Starting a business involves, as the old saying goes, 10% inspiration and 90% perspiration. But that doesn’t mean that innovation should take a back seat in your start-up. New ideas will keep your business fresh and ahead of the competition.
But turning your company into an ideas factory means the business has to encourage ideas, even if some don’t work.
Egg company Farm Pride, for example, has a policy not to punish mistakes. Farm Pride’s chief executive Zelko Lendich says attacking mistakes discourages innovation.
“If an idea doesn’t work and you jump on it every time, people are going to become more reticent about giving ideas,” Lendich says.
He says that if an idea does not work at Farm Pride, the company analyses what happened. It looks at ways to improve it and sort out the problems.
Bringing out the inner start-up
Another strategy is to encourage entrepreneurialism. At award-winning advertising agency Clemenger BBDO, for example, there are employees who are film directors and artists or who run businesses designing lap top covers, selling bottled water and fashion labels.
Clemenger BBDO managing director Peter Biggs says: “If you’re going to attract creative people, you have to give them outlets for their creativity. It creates more ideas and more cross fertilisation.”
Biggs also has a policy of taking ideas from everyone. He recalls one time when a receptionist provided an idea. All ideas are tested.
He freely admits providing ideas that never made the cut. Wesfarmers director Charles Macek says companies can get a lot of innovative ideas from their employees, simply because they interact with customers more and pick up what the market wants.
“The best ideas come from the shop floor, they come from the bottom up,” Macek says.
“People who are interacting with customers and dealing with the realities of whatever the business is will always be the source of innovation.”
Innovation and growth are terms bandied around a lot these days. But how is it that some companies can grow and prosper and others fail to do it, even under similar circumstances?
Innovation process
It’s because they have process. Innovation is not just about funky new products. The Chicago-based consultancy the Doblin Group says there are several signs of innovative companies.
None of these were about products. They include business models, networking through for example suppliers and alliances, performance of existing products, enabling processes whereby results are achieved, core processes, product systems, new ways of service, channels such as distribution, novel approaches to branding and customer experience.
Being an innovative company is hard in a global economy where information is quickly disseminated around the planet, where new inventions are picked up and copied quickly.
The innovations in the Doblin model therefore are much more sustainable. No two innovative companies are alike but they do work in similar ways.
According to the Brisbane Innovative Scorecard, developed by Deloitte for Brisbane Council, innovative firms have six characteristics.
These are organizational, or the kind of systems and processes or marketing methods the company uses for maintenance and purchasing.
The second is service process innovation, which looks at whether the company uses new methods to produce and deliver products and services.
The next one is service innovation, or how the company changes the services that are sold to customers. Supply chains are also important.
Logistics and distribution innovation are critical too. An obvious one is product and service innovation. How many new products and services does the company actually sell?
An equally important measure is product process innovation which looks at what new methods the company uses to manufacture or produce the goods.
According to this analysis, companies that have three or more of these criteria are regarded as innovative.
This model says there are two types of innovative companies. The first group comprises the novel innovators who bring products and services that are new to the market.
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