What does innovation mean for SMEs?

Marks Sattin Reading hosted a SME Round Table event in partnership with EY at our Work.Life offices in February. The topic for the event was innovation and growth. It was a great success with a varied demographic of SME business leaders from across the Thames Valley region. Throughout the morning a number of different topics were discussed but the one that grabbed everyone’s attention was the discussion on innovation. It was interesting to see the various ways organisations interpreted innovation, both in terms of how they define it and how they attempt to tackle and implement it.

What does innovation mean for SMEs?

For some, innovation was more conceptual and almost unquantifiable, they believed that measuring it was a sure fire way to stifle it. They preferred to give their employees free rein to try new things and see what the results were. Other business leaders felt that innovation should be measured and controlled. They felt that without proper processes in place, organisations could run the risk of time and money being poured into dead ends. They believed having a desired outcome or something to aim towards would help keep them on track or at least help stakeholders decide when to pull the plug and pursue other ideas. In summary, organisations should have some idea of how innovation is going to create value and be commercialised to avoid falling into the trap of innovation for innovation’s sake. Innovation will always be a gamble as it means moving into the unknown with higher degrees of risk- but also a chance of higher rewards.

How do we measure innovation?

In an ideal world, innovation would be exempt from the usual constrains of time, money and labour – all of which are often already stretched within a SME. In organisations, innovation has to compete for the same resources that any other business unit or function requires. As a business leader, your job is to try to find the right formula, looking at risk versus reward, as well as the right allocation of time and money to keep the business commercially viable. When it comes to innovation there is no secret formula for success and what works for one business won’t necessarily work for another. That is the challenge for an SME business leader - how best to tackle innovation for their business?, how much risk are they willing or able to take?, how much time or money should be dedicated to the discovery of new ideas and the processes or technology which accompany this? They also hold the responsibility of finding the balance between innovation and business as usual.

Key questions to consider

• Does your business have an innovation budget or do they allocate a certain number of hours per month to pursue innovation?
• How do you decide as a business the right amount of resource that’s required to boost innovation?
• Do you give your employees free rein to try new things or do you set up a targeted approach to achieve a defined solution or outcome?
• And is it better to aim for achievable incremental innovation or to aim for that one ‘big’ idea? 

One thing we all agreed on was that innovation is a journey, not a destination and events like this one are key to keep the conversations and ideas going. For more information on the Marks Sattin Business and Change team, or to view our latest opportunities, visit the Change Management page here.