When you first begin your startup, it is important that you innovate, that you deliver something new to the market that doesn’t already exist. Startups who are able to define and cater to their niche are often the most successful. But in the life cycle in every company comes a time when the business must consolidate its standing in order to then grow more. The risk at this moment then becomes a battle between finding the right balance between innovation and consolidation. To move forward your business will need both. Let’s take a look on the best ways to strike this balance:
- Evaluate: To strike a keen balance, it is crucial that you are aware of where your business currently stands. You need to examine how it functions, does it have the capacity and the right team to innovate and what are the risks involved in innovation. Often small businesses (and large ones) prefer to rest on their laurels as innovation can be costly and effect their bottom line. Evaluating your current state will allow you to forecast future business and then, make the decision on how much time and resources are then spent on innovation.
- Create a Buffer: Once you have evaluated your company’s situation, you will realise the right time for innovation. In case the time has not arrived and innovation will drastically affect your profitability and ability to run your company, then start creating a plan for future innovations. This could involve, earmarking resources for innovation or managing your working team better to give them time and bandwidth to innovate.
- Build a Team: A company looking to consolidate and one looking to innovate can be two very different looking animals. Your staff who might be exceptionally effective in their roles may find it difficult to think out of the box and come up with something new. It is important that you don’t place the emphasis of innovation purely on your shoulders but rather build a team that can assist you in taking your business to the next level. In this stage a mentor can be a valuable resource that can give you an outsider’s insight and advice on the best pat to follow for your business.
- Recognise the Market: In order to keep your company afloat through a phase of innovation, it is vital that you recognise the current state of the national and international economy. If the economy is experiencing a low, it is a better climate to consolidate and plan for innovation later. It is also key to check what competitors are doing. The actions of competitors will give you an idea on what is currently more important in order to gain the edge. Before you commit to one path over the other, remember following one strategy does not completely negate the other. Both are essential to running a successful business now and in the future.
While you follow the steps listed above, it is also important to talk to your employees as well as listen to what your gut is telling you. When it comes to striking a balance, do your research, formulate a plan and then, follow your instincts.