Innovation is not rocket science, here's how SMEs can ace it

Innovation is not limited to the so-called creative mavericks who can think out of the box. Small and medium enterprises (SMEs), too, can be innovative in diverse situations with an empowered set of employees. Innovation can be woven into the fabric of an organisation, as emerging problems need new thought processes.

How can SMEs practice innovation in a meaningful way? There is a multitude of frameworks available.

Getting started

Take, for instance, the issue of improving communication skills. Usually, it gets broken down into verbal, non-verbal and written communication. These can then be drilled down further.

Large enterprises will have major resources not optimally planned for innovation. SMEs should look at innovation as a competency that can be described, assessed, and developed. Innovation, like most of the cultural aspects in SMEs, starts at the top. Leadership should display, encourage and promote behaviours that help innovation.

As a prerequisite, send consistent messages and encourage the team to undertake such experiments without the fear of failure. The team should know that there is the freedom to try new tools and ideas.

A start can be made by allowing 10 percent of employee time for initiatives they are keen on. Big corporations like Google have had great success with this kind of allocation and SMEs can easily adapt to it. Resources will always be available once projects show signs of success.

To keep it simple, look at innovation as a behavioural competency with some of the associated descriptors as under:

1 Willingness to continue learning to ensure a “better-than-before” mindset. This can be achieved by setting and working on challenging goals for self and others. Referring to specific measures of baseline performance compared with better performance at a later point in time will help track incremental improvement.

2 Encourage experimentation to promote new ways to meet goals. At a basic level, this may mean keeping track of outcomes against a standard of excellence. Key performance indicators can include new or more precise ways of exceeding the goals set by management.

One of the key deterrents is the fear of the cost of failure. There are many ways to address this in terms of setting up stage-gate processes or limitations on expenses based on disproven assumptions. The best way is a lean startup model where the mindset is invested in learning.

3 Driving creativity:

a) Generating ideas in areas outside one’s domain. Well-structured programmes for suggestions and ideas with the criteria specified. Evaluation combined with incentives for selected ideas will spur real action.

b) Converting ideas into value propositions with sustained effort and investment. The hit rate may be low but the payout when done right can be pretty good.

Seeding ideas 

This can be a structure for setting a mindset of ideation and creativity in the organisation. Weaving this into the reward system will help enthuse people to participate more actively.

This, however, is not enough unless people are equipped to come up with ideas.  One method is to suspend evaluation while brainstorming or promoting “out of the box” ideas. Experts call it divergent thinking.

The next stage involves setting criteria for evaluation, which will look at all the ideas from the earlier stage.

Seeking out new ideas and willingness to absorb techniques, and processes, listening and encouraging different viewpoints are central components of improving innovation.

An old friend DeBono had over the years promoted concepts like Lateral Thinking, and Six Hats that are practical and easily taught. We recall many SME owners attending his workshops in India some years ago.

Encourage others to “wipe the slate clean” and tell the managers to dump the “I already know” phrase. Offer new perspectives to others to keep an open mind and learn with agility.

Assessment of aspects like “Tolerance to Ambiguity”, “Fear of Failure”, etc can help in understanding the baseline from where one is starting. Be aware of some of the barriers to progress such as stress, negative beliefs and being wedded to the routine.

While there is time, effort and cost involved in cultivating innovation, it has to be embedded in the culture of the organisation.

In the present VUCA world, this could be the most important aspect that will determine how an SME thrives and is resilient.