I NNOVATION FOR S MALL B USINESS : M YTHS & L EGENDS FRAMEWORK FOR ACTION David E. Dirks

T HE MANY FACES OF I NNOVATION Product Innovation Service Innovation Operational Innovation Application Innovation Disruptive Innovation Line-Extension Innovation Acquisition Innovation Enhancement Innovation

S O W HAT I S I NNOVATION ? Dirks Definition: Creating products, services and processes, both internally and externally, that solve current problems or fulfill unmet or hidden market needs.

More than one billion people – one sixth of the world’s population - are without access to safe water supply. At any given moment, about half of the world's poor are suffering from waterborne diseases, of which over 6,000 – mainly children – die each day by consuming unsafe drinking water. Problem:

Innovation:

C OMMON M YTHS : M Y FAVORITE FIVE Myth : Innovation is only for big companies with big R&D budgets. Fact : Although they garner a lot of media attention, the Fortune 500 doesn’t own innovation. The trend today is for larger companies to spur innovation by buy or invest in smaller businesses or creating their own internal ‘enterprise zones’. Smaller companies form the foundation for general innovation. Ex. Apple iPhone Siri Ex. Of the 1,279 U.S. firms granted 15 or more U.S. patents each between 2005 and 2009, 42 percent (up from 33 percent, 41 percent and 40 percent, respectively, in the 2003, 2005 and 2008 studies) are small firms

C OMMON M YTHS : M Y FAVORITE FIVE Myth : Innovation requires lot’s of money. Fact: Innovation isn’t free but it doesn’t always have to translate into direct dollars. Although a certain amount of investment is possible when prototyping products or services, innovation at the small business level is based on an investment of TIME, SPACE and PROCESS. Ex. More R & D Spending Sometimes Means Less Microsoft $12b Sony $8b Apple $4

C OMMON M YTHS : M Y FAVORITE FIVE Myth : Customers are a critical source of innovation ideas. Fact: They are but not in the sense we commonly think. Identifying problems are customers have and developing the innovations to solve them are the key. Ex. Apple iPod – Who told Apple it needed an iPod device? Or that they needed an iPad? Their customers didn’t. The most powerful innovations create markets.

C OMMON M YTHS : M Y FAVORITE FIVE Myth : Innovation isn’t by epiphany. Fact: The Hollywood version of innovation: the ‘great idea’ just hits us out of the blue. Innovation is about the ability to connect the dots accumulated from thought, research, questioning, and a multitude of sources.

C OMMON M YTHS : M Y FAVORITE FIVE Myth : Innovation is random. Fact: Innovation doesn’t just happen. It’s hard, challenging, exhausting and full of failure. Ex. James Dyson failed 5,127 times before developing his first, consumer-ready ‘cyclone technology’ based vacuum cleaner –but there was nothing ‘random’ about his continuous focus on getting the technology right. “ It wasn’t the final prototype that made the struggle worth it. The process bore the fruit. I just kept at it.” James Dyson

W HAT IS THE F RAMEWORK FOR S MALL B USINESS I NNOVATION ? There is no magic formula or method. There is a framework for innovation you can work with: Focus on solving customer problems. Think in terms of product, service, or process innovation. Establish an R&D budget. Create time and space in your workweek for innovation & discipline yourself to invest the time week after week. There is no magic formula or method. There is a framework for innovation you can work with: Focus on solving customer problems. Think in terms of product, service, or process innovation. Establish an R&D budget. Create time and space in your workweek for innovation & discipline yourself to invest the time week after week.

W HAT IS THE F RAMEWORK FOR S MALL B USINESS I NNOVATION ? Initially spend more time researching, thinking, and collecting data, information, ideas, thoughts without evaluation. Keep a database/repository for all the research & data you collect. Keep it organized so you can find it. Look outside your area of expertise for insights. Involve others and share your thoughts and findings to gain further insights. Initially spend more time researching, thinking, and collecting data, information, ideas, thoughts without evaluation. Keep a database/repository for all the research & data you collect. Keep it organized so you can find it. Look outside your area of expertise for insights. Involve others and share your thoughts and findings to gain further insights.

W HAT IS THE F RAMEWORK FOR S MALL B USINESS I NNOVATION ? Give your ideas a place to grow. Prototype, prototype, prototype. Test. Test. Test. Failure is a sign of progress. Never stop. Starting working on the next customer problem to solve. Give your ideas a place to grow. Prototype, prototype, prototype. Test. Test. Test. Failure is a sign of progress. Never stop. Starting working on the next customer problem to solve.