Innovation 101 for SMEs

Let’s try this. Can you tell the difference between creativity, Innovation, Invention, discovery, technology? Well, it’s not important that you are able to tell the fine differences, that’s for academics. However, its not bad to also have a basic understand of the same. Creativity for me is a disposition (tendency, character) that precedes and is a necessary condition for innovation. Creativity is that ability to think up new ideas. Innovation is then taking up such new ideas and converting them into solutions. Invention or discovery is a type of innovation (radical) where one is able to bring into being a thing, or idea which had not existed anywhere before? Technology is the science of doing something. The means of delivering the solution. It can be manual, mechanical, digital, etc.

At some point these words all become the same thing. I would simply put it like this;

First stage, is creativity which is the main recipe for the others. Second step is an invention or discovery which is then a first of its kind physical or non-physical item of intellectual value whose intellectual property can then be secured in terms of a patent, copyrights, trademarks etc. thirdly, innovation would be the next step where those inventions are converted into real solutions of economic value. Finally, technology is the science or process of producing the innovation into final marketable solution.

Evolution of Innovation

While it is easy to think that innovation is a new concept, it can go to the beginning of life when things were being discovered for the first time. From the guys that tasted and found that we can drink cow milk and not donkey milk. Those who found that we can eat certain fruits and not others. Ignore ice and stone ages, and start with agrarian revolution then industrial revolution. Then come mass production when we learned that we can use assembly lines to produce the same item many times over and over.  Fast forward to the internet era, the web (www) and then the web 2.0 until now we are in the industry 4.0 which enables automation and data exchange bringing to life cloud computing, Internet of Things etc.

Measures of Innovation

Now that you are in the here and now, would you consider yourself an innovator? Innovation would now range from developing a new thing to find a new way of using or doing an old thing. Where would you place yourself in the wheel of innovaitons? Well. Of importance, it becomes an innovation if it can satisfy any or all of the following three aspects;

Technically Viable

Your innovation has to be consistent with modern technology. Does your innovation demonstrably enable the finding of solution or you are taking us back to science congress stuff. Are you solving a problem that exists or you manufacture imaginary problems and excuses for your innovation? It’s always good to get validation of your concept from people that really understand the “why” around your innovation. Don’t therefore work alone, collaboration will expose you to critical examination and introspection.

Reduce Time to Market

Does the innovation reduce the time it takes results to be achieved? Whatever area of life you consider, there have been innovations that greatly reduced the time it took to deliver a solution. Motor vehicles, mobile phones, hybrid seeds etc, all impacted on time. This is mostly a function of the technology you adopt

Reduce Cost to Market

Has the innovation lead to reduced costs of achieving a solution? Phones and computers have reduced the cost that used to store and disseminate information. Digital innovations have even reduced the cost of communications as Mechanization reduces the cost of farming etc. Your customers must find cost savings in using your innovation as opposed to existing alternatives.

Shortens Time to Profit

Innovations have to make money, otherwise they become junk. To make money it has to have a market appeal in that it actually serves a need that people are willing to pay for. Even in the instance where your innovation precedes market demand you must ensure that you are able to stimulate sufficient demand for your product. Otherwise, if people won’t see how your innovation makes them savings or brings them more money then, too bad.

Your level of innovation

Innovation happens in several dimensions. There is no clear line demarcating the dimensions. Your innovation could either be on one or a number of the dimensions as follows.

Radical Innovation

Radical innovations is when you completely bring something into being for the first time in the world. Take for example when vehicles, airplanes, phones, clothes e.t.c. were developed for the first time. They came into being by radical innovation bringing a new way of life. This is perhaps the most difficult type of innovation to undertake. In most case, it happens that whatever you are trying to invent has been done by someone else somewhere before. Don’t crack your head trying to birth something new. On average, it rarely happens.

Incremental Innovation

This is the most common dimension of innovation, this is when you take something that existed and then make a slight improvement on it. The first mobile phone was a radical innovations. But the design improvements ever since have been incremental innovations. Here, the Chinese have excelled in recent times. Interestingly, we have used jikos since we have been around, then a start up comes around and revolutionizes how we make and use jikos. Look around, you will see products and businesses that can be improved. Do it.

Disruptive Innovation

When an innovation completely changes the way the market operates, it is disruptive. Those who are unable to respond to it fast are always swept by the wayside. This is what Equity did to banking. They brought nothing new really because most banking products then existed, but they just tinkered with the way accounts were opened and changed game. Then by the time the others are responding they went to mobile and agency banking. The smart banks responded immediately by copying. The lazy ones who were not very fast almost dropped dead or are walking dead. Most digital apps are operating in this realm. What disruptions can you conceive?

Innovation Strategy

The innovation strategy adopted must be consistent with and support the overall company strategy. Strategy must be conscious, deliberate and cannot be assumed. A few strategies adopted by firms will include;


Here is when a company deliberately decides to develop their own solutions from the root up. Such companies would invest in a good R&D capability including own research lab. It is often a very expensive and tedious process and requires a lot of risk taking since you don’t know “if” and /or “when” you will come up with an innovation. When things turn out good, you secure the intellectual property and enjoy the huge benefits of your innovation without competition for some time.


Here a company deliberately decided not to tire themselves with the hard work of developing something from the ground up. They just wait until someone else does the hard job then they just copy and tweak the innovation just a little bit. Can see it with phones and cars mostly where they look almost similar. The borderline between (il)legal is usually blurred and companies have paid a very high price for this. See, when your company is still small and without much muscle you can steal around. But one day you will grow big and rich, that will be the right time to sue you for theft. That’s when the judge is happy to give you such impossible penalties you have to be auctioned off.


Some companies who have enough financial muscle will always be on the lookout for innovative ideas that interest them. They then approach the innovator and buy the innovation. Purely legal trade of buying ideas and their rights. This also turns out to be a good avenue for companies to make extra revenue if they are able to identify ideas which are not within their scope. Tap such ideas, develop them and sell them off for a tidy profit.


Instead of doing it all alone why not join hands with other firms to walk the journey together. This saves up on time and costs. It also reduces on unnecessary competition which can bring mutual injury. Companies can co-develop and find ways to share the benefits. Collaboration can also include firms on different levels e.g collaborating with suppliers or even buyers to develop a solution.


A firm can decide on being open to ideas coming from anywhere both internally and also external to the company. Here the company positions itself to tap from customers (both complaints and compliments), suppliers, academia etc. Have you for example a clear customer feedback channel. Do you actively and consider customer feedback? How about the brilliant guys you employ? Have you the possibility for them to present their ideas?

Next we deal with How SME can innovate

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