Ann Marie Puig discusses the importance of innovation in business growth
Date : August 31, 2022 By
That the SME is the heart of the business fabric is clear. In general, SMEs make up a large part of any workforce. However, when it comes to innovation some SMEs feel that it is beyond their reach. Nothing could be further from the truth, and global business consultant Ann Marie Puig explains why.
The most innovative companies, those that are usually at the limit of knowledge, product, business model, etc., the famous startups, start out as all, or almost all, SMEs. Therefore, it is not that SMEs and innovation are far apart. It is one of the main sources of innovation in SMEs, both radical and incremental, occurs in organizations that are SMEs by their very nature.
The second reason is that, being true that SMEs have some disadvantages compared to large companies, typically: lower economic-financial robustness (investment and borrowing capacity, for example), less resilience to market changes that affect them directly, less ability to assume problems with their workforce, etc., it is no less true that they have an advantage that is especially positive.
In addition, it is one of the key elements of the breeding ground necessary for innovation to occur: agility. In contrast to large companies, bureaucratization, suffocating hierarchies, slow decision-making, structures that are difficult to change or even simply to shape, are not concepts related to SMEs. In SMEs, due to the nature of their size, the Property, Management and Team is usually so close, so intertwined and with such agile communication, that this allows changes to be made in companies at a speed that many large companies could not even consider.
And finally, it turns out that innovation takes many forms and that it doesn’t just depend on technology. In fact, technology in SMEs is usually only an enabler (very useful and very powerful, of course) for far-reaching innovations to occur. Still, they are not the factor that necessarily grants or denies the ability to innovate.
Explains Puig, “It is often assumed that without a team of technologists on staff and a strong investment in technology, you cannot innovate. It turns out that this is not so. Neither applying technology in SMEs is in itself innovating if it does not produce a change that generates new value in the nor to innovate is sine qua non the application of technology or advanced technology.”
SMEs are no further away from innovation than big business and strong investments in technology do not have to mean innovation, nor does all innovation require the participation of that technological effort. The entrepreneurial creativity of realizing that you could package a complete business model and support a third party to run it without having to create it from scratch, it was.
We then get to the heart of the matter. Innovation in small and medium-sized enterprises is one of the strongest levers of growth and expansion. What role does technology play in this? Sometimes a major one and others a minor one (as in the case of franchises), but it is always a catalyst, not a protagonist.
In order to arrive at concrete examples, we have to remember only this: innovation is any new idea applied that adds value, that is, that solves a problem to someone. From here, we can lower the ball to the ground and see, in practice, how innovation can help SMEs. That is, how by working on creating new ideas with the right methods we can grow and expand SMEs. Let’s look at some examples:
“Any SME has its main business, its core of activity,” adds Puig. “An interesting question to emerge new possibilities with which the company could expand is. The surface area of the business, what we are able to do and the customer segments we are able to serve, often widen significantly when working on this analysis. As a result, the perimeter of the business increases.”
SMEs, like any other company, large or small, serve certain customer segments. Stopping to analyze what we could offer to other segments (such as Seniors or Millennials) we create that new value proposition with the capabilities we have and what we know how to do. We can also access a new segment of customers that yesterday did not it represented nothing to our income.
These are just a few examples of how SMEs, with their agility and ability to try new things and make changes without the obstacles of having to turn a giant ocean liner at cruising speed on the high seas, have in innovation an ally and an expansion lever whose potential impact on the business is difficult to exaggerate. Sometimes it is the difference between a good business and a great business, others it is the difference between surviving and disappearing, but it is always worth spending some time and resources to consider how innovation can help our SME.