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  • Writer's pictureJohn Bell

What Small Business Can Learn from the Enterprise Innovation Ecosystem

Large, incumbent businesses have been playing catch up in innovation. Pressured by changing customer expectations and threats from the investment and startup world, they look to the lean startup playbook to innovate from within before their business is disrupted by others.

  • CapitalOne Labs combines design thinking, new technology solutions and an internal team dedicated to inventing the next payment solutions for CapitalOne.

  • Johnson & Johnson, Bayer and Willis Towers Watson are some of the corporate partners in the health segment of Plug and Play, a global startup accelerator, which exposes and "matchmakes" big companies with promising startups.

  • Travelers Insurance engages employees to develop creative solutions to business challenges via an annual Innovation Jam – a 2-day hackathon-style event with over 100 teams.

Each of these examples are a part of a more complete Innovation Ecosystem that help CEOs change culture and disrupt from within. From R&D functions, to M&A activity to growing list of ways to engage startups, employees and new, more agile practices, this becomes the new Business Innovation Ecosystem.

But what about small business? Should they be adopting this innovative front-footing? Or are they more nimble, innovative and close-to-the-customer to begin with? If they should be taking extra steps to innovate, what lessons can be learned from billion-dollar enterprises that make any sense for smaller business?

New, small business startups are often inherently innovative. They have a different angle on the market, a new and improved product or service or an underserved customer target.

Established small and mid-size businesses (e.g., 10 – 250 employees) are just as likely to fall into a rut of business-as-usual as a larger company. It may take a jarring market shift or a competitor threat to really motivate the incumbent business to look for new solutions.


How many stories have we heard about restaurants pivoting to become ghost kitchens for take out? Or roofing companies expanding to do skylights for the stay-at-home optimizer market? The party promoter who launched a funky drive-in movie experience?

5 Ways to Innovate in Your Small Business

Let’s not wait for the next existential threat to inject innovation into business. Here are five ways small to mid-size businesses can bake-in practices to keep ideas fresh and support growth.

The Hack-the-Business Challenge

Engage employees to create new solutions for customers and other stakeholders by holding a semi-annual, 2-day challenge. While this takes participating teams offline for up to 2-days – a tough choice for any small-to-midsize company – it pays off dividends in high employee engagement scores and retention while potentially revealing a winning idea or two.

The Customer Design Sprint

Design thinking and human-centered design are associated with sophisticated design companies like IDEO, ?WhatIf!, Fjord, and Frog Design. They generally serve big business and most have been acquired by larger consultancies. At the same time, some of the core principles of design thinking – especially the method for gaining insights from customers – were made popular by some of the best and scrappiest small startups.

It doesn’t take forming a new department or a six-figure consultant engagement to quickly earn the benefits of design thinking. Hire an intern from the Stanford to run 2-3 sprints during the summer. Find the right person on your staff and invest in a Strategyzer Master Class on testing business ideas. Engage a local consultant versed in design thinking to engage your team and customers with a customer journey problem. These are all ways to leverage new practices to ensure your intimacy with your customer and openness to bigger solutions. Those that stay close to the customer and adopt creative practices will be more competitive today and tomorrow.

A Tribe of Connected Scouts

When did you last send a link to a co-worker about some interesting trend or innovation from Springwise, Indiegogo, CB Insights or somewhere else on the wild world Web? What if 10-20 people inside the organization did that routinely? That type of idea-sharing keeps people exposed to unusual ideas. It also keeps everyone humble and open to seeing a solution from outside the organization. You don’t have to subscribe to a big accelerator like Plug and Play or send staff to expensive events, virtual or otherwise. By creating a habit of sharing and acknowledging ideas, you empower a tribe of connected scouts looking for the next new thing.

Customer Co-Creation Sessions

Every business should prioritize listening to their customer. Chances are that if you are a small or mid-size business owner, you feel pretty in-touch with what your customers want and need. But what if you are just coasting on intuition? Customer surveys, periodic account reviews and even the client lunch can all help. Still, the extra mile is the customer co-creation session where you invite a handful of the right customers to collaborate over the course of a few hours to help strengthen your products, services and, ultimately, the value you deliver to those same customers. Customer co-creation is an aspect of the Design Sprint methodology.

Manage Your Innovation Portfolio

Who can afford big investments in innovation? Hardly anyone. Still, leadership for all-size businesses requires placing some bets. Business leaders can be more intentional about those bets by managing a small portfolio organized around three increments of innovation:

  • Incremental innovation – these include small improvements with big impact like how Tuff Shed uses digital communications and a configurator to engage customers from the time they purchase a shed to the actual installation which can be five to six weeks later. That email and messaging experience improves customer satisfaction and nudges the customer to do the few things needed to make the installation event a success.

  • Adjacent innovation – look left or right in your business to discover new ideas you can bring to your customer. Like the roofing company who expands to install skylights or make chimney repairs to the home improvement set.

  • Disruptive innovation – this represents the radical shift that may have outsized returns to your business. This is where you challenge sacred cows and business-as-usual. Ghost kitchens sprung up to satisfy the COVID-era take out surge yet may grow and become a thing – a revenue-sustaining thing. Just look at local examples like Urban Cocina and national examples like Guy Fieri’s Flavortown.

An established business may need to be more conservative with their innovation portfolio. That means putting their modest innovation effort (budget + employee time) against incremental and adjacent innovations. They might reserve a bit of energy to reveal that more disruptive opportunity via that annual Hack-the-Business Challenge or monthly internal discussions (via Clubhouse, perhaps?) amongst the tribe of scouts.

Smaller businesses can weave innovation practices into how they work and leverage their more nimble natures. Who knows, some may even grow to become the disruptor to bigger, incumbent businesses.


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