An Innovation Model for Small Organizations
medium enterprises account for 60 to 70 percent of all jobs created in
developed countries, and about 95% of all enterprises. Research shows that
employment and output from larger organizations has decreased overtime, whereas
SMEs account for 30 to 70 of value added to the economic production. In 2010,
small businesses accounted for 75% of all jobs created in the United States, and
that number is increasing as more startups and entrepreneurs enter the market
and disrupt larger organizations.
But in times of disruption and innovation, small organizations also face the challenge of getting disrupted and replaced by fierce competition from every corner of the world. Access to technology and information has made it easier than ever for everyone, everywhere, to become an entrepreneur and create a killer startup with great value proposition.
Even though small organizations have more flexibility than bigger ones, thus their capacity to be agile, curious, creative, imaginative and innovative is more tangible, they also have to deal with limited financial resources, and people. And having limited resources creates a scenario in which these small businesses have to decide whether to focus their energy and resource availability in doing and producing more of what they do, or experimenting with new ideas and letting their people create, invent and innovate. It sounds paradoxical, but it is not.
Once a small organization gets some market share, gains traction for its product or service, or even creates an unique value proposition for a particular niche, the pressure to produce more (particularly from investors) tends to kill the entrepreneurial spirit by shifting resources from ideation and innovation to execution. But small organizations must not only keep the pace, but also the creative inspiration that allowed them to get to where they are.
The question is how to manage and balance resources in such a way that the organization produce the needed results to survive the first five three years, and become sustainable in the long term, versus keeping the pace of creation and innovation, dealing with the chaos and uncertainties.
I want to propose this innovation model for small organizations based on three pillars: Teamwork and Collaboration; Customers’ Feedback and Individual Development.
1. Deliberately fostering creative collisions (Teamwork and Collaboration): in a small organization everybody is very busy trying to produce results. In doing so, they are all dealing with challenges and opportunities to learn and make things better. A great way to continually think and implement innovation is by sharing the information that comes from those challenges and opportunities, and bringing the team onboard to discuss about solutions and ways to tackle them. Everybody is busy, and they don’t need to spend a lot of time in these creative collisions. Rather, they can happen on a continuous and random basis. Very likely, many more ideas and potential innovations will come out of those collisions.
2. Leveraging customers’ feedback and input (Customers’ Feedback): design thinking and human-centered design offer great tools to create solutions around people’s needs. Small organizations have closer and more constant contact with their customers, and that creates a fantastic opportunity to leverage innovation on their knowledge. Customers and users have a lot of knowledge, particularly around the problems they have, and opportunities they see. An organizational culture in which every employee is filled with empathy and becomes sort of a “design thinker” and gets useful information from their customers has a huge advantage over those companies focusing on doing more and more. This is fundamental for small organizations to survive and thrive.
3. Supporting, challenging and developing talent (Individual Development): small organizations very often have a lot of brainpower, even though they don’t have a lot of people. Leaders have a huge responsibility in developing their people to help them advance in their skills and careers. These leaders spend a lot of their time producing results, as everybody else. They can’t really afford not to focus on execution and results. However, in the long run, survival and sustainability depends on having teams that are continually pushed to the next level of their potential. To do that, leaders have to support them in their endeavors by becoming their trusted coaches. Also, they have to challenge people for them to reach a state of Flow, in which the task at hand is interesting and inspires them to learn more. All that contributes to developing people’s potential, providing them with opportunities to thrive, which also results in loyalty and increased creativity and effectiveness.
This model has great advantages. First, it is free. Creative collisions, customers’ feedback and developing people don’t have any monetary costs. They only require greater commitment from the team to look at the long-term purpose, rather than at the specific actions of the idea. It empowers people, as it transfers important responsibilities such as empathy and continual improvement. And it strengthens operational capacities, since people are constantly challenged to reach their next level of potential. In doing so, they will be better prepared and more resilient in the face of future failures, and more humble in the face of potential successes.
Are you in a small organization? What kind of activities can you do to use this model of innovation? How can you help your organization become more collaboratively through creative collisions, more open to customers’ feedback and more deliberate about developing its talent?