Three Paths to Innovation at Small Companies

September 23, 2015

Most people agree that an innovation strategy is critical to a company’s success, however many also say that it is easier said than executed.  Of the one hundred largest companies in the U.S. a century ago, only seventeen survive today.  The rate of new product innovation in consumer goods increases exponentially year over year.  Surprisingly, 95 percent of all technology ever invented was invented in the last five years.

While many large organizations have the luxury of dedicated research and development departments, successful small businesses typically struggle to foster innovation because they are consumed trying to anticipate and meet growth rates of their existing product and service lines. 

Here are three paths to foster innovation at small companies.


Offer time for trial and error.  In today’s economy, it is common to be risk averse and core competency focused.  This is particularly true of small organizations where employees often have to wear many hats and switch gears to accommodate growth.  Innovation is often stymied by fears of failure, however making mistakes, realizations, corrections, etc. is inherent to the process of innovation.  The mindset must be changed to encourage trial and error while still attaining production and performance goals.  By imploring employees to approach challenges in new ways—albeit with mistakes, leadership creates an environment where it is safe to innovate.   

Establish a pitching platform.  Dale Carnegie’s 21st Human Relations principle is to, ‘Throw down a challenge.’  Aspiring entrepreneurs are often attracted to small organizations because they believe in the value propositions and are excited about growth opportunities.  Creative, entrepreneurial employees often have an innate knack for identifying new products, duties, tasks and workflow improvements.  They are more than willing to bring these ideas of improvement to fruition if they are given an opportunity to do so. 

Consider creating an entrepreneurial platform which allows employees to pitch their ideas to key leaders.  This can be done on an infrequent basis, such as semi-annually or quarterly, or more frequently.  To avoid losing peak productivity time, host the entrepreneurial platform during lunchtime when the pitchers can hear each other’s ideas and be honored by dining with the company’s top leaders. 

Justify a job rotation program.  Dale Carnegie’s 7th Human Relations principle is to ‘Be a good listener.  Encourage others to talk about themselves.’  Another great way to tap into employees’ ‘Aha!’ ideas and drive innovation is to implement a job rotation program—no matter how small.  First, identify which roles are on opposite ends of the spectrum, e.g. a manufacturing employee and an installer, or a sales person and post-sale customer service representative.  Then, schedule a half-day, full day or a few days (if capacity allows) to enable the employees to shadow each other’s jobs.  The installer may share a recurring challenge encountered when installing the product that is relevant to a particular point of production.  By discussing it with the manufacturing resource, they may jointly identify opportunities to completely solve, or at least improve, the problem.

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