Author and innovation expert Stephen Shapiro helps companies such as Microsoft, General Electric and Procter & Gamble foster a culture of innovation. Shapiro's latest book, "Best Practices Are Stupid: 40 Ways to Out-Innovate the Competition," became a No. 1 best-seller in the business innovation category. We spoke with Shapiro recently about how small businesses can effectively foster innovation.

Why is creating a culture of innovation even necessary for small businesses?

Shapiro: Innovation is necessary for all businesses. If you're not changing, you're not staying relevant. Innovation isn't about new products or new processes, necessarily. It's really just adapting to meet the needs of a changing market. And if you're not doing that, you become irrelevant.

How can small businesses know where to focus their innovation efforts?

Shapiro: You can't be the best at everything. They need to figure out what it is that differentiates them, sets them apart from everyone else. And what they need to do is innovate where they differentiate.

What are the challenges that you see small businesses facing when they pursue innovation?

Shapiro: There's a few different challenges. Obviously small businesses range from mom-and-pop family-owned businesses to startups. So each of them have their own challenges. But if it's a family-owned business, one of the challenges is just change. They might believe the past is going to be the path to future success. And in fact, past successes are typically the things that cause us to fail in the future.

Small business owners can become so deeply entrenched in their company, their industry, their customers that it's hard for them to innovate because they're just so expert, which actually seems paradoxical. But that's one of the big problems. If you only learn from people in your industry then, first of all, you're playing a game of catch-up. As a small business, you can't replicate what a big company is doing and try to beat them at their game. You have to find something [that] sets you apart. And therefore, best practices aren't going to work.

What can small businesses do to foster innovation?

Shapiro: The first thing is to become aware of the need for innovation and have a commitment from the top. The next step is understanding that your ideas aren't as important as the questions that you ask. Changing the question is critical to being able to find better solutions. So when I help companies, the two things I focus on most are differentiation and then reframing the questions. And if you just do those two things, we tend to see a minimum tenfold improvement in innovation.

As Albert Einstein once reputedly said, "If I had an hour to save the world, I would spend 59 minutes defining the problem, one minute finding solutions."

What else would you advise small business owners to do to create innovation?

Shapiro: When it comes to professional development, most people spend 100 percent of their time with people in their industry or in their functions. So, if I work in a restaurant, I tend to spend most of my time talking to people who are in the restaurant industry, and if I happen to be the CFO for that company, I tend to hang out with CPAs and finance people. Take a percentage of your time and connect to people with different areas of expertise that might be related to what you're doing. So how can the food service industry learn from the retail industry or how can it learn from the way they run manufacturing plants? And one last point specific to small businesses: Figure out how you use your size as a strength rather than viewing it as a weakness. There are so many opportunities where smaller businesses can actually excel because they're more nimble.

The Takeaway

After talking to innovation guru Stephen Shapiro, it's clear that you should be spending more time defining the right questions, innovating where you differentiate and getting out of your office or industry to find solutions.

Tags: innovation Interviews