Family businesses are often more innovative than “ordinary” businesses. This is a recurring conclusion in several studies, such as those conducted by ABN AMRO and ING. But being innovative is one thing; the trick is to stay innovative. How do you do that?
We believe that innovation becomes truly successful only when talents in all levels of the organization are challenged. That they jointly develop new products, processes or even business models. Interconnectedness can be an important force in this regard. At the source of that connectedness in a family business are important core values such as “shared values” and “like-mindedness.
The shutters open
It is also important to open the shutters! Employees must learn to cooperate with each other (internally), but above all look for cooperation outside the company walls (externally). By nature, joint innovation is usually not an obvious strength of family businesses. Still, we think it is necessary, especially at a time when (technological) developments are
succeed each other with exponential speed.
Decisive innovation
Collaborative innovation has many faces. Consider collaboration with customers, suppliers, universities, colleges or even competitive colleagues, for example. Why? As a collective, you think out-of-the-box more easily and generate more (and often better) ideas. This encourages knowledge exchange and innovative thinking. In short: collectivity and collaboration within and outside one’s own organization leads to more decisive innovation.
An example
Koninklijke Smilde in Heereveen is a family business that dared to open the shutters. In terms of innovation, the company decided to activate several external tracks. It did so in part through:
- Participation in the Kitchen Republic kitchen in Amsterdam (an incubator for local food producers and startups with growth ambitions);
- Launching two food concept competitions between students and food startups;
- Collaboration with a college;
- Competing for a spot on the internal Dream Team, which looks for new product-market combinations.
Smilde raves about the energy and output of the various tracks. Radical and disruptive are words the company uses to describe what the search for these tracks has produced.
Practical Tips
In every family business, there is room for innovation of innovation. We offer six practical tips to fuel innovation:
1. Invest
From the beginning, invest time, space and (if necessary) money in innovation and in a culture of innovation. In this way, everyone can contribute: it is important for innovation to occur independently of specific individuals.
2. Check
Successful innovation requires commitment, creativity, discipline, as well as a good project approach.
3. Fail
Dare to make mistakes: nine out of ten innovations fail. So that effectively means that it takes nine learning moments to arrive at the tenth innovation, which does succeed.
4. Work together
Not only internally, but also select external partners for collaboration. Consider universities, colleges, as well as competitive peers or just companies in other industries (with similar processes or goals).
5. Document
Record the relationship with collaborative partners and what happens to innovative results. But at the same time: remember that too stringent an approach stifles innovation.
6. Stop on time
The amount of resources (such as money) is limited and the payback period of innovations is ever shorter due to ever shorter life cycles. So stop in time with innovations that have no real chance of success.
We took inspiration from several publications in writing this blog article. Curious? Then read on here:
– Het Financieele Dagblad wrote about effective innovation
– Chro.co.uk describes why family businesses are more innovative
– ABN AMRO wrote about innovation and sustainability in family businesses
– The Leeuwarder Courant published Royal Smilde’s success story
