As my colleague and leading innovation thinker Rita McGrath put it, in a transient advantage economy with rapidly changing business demands, small and medium enterprises (SMEs) face the challenge of staying ahead of the curve to remain competitive. Embracing innovation and agility is key to adapting to evolving customer demands, technological shifts, and market trends.
There are a number of ways in which SMEs can use innovation and agility to their advantage.
SMEs should start by building a culture of innovation in the organisation. This is essential for businesses to embrace new ideas, explore unconventional approaches, and drive continuous improvement. It will also train people to look for disconfirmation bias data and experiment cheaply. Remember the early Amazon two-pizza teams for new ideas?
As part of building such a culture, SME owners must encourage idea generation within teams and functions. Establish platforms and channels for employees to share their ideas and suggestions. Encourage a mindset that values innovation and rewards creative thinking. One of the ways to build a culture of innovation is also by encouraging a safe environment for experimentation and risk-taking. Look at providing resources and support to explore new concepts, products, or processes that would address a pain point for someone.
Next, embrace the latest technologies that are emerging as potential disruptors. SMEs can leverage such technologies as artificial intelligence (AI) and Internet of Things (IoT) to gain a competitive edge and drive innovation. AI-powered tools are useful for data analysis, customer personalisation, and process automation. It is being used in factory floors, marketing and HR today. AI can help leaders make data-driven decisions, improve customer experiences, and enhance operational efficiency. IoT applications help to gather real-time data, optimise supply chains, and create connected customer experiences. It enables businesses to gain valuable insights, streamline processes, and develop innovative products and services.
Nest, a smart home technology company in the SME sector, revolutionised the home security market by leveraging IoT. Their smart cameras and sensors provide homeowners with real-time monitoring and customised alerts. By staying abreast of technological advancements and strategically adopting relevant solutions, SMEs can gain a competitive advantage and adapt to changing customer expectations, which are essential for sustained growth.
The third plan is to cultivate agile practices. Agility enables businesses to respond swiftly to market changes and customer demands. Here are two approaches to cultivating agility:
Agile project management: Implement agile methodologies, such as Scrum or Kanban, to enhance project execution. Such practices promote iterative development, frequent feedback, and continuous improvement, allowing you to adapt to evolving requirements.
Cross-functional teams: Form cross-functional teams that bring together diverse skills and expertise. These teams drive collaboration, enable rapid decision-making, and promote flexibility in response to market dynamics.
You all have heard of Spotify, a digital music streaming service that adopted the ‘Spotify Model’, which emphasises cross-functional teams known as ‘Squads’. This approach enables rapid development and deployment of new features, facilitating continuous innovation. Agile practices enhance efficiency, promote collaboration, and enable SMEs to pivot their strategies in a powerful way.
Finally, embrace open innovation as a way of working. SMEs can leverage open innovation by collaborating with external partners, such as start-ups, universities, or industry experts. This approach brings fresh perspectives, and access to new technologies, and improves knowledge sharing.
When it comes to partnerships, seek strategic ones with start-ups, universities, or other SMEs to exchange knowledge, share resources, and collaborate on innovative projects. You may also want to look at industry collaboration where you would engage with industry bodies, participate in industry events, conferences, and forums to network with experts, gain insights, and explore potential collaborations or joint ventures. LEGO, the toy manufacturer, collaborated with its users through the LEGO Ideas platform. This open innovation approach allowed users to submit and vote on new product ideas that lead to successful product launches.
Used right, open innovation can be a powerful option for SMEs in the most cost-efficient way. Another way to become more agile is to develop strong relationships with suppliers and customers. From India to Finland I have been helping new ventures and SMEs to find the right collaborators for expanding their businesses this way. I have seen it enabling many SMEs to tap into external expertise, access new markets, and bring innovative solutions to market faster.
There is no question that adapting innovation and agility will be the way to drive growth in the current environment when recession is officially announced in many parts of the world, and unofficially felt in many other countries. By fostering a culture of innovation, embracing emerging technologies, cultivating agile practices and open innovation, SMEs can adapt to changing market dynamics, meet customer expectations, and drive sustainable growth.
Delhi-NCR-based Gaurs Group has established a 15 MW solar power plant at Mahoba near Gwalior. The project is spread over a 50-acre area. "Built with an investment of Rs 80 crore, the plant will generate 2.25 crore units of electricity annually. The project's capacity can be enhanced as per future requirements," the statement said. "Built with an investment of Rs 80 crore, the plant will generate 2.25 crore units of electricity annually. The project's capacity can be enhanced as per future requirements," the statement said.
The project has been financed through private equity and funding of Rs 55 crore from SBI. Manoj Gaur, Chairman and Managing Director of Gaurs Group, said the company has completed the 15 MW Mahoba solar power project and dedicated it to the nation on World Environment Day. Manoj Gaur, Chairman and Managing Director of Gaurs Group, said the company has completed the 15 MW Mahoba solar power project and dedicated it to the nation on World Environment Day.
"The minimum useful life of the plant is 26 years. However, it has the potential to operate beyond the stipulated time frame," he said, adding that the company is committed to sustainable development and reduction in carbon footprints. Gaurs Group said this will result in a reduction of 18,000 tonne of CO2 equivalent annually. Gaurs Group said this will result in a reduction of 18,000 tonne of CO2 equivalent annually.
It has also adopted solid waste management in the real estate sector. More than 60,000 kg of solid waste is collected and converted to compost every day, which is nearly 21,900 metric tonne annually from its delivered projects, the statement said. Gaurs Group, one of the leading real estate developers in Delhi-NCR, has delivered over 65 projects spread over 60 million square feet, comprising around 65,000 dwelling units. Gaurs Group, one of the leading real estate developers in Delhi-NCR, has delivered over 65 projects spread over 60 million square feet, comprising around 65,000 dwelling units.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
