What does “innovation” really mean in my business?

What does “innovation” really mean in my business?

OK, if you read my last blog, I talked a bit about changing the way you play the game. That included a challenge to be innovative.  But just what does being “innovative” mean, particularly in today’s uncertain economic environment?

The term “innovation” is bandied about in strategy sessions and marketing promotions, but can you actually define what it means to your business?  Back in 2020 (you know, that year that we lost), GovGrant conducted a survey of 500 SME decision-makers across seven different sectors to understand the gap between their investment in R&D and the UK government’s ability to support it.  According to their research, 85% of UK SMEs considered innovation an important part of the post-COVID recovery.

(There will be a cheesy classic catchy tune with every blog, so if you don’t have Spotify head on over and put that right)

“Innovation has never been more important for creating a resilient and productive economy post Covid-19” – Luke Hamm, CEO GovGrant

But the respondents couldn’t quite agree on just what “innovation” meant – 42% said they viewed it as “tiny and continual changes that happen daily”, while the remainder said it happened rarely (but with a significant impact) or occurred sporadically.  Only 26% felt that they were currently doing something highly innovative.

Weathering the Storm

In an attempt to find an ideal definition, I decided to expand my reading horizon outside the world of business and came across an article on “cognitive super-agers”…people who reached 100 years of age with their mental faculties intact. OK, what the heck do mentally competent centenarians have to do with innovation?

Well, bear with me for a minute.  Surprisingly, those who achieved this milestone were likely to remain cognitively sharp for the remainder of their lives, even when images of their brains showed hallmark signs of Alzheimer’s disease.  (Glory hallelujah, there may be hope for us).

The Concept of Resilience

Here’s the nugget to walk away with: part of the super-agers’ resistance to the onset of Alzheimer’s was attributed to “cognitive resilience”, the ability to withstand higher levels of brain damage before becoming symptomatic.  A deeper look at what contributed to this “resilience” included obtaining a quality education, choosing an occupation that dealt with complex facts and data, and undertaking new and challenging activities, like learning a new language or playing a musical instrument.  These super-agers were super-learners; they showed a desire to continuously learn over the course of their lifetime.

It made me wonder – can this notion of “resilience” translate to business, more specifically to SMEs who are trying to survive intact and long-term against the outside forces that might ravage their revenues and dilute their customer bases?  If “cognitive resilience”  allows a person to live to be 100 years of age with their mental faculties intact, despite physical evidence of a diseased brain, then can a small business remain “resilient” over the course of its lifetime in the midst of economic or competitive uncertainty?

“Execution pays your salary. Innovation pays your pension” – Steve Blank, creator of Lean Start-up

Innovation can provide the ability to remain resilient and relevant for the long-haul – both as a person AND as a business.  But what does that actually look like?  A team of business school professors from MIT, Harvard and BYU decided to take a deep dive to find out.  They undertook a study of innovative entrepreneurs whose creative, often disruptive, business strategies differed from other business executives and entrepreneurs. Over the course of six years, they observed the habits of 25 “innovative entrepreneurs” and interviewed over 3,000 individuals who started innovative companies or invented new products. And what they found is that “innovative entrepreneurs” practiced five specific “discovery skills” 50% more of the time than executives without a history of innovation.  These researchers refer to the five discovery skills as the ”innovator’s DNA” and, like our physiological DNA, the outward expression of these traits are as individual as the breakthrough business ideas they generate.

But here’s the best news: you don’t have to be born with the innovator’s DNA.  The skills identified can be acquired and nurtured over time.  Like our super-agers, it comes down to continuous learning – identifying the skill, practicing it, and ultimately applying it in your own way to create something different.

Here’s a brief description of the five discovery skills that innovative entrepreneurs practice:

  1. Associating – taking disparate ideas and linking them in some way
  2. Questioning – challenging assumptions by playing devil’s advocate; looking at opposing positions to create something better than either alternative
  3. Observing – watching how others live and work; identifying what they might be struggling with
  4. Experimenting – providing interactions to observe reactions and gain insights
  5. Networking – interacting with people with differing ideas and backgrounds

“I think a lot of the time your greatest growth comes from your darkest times” – Ashleigh Barty, Women’s Wimbledon Champion 2021

Ever heard of the “Medici effect”?  The Medicis were a wealthy Italian banking family who funded a variety of artists, scientists, architectects, and philosophers in Florence during the 15th century.  As these individuals from diverse disciplines connected, their collaborative ideas resulted in a creative explosion that spawned the Italian Renaissance.

Such examples suggest that “innovation” is really about two things – embracing diversity – of people, perspectives and ideas – and taking risks.  Business researchers Nathan Furr and Jeff Dyer note that innovation requires a particular kind of leadership that can run counter to conventional wisdom.  You can’t just come up with a list of strategic priorities for the future and tell your organization to deliver on them. You need to make room for questioning and discovery.  Continually challenge the status quo.  Some innovative entrepreneurs actually spend 15 to 30 minutes a day coming up with 10 questions to challenge the status quo in their industry.

“I haven’t failed. I’ve simply found 10,000 ways that do not work” – Thomas Edison

Observe and test things out.  Talk directly to your customers, take a closer look at your competitors, identify their problems then think about solutions that you can turn into viable opportunities.  Build quick and easy access to your customers to allow for interactive experiments that will allow you to see what they will or won’t go for.  And be willing to fail.

Even if your “innovation” isn’t successful, the learning continues.  Experimentation provides more clarity of direction – if something fails, you can quickly abandon your course of action or modify your direction, all the while benefiting from the knowledge of what worked and what didn’t.  Furr and Dyer suggest “fostering an organization that can learn from mistakes faster, more efficiently, and more consistently than competitors do” can create a sustainable advantage.  You just have to be willing to embrace some uncertainty in the process.

And…it’s good to surround yourself with people from varied backgrounds.  Having a diversity of skill sets and levels of expertise will allow your business to move through challenging and uncertain situations more effectively.

Ultimately, being innovative means being a lifelong learner; having a continuous desire to understand and improve through observation and self-reflection, to find gaps in functions or skill sets, and to experiment and take risks while learning from the outcomes.  Be innovative in your business and you build resilience – to become not the victim of change, but the driver of it.

“The ones who are crazy enough to think they can change the world are usually the ones who do” – Apple “Think Different” campaign, 1997

How does your company innovate? Do you have any tips to staying ahead in the game? As a small business playing in the public sector, what would you like to see The TenderHood doing to make your life easier? Use the comments field below.

Mo Devereaux Head of Strategy at The TenderHood

MO DEVEREAUX – aka MoBot, comes from a rich background in startups and business development, and is responsible for marketing and business strategy at The TenderHood.

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