Harnessing Innovation for SME’s

Demetris C. HadjisofocliExecutive Director, Entrepreneurship Frontier Network, Ltd.

Introduction to Business Administration

• Innovation• The process of making improvements by introducing something

new

• Entrepreneurship• Willingness to take the risks involved in starting and managing a

business and the use of resources to implement innovative ideas

INNOVATION

• Innovation vs Creativity• Creativity is coming up with ideas • Innovation is bringing ideas to life

• Innovation vs Invention• Invention is the creation of a new concept • Innovation is reducing that concept to practice, and making it a

commercial success

• Innovation vs Science• Science is the conversion of money into knowledge • Innovation is the conversion of knowledge into money

INNOVATION IS CRITICAL

• Shift of emphasis from a regional industrial economy to a knowledge-based entrepreneurial economy driven by innovative technologies• Customer Driven Economy

• Customers seek alternatives, compare offers, and hold out for the best option

• Shortening Product/Service Life Cycle• If you understand the technology it is obsolete

• Rabidly changing business environment• It is not the big that eats the small; it is the fast that eats the slow

• Convergence• Globalization of world economies, technologies and innovations

INNOVATION MANAGEMENT (TRADITIONAL)

• Key Driver for Change & Competitive Advantage

• Focuses on large organizations with• Lots of resources

• Planning infrastructure

• Small SME’s are left out

SME’S IN EUROPE

• Primary Source of Job Creation (68%)

• Primary Source of Economic Growth (63% of total Turnover)

• Suppliers of large OEM’s

• Majority employ less than 10 people

KEY FOR SME’S INFLUENCE OF INNOVATION

• Using innovation subsidies

• Links with knowledge centers

• % of turnover invested in R&D

INNOVATION-LESS CHARACTERISTICS OF SME’S

• Management by exception (Centralization)

• Little analysis of the impact benefit of any change

• High ICT Usage/Low expertise

• Lack of Resources & Knowledge

• Lack of Motivation & Incentives

• Start up strategies

• Chicken & Egg Syndrome

WHY INNOVATION FAILS

• Goal Definition• Action Alignment• Allocation of Teams & Resources• Feedback & Results• Performance Monitoring • Collaboration & Communication between Customers &

Suppliers• Innovation Culture

• Grade; F - Poor

BUSINESS ENVIRONMENT

• Legislation

• Authority Support (Government, Regional, Local)

• Outside Experience

• Values & Motivation

• Age of the SME

• Industry Sector

• Business Activism

EFFECTIVE INNOVATION PILLARS

• Management of

• Goals• Actions• Teams• Results• Collaboration• Technology• Infrastructure

INNOVATION PROCESS

• Inspire People

• Reduce Resistance

• Ensure that everyone is participating

• Clarify the resources and define success

• Measure against performance metrics

• Feedback & Communication

ORGANIZATION & PEOPLE

• Built a winning organization

• Get rid of bureaucracy

• Eliminate boundaries

• Put values first

• Cultivate leaders

• Create learning culture

• Harness your people• Involve everyone• Make everybody a team player• Stretch• Instill confidence• Make business fun

INNOVATION LEADERSHIP

• Leaders who can energize, excite and inspire rather than hinder, depress, and control.

• Create a Vision and then ignite the organization to make the vision a reality• Micromanagement (Bad)• Everyone should be encouraged to be involved and new ideas should be

welcomed• Lead by example• Get people to see exciting opportunities and possibilities for the future

through positive attitude• People change and unlock their inner power when they are emotionally

engaged and committed

MAKE RELENTLESS INNOVATION A WAY OF LIFE

• Lead innovation, emphasize opportunities not problems, and encourage innovative behavior

• Establishing the culture of innovation requires a broad and sustained effort

• Questions are critical to innovation, so start with creating a culture of questioning

• Exploration of possibilities, discoveries, innovation, and progress start with challenging assumptions, asking searching “Why?” and “What if?” questions, and playing “What if” scenarios

• Encourage your people to challenge assumptions• Reward both individual and collective contributions • Celebrate success

ENCOURAGE ENTREPRENEURIAL CREATIVITY AND EXPERIMENTATION

• Develop entrepreneurial staff and create a corporate climate that encourages rule-breakers and outside-the-box thinkers• Experimentation by definition is a trial-and-error process, but

experimentation is also the key to discovery• Without action, you cannot know whether or not your

innovative ideas will actually work

INVOLVE EVERYONE, EMPOWER AND TRUST EMPLOYEES

• Talented and empowered human capital is the prime ingredient of organizational success

• A critical feature of successful teams, especially in knowledge-driven enterprises, is that they are invested with a significant degree of empowerment, or decision-making authority

• Formulate stretch goals, provide resources, and empower your people

• Find a balance between hands-off and autocratic management styles

BUILD TEAMS AND PROMOTE TEAMWORK, LEVERAGE DIVERSITY

• Teamwork is essential for competing in today's global arena. Build a star team, not a team of stars

• Diversity of thought, perception, background and experience enhance the creativity and innovation

• A team should not just be diverse; it has to make the most of it• Involve everyone, facilitate cross-pollination of ideas, build and empower cross-

functional teams if you wish to harness the power of diversity• Challenge people from different disciplines and cultures to come up with

something better together and achieve creative breakthroughs.

MOTIVATE, INSPIRE AND ENERGIZE PEOPLE, RECOGNIZE ACHIEVEMENTS

• Financial rewards do encourage people to produce results• But the kind of ownership that really generates energy is not

financial; It is emotional• Set stretch goals – they energize people. Become a positive,

encouraging person• Give people a sense of responsibility and make them feel

that their actions make a difference• Communicate with people frequently and praise them

ENCOURAGE RISK TAKING

• Take risks! Don't play it safe! • Making mistakes is essential to innovation and organizational growth, as

long as systems are developed to learn from failures and to avoid making the same mistake twice

• The more people fail, the more they succeed• They learn from taking action, from mistakes, from feedback, from getting

their hands dirty• Treat failures as learning opportunities• Develop a tolerance for mistakes and give your people freedom to fail,

learn from failures, and start again more intelligently

MAKE BUSINESS FUN

• Fun must be a big element in your business strategy

• No one should have a job they don't enjoy

• If you don't wake up energized and excited about tackling a new set of challenges, then most likely you are in the wrong job

MANAGE LESS

• It is amazing how much people will do when they are not told what to do by management• In the new knowledge driven economy, people should

make their own decisions• Managing less is managing better• Close supervision, control and bureaucracy kill the

competitive spirit of the company• Weak managers are the killers of business; they are the

job killers• You cannot manage self confidence into people

CHANGE IS AN OPPORTUNITY

• Change is a big part of the reality in business

• Willingness to change is a strength, even if it means plunging part of the company into total confusion for a while

• Keeping an eye out for change is both exhilarating and fun

GET RID OF BUREAUCRACY

• The way to harness the power of people is • Turn them loose• Get the management layers off their backs• Bureaucratic shackles off their feet• Functional barriers out of their way

• Bureaucracy is the enemy • Drop unnecessary work • Delayer! Create a flat responsive organization

• Cross-pollinate to make faster and better decisions• Encourage employees to identify problems and come up with solutions• Make your workplace more informal

ELIMINATE BOUNDARIES

• In order to make sure that people are free to reach for the impossible, you must remove anything that gets in their way

• Boundary-less describes an open organization free of bureaucracy and anything else that prevents the free flow of ideas, people, decisions

• Informality, fun and speed are the qualities found in a boundary-less organization

CREATE A LEARNING CULTURE

• Turn your company into a learning organization

• Spark free flow of communication and exchange of ideas

• The desire, and the ability, of an organization to continuously learn from any source, anywhere - and to rapidly convert this learning into action - is its ultimate competitive advantage

INVOLVE EVERYONE

• Business is all about capturing intellect from every person

• The way to engender enthusiasm is to allow employees far more freedom and far more responsibility • Start with yourself...

• Encourage people to take initiative...

• Use the brains of every worker...

• Create an atmosphere where workers feel free to speak out...

CONSTANTLY FOCUS ON INNOVATION

• You must constantly focus on innovation• Observe competitors• You must constantly produce more for less through

intellectual capital• Look for the quantum leap – not incremental• The fundamentals have got to be more education• More information knowledge, faster speeds, more

technology across the board

INNOVATION II

• You Innovate to• Improve products and services

• Retain existing and win new customers

• Find new ways to solve a problem

• Save money

• Enhance your jobs

• Make a task easier, faster and/or more enjoyable

• Increase your promotion potential

• Achieve great results and have fun

INNOVATION III

• Forms and Sources of Innovation

• Innovation can be incremental or radical

• Innovation can result from technology transfer or through development of new business models and concepts

• Innovation can be technological, organizational, presentational, etc.

HARD VS. SOFT INNOVATION

• Hard Innovation is organized R&D characterized by strategic investment in innovation, be it high-risk-high-return radical innovation or low-risk-low-return incremental innovation

• Soft Innovation is the clever, insightful, useful ideas that just anyone in the organization can think up (SME)

SPEED

• Speed is everything• Speed is the indispensable ingredient of competitiveness• Speed, simplicity and self-confidence are closely

intertwined• Simplify the organization and instill confidence, and you

will create the foundation for an organization that incorporates speed into the fabric of the company

SPEED II – THE SEQUEL

• Fast Thinking Road-mapping • Anticipate, and spot trends• Let best ideas win

• Fast Decision-making • Setting Rules and Guiding Principles • Reassessing Constantly Past Decisions • Getting Rid of the Bureaucracy

• Fast to Market • Launching a Crusade • Own Your Competitive Advantage • Institutionalizing Innovation • Rapid Experimentation

REMEMBER

• Inspire• Set Benchmarks• Let them Loose• Trust• Speed• Leadership• Risk• Motivation• Incentives• Knowledge Assets• Failing is good

MAKE BUSINESS FUN

• As business today is about passion and creating new things, fun has become a big element in the business strategy of many highly successful businesses

• Make fun an important part of your corporate culture to enable relentless innovation and create an inspiring culture

• "What's really driving the new economy – and confounding the grand pooh-bahs of the old one – is that individuals are having a huge impact and an awful lot of fun

• People should be happy at work and have fun• Encourage just-for-fun programs• Find some humor in your failures. Don't take yourself so seriously. Loosen

up, and everybody around you will loosen up. Have fun. Show enthusiasm – always

THANKS

Questions