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‘Innovation’ has been a business buzzword for years, yet somewhat of a grey area when it comes to what it is; how it is quantified and what business benefits it delivers. However, one thing remains undisputed – everyone wants to be innovative.

Unfortunately, for the time-poor small or medium business owner, innovation often gets pushed to the back of the pile. If SMEs are going to commit to investing time on innovation, it needs a new image. It needs an image overhaul that emphasises its necessity in progressive businesses, as well as its ability to increase productivity and profitability. While everyone wants to be seen as innovative, it’s important that SMEs are focused on being innovative.

Innovation – what is it?

Innovation can be one of three things;

  1. The improvement of an existing process
  2. The novel application of technology
  3. Combining multiple ideas or processes which didn’t exist previously

Innovation doesn’t need to be complicated. Some of the best innovations have involved putting two existing ideas together to create a different customer experience. Take Uber for example – the idea was born from the traditional concept of a taxi, yet they combined the notion of regular people using their own cars with a traditional market setting, and created a new form of transportation.

There are countless other examples of companies doing this well – here are five simple steps that SMEs can follow to become more innovative:

  1. Work on the culture, not the structure

Rather than being a structural problem, a lack of innovation is usually to do with the existing business culture. Before the magic happens, SMEs need to ensure that the entire business is onboard and ready to work on finding new ways of delivering outcomes.

  1. Integrate customers in the innovation process

Innovation comes at the intersection of a company’s knowledge and customers’ requirements. The one thing that’s proven successful for MYOB time and time again is integrating customers into the innovation process. Before innovation can begin, businesses need to know their customers inside out; what gets them excited? What aggravates them? What keeps them up at night? Having a method that allows the customer to be in the lifecycle of the idea generation process is the mark of a practical innovator.

  1. Updating trumps creating

A common trap many innovators fall into is wanting to create something new. More often than not, this type of innovation is either too complicated or irrelevant to their business strategy to translate into tangible benefits.

Small and medium businesses are the backbone of the Australian economy for a reason – they are necessary, and they work. SMEs should build on what they already produce, in order to make the customer experience even more rewarding, and allowing them take the lead ahead of competition.

  1. Focus on ideas

A culture of innovation is fast-paced, and unapologetic. Generating ideas, testing them, refining them and throwing them out if they don’t work allows the innovator a unique view into their business problems, leading them closer to that ever-elusive ‘aha!’ moment. SMEs should brainstorm 100 solutions to a problem, right or wrong, good or bad. More ideas increase the likelihood of that light bulb moment.

  1. Don’t be fast; be right

Innovation is often confused with the need to be first to market, yet some of the greatest innovators have been 5th to market. Take Apple as an example. There have been multiple smart watches released before the iwatch hit our shelves, yet a recent report from BI Intelligence tells us that Apple will control nearly half the market by 2017. Customers don’t remember what was first, they remember firstly what is most useful.

It’s time to bust the myth that innovation is only possible with big brands and big budgets. SMEs need to bring innovation to the forefront of their business strategy, engage their workforce and culture and focus on the big ideas. Bring these elements together and it’s only a matter of time before that the elusive stroke of brilliance will strike.

About the Author:

Simon Raik-Allen is the Chief Technology Officer and resident innovator at MYOB.

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