Sunday, January 17, 2010

Innovation... That's not a bad idea!

Only 47% of senior executives see their companies as more innovative than the competition, and 17% concede that they're even less innovative than peers, according to an Ernst & Young survey of C-suite executives at firms with revenues of $50 million to $5 billion. Among the most frequently cited innovation challenges are lack of appropriate personnel (48%) and "lack of a big idea" (41%).

Source: Ernst & Young

We all want to build an innovative business, but we don't think we have what it takes within our organizations to do. Add to that at the same time we don't follow through with what we need to do to actually innovate. If you feel this way, the following are all the ways you can promote instead of stifle innovation in 2010.

1) Help others innovate- Too often we find ourselves as business leaders telling those in our organizations to come up with innovation and as soon as they do we ready our rifles and shoot them down.

2) View innovation as a core business product- You would never stop making your product better, why would you stop making your company better?

3) Innovation isn't just a way to improve sales- Innovation can come from anywhere, a new quality control procedure, a new more efficient way to file important information, a better system of procurement; if these things make your company better, they are all forms of positive innovations!

4) Support innovation- After you have broken the habit of shooting down innovative ideas (see #1), they still have to grow. Think of innovation like a seed. You can simply plant it and hope it grows, or you can water it, give it nutrients, make sure light shines on it and make sure it grows.

5) Don't handcuff innovation- Really #4 and #5 could be combined, however sometimes we support innovation, giving it time and space to grow, but then handcuff the growth by giving it unrealistic time lines or require it to meet impossible metrics. This isn't to say you should fund all innovation to the hilt, but be realistic with your expectation for innovative ideas.

6) Reward innovation- Innovation makes the company better. If someone attempts to innovate and it doesn't earn or save $1, don't punish the innovator as a failure. Creating a culture which rewards innovation will make it easier for employee's to bring better ideas to the table.

7) If at first you don't succeed, keep trying- No innovation is perfect right out of the box. More than this, not every attempt to innovate will be successful. However simple law of averages says the more innovations you support, the more likely one or more will be a success.

Sunday, January 10, 2010

2010 and The Partnership Revival?

This year all of us are looking for ways to grow our businesses to recover some of what we lost in 2009. One way to grow a business that often gets overlooked is a partnership. Many small business owners avoid partnership like a plague because of past experience. We have all had a business deal, class project, or personal relationship that has soured our view of partnerships. Whatever the reason for your partnership-phobia, '09 put a lot of us in the same boat trying to generate business with little resources, and joining a partnership will allow you to do just that.

For those who may be unfamiliar with the concept an effective partnership offers many benefits to a small business owner, but the 4 biggest are listed below.

1) Partnerships don't result in the loss of decision making control- In a partnership both companies agree to help each other, but no one has to give up control of their own company. If company X and Y partner with each other, partner Y can't influence the decisions of company X and vice versa.

2) Partnerships focus on your core- In an effective partnership both partners should be focusing on their core business methods. As a result neither company has to dedicate "additional" core resources to the partnership to receive benefit.

3) Partners can come from anywhere in your channel- Good partners are not always companies in your specific industry. Partners can be your suppliers, your competitors, or other companies who share your customers, but don't provide the same products or services.

4) Partnerships have no upfront costs- An effective partnership provides benefits to both companies as a result of the collaboration. If one company has to pay upfront to enter into a partnership there is a fundamental flaw with it. Now this is not to say that a company can't receive compensation as a result of the partnership, my company provides financial incentives to our partners when their effort results in a sale for our company.

Ultimately every partnership is unique and can be structured to take advantage of all kinds of business needs. Cost cutting, revenue boosting, entering new markets, are all reasons to enter a partnership and are all problems we are trying to solve in 2010. So as a small business owner don't just assume you have to spend more or work harder to see results. Take the time to find a suitable partner and you might be surprised to see that you are working harder because you are back to being busy!