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Yes, your small business can innovate like Google

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I talk with lots of small business owners who feel stuck. Their market share is eroding. Their products and services have been commoditized. And they barely recognize their customer, let alone empathize with their newly evolved habits, behaviors, and desires.

When I talk with them about innovation, it’s not unusual for them to say something like, “Yeah, I’m sure my little 50-person company can be just as innovative as Google!”

Related: How to move from imitation to innovation

Actually, it can. In fact, it’s entirely reasonable for you to expect your business to launch a new, innovative product or service to market within the next 100 days.

Let me show you.

Small business woes

A typical small business employs between 1-100 employees and generates up to $50 million in revenue. According to the Small Business Administration, there are 28 million small businesses in the US that account for 54% of all US sales.

So then, imagine you’re the owner of a small, $5M/year distribution business. You sell fasteners (i.e. nuts and bolts) to OEMs that use your fasteners to assemble the products they sell to their customers.

“Small companies actually have a phenomenal advantage.”

You’ve been in business for 30 years. And for the first 20-25 years you sold the same product to the same customer in the same format.

But recently, the industry has shifted. Your customer has become more attuned to buying directly from the online Amazons and big box Home Depots. And so you now find yourself scrambling to sell amongst an entirely new arena of competitors, products, services, and customers.

As a result you’re losing market share, as your products and services no longer provide the value they once did.

Apples and pineapples from Google

Let’s compare your small fastener distribution company with Google…

  • In 2017 Google is the world’s most valuable brand
  • Google has a $109.5B valuation
  • Google has acquired approximately 1 new firm per week since 2010
  • As of February 2017, Google employs 72,053 people with 1,000 job vacancies

Beyond that, Google is operating within the white-hot technology sector while you’re servicing an industry dating back to the 1700s.

Of Google’s 72k employees, the largest function is engineering. Your company has never employed a single technologist—no developers, designers, UX researchers, or product managers. And if you have, you’re not quite sure what they do other than tinker with your website and cycle the router when the internet is flaky.

No start in sight

If you’re like most small business owners you’re probably feeling stuck, thinking you’ll never be able to dig yourself out of the hole you’re in.

And even if you could…

Where would you start?

Who would you need to hire?

How would you ever come up with the millions of dollars it must cost?

How would it all impact your established business lines?

These are the types of uncomfortable unknowns that keep most small business owners from doing anything.

But the truth is, getting started is a lot simpler (not necessarily easier) than you’d imagine.

How to innovate like Google

First things first: Your small size is a phenomenal advantage. Imagine the planning + resourcing + alignment it takes for a corporation like PepsiCo’s 800,000 employees to begin such an initiative.

Small businesses have their company leaders within arm’s reach. You can probably call a meeting and have all of your key players sitting in your office within the next couple of hours.

Instead, if you were PepsiCo, you’d spend weeks coordinating a leadership summit in order to arrange executive sponsorship. Because without such sponsorship in such a massive enterprise, the initiative would be DOA.

So with your core team at the ready, here are the next 2 steps you need to take:

  1. Select someone in your company to own the process
  2. Tackle the first, most important problem to solve

Here’s how it works.

Selecting a process owner

You’re going to need someone to drive consistent momentum. Otherwise, people will hear “innovation” and, at best, roll their eyes. Otherwise, you will begin, like the dozen or other so big company initiatives, and then pause indefinitely to put out everyday fires.

This person’s mission of pushing for speed (remember: 100 days) and cadence will keep the team engaged.

You won’t need to create a new department or hire a bunch of expensive consultants. One person will do.

“Make one person on your team responsible for driving consistent momentum.”

This person does not need their title changed to include the word “Innovation” in it. Avoid tactics like these that only lead to unnecessary org changes, inflated company announcements, and political drama.

Select someone in the company with enough authority to make decisions and get others to follow their lead.

This person should be open-minded and eager to experiment. This person should love big challenges and being uncomfortable. This person should have a passion for learning new things.

Tackling a big problem

What follows is an introduction into a practical framework your team can use to surface big problems (opportunities), prototype solutions, validate assumptions, and launch those validated solutions to market in the form of an MVP (minimum valuable product).

First, decide what kinds of problems your business leaders are interested and experienced in. Generate a list of 5-10 problems you’ve encountered in your market. These could be gaps in your products and services or entirely new ideas—things your leadership team has seen first-hand, ideas you’ve heard bubble up from on-the-ground employees, or suggestions existing customers have made.

Next, figure out who is impacted by those problems and talk with them. You want to learn if this is truly an important problem to the actual consumers of a potential solution (i.e. would a solution to this problem be something they need and want?).

You also want to learn how they’re solving it today—if existing solutions are getting the job done and your solution won’t be 10x better (i.e. revolutionary), move on to the next idea.

Once you’ve identified your top handful of ideas, select 1 to start out with. We recommend organizing a 5-day Google design sprint to prototype solutions and validate with actual customers. If you’ve never run a design sprint, there are training options available.

If your customers validate your solution, commit to spending the next 2-3 months to launch your MVP. From that point, it will be a matter of observing its practicality in a live market, and iterating.

If your customers invalidate your early solutions, move on to the next idea. It’ll be tempting to feel you’ve wasted ~1 week only to “fail.” Instead, consider the time and money saved that would have otherwise been committed to building, marketing, and staffing a solution that was doomed from the start.

Congrats are in order

If you make it so far as to execute these 2 steps, take time to celebrate. Even if it was messy (it will be), it’s a win.

Why, what did you just accomplish?

  • You’ve given your company a viable chance to reclaim market share within an existing business or altogether created new lines of business
  • You’ve saved your company months of effort and lost opportunity
  • You’ve saved tens or hundreds of thousands of dollars by not only launching validated solutions within 100 days, but avoiding building the wrong ones
  • You’ve built a reputation for being innovative, which on its own provides tremendous brand equity
  • You’ve re-energized and recommitted your staff

You have a lot of work in front of you to get the process honed and baked into the culture and mindset of your entire organization. However within the span of 1 quarter, you officially began practicing the same format Google, Uber, Home Depot, and hundreds of the world’s most innovative companies use to launch their groundbreaking products and services.

You’re also now in the grittiest top 1% of companies that see the ground coming out from beneath them and decide to embrace the challenge by taking action to adapt, grow, and come back stronger than ever.

Additional resources for small business executives:

  • Design Sprint on Medium: Stories and best practices for launching products and services your customers want and need
  • Duco: A guide to help you validate innovative solutions in 5 days

I outlined additional detail on the steps any size organization can take to become more innovative in: Innovation Goes on a Diet.

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Author

Jay Melone
Jay Melone is the Strategy Partner at New Haircut, a software design firm. They combine design thinking, design sprints, and full-stack software development to offer digital innovation-as-a-service to their client companies. They offer Duco to teams looking to prepare for their own upcoming sprints. Watch his DesignTalks on how to prepare for your first sprint and get executives on board with sprints.

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