Innovation as an opportunity
Innovation can sound like a topic that’s both simple and complicated. Many think it’s something that only the companies aiming to innovate should be doing while others feel most companies should be innovative but might struggle to see concrete opportunities in it. This document serves as a source of inspiration and ideas for SMEs, with a focus on how to leverage innovation as an opportunity.
We talk about:
- How to utilise your position as an SME - SMEs within the EU are supported by EU’s SME Strategy. Thanks to this they can find resources specifically designed for them as well as have access to projects and grants aimed to SMEs.
- How to utilise your Organisational Culture - Every company has an Organisational Culture. Make sure your culture is supporting you in your strategy, rather than working against it.
- Collaboration - Collaboration with other organisations can offer great opportunities. These opportunities can especially benefit SMEs looking to do business internationally, and SMEs harnessing innovation in their operations.
- Reverse innovation - Reverse innovation means innovating for an emerging market, and utilising that innovation in your home market. This can be a great opportunity for SMEs looking to do business in emerging economies.
1. Utilise your position as an SME
We’ve all seen and heard the buzz around innovation and growth. One common assumption is that large companies are unable to innovate whereas startups are great at it. Despite the romantic underdog stories of ubers and airbnbs, this assumption is hardly accurate. The vast majority of startups fail and, according to BCG, the top five of the most innovative companies consist of names such as Apple, Alphabet Amazon, Microsoft and Samsung. But where does that leave SMEs?
Regarding innovation, SMEs are in a fairly good spot. This is not only because they tend to land between startups and large companies, both in size but also figuratively, in their innovation capabilities. From an economic point of view, startups are important for the EU. Thus they are also supported by EU’s SME Strategy allowing them access to projects like CUBE IN platform itself. Make sure to educate yourself on what kind of opportunities, projects and funds might be available for your SME through EASME. Then take advantage of these opportunities and resources.
2. Utilise your Organisational Culture
Every organisation has a culture. In the simplest terms, culture is the “the way we do things around here” of the company, and how those things differ from other companies. However, all too often the culture of the organisation is left completely unmanaged. At worst this can mean that the culture of the organisation can even actively work against its strategy. Even at its best, the culture is rarely where you’d want it to be and actively aligning it with your strategy is usually a good idea.
Taking all this into account, managing the Organisational Culture of an SME can be a more simple task than in larger and more complicated organisations. While this of course always depends on the company and the context it’s operating in, the sheer numbers of people working for SMEs tend to make the process more straightforward. This also means that SMEs striving to be innovative have an easier time utilising the culture of the organisation compared to their larger counterparts. A small tech company with fewer departments and teams can harness their organisational culture around innovation much more effectively than a large multinational company with a number of offices and functions operating in different fields and under different restrictions.
What kind of an Organisational Culture best supports your strategy always depends on the organisation itself and going deeper into the topic is best done separately. From the innovation point of view, the key is to keep in mind why you want to innovate and towards what. The next step then is to decide what kind of innovation it is that you need.
Collaboration can be an opportunity in different ways. Moving to a new market is often best done through collaboration with local companies in that market. At the same time, a smaller company focusing on innovation can make an excellent partner for a larger company looking to stay - or to become more - innovative. You can find a number of country specific documents on finding a business partner on the CUBE IN platform.
As mentioned in the previous section, the process of fostering innovation can be a complex one for larger organisations. As a result, it can be more beneficial for them to create partnerships with smaller companies. This allows them to continue operating without drastic cultural changes but still benefit from innovation through their partner company.
While these partnerships can indeed benefit both sides and it might seem like the obvious thing to do, this doesn’t come without potential caveats. First of all, collaborations and partnerships always have their own challenges. Looking past the obvious legalities etc, it’s important to lay down some cultural groundwork as well, or you may risk wasting everyone’s time and resources.
We recommend organising a kick-off meeting at the very beginning of the project. In this meeting, you should aim to discuss openly how you will collaborate. What are the expectations? Who makes the decisions and how will you communicate? This might sound obvious, but it is all too often that we see companies starting a project without agreeing on much - or at all - of this, only to find out several months later that they haven’t been on the same page at any point.
With this in mind, collaboration can be an excellent opportunity for both sides. The larger companies can often benefit greatly from the relative flexibility of the smaller company. On the other hand, the resources of the larger company can be a crucial benefit for the SME.
4. Reverse innovation
Because you’re on CUBE IN, the chances are that you already know about the opportunities reverse innovation offers you. If not, you can find a pretty good explanation of it here. In short, reverse innovation refers to innovating specifically for emerging economy markets, and then utilising those innovations in your home market. This can range anywhere from developing a new product specifically for a certain market - and then continuing to eventually bring that product back to your home market - to improving the processes you have to bring a cost effective version of an existing product to meet the demands of the emerging market and then utilising what you learned from this in your home market as well.
Needless to say, this all ties together. If you are an SME interested in innovation and doing business abroad, reverse innovation is a real opportunity for you, and all three of the previous steps can help you on this path. Furthermore, you’re already in the right place for finding more information about this. CUBE IN is a platform designed to promote reverse innovation, and to provide information about doing business in emerging markets. So, if you want to read more, I’d recommend starting from the library.