I asked a client the other day how much he invests in research and development in his company on an annual basis.
“Eden,” he laughed, “I’m a small business with 25 employees and do less than 3 million dollars a year in sales, I can’t afford an R&D Department.”
“What do you think R&D is?” I asked.
“Well, that’s when you have a department specifically focused on identifying and testing new ideas and enhancing current products or services.”
“That’s correct,” I replied. “So are you saying that because you are a small business you don’t identify and test new ideas or enhance your current products or services?”
“Of course not! We are always looking for ways to make things better.”
“Is there really a WE or is it usually just YOU? I would imagine that you are probably the only one that is consistently looking for ways to make things better right?”
I continued, “And I would suspect that your process of improving your business is random, spontaneous, and haphazard. It’s probably what we call ‘interruption innovation.’”
An example of ‘Interrupt Innovation’ is when you walk into your place of business after a networking meeting and begin to make some changes based on idea you just heard that you liked.
Meanwhile your staff is saying, here we go again, changing things that don’t really need to be changed. Or worse, talking about making changes and then nothing happens.
Most business owners hardly give their current systems and procedures a chance to work before they are changing it and doing something differently.
So the difference between a large business with a dedicated and obviously funded R & D Department and your business is that they know they are doing R & D, and are intentional and organized in their approach. But because you, who don’t recognize that you are doing R & D, are not intentional about it there is a lack of organization to your approach.
Part of the appeal to entrepreneurship is the coming up with new ideas. You became a business owner because you believe that you can do something better than what is already being done.
I am not suggesting that you should give that up. In fact, I am going to encourage it. But do so in a way that supports the development and improvement of the business in a consistent and orchestrated manner, while creating an environment where your people actively engage in supporting the improvement and innovation of your business as well.
Here are some tips that will enable you to increase your effectiveness in improving your business.
1- Remember your business is a collaboration of systems working together to produce the results of the business. If you make a system better, you improve the business.
2- Schedule specific times to review your systems and procedures. Put it on your calendar to work on your specific systems and view it as a priority.
3- Research and Development ultimately comes down to learning. Think about it, that’s what big companies with fat R & D budgets do. They are learning, exploring, testing and researching.
A small business does this by intentionally exposing themselves to information that will help them see and understand new opportunities through reading, attending seminars, surfing the internet etc. Many of our clients set aside specific times of the week and close their doors to read and learn about things that will give them information that will help them improve their business systems.
4- Encourage your staff, regardless of the size, to get involved in the process of helping to innovate and improve your systems. If they are working the system, then it stands to reason they should be the master of it. Your bookkeeper should be the master of those systems as an example. Empower them to introduce ideas and offer suggestions on how to improve the systems they operate. Create an environment where your people take ownership of the systems they operate.
Engaging in these steps will give you the same leverage as the huge companies with deep R & D pockets.