Innovation can be defined as the introduction of something new.
It can be gradual or radical, hence small business owners do not always have to come up with a game-changing, revolutionary idea to be innovative – small tweaks and refinements can also be regarded as innovations (e.g. better packaging, new partnerships, and new negotiation and marketing techniques). Innovation is critical for small businesses because it makes them more competitive, increasing their odds of survival even under the most difficult circumstances.
Small businesses are well-placed to innovate because their small size makes it easier, faster and cheaper to respond to changing market conditions; they are accustomed to working with resource constraints and improvising; they are open to trying new ideas that could enhance the business in some way; and they are usually part of formal and informal networks which share ideas and experiences the small business owners can learn from. Small businesses can create a culture of innovation by continuously identifying specific issues or challenges that need to be addressed within the business, and encouraging employees to develop solutions.
Customers and suppliers can also be approached (e.g. through casual conversation, surveys) to find out what changes they would like to see being implemented. In order to innovate successfully, small business owners should acknowledge that complementary skills sets are required within the business. Innovation requires teamwork, bringing together people who can dream and come up with ideas, people who can plan and execute to make the ideas a reality, and people who can communicate the changes to internal and external stakeholders and secure their buy-in.
Importantly, small business owners should be risk-takers who are willing to fail as innovations do not always have the desired impact. There are companies that specialize in innovation (e.g. developing new product or services, system or process improvements, organizational restructuring, identifying a new vision and strategic direction), making this a potential business opportunity for small business owners who can adapt to different situations and consistently deliver good value.
Potential clients would include corporates and other SMMEs that are stuck in a rut or lack the time, resources and know-how to think creatively and explore new possibilities.
Outsourcing innovation is, therefore, a win-win situation, particularly where there is clarity around the ownership of intellectual property.