5 Ways Small Companies Can Out-Innovate Big Corporations
Developing innovative ideas is a critical activity for growing companies of all sizes. But leaders of many small companies believe innovation is just for big companies that employ scientists and have large research and development departments. This false belief prevents many leaders from effectively identifying and applying innovations in their organizations. As a result, small businesses may fail to identify valuable ideas that would assist them in growing a profitable company.
Richard Branson has said, "Small businesses are nimble and bold and can often teach much larger companies a thing or two about innovations that can change entire industries."
Leaders of small companies can leverage their business' size and unique culture to rapidly develop and apply creative ideas. Here are five ways small companies can innovate better than much larger organizations.
1. Speed of execution
Small businesses can position themselves to make decisions quickly, allowing them to be first to market with innovative ideas. Instead of spending months or years evaluating new ideas and passing them through multiple departments, a flexible small business can make fast decisions regarding whether to pursue a particular idea. When a valuable idea is discovered, it can be developed quickly and launched to potential customers. This fast action distinguishes the business as an innovator, and causes its competitors to play "catch up."
2. Fast access to business resources
When a valuable idea is discovered, business leaders can quickly allocate resources to develop and market the idea. Multiple departments can get involved at the same time to implement the new idea, and personnel reassigned to the project, which shortens the development time. Larger companies with many product lines must distribute their resources among all of their products and services. A smaller company is able to temporarily reallocate significant resources to the innovative idea that is critical to the growth of the company.
3. Team environment
Small businesses can develop a team culture that encourages everyone to get involved in the innovation process. Rather than focusing creative activities on a few individuals or groups, business leaders can promote creative thinking throughout the organization. Every individual brings different experiences and perspectives that can assist in the identification and development of new ideas. This team approach accelerates the speed of execution, which helps position the business as a market leader.
4. Company-wide innovation support
To successfully cultivate a team of people who are actively identifying and developing innovative ideas, a company's leaders must openly support innovation activities. This support must start with the CEO and include all other executives, directors and managers. When employees and contractors see unanimous support for creative activities, they understand the importance of those activities and are motivated to participate. This helps to strengthen the team environment and accelerates the development of new ideas.
5. Measure innovation
To further motivate people to spend time identifying creative ideas, small businesses can emphasize innovation by making it part of the company's job descriptions and evaluation criteria. Many companies do not consider innovation when evaluating an employee's performance. If bonuses and pay increases are not tied to any creative activities, it sends a message that new ideas are not important. This message causes employees to place a greater emphasis on other activities that are specifically mentioned as part of their job performance. Start measuring and emphasizing innovation to stress the importance of creative thinking to everyone in the organization.
Regardless of the size of the company, business leaders who start identifying and applying innovative ideas will enjoy a thriving business.
Entrepreneur Editors' Picks
How an Encounter With the 'Armpit of Destiny' Helped the Founder of Grubhub Take His Business From His Apartment to a $2 Billion IPO
You Can Train Your Brain to React to Stressful Situations Better. Here's the 3-Step Process.
A Disastrous Valentine's Day Inspired This Founder to Launch Her Own Floral Brand. It Became a Celebrity Magnet With Retail Revenue Up 450% Since 2019.
What Is Your Dream Job? Ask Yourself These 4 Questions to Find Out.
This Is the Crazy Process This Juice Franchise Went Through to Get USDA-Certified Organic. But It Sure Has Paid Off.
No One Would Rent Me a Café in Trendy NYC Neighborhoods, So I Tried Something Risky. Now I Have 3 Coffee Shops.