A LOCAL newspaper recently reported that out of 159 small and medium-sized enterprises surveyed, only 6 per cent were willing to take on more risks that would potentially generate better returns.
The survey was in response to recent enhancements made to the Productivity and Innovation Credit Scheme (PIC) by the Singapore Government.
While some argued that there was a need to frame what constitutes “innovation” to qualify for the PIC claim, others felt it would be too rigid if a prescriptive method was adopted.
We are all familiar with global brand names like Facebook, Google and Apple and their impact on both our business and personal lives.
Does it mean that if we are not creating anything earth-shaking or globally recognised, it is not regarded as innovation?
Marketing guru Philip Kotler said more than 30 years ago that “the company has only two functions — innovation and marketing”.
While many companies may lack the research and development expertise, time and money to create a product that will radically change their businesses, they could consider incremental improvements to their products and processes.
Most companies approach the subject of brainstorming without a proper structure.
A common scenario
Here's a fictional conversation in a meeting which may sound familiar:
Team leader: “Recruit more sales people!”
Sales manager: “But HR says there is a headcount freeze.”
Account executive: “How about trying online sales?”
Sales manager: “No, Finance says we have no budget.”
Team leader: “Ok, back to work! Get out and do more sales!”
This approach, not surprisingly, kills any creative impulses that employees may have about getting the company out of its current situation and, more importantly, innovation remains in the closet.
At your next meeting, keep an open mind, especially if you are the sales manager, and allow ideas to flow freely.
Ask people at the meeting not to pass judgment at this stage, rationalise why an idea won’t work or voice their “sure-to-fail” theories. There is room for defending ideas later, but not at this early stage.
Henry Ford said that thinking is the hardest work and that is why few engage in it. It is crucial that bosses be patient and allow ideas to brew and not rush to kill the seeds of an innovative plan.
The AIM way
A useful process is AIM, which companies can consider using to generate innovative ideas:
• Advantages: Why does the company want to get to this desired stage? What’s in it for the company? How will this impact the stakeholders — customers, suppliers, competitors?
For example, the management thinks that new product lines will attract a new target group and increase the company’s market share.
• Impediments: What is stopping the company from achieving this desired stage?
Reasons might be difficulty in hiring skilled staff, shoestring budget to purchase brand new equipment, and so on.
• Maybes: What else might happen when the company achieves its desired future?
For example, better sales and a larger customer base might give the business the opportunity to venture overseas.
Take some risks
It is likely that many companies will adopt or adapt existing ideas rather than invent new products and services.
The innovations may be new to the firm (for example, creating an e-commerce platform when it did not have one) but not to the industry and the global market. There is nothing wrong with that.
In essence, if the innovative ideas implemented by the company help it to achieve its desired outcome, then the approach can be counted as a success.
The future will be brighter for any company willing to risk making changes in the spirit of innovation.
Article by Desmond Chua, an associate lecturer at the Singapore Institute of Management (SIM) and an entrepreneur. He is also a relationship coach who helps people with relationship and career challenges. For more information, e-mail him at email@example.com