Kieran O’Brien looks at innovation, SMEs and particular challenges they face in becoming innovative organisations
Author: Kieran O'Brien
Last Updated: 4/12/2010 5:40:04 PM
Summary
Looking back at 2009 : At the beginning of each business or financial year it is very useful or business owners and management to review progress against business plans; to identify success and failures and to take on board lessons learned in order to improve future business performance.
Article
Our marketing strategy in 2009 focussed on traditional
networking as a way of generating new business, favouring this
over the much hyped online social networking approach. This
strategy was followed as it was felt that our services are
best presented in person though online marketing was also
pursued but in a very limited fashion.
Over the past months, the regular events, seminars and workshops
held by various government and semi government agencies, banks
and HEIs in particular provided regular opportunities
for meeting potential clients.
Enterprise Support
Many of these seminars and workshops attended were sponsored by
Regional Development Authorities with the objective of
furthering government policy and assisting small and
medium enterprises. SMEs currently account for 99% of UK
enterprises, employ approximately 60% of UK employees, and
have less than two hundred and fifty employees according to latest
statistics.
The primary focus of these events was to inform decision makers
of the wide if confusing range of government support and
grants available for business improvement activities.
The benefits of even marginally improving SME productivity in
the present environment are obvious with the major focus of
these seminars being "Innovation" which covers products
and services and also organisational processes. The present
Government view is that "Innovation drives economic progress,
for business this means sustained or improved growth, for
consumers it will mean higher-quality and better-value goods,
more efficient services and higher standards of living. To the
economy as a whole, innovation is the key to higher
productivity."
Innovation
Research on Innovation has been mainly carried out on larger
organisations but in general these findings can be applied to
all enterprises. Innovative organisations have taken a
strategic approach to innovation and firmly linked it to
overall corporate strategy. They have established effective
external linkages, and work with lead customers, suppliers and
relevant organisations and individuals using both formal and
informal networks to identify and take advantage of
new product, process and market knowledge. They have
established both formal and informal organisational practices
to ensure emerging opportunities are quickly and effectively
exploited.
Managers in such organisations demonstrate their personal
commitment to the organisation's innovation strategy and
communicate this effectively to all employees through their actions
as well as words. Employees throughout the organisation
understand how innovation helps the company succeed and are
nurtured by a supportive working environment where
communication works effectively both vertically as well as
horizontally across the organisation.
Challenges within Small and Medium Enterprises
SMEs at their incorporation in our experience are inherently
innovative and often established to take advantage of a gap in
the market, by founders who may not have achieved their
potential within their previous organisations.
In the modern constantly changing environment where the rate of
change is increasing and product life cycles decreasing,
innovation is an imperative and only those who adopt it as part
of their strategy are likely to survive and grow in the long
term.
Owner managers of these enterprises generally have similar
characteristics, with a high level of skills in their fields
e.g. technical or marketing, self confident, ambitious and like to
make decisions and be in control. Their enterprises and
organisations are usually highly dependent on them and often
moulded to suit their personalities and styles. Research suggests
that these business owners rate opportunities of making their
own decisions, doing something enjoyable as well as the
challenge of growing their business as more important than
financial rewards. Owners often employ like minded individuals
who are adaptive and when required work flexibly to
achieve business objectives and ensure the success of the
enterprise.
These organisations are often successful though the degree of
success in our view i.e. growth and profit is very much linked
to the personality of the owner manager.
Companies in which owner managers demand a high level of control
often demonstrate a lack of diversity with managers and
employees acting in line with the perceived wishes of owners
rather than taking ownership of business issues. Ultimately it
can lead to employees taking on the role of the emperors'
subjects as in Hans Christian Andersen's novel without balanced
opposing views to inform decision making.
So while innovation generally underpins new enterprises, the
owners' personalities ultimately determines whether innovation
in these organisations is once off or whether it becomes part
of successful business strategy.
Going Forward
Over the past year we found that seminars and workshops provided
useful and up to date regulatory and market information but
more importantly in our case attracted our target audience and
provided good networking opportunities. A number of these events
were attended and they generated a number of business leads.
In contrast the benefits from our online social
networking efforts have yet to be realised.
Government support for innovation is well directed with
management research showing firms using innovation
effectively; outperforming their competitors in terms of market
share, profitability and growth. Productivity within the
West Midlands region lags behind the UK average considerably
making Innovation a particular priority for our region and
therefore of particular interest to our clients.
Consultants can aid economic recovery by helping owners and
managers of SMEs create innovation friendly environments, and
ensuring innovation becomes an integral part of their business
strategies. We can also help them recognise their organisational
limitations and encourage the delegation of decision making
and promoting the empowerment of management teams.
Specifically we can play important roles in building external
linkages with other organisations and sharing our
business knowledge and experience. Ultimately the most
effective and useful consultants will help build truly
learning and innovative client organisations, ensuring the
success of their clients' enterprises and playing important part in
economic recovery within the West Midlands and across the
UK.
About the Author
Kieran O'Brien B.Eng MBA kobrien@denovoconsult.com. The author is a
business consultant and owner manger of DenovOConsulting Ltd which provides
consulting and interim management services to medium sized and
owner managed enterprises mainly across the West Midlands.
He has degrees in engineering and business and has worked
with manufacturers and service providers for over 15 years in the
UK and Asia, launching products/services in overseas markets,
setting up and managing new enterprises, and turning around
failing business.
He speaks Japanese, graduated with an MBA from
Aston University in 2006 and now lives in Warwick with wife
and son. He is a new member of Coventry & Warwickshire
First and has recently been asked to serve on Aston University's
standing committee of convocation and to join Coventry
University's panel of mentors to help young entrepreneurs.