Innovation is widely viewed as the key to ending the recession and creating jobs as well as making small business startups more successful. And indeed, almost every day we hear of some new Internet venture that promises to change the way we live, work and play. But the problem for most of us is that product innovation, such as the creation of the Apple iPad, is the work of large companies and not that of small firms. Yet it is true that small firms play a big role in the innovation process, and this paper will show how they do it.

We’ll begin with a definition of innovation. It is the creation and introduction of new and better processes, products, services, ideas or technologies that are accepted by markets, individuals and society. Notice that the definition includes new and better processes and not just products. This fact among others enables small businesses to create a competitive advantage in the marketplace by lowering costs and improving customer service. Notice also that the definition includes acceptance of the innovation by markets, individuals and society. Ideas, products, or processes that are not useful to someone somewhere cannot be considered innovations. Innovations can be small scale or large, immediate or long term, and of course, product or process based. It is on the frameworks of time, scale and focus that we will address how small businesses can create, implement, and prosper from innovations, initially in process, and later in products and services.


Innovation Phase 1-Immediate Time Frame, Small Scale, Process Focus

The most immediate innovations that small businesses can make is by a Process Focus. Everything an organization does is a process, and should be viewed, analyzed, and reviewed for productivity improvements, particularly those which can be shown to benefit customers. Examples could include faster order turnaround time, accurate billing, prompt inquiry response, and the use of skilled customer service representatives. Improved processes can also lead to improved products if a process improvement can be presented to a customer as an increased value product or service. A critical need is to develop an ongoing dialogue with your customers, in which you search for important process issues that can lead to new products, as well as reviewing present products that could be improved and lead to new sales opportunities.


Innovation Phase 2-Medium (2 yrs) Time Frame, Small-Medium Scale, Product and Process Focus

In this phase, our emphasis changes from what can be done immediately to what can be done in the near term future (no more than 2 years). The focus now is on innovating for growth. Innovative organizations can grow by developing increased capacity through collaborative relationships with other firms and individuals. Collaboration enables each partner to specialize in their core competencies, and thereby address the potential to extend product and service lines as well as internal processes. For example, a firm rich in processing activities might collaborate on market development with a firm highly experienced in sales. Another may have expertise in project management and could link up with a small organization in the process of building a new facility. The main point is that innovation can be enhanced by collaborative working arrangements that build on the expertise of more than one organization. It is possible to focus on both process and product/service innovations simultaneously when the expertise to do so is jointly available. This synergy can lead to major breakthroughs on complex problems that neither firm can accomplish alone.


Innovation Phase 3-Long Term (5 yrs), Time Frame, Growth Maintenance Scale, System Focus

This is the future phase, when innovation can and does create not just process and/or product innovations, but whole system change, development, and growth. This is where new industries and obviously new companies can emerge to challenge the present and create the future. The focus is system wide, and involves the study of issues that are important on a global basis. We need to focus on problems to be solved, opportunities to be exploited, and always within the limits of our own capabilities and interests. The field for innovation is not limited to the present or the past, but rather to the future, not limited to what is or was, but what could be. The future will be determined by the quality of this inspired innovation. Examples could include a brand new venture accessing technologies and developing products for markets not heretofore sought by the organization. Complete re-branding and business model changes can also be part of wide the wide ranging innovations that are possible when the field of vision is unlimited by present company focus.


In this short paper, we have looked at the present, the near term future, and the long run future for personal, business and world considerations. Innovation can change the person, the business, and the world. And innovation even if starting small can lead to great things. It requires a permanent open minded presence and ongoing search for the improvement of processes and outputs, always aiming for greater productivity and satisfaction, anywhere, everywhere, and all the time.

Share This