"With business as usual off the table in a recession, people become more open to new and efficient ways of doing things. And they’re forced to show more entrepreneurial discipline — you have to expend imagination before spending money," says Rita Gunther McGrath, an associate professor of management at Columbia Business School (Why Bad Times Nurture New Inventions, The New York Times).
And small businesses have the advantage when it comes to innovation. A recent study by Intuit, Small Business Innovation 2009, found that small businesses have six "innovation enablers" that make them more likely than large corporations to use innovation successfully:
- Personal passion: Personally invested, most small business owners are willing to try new approaches to make their business more successful.
- Customer connection: A deep and direct relationship with the market and customers helps small businesses understand customer needs, identify new opportunities, and fix problems quickly and efficiently.
- Agility and adaptation: Unlike large corporations, small businesses can quickly adapt to changing market conditions and implement new business practices.
- Experimentation and improvisation: When pursuing new opportunities, many small business owners and managers aren’t afraid to experiment and improvise, accepting failure as part of the path to success.
- Resource limitations: Small businesses are adept at doing more with less. And these resource constraints lend to their innovative mindset.
- Information sharing and collaboration: Small businesses traditionally rely on strong social networks to share information and inspire innovative thinking.
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