Four Ways Family Businesses Can Encourage Innovation
Apr 16, 2013
Innovation is the key to driving business success. In today’s increasingly crowded business environment, it’s key to staying competitive. Whether it involves developing cutting edge products and services, creating a new process, or simply remaining flexible to adjust to the changing needs of your client base, businesses must continue to innovate and evolve for their own survival.
One of the biggest challenges that family businesses face with regard to innovating is striking that healthy balance between the family’s business traditions and heritage, with the need to remain nimble and open to change in order to improve the business profitability and sustainability. Change can be uncomfortable, but it’s often necessary to meet the changing demands of the marketplace.
An example of a family business with a long, rich heritage that has survived and thrived through constant innovation and reinvention is Crane & Company. Check out this video with Crane & Co. Chairman, Charlie Kittredge, as he discusses 200 years of family business success:
Ways Family Businesses Can Inspire and Embrace Innovation
Developing such an organizational culture can be a complex task, but here are four easy ways that your family business can inspire innovation:
- Encourage New Ideas and Open Communication. If you want your employees to “think big,” you must create a supportive company culture that encourages communication, innovation and creativity. Family and non-family employees need to feel like they can share ideas without fear of failure or judgment. You may be familiar with the saying, “There is no such thing as a bad idea.” That’s just it — there can be no innovation without first having an idea. What might be an idea of little potential one day could resurface as an idea with great potential in the future. A supportive leadership team with an open-door policy that fosters cooperation, yet allows for individualism, is the catalyst for welcoming new innovation in the family business.
- Designate an Innovation Team. Create a small team of “innovation ambassadors,” that rotates employees every three to six months. Select one person from each department or business unit to serve as an ambassador and field innovation ideas from all generations and ranks of employees involved in different aspects of the company. In doing so, all operations, from recruiting and hiring to marketing and technology, are covered.
- Meet and Brainstorm Regularly. Encourage communication by scheduling monthly staff meetings, and ask your employees to bring three thought-starter ideas on specific areas that could benefit the overall business. This could include improvements to your business’ customer service model, ways to incorporate new technology, or using social media to drive sales. Discuss and flesh out the ideas as a team. If your business has several divisions and it’s too cumbersome to meet all-together, hold individual meetings by unit. There’s nothing like a thought-provoking team conversation that spurs the imagination and gets the creative juices flowing.
- Offer Employee Incentives / Rewards. If you want to encourage innovation, consider putting an employee rewards program in place. People like to feel appreciated and may be more inspired to contribute ideas if there is a particular incentive involved. Rewarding great ideas is vital to the success and productivity of a business, and many companies are finding unique ways for rewarding their employees. To decide on the best approach, you need to have a deep understanding of your employees’ motivations. Maybe it’s not a cash bonus they would want, but rather, an extra day off, or a restaurant gift certificate or movie theater tickets.
Recognizing that innovation is critical to your business’ success is important, but encouraging an environment that supports ideas and involves all your employees is paramount. Discussing and brainstorming innovative ideas and approaches on a regular basis will help you stay focused, and allow for even more idea generation. Don’t forget where those innovative ideas came from – finding and implementing the right employee rewards program will bring more value to your business at the end of the day.