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Small Business Innovation – Stay Competitive

May 7, 2010 by Frank Goley, Business Consultant

In order for Small Businesses to compete in the Global Competitive Business Marketplace, Innovation is imperative.  One factor affecting Innovation is Pressure.  Pressure from the Competition urges Small Businesses to successfully innovate and adapt.  Also, innovation can be encouraged from within a company as employees need a certain amount of pressure to jump start the creative process.  Positive and constructive pressure from the top of a company stimulates your people to creatively think outside the box.

The real conundrum is converting the creative ideas into a business practice.  This is when and where your employees need the most encouragement and positive reinforcement. As CEO you must demonstrate as much interest and commitment in new product development as you are in existing product lines.  Innovation isn’t only producing new ideas but adapting new product versions from your inventory of developed creative ideas.  We must foster environments which applies creative imagination to problems and then finding excellent solutions to those problems. 

As CEO you can foster innovation  in your Company by:

1.     Reorganizing Individual Contribution

2.     Providing a Bonus Incentive Program to reward Individual and Group innovation contribution

Innovation is mastered by being an Expert in your particular field.  Technology leadership or a commitment to know more about your field than any other company is very important toward closing the Innovation Gap.  Joint Ventures, Strategic Alliances or Partnerships can’t close the gap on their own.  It is your core competency, with the added synergism of a JV, Strategic Alliance or Partnership, which makes Innovation truly successful.  The best way to beat the competition is to sell products with technology they can’t match.  It is only through innovation and successful implementation of that innovation which allows a company to achieve true competitive advantage in the global market place.  However, this innovative product must be:

1.     Cost effective enough to earn Big Margins of 50% or more

2.     Beat the heck out of your competition

3.     Save your customers significant money

This Profit Margin must be big enough to allow for product investments to sustain your competitive advantage.  You need to be continually reinventing yourself in order to produce innovative products which are fundamentally better- you need to effectively obsolete your existing products to truly compete.

Innovation takes years to develop, yet you must bring products quickly to market to compete.  Therefore, stream lined corporate systems must be in place, so as your company structure grows, and you don’t lose the ability to innovate and subsequently market the product in a market leading fashion.  Then once in the market, you must aggressively protect the proprietary nature of that “edge” product by making aggressive utilization of Trade Marks and Intellectual Property Rights.

Posted in Business Growth Strategies.

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