Here’s how SMEs can muster some innovation competency

Investing in potentially unsuccessful innovations is a risk and there could be cash flow problems too.

Many SMEs that have tried their hands at innovation know that it is a complex process with many distinct stages and inherent risks. It will often require some investment of time and money and there may not be any desired outcomes. Which is one reason the lean innovation framework insists on investing in learning, becoming agile, breaking silos, testing assumptions and so on.

How can SMEs muster a decent level of innovation competency?

The SME leadership team has to deal with various risks especially when their resources are limited to sustain a long-term project. The risks can be on multiple fronts such as:

• Operational: The slack time needed for proof of concept of new ideas or change in processes may mean that the current quality standards, cost, or scheduling requirements may not be met, at least temporarily.
• Commercial: Failing to attract enough customers or losing existing customers who do not consider the value addition.
• Financial: Investing in potentially unsuccessful innovations is a risk and there could be cash flow problems too.

Ever read the Tagore poem, “Where the mind is without fear?” Tagore’s words hold many clues. The narrow domestic walls he talks about could well be the boxes or cubicles we confine ourselves in. The dreary desert sands of dead habits represent the status quo, and it drowns creativity and innovation. Ever widening thought and action can be seen as opening up our mind and following it up with actions to make a positive change. What can stop these ingredients from being unleashed positively?

“Without fear”:  Often we see people encounter fear of failure. Research has consistently shown that risk-taking is an important part of creativity. Occasional risk-taking is all that is needed. This risk can be intellectual or social. Intellectual risk refers to actions that expose a person to the possibility of failing, such as trying to learn new skills or trying out the latest ideas. Social risk refers to a willingness to challenge norms and fear of negative evaluation – like apprehension about receiving negative judgments from others. An SME entrepreneur has already shown an appetite for risk, which involves striking the balance between fear, courage and foolishness.

“Dreary desert sands of dead habits”:  This alludes to a fear of change or lack of tolerance for ambiguity. This requires a certain amount of curiosity and openness, especially to those ideas that are different from the ones we believe in. The human brain needs to be engaged in order to create. If not, it is likely to settle into survival or defensive mode.

“Ever-widening thought and action”: This is a call to think and act in an expansive way. The late Steven Covey suggested finding those activities that help us centre ourselves, that help us learn, and that help us develop our humanity and its potential. Understanding creativity can assist with both of these tasks if we approach it with an attitude of commitment, curiosity, and caring. “Ever-widening” could refer to opening the mind to fresh opportunities for action if we are able to look at diverse ways to enable them.

“Into that heaven of freedom”:  Freedom is definitely a catalyst. Providing it while making people accountable is a tough task. Responsibility often conjures up work, deadlines, job security, absence of autonomy, time commitment, fulfilling other people's needs, living by others' rules, and so on. Freedom, on the other hand, often conjures up play, fun, free time, private life, home life, hobbies, taking care of self, no schedule, no rules, no worries, vacations, autonomy, etc. Trusting employees to self-manage and find the balance is the key. It improves confidence and self-esteem. It requires an eyes-on, hands-off approach, and even hand-holding for a brief period, but the employees would start thinking independently and become more innovative. Freedom could mean Freedom to Operate, to try something new.

“Clear stream of reason”: This points to the structured and logical part of innovation. By its very nature, innovation brings a picture of just expansive thinking and generation of ideas. In practice, this has to be followed by action. Delinking the ideas from their execution is a recipe for failure. Edward De Bono identified that creativity is not just innovation, but also includes incremental changes added to the existing system, product, process etc. A kind of pragmatism is needed and that comes in after the free flow of brainstorming where the team generates many outrageous ideas. Then all the ideas are passed through various criteria of ‘working with what we have or can get’ realistic assumptions so that ideas can get to the execution stage.