Fostering entrepreneurial growth through innovation
By ATB Financial 19 August 2020 4 min read
When you think of growing your business through innovation, you might automatically consider major corporations as key drivers of ushering in new ideas and technologies. But small and medium sized businesses (SMEs) also can be pioneers of intriguing things to come, whether by reimagining their own internal operations to streamline processes or by integrating new operating models to best meet the needs of their customers.
Encouraging innovation within your team calls for creative reinvention, strategic planning, clear business models and helpful tech tools. It can be overwhelming to manage those many moving pieces, but forward-thinking SMEs should recognize how integral innovation can be for the financial health of their business.
Facing disruption? Develop a creative company culture
Crises such as the pandemic can muck up the gears keeping your business running smoothly, so you have to react smartly and quickly to emergencies. If there’s any time to think outside the box, it’s during those moments of intense disruption, says Dustin Paisley, entrepreneur strategist at ATB.
“Innovation means looking at a problem differently than you normally would, and finding a different solution to that problem than you normally would have,” says Paisley. He cites the example of an Albertan bike studio that had to shut down their usual physical space during the COVID-19 lockdowns. They moved their exercise classes to an outdoor parking lot nearby, “which was a creative way to look at your business during this disruption,” he adds.
As you can tell, innovative thinking doesn’t always have to reach grandiose heights. It can be a swift pivot that makes sense for staff and customers. What helps, though, is following one of the first rules of Entrepreneurship 101: having a solid business model.
“You can think of a lot of interesting ideas but without a plan in place focused on cash flow and revenue, it’ll be difficult to drive innovation forward,” says Paisley. “You don’t want to rely on or keep chasing venture capital funds.”
This business model should contain narrative elements that speak to the business’s mission and evolution, according to the Harvard Business Review [HBR]. The HBR report goes on to say: “Because a business model tells a good story, it can be used to get everyone in the organization aligned around the kind of value the company wants to create. Stories are easy to grasp and easy to remember. They help individuals to see their own jobs within the larger context of what the company is trying to do and to tailor their behavior accordingly.”
Recognizing which technologies work for you
Every successful innovation occurs at the intersection of three elements, a McKinsey report outlines: a valuable problem to solve, a technology that enables a solution, and a business model that generates revenue from it. Now that we covered a business model, let’s look at how innovation can stem from harnessing a technology to improve your business.
Paisley refers to an example of a pizza chain in Alberta that streamlined their process to better manage their email lists. “This new system wasn’t very expensive or complex, and shows how having the right technology in place can help with innovation,” he says.
A global study of business leaders from SMEs in 23 countries reported that 74 per cent of leaders say technology helps their ability to innovate. The will is there, but often funding challenges discourage some SMEs to take advantage of the technologies available. Still, financing strategically to invest in digital tools or next-level hardware could not just make staff more efficient but also attract customer attention.
That innovation could entail folding artificial intelligence [AI] tech into speech-recognition tools your company developed, or finding ways to automate internal processes such as onboarding new employees. There isn’t a one-tech-fits-all solution because your business needs are different than another’s, so you should look holistically at your entire company infrastructure to better understand the technological solutions that will hurdle over your immediate problems.
Why social innovation matters
Beyond integrating creative ideas to assist with business growth on the ledger book, SMEs may want to consider how social innovation can invigorate their staff and audience.
Social innovation focuses more on companies developing solutions to assist with socio-economic or environmental issues in support of social progress. It shouldn’t rest solely on the shoulders of the executive team to dream up and execute, though. Charmian Love, co-founder and director of sustainability consultancy Volans, told the Guardian: “I am most excited when the principles of social innovation bubble up in strategy groups, and R&D groups. That's when the rubber hits the road, even though they may not even call it social innovation."
Why does this help businesses? “A more community-minded approach lets you think about different things than just profit and driving shareholder value,” notes Paisley.
Social innovation practices can inspire your team because they recognize how your decisions aren’t solely motivated by profit, but by doing some good for the community. Your customers will also appreciate a community-oriented approach that brings compassion to innovative strategies.
Allocating mental bandwidth and problem-solving planning to innovation can inspire your SME to ascend to the next level of success. It may not happen in a fingersnap, but by following our advice in this post, you can be well-prepared to tackle the most head-scratching of challenges.
If you’re looking for a deep dive on everything you need to know around how to grow your business, our ATB X Accelerator program might be just the place for you. Alternatively, feel free to reach out to one of our entrepreneur strategists to explore where you are with your business, where you want to be, and how to get there!