Many of the publications about innovation management are around either entrepreneurship or innovation at big multinationals. Very few articles will focus on the medium enterprise. Here I will describe some potential ways how medium enterprises can become more innovative or keep up their entrepreneurial spirit.
Medium-sized enterprises are a special kind when it comes to innovation. I will not get into the discussion on how many employees a medium-sized company should have or what the revenue ranges are, since this will be different in different countries. What is more important that most these companies are not anymore the entrepreneurial small company, that moves fast, with an entrepreneurial leader taking the company to new unknown paths. Neither will they be big companies with loads of cash to invest in R&D departments, dedicated resources to innovation and constant refining of innovation processes.
Large parts of medium-sized companies are more worried about keeping their heads above water or keeping up with their own strong growth, making sure that cash flow stays positive, their customer receive their goods in time, while keeping their supply chain and service delivery running efficiently and effectively. All of this is very time consuming and therefore staff will in general not have much time for innovation. At the same time, entrepreneur(s) will have become even busier and cannot take on all the innovation challenges the company encounters. New innovative people will need to stand up, but, with a culture often mended towards awaiting the actions and decisions by the entrepreneur, most people will not take on this challenge.
Of course I am generalizing here, since some companies keep carrying the entrepreneurial spirit all the way along until they become large and yes for sure many medium-sized companies do have an intense innovative culture. This post is for those that have difficulties in generating or keeping one.
So how can you as one of the leaders of a medium-sized company make sure your company starts innovating more, involving more people than just the entrepreneur? First of all, and although very basic, you will need to make sure the management team’s vision is very clear to all of your employees, so at least they know what the company is trying to achieve. Second of all, you will need to give people more time and freedom to come up with ideas, to “sell” those ideas internally and develop and implement their innovations. Employees will need this freedom, especially from the entrepreneur, since entrepreneurs, themselves many times very innovative, can have strong abilities to kill ideas not generated by themselves.
Third of all, you will need to show the employees that you are for real when it comes to innovation. This does not mean just putting innovation as one of your core values and hope it will happen. Without dedication of some of your resources and showing in every action that you mean it, it will not. But, since you are medium-sized and might be somehow strapped for cash, these resources need to be earned. People will need to convince you that it is worth investing, which leads us to my fourth point.
In the fourth place, people in your organization will need to learn the importance of entrepreneurship, to really lead an innovation from start to finish. Ideas need to become initiatives. Otherwise, you will just have a large number of vague ideas that go nowhere. People will find it easy to “shout out” new ideas, but when given the opportunity to take them forward, they stumble.
Besides given direction and opportunities, your company will need processes, tools and insights. They will differ per organization. For example, a technology based company will need more detailed R&D processes and controls, while service companies clearly need processes to capture and transform customer feedback into new solutions. But in general some initiatives can be put in place to start your very pragmatic innovative movement:
- An Idea program. Yes, the good old idea program – they will help to get people involved. This can be started with a simple online form, but make sure your employees get involved with developing them conceptually offline and your managers to discuss and evaluate ideas at set times. This offline involvement and periodicity is crucial;
- Market understanding and customer insights. Get all of your employees more involved with the final customer. Being at the front end will make them understand better where the opportunities are. Take away the chairs from your back office staff (as one innovation manager told me she did once) to get them on the production floor, talk to sales staff and to the customer;
- Involve different departments in the resolution of company problems, although they might seem to be very “departmental”. Other ways of viewing the same problem will result in new insights on how to resolve them. It is also a way to show people that innovation does not only involve new products and services for the customer. Other types of innovation might be just as much or even more useful;
- Make sure your employees get outside to see other businesses, learn at events and connect themselves with others. You will need to free up some money and time for that. Besides improving their “baggage” you will also have yourself much more motivated employees;
- Stimulate the search for innovation incentives, such as tax benefits, public financing, but also private equity funds to drive new initiatives. Crowdfunding is another innovative way to capture funds for your innovation. Nothing better than having your innovation “sponsored” somehow;
- Get people to search for potential partnerships. Yes, it is not just the management team that should be looking for that. Your employees should be encouraged to see if they can connect you to their relations or find opportunities for potential “out of the box” partnerships. Many times your company will not need to develop and invest in an idea. It might be out there already!
Innovating in a medium-sized enterprise needs to be very pragmatic, educating and encouraging individual and group initiative. What have you done at your (medium-sized) company to make this happen.
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Caspar van Rijnbach is a Brazilian based innovation consultant, author of several international publications and currently responsible for the innovation practice of Ernst & Young Brazil.
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