Monday, October 20, 2008

How smaller companies encourage innovation.

Smaller companies have significant advantages over large corporations when it comes to innovation. During a rapidly growing economy, every business is forced to keep up with demand for its products and services, and struggles to make investments that increase productivity. Other investments, such as those that drive innovation, are often put aside in order to meet short-term commitments. During an economic downturn, small businesses (and startups) can inexpensively access top talent as part-time consultants if not as full-time staff. By working closely with these talented engineers and designers, smaller businesses that invest in encouraging innovation will be ready with new products and services when the economy eventually turns around.

Where small companies generally fall down, however, is in building disciplines around the creation, capture, and execution of new ideas. Most small companies develop from a single successful idea, usually the brainchild of the founder. But founders can't afford to remain the sole font of innovation in their businesses any more than they can remain the sole salesperson. Nor can they rely on the passions of their staff and the mental sparks created when 30 people interact each day in close quarters. Innovation requires work. Work requires structure. For smaller companies, invention is 1% inspiration, 49% perspiration, and 50% smart routines. Typically, small companies can't spare employees to spend days or weeks observing customers to understand what turns them on. Instead, most ideas have to come from the employees themselves. So it’s critical to hire creative people and make them open channels to consumers by teaching them to sharpen their powers of observation as they go about their everyday lives.

Good leaders reward the behaviors they want by creating an incentive system for innovation. At an early stage in the company's growth, it pays to keep it simple. Give small awards - $100, perhaps, or a dinner for two - for new ideas. Present these awards at quarterly review meetings, to publicly celebrate the ingenuity of the employees. Later, if the company proceeds further with any of those ideas, their creators might receive $500. Employees who's ideas are taken to market, get paid more.

Innovative small business owners need to be:
- clear about what they want to achieve,
- able to assemble and lead teams of talented people,
- comfortable when dealing with the unexpected,
- able to learn at an accelerated rate.

These entrepreneurs don’t just wait for new ideas - they wheedle them, hunt for them, flirt with them, and coax them into being. They make a list of every possible way a product could be designed or something could be done. Then they try to figure out what hasn’t been done, or ignore physical laws and other constraints. They decide what would be the best possible way to do something; then move backwards, reverse engineering it step-by-step into reality. Inventor David Levy says he used to lie in bed every Saturday morning forbidding himself to get up until he thought of something new.

However, according to Dee Hock, “The problem is never how to get new innovative thoughts into your mind, but to get the old ones out.”

3 comments:

David J. Fone said...

Hi John: I read your full page "eHow to Conduct An Online Job Search" in the Jobs Extra section in the Oct. 21 SD U-T. One statement leaped at me from the page: "Many employers post job openings on their Web sites, but emailed resumes are probably directed to the human resources department. This is usually the last place you want your resume to go...."

This confirms what I've always suspected: That HR drones are paper-pushing gatekeepers who will reject a perfectly qualified candidate because they used a font they don't like, or printed on paper of a shade or rag content that doesn't please them, or that the applicant's name reminds them of a hated former associate.

When I've used online application templates that are loaded with "gotchas" that don't allow for any simple explanation, I wonder how many unqualified people who just happen to fit those narrow prerequisites end up getting hired, only to not work out.

HR departments, who ostensibly are there to recruit and administer the most qualified candidates for a company's positions, seem to cling to boilerplate stationery-store applications that tell them everything EXCEPT what they actually need to know about an applicant's suitability for that company and that position.

If it's illegal to ask my age, then why must I list what year I graduated from high school, which provides the same information?

If I'm applying for a middle management job, who cares what grade school I went to? Why does an application leave several lines to explain away a felony conviction which "may or may not preclude (me) from employment", yet leaves only a quarter-inch of space to explain why I left a previous employer? What is so difficult about asking each department head to customize a job application for each position, containing the legal necessities but also asking questions pertinent to the company and position? Why must a top-notch commission sales rep complete the same application as a candidate to cut the grass or clean the warehouse?

In today's economic climate, where companies who hired top-notch finance school grads and MBAs still go under due to unforeseen market forces, I wonder why potential employers still force job seekers --- who are, by their very presence in the job market, looking to improve their own bottom line --- to undergo credit checks, particularly under the misnomer "character check".

A credit check has nothing to do with character. By that measure, a fanboy in Mama's basement who watches porn all day, but has Mommy pay all of his bills, is of better "character" than someone working two jobs honestly to try and make ends meet, sometimes falling short. Adversity doesn't build character; it REVEALS it. If you're struggling, and trying to alleviate it by working a second job instead of being a parasite or a thief, that reveals your character.

With companies using credit checks, they systematically keep the rich richer and the struggling classes struggling, denying themselves the services of hungrier, more determined applicants who have something to prove....but may not wear the same designer outfits as the rest of the staff, or drive quite-as-nice cars.

I might also ask this conundrum: If you're working for a branch of a larger company, and it's obvious your branch is not operating within the clearly listed systems and parameters of the parent, what do you do? If you tell the parent company, you risk being fired for being a whistle-blower. If you don't tell the higher-ups, you're part of the problem....and this body can't endure growing any more tumors or scars from bitten tongues.

D. J. Fone, El Cajon CA djfone@msn.com

john cotter said...

David
Not all HR departments are bad guys - however, most are only interested in filling the vacancies they've currently been directed to fill, and since they're usually overloaded with work, they're unlikely to take further initiatives on your behalf.
Concerning your conundrum, there's not much you can do since you're not authorized to approach the parent company about local operating procedures. You sound unhappy where you are - maybe it's time to move to a company that's a better fit to your skills and temperament.
Thanks for your comments.
Best wishes
John

cukie6 said...

Very interesting. Good ideas.