For any business to be sustainable, they need to innovate. And they need to do so continuously.
If we just look at companies like Blackberry, Kodak or Blockbuster, who were once the darlings of their industry and were thought to be infallible, failing to innovate quickly enough was the cause of their decline.
When well-established businesses innovate, they generally have the resources, experience and capital to try out a new concept from scratch. And if their efforts are unsuccessful, they’re able to absorb the costs – be it money or time – of their “failed” endeavour relatively easily, and move on.
When small business owners and entrepreneurs innovate, they typically start off small; addressing a need they’ve identified. It’s relatively easy for entrepreneurs to come up with fresh ideas and identify gaps in the market. But it’s fairly difficult for them to keep innovating.
With this in mind, I actually think it’s better for small businesses to focus on innovating their business model – making things faster, better and more streamlined. Innovating is not just about coming up with something entirely new, it can mean constantly improving something that already exists.
The business innovation process – Let’s talk about boat building
To put this idea into perspective, imagine you were building a ship. A large business would build the entire ship from start to finish and then invite people to climb aboard. They’d make their investment and then launch their new creation out onto the ocean.
An entrepreneur or small business owner may start out with a humble rowing boat. Testing their simple vessel on a tranquil lake, rather than the ocean. Treating this experience as a learning curve, they’ll expand on their boat and add to it as they go. Building their rowing boat into a something bigger and better as they spend more and more time out on the water. With this approach, they can test things out and improve their boat based on their experiences.
So what should smaller businesses consider when eyeing innovation?
Innovate your business model: As I mentioned in the boat building analogy above, I really do think that small businesses who are looking to innovate should being by coming up with creative ways to improve their existing business model. Start with brainstorming ways to become faster and more profitable and to up your customer experience.
If it’s working in one place, maybe it could work somewhere else: There’s nothing wrong with “recycling” things that work. If there are aspects of your business model that are particularly successful, consider how these processes can be utilised in other areas.
Develop good relationships with your customers: If you have a positive relationship with your customers, they can act as a sounding board for your new ideas. Essentially, they can serve as your innovation “guinea pigs” and help you to test out your business innovation process.
Be patient: Everyone wants to be an overnight success. But there are only one in a million people who get this right. If you take a proper look at many of the famous “disruptive” businesses, it actually took them quite some time to make their mark.
Keep an eye out for market disruptors: As a business owner, you must constantly keep their eyes open for other businesses or technologies that could replace you. And it won’t necessarily be new competitors. It’s likely to be a new technology or “thing” that people could buy that will diminish your business’ value.
Digitalisation and new technologies present big thinkers with countless ways to innovate. But they can also put companies that fail to innovate out of business. The trick is to use these tools and trends to your advantage.
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