Innovation Nation

Is your company as innovative as it can be? Lately, the word "innovation" — like its cohorts "branding" and "value" — seems to be used so much and so inappropriately that its true meaning has been obscured. A 2008 report by management consulting firm McKinsey & Company states that while 70% of senior executives believe that innovation is essential to growth, fully 65% were only "somewhat" or less confident in the decisions they make with regard to innovation.

So, if executives at major companies are struggling with the concept of innovation, what's a smaller business owner to do? Plenty, says Bob Eckert, founder of New and Improved, a New York City innovation consultancy. It actually may be easier for smaller companies to innovate because they're more nimble.

"Innovation is creating the solution to a problem. When it comes to small business owners, all they do is solve problems. Many have mastered the ability to leverage their imaginations and monetize them," he says.

While many firms use respected innovation measurement tools — like the KEYS assessment or the FourSight Breakthrough Thinker Profile — to measure the climate for innovation in a company, that may be overkill for some small businesses. Braden Kelley, innovation consultant and author of the Blogging Innovation blog, says that companies can take their own innovation temperature by asking a few key questions about the current state of innovation and how to improve it:

• Does your company have a culture of innovation? Oft-cited research by University of Lund professor Goran Ekvall in the 1990s found that as much as 67% of the creative climate in a company is attributable to its leadership. So, if your company isn't coming up with creative new products, services and methods of doing business, the issue may lie with how the owners and managers are projecting the value of that type of innovation, says Eckert. The first step to cultivating innovation is to ensure that employees understand that their ideas are valued.
• How does your firm cultivate and reward innovation? Once employees feel engaged, they'll be more willing to share their ideas, says Kelley. Have opportunities for them to submit ideas. Kelley likes focused challenges where employees bring their creativity to bear on specific problems within a fixed period of time because it shows more immediate results. However, he also emphasizes the importance of having a regular mechanism for employees to submit ideas, whether through regular meetings with supervisors or a good, old-fashioned suggestion box. The key, he says, is to be sure that every idea is acknowledged and that some kind of reward mechanism is in place for those who make creative contributions. Such rewards can be embodied in everything from small incentives and gifts to consideration during performance reviews, he says.
• How can we measure the impact of innovation? As ideas are implemented, apply metrics to them, says Kelley. How much money did they save? What was the impact of the problem they solved? By tracking these results, the organization will be more motivated to invest both financial and human resources in furthering innovation, he adds.

For more on innovation, check out this McKinsey & Company report on innovation, Inc. magazine's "Review of the Best in Small Company Innovation" and information provided by the Innovation Think Tank.