When it comes to surviving and thriving in your business and its future, innovation is critical. In fact, according to a study conducted by the Deloitte EMEA Family Business Centre, 76 percent of respondents listed “innovation” as a “top three priority.”
The study adds that family businesses may be able to innovate at faster rates than non-family companies “because they are not driven by the short-term interests of external investors and capital markets, and can spend more money on research and development.”
But innovation doesn’t just happen on its own; it takes commitment from decision makers and a dedication of time and resources. Innovation can only occur if it is welcomed, which means employees need to feel comfortable with experimenting ideas with the understanding not all will be successful.
According to the US Department of Labor, the workplaces that result in higher performance levels offer their employees “incentives, information, skills, and responsibility to make decisions essential for innovation, quality improvement, and rapid response to change.”
The intellectual development of team members, and the funding of research and development to not only improve team member knowledge base but also to benefit the development of the family company’s intellectual property, is “widely regarded [by family-controlled corporations] as an essential factor for achieving and sustaining a competitive advantage through innovation,” according to research conducted by Ivan Miroshnychenko of the Sant’Anna School of Advanced Studies in Pisa, Italy. In fact, “Family-owned firms have demonstrated an ability to innovate in almost every industry, from agriculture to space engineering” and additional research has suggested that “family firms are able to develop a unique composition of organizational resources together with knowledge structures and knowledge combinability that enhances their R&D investment behavior.”
Make a space for innovation like your business depends on it, because it does.