Innovation. Innovation. Innovation. Find any business magazine today and their telling you it’s all about innovation. True, like I noted in a recent post (April 23, 2007), innovation is important to business success to one degree or another. Apparently, the Big Dogz are all over this. Got to have it. Need it. Want it…badly.

Small business needs some level of innovation as well. But where does true innovation come from? How is it born? It comes from all sorts of places. For example, innovation (service or product) can come from your employees. But you won’t know it unless you ask them and take their suggestions seriously. Your competitors might be another source. What are they NOT doing that you should be in order to give more value to your customers?

Probably your best source for innovation is your customer base. Who better to tell you what you could do to improve your product or services? I don’t care what small business you’re in, you should be checking with you customers, especially your top customers, and ask them.

You could even make a contest out of it. For example, let’s say you’re a small, regional manufacturer of fishing lures for bass (ok…I’m a fishing nut too!). Why not hold a contest for the most innovative and fish-catching lure design? You could award a series of prizes for the best designs that actually catch fish. And think of all the free publicity you’d have! Outdoor editors would eat this story up!

Or you could bring several top customers to an ‘invitation-only’ dinner event where part of the evening is spent discussing your products/services and how to improve them.

If you have a service business, your innovation might be in how you package and deliver those services to you customers. What if you could deliver your services via internet? Your customers might tell you how to package or bundle your services for more effective use and delivery.

Product or service innovations can come in a variety of shapes and sizes. The key is to always be on the look out for those innovations that your customers will desire.

Customers don’t buy product or service innovations just because they are available. You’ll keep your customers coming back for more if you tap into their ideas on improving the products/services you offer and they use.

When was the last time you were asked by a small business owner for your suggestions/ideas on product or service improvements? You haven’t? See, there’s the opportunity.

Making Decisions by Consensus

Not all decisions are made by the boss. Sometime we want to include others in our decision making process. The Big Dogz know how to get others’ opinions incorporated in the decision. They use a process known as consensus.

First of all, a consensus does not mean that everyone agrees with the decision. It means that everyone can support and live with the decision. Generally consensus decisions have very high level of commitment to the decision. They also take a lot more time. If these decisions take so much time, we want to know the process for making a consensus decision.

• Make a commitment to consensus — tell people that you want a consensus decision. And, set a deadline for completion.
  
• Identify the alternative to a consensus decision. What will we do if consensus can not be reached? Options include a majority vote and a consultative decision by the leader.
  
• Have the group clearly state the problem to be solved. This is key to getting everyone focused on solving the same problem.
  
• Use brainstorming to create alternatives. The more alternatives the more likely you will get a robust solution.
  
• Establish criteria for selecting the optimum solution.
  
• Have the group use selection techniques like multi-voting and weighted voting to select the top alternatives.
  
• Use discussion of pros and cons to select the best solution for the group.
  
• Have each member of the group articulate the decision and their support for it.
  
• Publish the decision and track progress toward implementation.
  

Consensus does take time; however it can yield high commitment and help you make more profits. Be careful not to view consensus as the only method of making decisions. In a highly productive environment, about 20% of decisions should be made by consensus.

Over the next 30 days, experiment with using consensus to make a decision. I think you will find a higher level of commitment to these decisions and you may get some excellent and unusual solutions.

Interns Make $ense

One thing many of the Big Dogz do is find top notch and inexpensive new talent. What do they do? They hire summer interns! Of course, they do this so that they can identify potential new hires well before graduation day. The better Big Dogz find ways to make their summer interns productive and profitable by assigning them meaningful projects and work assignments.

You should be tapping into this resource as well. Want to get your finances organized better than they are today (you know how you like to keep you finances current…ugg!)? Want some extra thinking on some creative projects that have been languishing around the office or store? Your resource and solution is not far from your place of business.

Do you have a community college nearby? Four-year university? Then you have a way to tap into some excellent talent who can really help you improve your business.

There are a couple of things you’ll need to do in order to make the experience rewarding for both you and your intern.

1. Check with your local colleges and see what internship programs are already being offered by local businesses. Find out how the college/university helps to promote summer internships and promote them on campus.

2. Give you summer intern some really meaty things to work on. Don’t expect them to be too motivated if your only wish is to have them do filing and clean the bathrooms. Interns will be attracted to your posting if they know that they’ll be able to really gain some valuable work experience.

3. Match projects and work assignments to their college interests. Hiring a marketing major to work on projects that are not even remotely connected to marketing is a waste of your time and theirs. Finance majors might be interested in working on a new bookkeeping system for you rather than something unrelated. Take advantage of that college education that someone else is paying for!

4. Interview all candidates carefully and fully. Make sure that you are hiring the one(s) who have the best aptitude

5. Don’t be cheap and pay them competitively. While hiring an intern is generally less expensive than hiring someone and paying him or her benefits, etc., don’t cheap out on the summer wage. Not only are they working for the experience, but they need the money too!

6. Make your intern feel special during their time with you. Take them out to lunch once in a while and be sure to celebrate their successes as they complete work assignments. You may want them back the next summer and a great work experience will make them eager to come back again.

Creating valuable work experiences for talented college interns is a great way to enhance our business without spending a fortune on talent.

Listen with FOCUS

Most people think they know what active listening is. But the Big Dogz know how to do it. The key skill in high performance management is listening. It is easy to apply the principles of CLEAR communication; it not so easy to listen while someone else is talking. We tend to get distracted with our own thoughts and sometimes we are crafting our rebuttals while the other person is speaking. Although almost everyone would say the goal of active listening is to understand what the other person is saying, I want you to think of it this way:

Goal: allow and encourage a person to freely communicate their needs and opinions

To accomplish this goal requires us to listen with FOCUS.

Facilitate a dialogue — acknowledge emotion and demonstrate empathy. Address emotion before you let the speaker move on. A good technique is to use the exact word or phrase the speaker uses, especially if they are excited. If you have experienced what they are talking about sincerely express your empathy. “I know how you feel.” “I’d be upset if that happened to me.”

Open — be receptive to other perspectives, seek the other person’s perspective. Be careful of focusing on your rebuttal or position while the speaker is talking. Let them go first, it allows you to identify where you agree and where there are differences.

Concentrate — pay physical attention to the speaker. Make eye contact, nod your head and set aside what you are doing. Pay mental attention to what the speaker is saying. Be alert for non verbal signals that may be contradicting the words the speaker is using. Concentration is especially important in face to face communication. Studies have shown that the words we say make up only 7% of the message; the other 93% of the message is carried in the tone and non-verbal signals.

Understand — ask questions if you do not understand. Request the speaker to use a different analogy or example. Ask clarification questions to demonstrate understanding. Relate what the speaker has said to you own experiences. Insure you understand the speaker’s point of view before expressing yours.

Summarize — use paraphrasing to summarize what the speaker has said. Do a periodic summary to indicate you are listening and understand. Verify with the speaker that you understand correctly.

Try experimenting with active listening with FOCUS over the next 30 days. I am sure you will see less misunderstanding in your communication process. Things will get done more efficiently and you will reap both the profit of improved relationships and the increased profit of increased income to your business.

About this thing called Innovation

The current hot word in the world of Big Dogz is ‘innovation’. Not that innovation is new. Man has been innovating since life began. In his March 5, 2007 column, BusinessWeek columnist Dan Saffer (www.businessweek.com) noted that the Big Dogz are suffering from a “cult of innovation”. Innovation is now done for the sake of…innovation.

His point is well taken. Saffer took the word ‘innovation’ to task. He points out that creating purple ketchup is not innovation. Nor is Crystal Pepsi. Nor is ‘new and improved Tide’. What, the Tide you told me was great now sucks? Never cleaned very well? Oh, but this is supposed to be better? Didn’t they tell me that in the last ad?

Webster’s defines innovation as ‘something new or different introduced’. Well, that’s not too helpful. Does that mean that purple ketchup is innovative? I can’t get myself to think so. It tastes the same as RED ketchup.

Saffer’s point is well taken: today, many companies innovate for the sake of innovation. They sometimes take a perfectly good product or service and add some ingredient or other items and then call it “new”.

Innovation is not creating “products no one needs and few actually desire”, says Saffer. It’s just the opposite.

What is innovation to small business? It can be the difference that makes your ‘word of mouth’ marketing campaign easier to execute on. Creating the next purple ketchup isn’t going to do it for you.

Ask your self these questions:

1. What can I do to enhance my products or services (including things like pricing, ordering, customization, personalization, delivery, etc.) to make them more desirable to my customers?

2. What do my customers need/want/desire in my products & services that would make them continue to buy from me and spread the good word? Have I ever seriously asked them?

3. When was the last time I provided real innovation for my customers? What was it?

I like the idea of creating a small business that provides a level of real innovation that customers really value and want.

Use the Mouth to Grow Profits

Today, you’ll hear a lot about the latest thing call “word of mouth advertising”. Wow. If I’m not mistaken, ‘word of mouth advertising’ is as old as it is new. Back before radio, TV, or computers, there was just plain newsprint advertising. But even before that, there was ‘word of mouth advertising’.

The best businesses, I don’t care what business you’re in, get most of their customers, and sometimes all of them, through word of mouth. Who doesn’t want that? Word of mouth advertising, when one customer tells another potential customer how great your business is, is cheap. It doesn’t cost you anything out of your cash flow. You don’t have to take a second mortgage to do ‘word of mouth advertising’.

It seems easy enough. Just get your customers to brag on you and your business. One tells another, then another, then another…you get the point. Oh, and therein lies the rub. How do you get your customers to brag on you and tell everyone they know?

I like the way Andy Sernovitz, CEO of the Word of Mouth Marketing Association (WWW.WOMMA.ORG) describes how to do it:

Says Andy, “First, give people a reason to talk about you. If your business is merely fine, no one is going to care. You will have to do little special things (my emphasis) that people will go home and tell their friends about. The Carnegie Deli in New York gives you the best corned-beef sandwiches in the world—and they pile it up 7 inches high. If it were only 2 inches, it would still be the best, but you wouldn’t run home and tell your friends.”

You can probably think of a time when you went to some store, or received some type of service and were so WOW’d that you told everyone you knew about it. I’d bet that when the subject comes up…that store or service provider is probably the first one that pops into your head.

That’s word of mouth advertising. What special things could you do that would WOW your customers into advertising for you? If you can’t think of anything, you haven’t thought hard enough. Think again and then do it.

CLEAR Communications

The Big Dogz know how to communicate. Effective managers use specific techniques to help themselves to be understood as well as to understand others. There are a lot less problems and consequently more profits when we communicate effectively and efficiently. This article will provide some guidelines on how to be effectively understood. The Big Dogz use the mnemonic CLEAR to help remember the principles of being understood when they communicate.

Clarify — give the listener enough information so they have a reasonable chance of understanding. Do not use jargon or confusing language. Most people in the work place have a vocabulary at the eighth grade level. Do not try to impress people with your vocabulary at work. Keep it simple.

Link — link your message to something they already know. Using analogies is an effective method of explaining how things are to be done. When outlining a task process, referring to previous experiences as a baseline for instructions works wonders.

Engage — get them involved in the communication. Encourage them to ask questions. Ask them to paraphrase what you have told them. When an employee says they have no questions and they understand, then you are heading for trouble!

Anticipate — think about what concerns or questions they should have. Include the answers to these questions in your communication. You can even say “You might be wondering about this.” Then answer your own question. Anticipate portions of your communication that may be troublesome for them to understand; be prepared to repeat this information in different approaches to insure understanding.

Respond — especially respond to questions with dignity and respect. Encourage them to ask questions by thanking them for asking the clarification question. Paraphrase the question before you answer it and verify you understand the question. Once you think you have answered the question, get verification from the employee that you have answered their question adequately. Be sure to ask for a paraphrase to check that what they heard was what you said.

If you will follow these simple techniques, you will see a significant reduction in the misunderstandings in your communications to employees. And, you will see a corresponding rise in profits!