Innovation has the power to drive even the smallest businesses to success, but is it enough to help them take on the biggest corporations?
It’s not an easy question to answer, yet all we need to do is remember that plenty of companies running the world today started as small enterprises. The visionaries behind these companies were innovators. They hit on winning formulas and the rest, as they say, is history.
It’s easier for entrepreneurs to launch startups today than those firms of the past. You can connect to a world of business opportunities from your laptop, use a wealth of online tools to manage operations, and market your brand to an audience of millions via social media (as Quire, a modern project management platform says, “creating is one thing: Letting people know about it is another story”).
Despite this, innovation remains a key factor for taking any business to global success—so how can small companies out-innovative big corporations?
With that in mind, here are seven ways you can use innovation to compete with larger firms.
1. Faster concept to execution
Hitting on an irresistible idea is an incredibly exciting moment for any small business. But actually conducting research and development to bring that from the concept stage to a marketable product or service is a long, challenging process.
Fortunately, though, it’s still much easier for small businesses than larger companies.
Why? Because there are fewer hoops to jump through. An idea for a product or service doesn’t need to go to a team of executives and shareholders for approval, some of whom may be based on the other side of the world in a different time zone. There’s no need to wait for them to discuss the business plan, evaluate how it fits into scheduling, budget, and so on, and wind an idea through committee.
For small businesses, realizing an idea may be as simple as one employee approaching the manager to formulate a strategy together. This means you can get your innovation out into the world faster than bigger competitors—and establish yourself as a force to be reckoned with, a David to their Goliath.
2. Smaller workforce + tighter bonds = stronger teamwork
Research shows that the average American small business employs fewer than 100 workers, and these workers are responsible for creating more new jobs than bigger companies with more than 500 members of staff.
The smaller your team is, the closer they’re likely to be. Anyone with experience in a small business (this writer included) knows it’s easy to form tight bonds with people from across the workforce when there are only a few dozen of you on-site.
As a result, smaller companies are more likely to pull together and throw themselves into achieving a shared goal than bigger ones. It’s also simpler for managers and team leaders to keep staff updated on innovations, why they matter, and what benefits a successful product or service launch means for everyone.
3. Adapting to tech revolutions faster
Innovating can mean making big changes to your small business’s way of working. This may be because more people are required to conduct market research than usual (for example), or the project-management tools you normally rely on are too clumsy to accommodate the revised workflow needed to hit goals on time.
Fortunately, changing and adapting to established processes is less challenging for smaller companies.
You may have just a few departments, each comprising three or four people, to update. You can start using new platforms and strategies with less disruption: the switchover is simpler to negotiate without the danger of a company with hundreds of employees grinding to a halt.
4. A stronger drive to innovate
Big corporations that have established a secure foothold in their industry have little reason to innovate: the most successful brands with products or services in constantly high demand have already won the jackpot, so why prioritize innovation?
This might be a fairly simplistic way to think, but it’s true. And that’s why small businesses have more drive to hire workers capable of thinking outside the box and spotting valuable opportunities to get creative.
Startups and growing companies should consider employees’ backgrounds when hiring. Have they been responsible for helping past employers develop in new, exciting ways? Do they have skills that could prove beneficial to conceptualizing revolutionary ideas?
Identifying workers’ personal capabilities and talents can help small businesses find innovators, even if they don’t necessarily have the formal qualifications you expect. Bigger companies tend to focus on finding people who suit their carefully-defined criteria only—and they could be missing out because of it.
5. Innovative thinking stimulates company-wide growth
The right innovation can transform your company’s entire trajectory. You may bring a product to the market that consumers don’t even realize they need but seemingly can’t live without.
And that’s good news for the entire business. More income means more money to go around a smaller team, not to mention upgraded equipment and facilities. More credibility and awareness of your company means employees become more appealing candidates for future roles too.
Adopting this mindset can encourage your entire team to contribute to getting an innovation off the ground: everyone should be able to help in their own way. In big corporations, everyone is just a cog in a vast machine, and the chances of greater income trickling down to lower pay scales is slim (to say the least).
6. Less danger when trying unproven ideas
If a global brand has a disruptive idea that will consume their entire workforce and mean a change in direction, acting on it is a much bigger risk.
They have a lot more money to invest, but more to lose. A bigger customer base means more people depending on their current products or services. And approaching a lender for financing on an unproven idea could affect their credibility—just imagine the impact on their reputation if the innovation fails.
Small businesses don’t have to worry about any of this. They have fewer people depending on them. They have fewer shareholders to convince. They face less danger of destroying their reputation and losing years’ of income.
It can also be easier to gain access to the funding you need, since you’re likely seeking a smaller amount. You may even be able to find all the backing you need with a credit card or two.
In short: The risk is lower. The reward is greater.
7. Closer to customers
The bigger a company is, the harder it can be to build strong bonds with customers.
One reason is that we tend to view bigger corporations as faceless, autonomous machines. You’re just one consumer out of millions—why would they pay any attention to you?
Another reason is the sheer number of support requests and marketing obligations they have. Massive brands need large teams to interact with their audience via phone, email, live chat, and social media. Inevitably, some customers will be left waiting.
That’s a big problem when nearly half of consumers (in North America and Europe) will abandon a brand if they continuously receive poor service.
Smaller businesses, though, have fewer consumers to deal with. And that means you can learn more about how your innovative product or service will affect them.
A small business can invest in its audience more and understand their explicit pain points.
- Do they like the sound of your concept?
- Is there a market for your innovation?
- What insights can you gain by talking to customers at length?
Answering these questions and getting close to your audience can drive innovation, helping you compete with bigger brands.
SMBs for the win
Launching a startup or taking your small business to the next level is a daunting prospect. The marketplace is more competitive than ever, customers have a bigger range of options to choose from and countless people have the means to bring an idea like yours to buyers.
But there’s plenty of room and opportunities for small businesses to innovate their way to success. Follow the tips explored above to encourage innovation in your enterprise and bring your team together in a shared goal: evolving from the underdog into a big hitter.