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How to Create a Culture of Innovation in Your Small Business


You might hear the word “innovation” and think of disruptive technologies or companies – the iPod, FitBit, Uber, AirBnB. But innovation isn’t limited to tech startups. In fact, it’s something any business can do.

Whether your small business is B2B or B2C, service-based or product-based, or a mix of all of the above, nurturing a culture of innovation will help you stay ahead of the competition. At its core, innovation means improving upon what already exists, and continual improvement means you’ll just keep getting better what you do.

Here are five ways to create a culture of innovation within your small business:

1. Facilitate, don’t lead

In this article on disruptive leadership, a quote from Google CEO Larry Page really stood out to me: “My job as a leader is to make sure everybody in the company has great opportunities, and that they feel they’re having a meaningful impact and are contributing to the good of society.”

Rather than asking employees to blindly follow you, give them the resources they need to do their jobs, whether it’s training, professional development, mentoring, or trying something new (more on that below). The more you support your employees, the more room they have to grow and collectively improve your business.

2. Define what can be innovated

By telling your employees they permission to innovate in specific areas, they’ll know what to focus on. Do you want to cut expenses and increase profits? Streamline a process? Improve customer service? Develop new products? Create new policies that support your employees?

3. Be a partner

A flat organization in which managers are viewed as partners and collaborators, not scary taskmasters, is becoming the norm in the tech startup world. Why? As the author of the disruptive leadership article I mentioned above writes,

“In a true partnership, risks are shared, accountability is shared, and even parts of leadership are shared. Leadership is about what an organization accomplishes when many unite and engage in the courageous work of providing value to the marketplace and improvement to the community in which it operates.”

4. Celebrate risk-taking

So many huge companies say they value risk-taking, but they don’t. They encourage employees to take risks, but if you fail, you get blamed and/or punished for it. Ouch.

Encouraging risk-taking, empowering employees to make the right decisions, and celebrating triumphs as much as failures will create a culture of innovation. Hire smart people – and let them do their thing. Respect them, listen to them, and, as Larry Page said above, give them the support they need to make a difference.

5. Don’t shy away from failure

I mentioned this above, but it’s worth repeating. Failure is only failure if you don’t learn from it and do better next time.

Think about learning how to ride a bike. It’s not easy! You fall over a few (or a lot of) times, but you get back on, pedal more steadily, keep the handlebars straight, and work on your balance. Eventually, you get it.

Plus, if you’re not trying something new, you’re business is not growing, it’s not improving, and it’s not trying to do better. Meanwhile, your competitors are – and they’ll sail right past you. A culture of innovation will keep you ahead of the pack.


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