problem with a client is an excellent opportunity to find a new solution that can serve many other clients. The lack of bureaucracy typical of large organizations, flexibility and responsiveness to customer needs are the essential breeding ground for innovation.

But how can an SME be more innovative within its business?

Rowan Gibson suggests in his book "Innovation to the Core" that innovation always comes from a different and fresh view to the context and business. He identifies four possible attitudes (“The four lenses of innovation”):

1. Challenging orthodoxies: Questioning deeply held dogmas inside companies and inside industries about what drives success.

2. Harnessing discontinuities: Spotting unnoticed patterns of trends that could substantially change the rules of the game.

3. Leveraging competencies and strategic assets: Thinking of a company as a portfolio of skills and assets rather than as a provider of products or services for specific markets.

4. Understanding unarticulated needs: Learning to live inside the customer’s skin, empathizing with unarticulated feelings and identifying unmet needs.

This requires the development of an innovative culture within the company. In "Winning at Innovation”, Fernando Trias de Bes and Philip Kotler identify some key ingredients. From all of them, I would point out the importance of senior management commitment (the momentum of innovation must come from above), lots of communication (to remove inhibitors such as fear of failure, personnel error, ridicule or reprisals) and the adoption of a feedback system of success and failure.

Our species exists because thousands of years of genetic and social innovation, and that has allowed human beings to grow and overcome major crises. In the words of Hamel: "We owe our existence to innovation. We owe our prosperity to innovation. We owe our happiness to innovation. We owe our future to innovation. Innovation isn’t a fad – it’s the real deal, the only deal. Our future no less than our past depends on innovation”.