According to Jenny Tooth, a director of the British Business Angels Association, the London Business Angels Network usually receives 800 proposals a year from entrepreneurs looking to get their idea off the ground. This year, she’s forecasting the total may hit 1,200.
That’s encouraging. It shows innovation and entrepreneurialism are alive and well in Britain; that smart people who have been laid off are channeling their energies into business creation; and that limited lending by the banks isn’t always a complete bar on small business growth.
It’s also a warning, or perhaps a reminder: if you don’t foster innovation within your own company, there’s bound to be someone else out there who’s hungry and creative enough to find a way to put you out of business.
According to Nigel Grierson, head of the technology ventures arm of private equity firm Doughty Hanson, innovation comes in two flavours. One is evolutionary - the gradual, incremental change that most companies engage in. “But we look for revolutionary innovation,” he told me last week. “It’s all about creating market displacement. When markets are in transition, there isn’t always a creation of new value - it just shifts from one business to another. As a venture capital firm, we want access to that rapid shift in the source of value.”
So can you become more innovative to head off this kind of threat from impudent start-ups full of ideas and low overheads? Can you prevent that shift of value away from your business?
According to Matt Kingdon, co-founder of innovation consultanct ?WhatIf! (yes, those wacky punctuation marks are part of the brand…), you can. There are four stages to innovating — intent (you have to know what you want to do; insight (understand the market opportunities); ideas (come up with ways of exploiting them); and implementation (the hard bit: making it all real). But although that sounds formulaic, he adds that it’s more about culture than process. His four tips for creating an innovation culture are:
1. Teamwork. Your people have to communicate well, be passionate and work as a collective – it’s all about behaviour.
2. Create a vision. Tell stories about the great things the company has done in the past. If you can build up a mythology that fleshes out your great successes and heroic failures, you foster the idea that people who “have a go” are valued; and that the leadership of the company supports passion.
3. Diversity. A mix of different personality types, backgrounds and interests is more likely to create genuinely new ideas and find clever ways of making them happen. In many companies, people are hired because they fit the culture, not because they clash. That must change.
4. Be conscious about embarking on your journey of innovation. That means engaging with customers in a different way and exposing your own people to new situations. It’s an iterative process: a culture of innovation builds one step at a time. But eventually you can become a truly innovative business.
It doesn’t have to be a new product or service — innovation works on internal processes and systems, too. And while revolutionary innovation is a must-have for Grierson, evoltionary change is better than no change.
(Pic: Holger Zscheyge cc2.0)
