Common Innovation Mistakes: A Guide for SMEs on How to Avoid Them

Common Innovation Mistakes: A Guide for SMEs on How to Avoid Them

January 12, 2023

Common Innovation mistakes in SMEs, image generate with AI copilot

Discover how SMEs can sidestep the common innovation mistakes that hamper growth. Learn the importance of continuous innovation, customer focus, adaptive leadership, and strategic tech use. Join us in exploring actionable strategies to navigate the innovation maze effectively.

Introduction: 

Did you know that 70% of small and medium-sized enterprises (SMEs) struggle to sustain growth due to innovation-related challenges? In the dynamic landscape of SMEs, innovation is not just a buzzword but a vital strategy for survival and growth. However, in a rush to stay ahead of the curve, CEOs and owners often fall into common pitfalls that can restrain their company’s innovative potential. The good news? These obstacles are navigable with the right mindset and strategies.

Navigating the Innovation Maze

Innovate Relentlessly

It is the first commandment in the playbook of successful SMEs. The innovation journey is loaded with challenges, but the most common mistake is complacency. Many businesses fall into the trap of believing that a single innovative product or service will sustain them in the long run. The reality, however, is that Innovation is a marathon, not a sprint. To avoid this pitfall, SMEs should continuously explore new ideas, technologies, and methodologies. Establishing a routine for brainstorming sessions, encouraging creative thinking among employees, and staying abreast of industry trends are actionable steps toward embedding relentless innovation into your company’s DNA.

Amazon exemplifies relentless innovation with its “Day 1” philosophy, fostering a culture where exploration and experimentation are paramount. The “two-pizza rule” empowers small teams to innovate swiftly, proving that size does not inhibit agility and creativity.

Customer First

Another common misstep is losing sight of who matters most—the customer. In the enthusiasm to innovate, it’s crucial not to deviate from the core principle of prioritizing customer satisfaction. Remember, the end goal of innovation is to serve your customers better, not to dazzle them with complexity or novelty for its own sake. Cultivating a deep understanding of your customer’s needs, preferences, and feedback loops into your innovation strategy ensures that your efforts drive loyalty and long-term engagement.

Effective strategies include developing deep insights into customer needs and establishing feedback loops through surveys and social media engagement.

FARM Rio’s global expansion showcases the importance of adapting to local cultures while maintaining brand identity, underscoring the balance between authenticity and market demands. Their commitment to sustainability further highlights how innovation can align with global values and trends.

Adaptive Leadership

It is essential for navigating the unpredictable waters of business. A rigid leadership style that resists change is a significant barrier to innovation. Leaders must embody a vision that inspires their team while being flexible enough to pivot strategies when necessary. Leadership that embraces flexibility and learns from failure is critical to fostering an innovative environment; this includes cultivating a vision that inspires and adapts and encouraging calculated risk-taking.

Cultural Excellence

Culture cannot be overlooked. A culture that promotes high standards and nurtures innovation is the bedrock of a thriving SME; this involves creating a supportive atmosphere where employees feel valued and empowered to contribute ideas. Recognizing and rewarding innovative efforts fosters a culture of excellence and creativity. Moreover, investing in training and development ensures your team has the skills to drive your innovation agenda forward.

Sharing stories of overcoming setbacks can inspire perseverance and underscore the value of maintaining morale through challenges.

Tech as a Lever

In today’s digital age, technology is a critical enabler of innovation. However, merely adopting the latest technologies isn’t enough. The critical mistake to avoid here is technology, for technology’s sake. SMEs should use technology strategically, focusing on solutions that offer a competitive advantage, streamlining operations, and fostering growth. This requires a clear understanding of your business goals and how technology can help achieve them rather than chasing after every new tech trend.

Questions like, “Does this technology address a real need within our operations?” and “What is the expected return on investment (ROI)?” can help ensure that technology investments are aligned with business objectives.

Conclusion: Transforming Through Innovation

Innovation within SMEs is a holistic endeavor requiring more than good ideas. It demands a strategic approach to avoid common mistakes such as complacency, customer detachment, rigid leadership, cultural mediocrity, and misguided technology adoption. By innovating relentlessly, putting the customer first, embodying adaptive leadership, fostering cultural excellence, and using tech as a lever, SMEs can navigate the innovation maze more effectively.

The Volcano Summit Experience

It was a fantastic experience for Escalate Group to have participated as guest speakers in the online Volcano Summit this past June 13th.

The promise of the event was highly enticing when we heard this experience was going to be an online oasis to explore the future of innovation in our ever-changing world. And the outcome honored it.

Amid a pandemic lockdown and walking around this online encounter, we were able to learn from videos of previous editions of this yearly Guatemala-held event. We were astonished by the beauty of the setting and the energy imprinted by its leaders advocating innovation and educating a community thirsting for the latest trends in technology.

This year they could not fall short with the expectations of its audience. With limited time, they created a curated line up of activities to keep its community engaged with their promise.

The event included speakers, networking, meetups, workshops, expo booths, and breakout discussions. Those interested in a more personalized experience, engaged using a headset in an immersive VR encounter.

In our speeches, Escalate Group shared our customer-focused approach to innovation view and touched upon the topic of the opportunities that blockchain technology brings to the entrepreneurial world.

We are humbled and honored to have contributed to the success of this event, which attracted more than 1,500 participants from 30 countries on that Saturday morning.

Kudos to Emilio Eva, Director of Volcano Summit, and his team. They were able to make the Volcano Summit alive again this year, keeping faithful to its game-changer community and demonstrating that space and time are of no importance when bringing together investors, sponsors, businesses, and entrepreneurs!

My experience at the EXO World Digital Summit

What a wonderful three days at the EXO World Digital Summit with around 1500 or more global participants! Greater than a Digital Summit, it was a Digital Festival. Perhaps a novel way of Summit that will lead us to a newborn category of omnichannel events.  

 I have had the privilege of listening to many speakers during the past years, first at the Singularity University Executive Program at Moffett Field. Later at several SU Global Summits in downtown San Francisco. Moreover, at many podcasts, when working out in my smart bike training at home. This week the new digital experience created by the organizer of the EXO World made it different and better.   

I noticed I was more engaged with participating from home and sharing the experience with my family. Actively commenting within my several WhatsApp and Discord groups, broadcasting to my Twitter and LinkedIn communities, and crowdsourcing the notes of the Summit.  

Ironically in the middle of the quarantine, the whole adventure felt like an enhanced “business” week. Perhaps this better experience to learning and networking is partially explained by the “metacognition” concept presented by @NicoleDreiske on day one.  

The Summit brought to me many take-aways, and it was not easy to select my top “take-home-value.” Disclaimer: it was physically impossible to hear from all the presenters as multiple sessions were happening at the same time. I will binge myself into the recordings to complete the presentations and to listen again to the segments I liked the most. Meanwhile, here my list created right after the experience ended.  

Scarcity = Abundance – TRUST  

I have been wired, for more than five years, to the concept that exponential technologies are enabling us to make more significant gains and solve our big problems in the next two decades. I understand trust as a critical enabler for web 3.0 (the value internet). I evangelize how business models of the past century are based on scarcity, while the business models of this century are based on Abundance.  

However, early on, I felt very connected when @SalimIsmail presented Abundance in terms of Trust while inviting us to move from the male (patriarchy, information wall-guarded, oil-based-world) to the female (distributive and abundant world, collaboration, nurturing, positive reimagining better world) archetypes. Combine with, Peter Diamandis’s remarkable commentary about the inequalities, and his quote, “I’m not worried about artificial intelligence, I’m worried about human stupidity.” It completed my first take-home value.   

An Aha moment – “And COVID just accelerated it”  

@JeffBooth explained at his session that we’ve printed $186 trillion worth of money over the past 20 years, to generate $46 trillion of GDP growth. Then, he illustrated how we are living a deflationary abundance from technological development, e.g., cell phones, are staggering. So, given this increasing deflation, governments are creating a structural problem printing more money as they are destroying the value of cash. All this was pre-Coronavirus.  

He cited how Zoom went from 10M to 200M users in a month to explained that COVID just accelerate it. They are not going to go back to 10 million after the Coronavirus, he added. “This delta and more people working from home are going to put a downward price on commercial real estate prices, which will lead to a subprime crisis.”  

Jeff added, such a crisis and the debt will lead to more dislocation and inequality in society, which will eventually lead to uprisings, wars, and the rise of dictators—causing a system reset.  

Another path is to “let it fail,” Booth commented, but that will cause a global depression like the one from the 1930s, and it can cause the banking system to collapse. Can policymakers stomach this?   

Furthermore, he commented that the loss of trust in one’s currency might lead to the possible pegging of some currencies to bitcoin or other similar cryptocurrencies. Some tech (e.g., crypto-currency) will disrupt this and ultimately lead to an economic explosion. And COVID just accelerated it.  

We have to open the space for the new generation.  

The youth is the future of the world, the future of our countries and our cities. They are the next generation, the entrepreneurs of the Singularity age. We should enable future generations to take the lead.  

The dreamers touched my daughters and me. Dream Tank is an organization on a mission to ignite kids around the world through entrepreneurship to make their biggest dreams become a reality. They are here to activate 1 billion young people worldwide to build solutions to our global crisis and our future. Xprize, Openexo, and many other partners genuinely believe in unleashing the creative ideas of young people to design the future and are standing with them. How are we going to contribute? 

 Here another seven moments from the Digital Summit, worthy of comment. 

@PaulSaffo was explaining how the City-State concept, born out of the Information revolution, is a new challenger in the 21st century. It is as a dominant force versus the Nation-State model from the 19th century.  

@AnneConnely was citing Vitalik Buterin to explain how blockchain removes intermediaries. “Instead of putting the taxi drivers out of work, blockchain puts Uber out of work and lets the drivers work with the customer directly.” She added, much of today was designed around centralized trust models – the future is decentralized. It will be done from the bottom up.  

@VishenLakhiani was ending to-do-lists, phone-calls, emails, regular meetings, and presentations. Cultivating flow, and embracing collaboration and reflection through social tools. Recommending to use the OODA Loop for decision making: Observe, Orient, Decide, and Act.  

@DavidRoberts remarks about how CEO training is different to SEAL and CIA agents training and how the second ones are prepared to operate within a continuously changing and highly uncertain environments. Should CEO training improve?  

@PaulPagnato inviting companies to have Privacy and Transparency Standards, while explaining his 6Ts model: Transparency, Terms, Total Accountability, Total Cost, Truth, and TRUST.   

@AndrewHessel’s closing remarks: “the future of life is that we’re going to design and build more and more of it.” We have to navigate the limitations, opportunities, and ethics and “we have to move beyond the fear of the virus.”   

@RaymondMcCauley’s interactive and creative presentation illustrated how biotech will move from current applications in pharmacogenetics, disease identification, consumer genetics, precision agriculture, industrial-biology, etc., into CRISPR to create vaccines! Antibiotic, antiviral – Are we going to see the end of infectious disease?  

Thank you to all thought-leaders that took part in the EXO World Summit.  

To end this post, I would like to share a selection of my favorite quotes from my EXO Ambassadors colleagues when reflecting on the EXO World Digital Summit. 

“It is super inspiring, not only the content and the interactions but also for developing new formats for building community and making movements happen at a large scale. Next stop abundance, cheers,” – Lars Lin Villebaek

“What a fabulous chance for exponential thinkers to ideate the best possible future together. Congratulations to all involved!!! Look what can be achieved in one month, navigating huge complexity.” – Emilie Sydney-Smith

“In addition to amazing content and people, it has been a breakthrough experience in terms of emotional engagement. Last night I felt deeply sorry it was over. This feeling so deep never really occurred to me in traditional events. My Singularity attendance 8 years ago was an intellectual breakthrough but certainly not so emotional.” Augusto Fazioli 

“ExO World was awesome! It was as (or even more) inspiring and intensive as SU but accessible to everyone, which is the way to go (democratizing inspiration!). Kudos to all the team who made it possible. I think this event will be the first of his kind, looking forward for more to come 🚀” – Francisco Palao 

“ExOWorld! What-a-festival amidst gloomy times! A zero-carbon conference, attended by over 1500 purpose-driven individuals and knowledge seekers, from 50+ countries. None traveled. Everyone stayed at home with family, ate home-cooked food, logged-in at all odd hours from the comfort of their living room or bed, in their pajamas. All for a single cause: transform the world for a better future!” – Suman Sasmal

Five Leadership Lessons from last year

By Cesar Castro, Managing Partner at Escalate Group

“A fixed mindset is when people believe their basic qualities, their intelligence, their talents, their abilities, are just fixed traits. They have a certain amount, and that’s that. But other people have a growth mindset. They believe that even basic talents and abilities can be developed over time through experience, mentorship and so on. And these are the people who go for it. They’re not always worried about how smart they are, how they’ll look, what a mistake will mean. They challenge themselves and grow.” Carol Dweck, at Mindset: The New Psychology of Success.

 The things and relationships that I mostly enjoy in life and where I had the most challenging and rewarding experiences are: 1- The love for my family, 2- My passion for endurance sports, 3- My commitment to work, and 4- Being lured into the history of civilization. 

From these areas of my life I have learned many leadership lessons; the key ones from last year were the following:

1- Leadership lesson from my family

There’s an old saying that inspires me and many others to do better: “do things right and do the right things”. When you lead by example, you create a picture of what’s possible. Currently I am sharing my life with my pre-adolescent daughters and my wife; I have been re-educated in a very important concept that makes a huge difference in our life:

       –  Always look closely at your own behavior first and reflect on how everyone else is feeling in your presence

Parenting is a journey that many of us have embraced; it provide joy and the amazing opportunity to learn and be better persons, better parents and better leaders. Our kids learn by example. They notice our behaviors, actions, emotions and our words. They tend to observe us and copy us so our leadership consists in preaching not just words but by example.

 2- Leadership lessons from an Olympian

During many years as executive leader and active endurance sports practitioner, I have learned about discipline and the importance of setting small milestones, enjoying and celebrating performance peaks – even if they hurt – and making sure to take time to recover before and after big efforts. In mid-June I learned directly from Mary Whipple, a 3-time Olympic medalist, two important principles that stick in my mind when watching #Rio2016 and reflecting about exponential mindsets and digital transformations:  

    –       “There is not one way to row, there are many… you need to pick one, the fastest way!”

    –      “In order to perform, you can’t be afraid of how fast you can go”

 To gain the flexibility and adaptability capabilities needed in today’s fast-paced times, we need to take time to experiment, move fast, provide more autonomy to our teams and not be afraid of the exponential growth ahead of us.

 4-Leadership lessons from Work

I joined Microsoft once the Nokia acquisition was completed in April 2014; in the past two years I have seen Satya Nadella driving important changes not just in direction, but also in the culture and mindset of the company. At Microsoft, we fundamentally believe that we need a culture founded in a growth mindset. It starts with a belief that everyone can grow and develop, that potential is nurtured, not predetermined, and that anyone can change their mindset.

    –      “Leadership is about bringing out the best in people, where everyone brings their A-game and finds deep meaning in their work”.

We need to be willing to lean into uncertainty, take risks and move quickly when we make mistakes, recognizing that failure happens along the way to mastery, that we need to be open to the ideas of others and that the success of others does not diminish our own. 

 5- Leadership lessons from the Ancient Romans

The Romans were prodigious builders and their civilization produced advances in technology, culture, and architecture that can still be seen today. In early December I was thrilled to learn that I had to prepare a case about the Romans for my Harvard Executive program. My energy level crashed when reading the assigned chapters from two ancient texts – it was really hard. During my special January week in Boston, the Roman teachings led by Professor Frances Frei happened to provide a very high note and a unique lesson.

    –      Justice is a trade-on, not a trade-off, between severity and fidelity

A leader’s role is to make people better through our presence, commitment & support. Practicing deep devotion to our people (meaning our family, our friends, our colleagues, etc.) is very important, and to do so, we don’t have to lower our standards.

In the past, business models were created based on scarcity; now we live in a world of abundance where every business is a digital business and we are digitizing, dematerializing and democratizing the physical world. This implies a huge change on how we have to approach businesses, societies, etc., and requires us to re-align our leadership concepts. Leaders have to act as catalysts of change, find better ways to reach and manage the unique opportunities ahead, create clarity, learn how to engage with audiences and communities, empower people to make a difference and ultimately deliver success.

 Learning is a mindset, more specifically, a growth mindset. It’s vital for our children but also for our personal and professional lives. “Changing the way I think generates a change of how I behave”.  

I would like to learn from your leadership lessons and from your transformational leadership challenges.