Don't let innovation stagnate just because profits are growing. Here are three ways to keep the new ideas flowing throughout your business.
As soon as a business begins making enough profits to cover lunches and pedicures, it's often a safe bet that employees will lose some of the drive and innovation from which the profits originally grew. If you're not growing, you're dying.
A crucial part of growth is innovation. But innovation doesn't have to be your biggest expense. There are three ways to empower your people to embrace and excel at what we call "lean innovation."
1. Develop a pinpoint hypothesis.
When vetting new ideas, spend time upfront to pinpoint the key market, price, and value proposition to your customers. These conversations should start broadly and then work themselves to a few clear and simple points. When everyone on your team can understand, agree, and communicate the common hypothesis, you're in a good spot.
Allowing your team to decide on the precise concept helps them to gain alignment on what the future should hold. It also saves you time and money evaluating a concept that doesn't have internal buy-in. Testing a hypothesis becomes difficult and expensive if you don't know what exactly you're testing.
2. Put your hypothesis on trial.
Testing doesn't require expensive focus groups and quantitative studies. You and your team already have a large network; use it. Survey your friends, your followers, and your mailman-ask anybody to weigh in. Chances are, if you and your team love your idea, and your network loves your idea, you've got something to move forward on.
Take the feedback from your network, add the ideas you like, and throw away the concepts that don't hit home. You can continue to build the hypothesis before introducing the idea to your customers.
3. Test and learn in the market.
Often, there is no need to rush into offering your new innovation throughout all channels or to all customers. The market generally steers these decisions: If customers love your idea it will show, and if they don't that will become clear too.
Not rushing your idea to market can limit your brand and financial risk. If the innovation struggles, then pull it off the shelf. But, if your idea is a success you now have a hot (and limited) product that your customers love.
Growing your business is less about resting on your laurels and more about continuing to add value to a strong base. As your organization continues to grow, it's important to draw the fine line between staying hungry and growing fat.
KARL STARK AND BILL STEWART are managing directors and co-founders of Avondale, a strategic advisory firm focused on growing companies. Avondale, based in Chicago, is a high-growth company itself and is a two-time Inc. 500 honoree. @karlstark