One way smaller firms may compete with their larger rivals is by being better at the process of
innovation, which involves creating something that is new and different. It need not be limited
to the creation of new products and services. Innovation can involve new ways in which a
product or a service might be used. It can involve new ways of packaging a product or a service.
Innovation can be associated with identifying new customers or new ways to reach customers.
To put it simply, innovation centers on finding new ways to provide customer value.
Although some would argue that there is a difference between creativity and innovation, one would be hard pressed to argue that creativity is not
required to produce innovative means of constructing customer value. An entire chapter, even
an entire book, could be devoted to fostering creativity in a small business. This text will take a
different track; it will look at those factors that might inhibit or kill creativity. Alexander Hiam
(1998) identified nine factors that can impede the creative mind-set in organizations:
1. Failure to ask questions. Small-business owners and their employees often fail to ask the
required why-type questions.
2. Failure to record ideas. It does not help if individuals in an organization are creative and produce a
large number of ideas but other members of the organization cannot evaluate these ideas. Therefore, it is
important for you to record and share ideas.
3. Failure to revisit ideas. One of the benefits of recording ideas is that if they are not immediately
implemented, they may become viable at some point in the future.
4. Failure to express ideas. Sometimes individuals are unwilling to express new ideas for fear of criticism.
In some organizations, we are too willing to critique an idea before it is allowed to fully develop.
5. Failure to think in new ways. This is more than the cliché of “thinking outside the box.” It involves
new ways of approaching and looking at the problem of providing customer value.
6. Failure to wish for more. Satisfaction with the current state of affairs or with the means of solving
particular problems translates into an inability to look at new ways of providing value to customers.
7. Failure to try to be creative. Many people mistakenly think that they are not at all creative. This
means you will never try to produce new types of solutions to the ongoing problems.
8. Failure to keep trying. When attempting to provide new ways to create customer value, individuals are
sometimes confronted with creative blocks. Then they simply give up. This is the surest way to destroy the
creative thinking process.
9. Failure to tolerate creative behavior. Organizations often fail to nurture the creative process. They
fail to give people time to think about problems; they fail to tolerate the “odd” suggestions from employees
and limit creativity to a narrow domain.
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