With budgets becoming a little tighter as companies look to reduce costs during an economic lull, business innovation is hard to find. However, it’s during these times when other companies pull back that confident entrepreneurs look to innovate or simply find ways to improve their operations to avoid completely standing still.
Here are some ideas for how an entrepreneur should look at the current year and what business innovation is appropriate now.
Right-Sizing (Not Downsizing) in Search of New Opportunities
Slashing the workforce is often a mistake that other entrepreneurs make. Having invested in finding the right people, training them, and the experience they gained in their respective roles, this is a valuable resource that founders would be foolish to carelessly discard.
Instead of downsizing, right-size the organisation by looking for new business opportunities to step into. Then re-train valuable staff to work towards new goals and in so doing, adapt their talent to new circumstances.
A new opportunity could be the refinement of an existing product using customers’ feedback to guide what to redesign. Alternatively, it could mean introducing a new product that has synergy with an existing one and a ready list of customers who would find it beneficial to their life or business.
Constrained Innovation with Limited Risk (But Generous Upside Potential)
Look for ways to innovate in a financially constrained manner. This limits the financial and human capital investment while not holding back the potential upside.
One possible option is to have an API developed. These are programmed solutions that let other companies gain access to limited information in your databases that are acceptable to release. It could help third parties quickly check available stock levels, allow mobile apps to pull up pertinent details to share with users, or for another purpose entirely.
By allowing other companies to have this access, it encourages them to represent your products or to work in other ways for your mutual benefit. Check out this link to learn how APIs work. It’s provided by Appetiser Apps, a leading app developer, that regularly creates mobile and web apps which include API integration to extend its usefulness.
Consider the Financial Cost vs Opportunity Cost
Being prudent is necessary when money is tighter than usual. With that said, entrepreneurs must carefully weigh the financial cost of investing in innovation in a limited fashion compared to the opportunity cost of failing to do so.
New projects begun today have the potential to generate considerable revenue and profits in the years to come. This won’t start until the team puts a full effort behind it. A half-effort doesn’t count and is likely to only lead to lacklustre results.
Determine what is worth investing in, the extent that it’s prudent to do so, and stick to that. Don’t over-invest unwisely, but equally don’t either underinvest or fail to stick with it long enough to see success. Remember that most success requires more time than originally envisaged.
Streamline Processes for the Ultimate in Efficiency
Instead of looking at downsizing staffing levels, create a team dedicated to examining every system and process used within the company.
These should be viewed from the perspective of cutting out redundant steps in every process or work procedure to enable staff to complete their tasks in less time. Have the team consult directly with the individual staff members to get their input on ways to streamline existing processes in their jobs.
Also, be open to the introduction of completely new systems and processes where there’s a good reason to do so. Avoid unnecessary complications where someone is trying to justify their existence through over-complication. Instead, strip tasks down to see if there’s a better, new approach that will markedly improve upon the existing one.
Use the new efficiency to redirect staff to innovative new projects. Reassigning through greater efficiency allows the company to pursue new opportunities without adding to the payroll.
Come Out the Other Side Stronger Than Ever
Difficult economies lead to retardation of growth for many companies that turn into crabs and stay locked inside their shells. They merely try to survive the period, even if many staff have been culled to make it through because of only looking at enduring through the tougher times.
It requires a stronger mindset at the leadership level to forge ahead where business colleagues are holding back through fear. They may refer to it as “being cautious” to avoid declaring their fear publicly, but that doesn’t change what it is.
Failing to make the right changes and having a willingness to carefully look to growth opportunities are costly mistakes. Tough trading periods can last longer than expected. Intentionally turning away from growth is time that the business will never get back. It requires confidence in the abilities of your leadership and the staff below you to persevere and push ahead.