Our environment is changing all the time, and with it, the needs of customers. This doesn’t just affect large companies, but small ones as well. This means companies always have to deal with changes, and they have to modernize their business and their products/services on a regular basis.
A “future check” for small companies: are they innovative enough?
Launching a new product or improving an existing product: small companies looking to be innovative need to break with routine. But how exactly can you tell if you’re up to date, and how do you establish a culture of innovation? Urs Frey, an expert on the subject, has the answers.
Is your business future-friendly?
“Small companies sometimes make the mistake of thinking it’s fine to just carry on as they are while the going’s good,” says Urs Frey, an innovation expert and owner of 7impact consulting firm. But these days, simply having a good product is no longer enough. “Innovation is an image factor.” In other words, if you want to be up-to-date and in demand, you need to be innovative across all business areas for one thing, and at the same time, you need to be able to identify trends and social issues. “Let’s take the example of a buzzword like ‘future-friendly’. This is about being responsible and sustainable in how we use raw materials and resources. Or how about another example: convenience. This is something that is becoming increasingly important for a lot of people.”
It’s better to be proactive
Necessity is the mother of invention. The coronavirus crisis has shown just that. “A small cheese shop offers its customers the opportunity to do virtual shopping. For this purpose, its employees are each given a camera. Customers can then ask to see products and ask questions, and afterwards, the company either drops off their order or they have it delivered,” explains Frey. He was also impressed with a cake shop, which came up with a creative response to the toilet paper buying frenzy in the form of a toilet roll cake. For each cake sold, they donated 5 francs. “Ideas like these often go viral, and they provide a company with priceless publicity.” Spur-of-the-moment actions can be worth gold. Generally, though, our expert does not recommend simply reacting to situations all the time. “Being proactive would be much more advisable, which is why innovations should be part of the corporate culture.” Yet a lot of companies still baulk at the prospect, partly because of the costs. “Innovative ideas needn’t involve big expenses, though.”
Put your company to the test
“Small companies have the major advantage of being close to their customers,” explains Frey. This means they are actually more in tune with what their customers want than larger companies, and they can respond accordingly.” What companies must avoid at all costs, however, is waiting until they can no longer find any apprentices or staff because the company is seen to be boring and outdated. Or, even worse: until the company doesn’t have any customers left at all. One way of checking whether your company is up to date is to compare yourselves with the competition or similar companies. “Small companies don’t need to commission big market analyses or to find trend researchers. Instead, just ask yourself a simple question: how do other companies go about it? Would such and such be a potential solution for me as well? Am I the only one without an online shop? Would it be a good idea to use social media?”
Are you innovative? Do the self-check now!
You are innovative, and you bring this innovativeness to your products or services. You recognize the needs of your customers and you involve your employees.
It sounds like innovation is very important to you. However, if you want to stay ahead, it is worth investing even more time here.
Perhaps some ideas from the self-check will help you decide how to make your company more innovative.
Establish a culture of innovation
If you haven’t yet established a culture of innovation, we recommend you start out small. You could, for instance, set aside two days a year where you think about what you could do differently. “Ideally you should involve your employees in the process, and regularly collect their ideas,” says Frey. “Each quarter, you could then further develop the three best ideas, and after a year, you can decide which ideas you want implement.” Another way of doing it would be to think about what other companies would do with your product. “You might, for instance, ask yourself how the product designers at Apple would package your product,” Frey suggests. Or alternatively you could put yourself in your customers’ shoes: would I buy our product? What would need to change for me to buy it? Whatever you do, however, you must ensure people can be truly creative. “People need space, and you might even consider an occasional change of scenery. This could be doing something as a group outdoors or taking a course that has nothing to do with everyday life. That sort of thing can work wonders.”
Listen to your customers, but don’t accept their word at face value
Other options include exchanging ideas with colleagues, obtaining input from experts, contacting universities of applied sciences with specific problems, or asking people who have nothing to do with your industry for feedback. The most natural course of action for small companies is of course to ask their own customers. “The other side of the coin, however, is to focus too much on customer needs,” says Frey. “Take criticism seriously, think about what makes sense, but stay true to yourself. Avoid responding immediately to every single customer request, because otherwise you risk losing your identity.” A particularly good idea is to keep asking yourself these two questions: “What defines our company? What sets us apart?” You can then develop your company based on your answers to these questions.
About our expert
Dr. oec HSG Urs Frey was responsible for training and consulting at the KMU-HSG (Swiss Research Institute of Small Business and Entrepreneurship) at the University of St. Gallen for 15 years. He has been an independent consultant, coach and author since 2018. Through his company, The link will open in a new window 7impact AG, he advises and supports companies, managers and employees in strategy, management and business model innovation.
Frey’s The link will open in a new window book (published in German), “The SME innovator: how to get your business model in shape for the digital age”, is aimed at SMEs that have to keep adapting to survive. In his 224-page book, the SME expert presents 20 successful business models of large companies and examines how they can be applied and implemented in small and medium-sized enterprises.