RESEARCH: How successful small businesses grow
The respected Cranfield School of Management released the results of some very interesting research this week. They studied the nature of innovation in 108 small and medium-sized companies, and their findings could help all of us to build a successful growing business.
The traditional view of small businesses is that they are successful because of their agility and flexibility. A small business is more nimble than a bigger counterpart and can also be run in a more entrepreneurial fashion.
However, the research indicates that the real driving forces behind successful small businesses are not what we've traditionally believed them to be.
Cranfield found that the most successful, ambitious SMEs are those that achieved growth by selling more of their existing products or services to their existing market.
Gerard Burke, a Director of the Business Growth and Development Programme at Cranfield summed it up well when he said, "Our research shows that successful SMEs tend to focus on continually improving their products, services and processes - often in response to customer feedback or demand - not on launching new products or venturing into new markets. This 'incremental' innovation, often popularised by the term 'sticking to the knitting' appears to be part of the recipe for success for SMEs, rather than attempts at radical innovation."
As businesses, we're always being told to innovate. We're encouraged to do this by developing new products and to strike out to find new geographic markets for our goods. But the Cranfield research tells us that this is the wrong type of innovation for small businesses.
Successful small businesses tend to concentrate on 'incremental innovation' - constantly focussing on improving their products or services and the processes behind the creation and selling of their goods.
The small, but constant improvements to their products and the way they sell them are driven by a deep understanding of the market they operate in, and are made in response to customer demands.
This process of continual improvement has a steady and real effect on the long-term performance of the business.
Instead of trying to make giant strides forward, successful small businesses focus on making frequent small steps.
So the next time you're looking to make a big leap forward, take some time to see whether you'd be better off taking a series of small steps to get there.
From the Business121 No.25 newsletter
Sign up for your own copy at www.business121.co.uk
The traditional view of small businesses is that they are successful because of their agility and flexibility. A small business is more nimble than a bigger counterpart and can also be run in a more entrepreneurial fashion.
However, the research indicates that the real driving forces behind successful small businesses are not what we've traditionally believed them to be.
Cranfield found that the most successful, ambitious SMEs are those that achieved growth by selling more of their existing products or services to their existing market.
Gerard Burke, a Director of the Business Growth and Development Programme at Cranfield summed it up well when he said, "Our research shows that successful SMEs tend to focus on continually improving their products, services and processes - often in response to customer feedback or demand - not on launching new products or venturing into new markets. This 'incremental' innovation, often popularised by the term 'sticking to the knitting' appears to be part of the recipe for success for SMEs, rather than attempts at radical innovation."
As businesses, we're always being told to innovate. We're encouraged to do this by developing new products and to strike out to find new geographic markets for our goods. But the Cranfield research tells us that this is the wrong type of innovation for small businesses.
Successful small businesses tend to concentrate on 'incremental innovation' - constantly focussing on improving their products or services and the processes behind the creation and selling of their goods.
The small, but constant improvements to their products and the way they sell them are driven by a deep understanding of the market they operate in, and are made in response to customer demands.
This process of continual improvement has a steady and real effect on the long-term performance of the business.
Instead of trying to make giant strides forward, successful small businesses focus on making frequent small steps.
So the next time you're looking to make a big leap forward, take some time to see whether you'd be better off taking a series of small steps to get there.
From the Business121 No.25 newsletter
Sign up for your own copy at www.business121.co.uk
posted by Socket @ 6:31 pm
0 Comments:
Post a Comment
<< Home