Secret to Success: Fostering Innovation

Most business owners aim for continuing profitability and growth. One way to ensure this is to make innovation a priority. Approximately half of the nearly 2,800 small business owners responding to the April 2017 Allstate / USA Today Small Business Barometer say they’ve experimented with new business practices to provide their customers with additional goods or services. And roughly two-thirds say their businesses have shown improved growth.

How to Encourage Innovation

How does a company become an innovative one? It’s sometimes assumed that innovation requires your company to have endless resources or is solely to be achieved by those in technical or research roles. But, developing an innovative business culture typically has more to do with not only allowing — but openly encouraging — employees to explore new ideas and make mistakes. For instance, it’s a good idea to:

Encourage employees to be proactive problem solvers. What issues do customers have that they have voiced?  Equally important, what issues are customers not discussing, or perhaps, are not even aware of? According to the Boston Consulting Group’s (BCG’s) report The Most Innovative Companies 2016, leading innovators cite customer suggestions as frequent sources of new ideas.

You should encourage your employees to pay attention and also engage in conversation with their customers — whether those customers are paying clients or other departments within the company which they are supporting — and to look for ways to improve the process at any step.

Boost innovation from the entire organization. It’s not just the IT or research departments that are expected to come up with new ideas. Every group in the organization, from accounts receivable to human resources, can come up with ways to innovate.

Hold brainstorming sessions. Innovation rarely occurs all at once. Outrageous, unworkable ideas may be the genesis of concepts that ultimately prove both viable and profitable. Employees need to be confident they can suggest ideas without fear of ridicule. One way is through brainstorming sessions. The goal is to help employees become comfortable considering even wacky ideas, without censoring themselves or others. A good rule of thumb is “there are no bad ideas in brainstorming” – as you never know what will be the outcome when people collaborate on ideas.  The BCG report found that, within leading innovative companies, employee ideation forums (i.e., “brainstorming”) were the sources of new product ideas 68% of the time.

Work across departments. People tend to feel comfortable with co-workers they’ve known a while in their day-to-day responsibilities. At the same time, outsiders often provide a different perspective. They can help employees question their regular habits and assumptions and to view accepted wisdom from a different perspective. In pursuing innovation, it often helps to assemble teams that include both colleagues who’ve worked together before and those who are newer to the group.

Look outside the company. Ideas can come from customers, suppliers, data and partners, among others. Innovators in the BCG study leveraged all these sources.

Celebrate both blockbusters and incremental wins. A big win — an innovation that turns an industry upside down — can change a company by granting it a commanding place in the market, which in turn enables it to charge more for products and attract bright, eager employees.

Although every innovation isn’t necessarily a blockbuster, each breakthrough can (and should) be celebrated. Steady improvements in processes, products and services can boost your bottom line and employee morale. In the long run, small improvements may also serve as catalysts for more revolutionary innovation down the line.  Also, your employees will feel empowered that their ideas and concerns are being heard and addressed by the organization.

Other Strategies

Companies striving for innovation need to have the proper structure in place to be able to advance it. It’s important to build policies that will promote research and development. For example, performance reviews should incorporate measures of innovation, so that the idea of the importance of innovation is always present.

Employees also need time and space in which to develop ideas. If possible, you should try to schedule periods of time in which they can shift from their daily responsibilities to focus on generating new processes and projects (perhaps a monthly meeting during slower periods – where possible). In addition, your budget should account for innovation costs.

Keep Going

Innovation is a never-ending process. Building an innovative company, and making innovation an integral piece of your company’s culture, requires a sustained effort, as well as the willingness to accept some short-term failures as the price of long-term success. Of course, it’s also important to make sure that new ideas are tested and relevant to your company. But, encouraging innovation can ensure your company remains flexible and responsive to changing conditions and market demands.

© 2017