Business is continually evolving, so too should your business. In other words, as a business owner, you better be innovating your business to make improvements. Innovation, according to Deloitte is defined as development of new or improvement of existing products, services or processes.
According to the 2019 EY Innovation Survey, 50% of respondents spend more than 5% of their annual budgets on innovation, yet 42% say budget is their biggest barrier to progress. According to McKinsey, 80% of executives think their current business models are at risk to be disrupted in the near future.
Of course, the average small-business owner is way too busy to be thinking this strategically, and probably doesn’t have a large Innovation Budget to speak of, so how do they innovate? Here’s a full-proof method to quickly improve your business today.
You need three elements to work in harmony to make improvements. In a recent interview with Pam, the Self-Appointed Queen of Innovation, she laid it out for us:
First, we need Processes for our business to run by. In short, what is needed to do the task. In most instances you need to:
- clearly define what the desired result is (the scope or desired end result),
- ensure that what we want done is documented, (the how) and
- you’ll need to provide tools to help your team actually do the work (machinery, computers, software, phones, coffee etc).
Next, we need to instill Accountability. Making sure that you are accountable to a third party. Your team will need to be accountable to you, and ideally (as a business owner), you will be accountable to your business mentor/coach or advisory board. You need three things for accountability to work:
- trust between you and your team, and each member of your team,
- training for each team member so they can effectively carry out the task, and
- follow up. When delegated, there is follow-up to ensure it is completed on time and on budget as expected.
Lastly, there has to be Motivation in every corner of the business. Motivation comes from within each of us and it’s the business owner’s responsibility to connect the task to the person carrying it out. To help with this, there are three tactics we can use:
- the business vision must be clear and communicated to all,
- as too must the company’s values – what we believe in (integrity, ethics etc), and
- the cause of the business – this is greater than money – it is why we’re business and why we go to work.
To improve your business all three; processes, accountability and motivation, need to be strong. How do you tell which one needs to be worked on? To understand that, look at the symptoms in your business.
If your business is becoming compliant, then you have good processes and accountability, but you need to work on poor motivation.
If you are seeing erratic performance, the chances are you have good accountability and motivation, but you need to work on sub-par processes.
If performance degrades over time, your business has good processes and motivation, but it’s the business owner’s responsibility to work on the poor accountability.
Pam, the Self-Appointed Queen of Innovation, also points out that, “the PAM model is great for identifying and solving any problem in business”. Once the business owner understands the importance of the processes, accountability and motivation they can literally solve any problem in the work place with these simple steps.
1 – Identify the frustration or what needs to be improved.
2 – Has it happened more than one? If not, then you’ll have to solve differently.
3 – Write down the result you want. For example, instead of X I want Y.
4 – Get to the root of the problem by asking questions to identify if – in turn - processes, accountability and motivation are all as high as they should be.
5 – Based on the PAM investigation, define what the next action is, by defining the what, where, when, and how?
The Most Innovative Companies in 2019, use AI, platforms, and ecosystems to enable themselves and others to pursue new products, services, and ways of working, but for the small business owner, innovation does not take large budgets or the latest technology. Successful innovation for the small business owner takes the ability to focus, critically evaluate your own company and the aptitude to work at grass roots. Oh, and it takes grit – a never ending passion to improve.
I’m Nick Leighton and I’ve been coaching business owners and executives for the past 20+ years. I believe that with the right guidance and drive, you can achieve your business and your personal goals!
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