Innovation & Adaptability: The Growth Edge

Why Innovation & Adaptability Matter for SMEs

In today’s volatile business environment, the ability to innovate and adapt is no longer optional—it’s a necessity. Unlike large enterprises with vast resources, smaller businesses must leverage agility, creativity, and forward-thinking leadership to stay competitive, seize new opportunities, and navigate market shifts. Innovation isn’t just about technology—it’s about creating new value, improving processes, and staying relevant to your customers. Let’s further explore this focus of The Five Focuses of Agile Growth.

✅A study by Deloitte shows that innovation-driven SMEs grow twice as fast as their peers. When combined with adaptability, innovation enables businesses to pivot, seize new opportunities, and stay resilient in the face of uncertainty.

✅Research by PwC reveals that 61% of CEOs are concerned about the speed of technological change. Yet only a fraction of SMEs have a structured approach to innovation. Those who do are more likely to survive disruption, seize new opportunities, and maintain competitive advantage. The world will not stand still while a business focuses inward to find stability and certainty.

💲The Cost of Staying Static

Many companies fall into the trap of “this is how we’ve always done it.” That mindset can lead to:

❌Missed market opportunities

❌Stagnant growth

❌Loss of relevance with customers

A classic example is Kodak—a company that failed to adapt to digital photography despite inventing it. In contrast, small companies like Mailchimp (before its acquisition by Intuit) thrived by consistently evolving their services based on user needs and market shifts.

The Role of Leadership: CEOs, Founders, and Senior Executives

Leadership is the catalyst for innovation and adaptability. In SMEs, where leaders are often close to customers, products, and employees, CEOs and founders are uniquely positioned to set the tone for change. It starts with mindset:

• Modeling curiosity and experimentation

• Encouraging cross-functional collaboration

• Allocating resources (time, talent, and budget) to innovation initiatives

• Making space for failure and learning

Great leaders foster a culture that rewards new ideas, listens to diverse perspectives, and adapts quickly to market signals. They don't just delegate innovation—they lead it.

Questions for Leaders

• When was the last time your team tested a new idea?

• Are you creating space in your calendar and meetings to discuss innovation?

• How do you respond when an idea fails—do you treat it as a learning opportunity?

• What trends are emerging in your industry, and how are you preparing?

• Is your team empowered to challenge assumptions and suggest new solutions?

  
  

🚦Common Innovation Challenges for SMEs

1. Limited Resources: Time, budget, and talent constraints often make innovation feel out of reach.

2. Risk Aversion: Fear of failure can prevent experimentation.

3. Lack of a Clear Process: Innovation seems chaotic without structured systems.

4. Short-Term Focus: Day-to-day operations can overshadow long-term strategy.

5. Cultural Resistance: Teams may resist change, especially if innovation isn’t modeled from the top.

Steps to Cultivate Innovation & Adaptability

1. Create a Culture of Curiosity

Innovation starts with asking better questions. Encourage your team to challenge assumptions and propose new ideas.

📈Example: Little Potato Company, a Canadian agri-business, encouraged staff to submit product improvement ideas. One employee’s suggestion led to a new ready-to-eat line that became a top seller.

👉Activity: Hold monthly “Innovation Hours” where staff present one new idea or improvement. Celebrate contributions regardless of implementation.

2. Pilot, Test, and Learn

Avoid big-bang implementations. Start with small, low-risk pilots to validate ideas before scaling.

👉Exercise:

• Identify one customer pain point.

• Design a small test to solve it.

• Measure the outcome and refine.

📈Example: A boutique architecture firm in Vancouver tested virtual design consults during the pandemic. Positive client feedback led to a permanent hybrid service model.

3. Develop Agile Decision-Making

Empower cross-functional teams to make decisions quickly. Use short planning cycles and regular retrospectives to learn and improve.

👉Tool: Use frameworks like Lean Startup or Scrum to iterate quickly.

📈Example: Vessi, a waterproof footwear startup, built adaptability into their product development cycle. Their rapid prototyping and feedback loops helped them expand product lines efficiently.

4. Invest in Continuous Learning

Stay updated with market trends and best practices. Encourage team learning to build an innovation-ready mindset. Offer staff access to Coursera, Udemy and other online learning for upskilling. Participate in industry-specific webinars and trade shows.

👉Exercise:

·         Allocate a training budget per employee.

• Require each team to present one learning insight quarterly.

📈Example: A small HR consultancy created an internal “Learning Council” where employees curated and shared key articles, podcasts, and tools.

5. Use Customer Insights as a Compass

Your customers are your best innovation partners. Talk to them, observe their behaviors, and involve them in solution development.

👉Exercise: Empathy Interviews

• Choose 5 loyal and 5 former customers.

• Ask about their biggest frustrations and unmet needs.

• Use insights to spark new service or product ideas.

📈Example: A Toronto-based catering company learned from client interviews that customers wanted more sustainable packaging. Their eco-packaging initiative became a marketing differentiator.

6. Integrate Innovation into Strategy

Make innovation a strategic priority, not a side project.

👉Action Plan:

• Add innovation goals to your quarterly OKRs or business scorecard.

• Track metrics like number of new ideas tested, pilot success rates, or time to implement new solutions.

📈Example: Knix, a Canadian direct-to-consumer apparel brand, built innovation into their strategic planning. They launched dozens of product prototypes each year and co-created solutions with their customer community.

🤔Thinking Questions

• Are we fostering a culture where new ideas are welcomed and tested?

• What percentage of our time and resources are invested in exploring new opportunities?

• How quickly can we respond to unexpected changes in the market?

• Are our current products or services still the best fit for our customers' evolving needs?

• Do we regularly gather ideas from across all levels of the organization?

Innovation starts at the top. As a CEO, founder, or senior executive, your role is to lead with vision, model adaptive behavior, and empower your team to think boldly. It’s not about having all the answers—it’s about creating the environment where the best ideas emerge, are tested, and can scale.

The businesses that thrive in uncertain markets are not the biggest—they’re the most adaptable. Make innovation a leadership priority, and growth will follow.

 📢 Small businesses often have the advantage of agility. When paired with intentional innovation, that agility becomes a superpower. The businesses that will thrive in the future are those that learn fast, try new things, and adapt without losing sight of their core mission.

🎯What’s one thing we could try this month that might make us better next month?

Jerome Dickey, MA (Leadership), PCC, CPHR, QMed