Do start-up businesses spend enough time in creativity and innovation?

startup bizzEvery now and then, I attend a management conference. Usually what I hear is the following: the current environment is characterized by rapid technological change, shortening product life cycles and globalising. All organisations need to adapt to this dynamic environment and be more creative and innovative to survive, compete, grow and lead. To beat the new entrants, aka the startups, innovation is the key! Then startups enter stage. Wow, is the general word I hear from the audience, when the startup guy, usually in jeans and beard, explains his success story.

So can we innovate more, is there the capacity in start-up businesses?

Certainly the engagement and involvement of employees can lead to more commitment from them because their thoughts, ideas and projects can have an impact on the organisation. We can speak of newly developed organisational culture; vision, mission, values and a behavior tone of voice can shift the organisation in new directions.

What are the problems associated to innovation and creativity?

The first major issue is an increased level of regulation and policy to trade.

Economists believe that regulation hurts small business in four ways. First, as Nicole and Mark Crain of Lafayette University explain, regulatory compliance exerts a disproportionately large burden on small companies because the fixed costs of adhering to rules can be spread out over more revenue in large firms than in small ones. In the US, Crain and Crain estimated the per employee cost of complying with Federal regulations at $10,585 for businesses with fewer than 20 employees but only $7,755 for businesses with more than 499 workers.

Small business owners are increasingly frustrated by government regulation, which they say has become a major problem in recent years. Twenty-two percent of small business owners surveyed to the National Federation of Independent Business’s November member survey say that governmental regulation and red tape is the most important issue that they face today, just one percentage point fewer than the fraction that identified taxes the number one problem.

Now researchers at a variety of think tanks are beginning to believe that government regulation is doing more than causing entrepreneurs to gripe. They are concerned that rising regulation could be keeping would-be entrepreneurs from starting companies. Anthony Kim of the Heritage Foundation explains, the rising cost of complying with regulations makes marginal entrepreneurial endeavors uneconomical, which also causes the start-up rate to decline.

How can a start-up free itself of time to innovate and what does this mean for collaborative innovation?

When you want to enhance the innovation level in the organisation and create exceptional results, you need to invite your employees and your team to create white boarding to effect a kaisen, a Japanese term for continuous improvement, this will start tapping into the brainwork of product development sales and marketing, there is no point designing an innovative product if you have no demand generation.

Here are 3 tips for innovating in the team:

  1. Innovation is not the same as invention.

Many people conflate innovating with inventing. While there are similarities, we think of innovation as a way to find more appealing ways to do or make things that already exist, and invention as the creation of something that never existed before.

  1. Always have a head of innovation.

Nearly all companies these days have a head of innovation, although this can be a co-founder or CEO. A business that values innovation needs to have a chief innovation officer (or at least a leading person of influence tasked with that responsibility) who not only drives the innovation initiatives of the company but also works to embed the paradigm of innovation into the company’s vision and culture.

  1. Customers must drive innovation.

Innovation should drive company strategy, customers should drive innovation and provoke thinking. Companies must innovate in ways that make sense to their corporate missions and values; if they break their brand promise to consumers, they can easily lose credibility and trust.

Always remember innovation evokes constant change and driving solutions. The more complex the world becomes, the more problems there is to solve.

The negatives are that start-ups have a tendency to run out of cash. For every founder that manages to bootstrap a startup, there are dozens, maybe hundreds that do run out of cash for any number of reasons: they do not want to give up equity, they do not budget properly, they do not plan for how long it takes to raise rounds of funding, their burn rate is too high, or some combination of the aforementioned.

If gaps in the strategy fail, then the team does not have what it takes. Some founders just can not get along. Others fall apart when the initial strategy fails, as it often does. Still others are out to make a quick buck and are not committed to working day and night over the long haul. Any VC or investment house will tell you, a big part of what they invest in is the management team and not just a great idea.

Perhaps the most important tip I can give you is this: If your startup fails, it is worth spending time to understand what went wrong. That’s the only way you’re going to improve the odds of making it next time. And, I am sure there will be a next time for you. Hopefully when you start planning and exercise the business strategy you will see the paradigm between a good idea and commercial reality and importantly what’s needed to be implemented to drive business growth and success.

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