Innovation in Business: How to Keep Innovating as Your Startup Grows

You don’t need to start scaling for expansion from the start. But keeping up with startup innovation while you're growing does take strategy.

April 8th, 2016   |    By: Zach Ferres    |    Tags: Innovation, Product, Scaling

Creativity and innovation thrive in an early-stage startup environment. Communication is harmonious, decisions are made quickly as a team, and shared understanding trumps systems and processes as everyone shares the workload.

When I launched BounceFire, my first startup, I was juggling many tasks: selling our services, writing code, hiring employees, and drywalling the new office, not to mention cleaning the toilet. We did everything manually. It was only when we hired our first employee that I could start offloading certain tasks.

Innovation in Business: How to Keep Innovating as Your Startup Grows

But as the company grew, it encountered a common problem for startups: How do you keep hold of that easy communication, creativity, and innovation as you scale?

The Challenge of Innovation
for startup businesses

BounceFire hit that wall around the 10-employee mark. We were holding weekly “9:09” meetings to keep everybody together, but our attempts at consensus made the decision-making process difficult, and innovation and creativity began to break down.

Sharing every piece of communication with every team member would have sucked up all of our time, so we had to get selective, introducing more structure and processes. But structure creates barriers around communication, and processes make it difficult to stay agile.

When these challenges start to hit, a lot of entrepreneurs fall back on the lessons they learned in business school, but these aren’t always the best solutions.

In fact, some of those lessons can actively hinder innovation in business. Here are three things to relearn:

1. DON’T always invest in your most profitable business.

This investment approach is one of the oldest around, but it belongs in the past. Investing in your most profitable business means investing in the maintenance of your current business, rather than the creation of new things. It stunts business innovation and creates the “Innovator’s Dilemma.”

2. DON’T offer carrot-and-stick compensation.

When jobs consisted of repetitive tasks, people were motivated by money and disciplined for poor performance. But today’s jobs require creativity and complex problem-solving skills, and money isn’t the only motivator.

The best approach to motivation today is the one outlined by Daniel Pink in “Drive.” He writes that people need to be paid enough to take money off the table, but beyond that point, autonomy, mastery, and purpose are more important motivators.

3. DON’T hold meetings to solve problems.

Most of the time, meetings don’t need to happen. At Coplex, we rely on the modern meeting format, and beyond those, we hold just one 30-minute biweekly announcement call. We only hold meetings between teams when absolutely necessary and leave teams to organize their own short and concise internal meetings.

Remain Innovative In Your Startup Business By Staying Creative

If the traditional business school lessons won’t help maintain your culture of creative business innovation, what should you be doing instead?

Here are a few simple suggestions:

1. Aim for small, cross-disciplined sprint teams.

We use the scrum agile methodology at Coplex. Each startup we work with gets assigned a sprint team, consisting of a product manager, a user experience designer, a scrum master, and developers. These small teams don’t rely on a chain-of-command to make decisions. We empower them to make the right choices for themselves.

2. Keep your organization short.

“Tall” organizational structures are the single biggest killer of business innovation because hierarchies slow everything down. A flat company may not be possible, but you want to keep the business short to maintain alignment between the layers. This ensures that no teams are left twiddling their thumbs, awaiting decisions from the top.

3. Maximize cross-team collisions.

Keeping everybody connected is important for fostering that sense of collective creativity. We do a lot of little things to maintain this habit: weekly “clean eats” lunches, occasional weekend beer sessions, annual retreats, conferences, and of course, chatting on our sometimes shocking #random channel on Slack. You don’t need a supercollider to bring your teams together; all you need is a few simple gestures.

4. Keep communication tools open.

We use Slack and a Facebook group for most of our internal communication, but Google Drive also plays a big role. Every process in our company is defined in our “Process Docs,” and every team member is encouraged to leave comments to help us improve. By keeping communication tools open, every employee gets his or her say in the company’s future.

5. Learn together.

Whenever possible, we like to send our team members to events and conferences together. We don’t just send teams individually; we like to mix and match team members to forge new bonds within the organization, and if a team is idle, we will have them master a new craft together.

6. Open your office design.

Single-person cubes and offices create literal and metaphorical walls in your office. We have rooms for meetings and brainstorming, but these are all shared spaces. An open floor plan encourages cross-team and cross-discipline communication, and while efficiency may take a hit, the shared contextual understanding of the team far outweighs any downsides.

You don’t need to start scaling for expansion from the start. The key is to find the inefficiencies within your organization and tackle them iteratively. Forget the old lessons of business school because they’re no longer applicable. You need to keep things agile and open to ensure you don’t stifle creativity and innovation.


About the Author

Zach Ferres

Zach Ferres is the CEO of Coplex, a startup accelerator that works with noncoding industry experts to start successful tech companies. He is also a founding partner at Coplex Ventures, the VC arm of Coplex. Follow Zach on Twitter.

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