The Small Business Innovation Imperative

With President Obama’s call for the small business community to focus on innovation and creativity to enhance America’s competitiveness in the world economy, it’s time for entrepreneurs and small business owners to take up the challenge.

Startup America is an initiative aimed at strengthening access for entrepreneurs and firms with high growth potential to a range of government and private sector support, from capital and mentoring to reducing barriers.

But whether a new venture in a high-growth sector, or a cog in the main street economic engine, it’s essential for every business to focus on innovations that will help build and support the nation’s ever-evolving business environment.

The legend of the phoenix, the mythical sacred firebird, can provide a useful metaphor for the current state of small business in America. Like the phoenix, small business must periodically reinvent itself in order to survive and prosper. And like the recent economic meltdown, and subsequent beginnings of recovery, the phoenix symbolizes the extinction of the old, replaced by the new and rejuvenated spirit.

Rising from the ashes of near extinction may be somewhat of a stretch when looking at what has happened to American small business over the last two years, but for many small company owners and their employees, the experiences and feelings associated with the Great Recession have been both memorable and traumatic.

Such business trauma often brings us to a cross roads in our thinking and attitudes in how we approach business operations and our business future. The beginnings of rejuvenation should include discovering ways to take our companies “outside the box,” which includes being innovative and creative in what we sell, and how we sell it.

Here are a few suggestions to begin fostering a more innovative and creative business environment:

• Look at your company culture. The process of innovation cannot be realized without first having a culture that both fosters and rewards creativity. This culture is often the result of an entrepreneur’s vision, insight and risk-taking mentality being allowed to filter down through the organization, and encouraged to proliferate. Companies which embrace a culture of risk-taking without fear of failure or reprisal are ripe for tapping employee creativity, which leads to innovation.
• Look at your staff. Having a business culture that sustains creativity as a core value works best when coupled with staff prone to being creative. Employees who love marketing, strategy, product development and other similar functions are often a good fit for teams charged with leading the company toward creative and innovative solutions. By the same token, inviting participation from anyone in the company who can creatively contribute to the effort signals a culture of inclusion and helps maximize staff morale.
• Don’t try to force creativity. Some of the best ideas come of their own volition, in their own time frame, and from disparate sources. It is much more important to foster collaboration within a company than it is to try and set up deadlines, goals and objectives that demand creativity and innovation. Some of the most creative minds resist formalized structure, and instead thrive on free-flowing, uninhibited “space” from which the best ideas emerge.
• Use an innovation-leading question. Using a form of the following questions with a group of employees can jump-start the creative juices and lead to some amazing mental gymnastics: “What is impossible to do in our business today, but if we could do it, would fundamentally change who we are, what we make, or how we sell?” Or, “What could we do differently that would make what we do or sell more exciting to consumers?”
• Capture all ideas, no matter how crazy they seem. Encourage the practice of capturing all ideas, whether they are generated through a formal meeting, at informal events or gatherings, or even from occasional daydreaming by random employees. The genesis of great innovation can often come from the most innocuous source. Capturing the initial idea forms the basis for future collaboration and development.
• Go down multiple paths. Allow the innovation process to travel down concurrent paths, even going in different directions. Creative thinking along several paths must be fostered in order for ideas to be proven to have potential, be tabled for future development, or discarded. Since innovation is such a dynamic process, multiple lines of thinking must be allowed to co-exist so ideas can be fully developed to fruition or extinction.

Innovation involves undertaking a process that results in creating truly unique solutions in the form of business models, products or services. So, whether you’re an active participant in the Startup America initiative, or simply an enterprise looking to grow and succeed, like a reincarnated phoenix rising from the ashes of its former self, we can reinvent the small business landscape in America by creating and innovating the next generation of new products and services consumers will get excited about.

Dan Hannaher is Regional Administrator for the U.S. Small Business Administration. He can be reached at daniel.hannaher@sba.gov.

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