Best Practices for Small Business Innovation Management

Here’s a new, highly-timely way to classify innovations: FLEXIBLE vs. INFLEXIBLE. When chaos abounds, prioritize the FLEXIBLE. Yet companies usually spend most money and time on what’s INFLEXIBLE. Six ways to change the balance are: 1️⃣ Map your innovation portfolio How have you spread your bets along axes such as time horizon, type of risk taken, and ability to change course? Know where your portfolio is currently at, and what profile you wish to move toward. 2️⃣ Create options What are inexpensive bets you can place on ways your world might shift? Consider, for instance, low-cost products that might be embraced by customers feeling acute economic pressures. Perhaps these bets have a relatively large probability of not paying off – that’s OK if they’re taken inexpensively, keeping your financial risk small. 3️⃣ Think platforms, not products Platforms create flexibility to change what you offer customers, while retaining a sticky customer relationship. They often have a software component, even in the world of physical goods. 4️⃣ Stay focused on your customers’ constants We can be certain that today’s chaotic environment won’t settle down soon. But your customers’ Jobs to be Done stay fairly constant. Know those very well and concentrate on them. 5️⃣ Prioritize business model and service innovations Product innovation often takes time and multi-year planning. Business model and service innovations are much more flexible (and cheaper), yet oftentimes companies lack clear mechanisms to pursue these. Fix that. 6️⃣ Pursue Costovation You can concentrate some of the less flexible portions of your portfolio on cost innovation (Costovation), because your costs are often more controllable than your revenues. Use the tools of innovation to radically re-think your costs. The innovation literature has many classifications: disruptive vs. sustaining, existing vs. new market, etc. But it’s been rare to classify flexible vs. inflexible. Now’s the time to change that. When everything seems to be swirling, focus on what’s FLEXIBLE.

Your company's growth is a tightrope walk between innovation and complacency. Take too few risks? You'll be forgotten. Take the wrong risks? You'll compromise your brand. Plenty of the world’s most innovative companies we work with at Motto have figured it out, and we’ve seen some patterns. They expand boldly *without* compromising who they are. How’s this possible? By aligning innovation with their core values at the foundational level. Here's what that looks like in practice ↓ ⦿ Value-driven decision making Every new initiative should be measured against your company's fundamental beliefs. If it doesn't align, it's not worth pursuing. ⦿ Create a "failure budget." Allocate resources specifically for experimental projects Reward people for trying, not just succeeding. This tells your team it's okay — wonderful, even — to take calculated risks. ⦿ Implement an innovation framework. Set clear guidelines for new ideas. Leaders should ask themselves… → What will keep our company in the leader position? → What is the impact if we play it safe? → How will this innovation align (or not align) with our values? Make sure innovations contribute positively, inside and out. ⦿ Foster cross-pollination Form diverse "skunk works" teams. Give them a specific goal and deadline. Then, watch as fresh perspectives lead to groundbreaking ideas. ⦿ Embed values through education. Your team should breathe your company's values—When they do, even their boldest ideas will align with your core identity. Innovation isn’t about recklessness— It’s about daring to fly while staying true to your roots. When you master this balance true growth happens. Motto® helps tech companies align vision with bold growth. Let's talk about your next big move. → wearemotto.com

In “The Venture Mindset”, we explore how successful companies foster innovation by prioritizing people over rigid processes. However, placing people over process does not mean that there is no process at all.     Chaos doesn't necessarily translate into innovation; moreover, it can easily destroy ideas. The design should facilitate cutting through quite a bit of the internal bureaucracy and keeping the development team small, independent, fluid, and protected from internal politics. Let's examine two examples of this principle in action: Case Study 1: Gmail at Google Google's approach to Gmail is a textbook example of the power of trusting talented individuals: 1. The project started with a single engineer, Paul Buchheit.  2. Leaders provided a vague directive: "Build some type of email or personalization product."  3. There were no strict feature lists or rigid processes.  4. Google executives supported the project and bet on its potential. Result: Gmail revolutionized email services and became one of Google's most successful products.    Case Study 2: The Happy Meal at McDonald's The Happy Meal's success shows how intrapreneurship can thrive even in traditional corporate environments: 1. Yolanda Fernández de Cofiño, a McDonald's franchisee in Guatemala, developed the concept.  2. She created a children's menu without approval from headquarters.  3. McDonald's world conventions allowed for idea exchange.  4. Executives recognized the potential and scaled the idea globally.  Result: The Happy Meal became a worldwide success and a staple of McDonald's offerings.    Here is what you can do to support the employees in your company:  1. Trust your talent: Give motivated individuals the freedom to pursue their ideas.  2. Provide resources: Offer support and necessary tools without micromanagement.  3. Create "racetracks": Design systems that allow for rapid development and testing of new ideas, with clear funding mechanisms, simple rules, guardrails, and milestones.  4. Embrace calculated risks: Be willing to bet on promising projects, even if they're unconventional.  5. Scale successes: When local innovations show promise, be ready to implement them more broadly.    How does your organization balance structure and freedom to foster innovation? Share your thoughts and experiences in the comments! #stanford #stanfordgsb #venturecapital #startups #innovation #technology #founders #venturemindset 

Most companies claim they embrace failure. But walk into their Monday meetings, and watch people scramble to hide their missteps. I've seen it countless times. The same leaders who preach 'fail fast' are the first to demand explanations for every setback. Here's the uncomfortable truth:  Innovation dies in environments where people feel safer playing it safe. But there's a difference between reckless failure and strategic experimentation. Let me show you exactly how to build a culture that genuinely embraces productive failure: 𝐂𝐡𝐚𝐧𝐠𝐞 𝐲𝐨𝐮𝐫 𝐩𝐨𝐬𝐭-𝐦𝐨𝐫𝐭𝐞𝐦 𝐦𝐞𝐞𝐭𝐢𝐧𝐠𝐬 Stop asking "Who's fault was this?" and start asking: "𝘞𝘩𝘢𝘵 𝘩𝘺𝘱𝘰𝘵𝘩𝘦𝘴𝘪𝘴 𝘸𝘦𝘳𝘦 𝘸𝘦 𝘵𝘦𝘴𝘵𝘪𝘯𝘨?" "𝘞𝘩𝘢𝘵 𝘴𝘱𝘦𝘤𝘪𝘧𝘪𝘤 𝘥𝘢𝘵𝘢 𝘥𝘪𝘥 𝘵𝘩𝘪𝘴 𝘧𝘢𝘪𝘭𝘶𝘳𝘦 𝘨𝘪𝘷𝘦 𝘶𝘴?" "𝘏𝘰𝘸 𝘤𝘢𝘯 𝘸𝘦 𝘶𝘴𝘦 𝘵𝘩𝘪𝘴 𝘪𝘯𝘧𝘰𝘳𝘮𝘢𝘵𝘪𝘰𝘯 𝘧𝘰𝘳 𝘰𝘶𝘳 𝘯𝘦𝘹𝘵 𝘪𝘵𝘦𝘳𝘢𝘵𝘪𝘰𝘯?" 𝐂𝐫𝐞𝐚𝐭𝐞 '𝐞𝐱𝐩𝐞𝐫𝐢𝐦𝐞𝐧𝐭 𝐬𝐡𝐨𝐰𝐜𝐚𝐬𝐞𝐬' Monthly meetings where teams present their failed experiments and the insights gained. The key? Leaders must go first. Share your own failures openly, specifically, and without sugar-coating. 𝐈𝐦𝐩𝐥𝐞𝐦𝐞𝐧𝐭 𝐭𝐡𝐞 "24-𝐡𝐨𝐮𝐫 𝐫𝐮𝐥𝐞" After any setback, give teams 24 hours to vent/process. Then require them to present three specific learnings and two potential next steps. This transforms failure from a dead end into a data point. Most "innovative" teams are just risk-averse businesses in disguise. They've mastered innovation theater, not actual innovation. Don't let your people think they need permission to innovate. Instead, start building systems and a culture that make innovation inevitable.