According to recent research by Orange, small businesses are asking all of their employees, including support staff, to come up with ideas for growing the business.
Orange surveyed more than 1,000 firms and discovered increased levels of innovation in most businesses, with 60% saying they are now at their most innovative.
47% of the survey’s respondents said they did turn to their staff for ideas and 25% said support staff frequently submit their suggestions on ways to improve the business.
The research also found that companies attribute this surge in innovation to a desire to reduce costs and an urge to stay ahead of competitors. 44% of respondents said cost savings were the motivation behind turning to employees for ideas, whilst 32% said it was get a competitive edge over their rivals.
This new trend for involving employees is helping firms to increase their profits. In the last 12 months, the average firm has turned four employee ideas into new offerings and 33% of companies said these ideas have generated £250,000 additional profit.
Asking employees for their suggestions does not cost any money and could be one reason why a survey by Portal, the IT consultancy firm, found that nearly 33% of UK firms spend nothing looking for innovative ideas for products and services.
Only 20% of businesses and limited company contractors spend in excess of 5% of their revenue on R&D, despite over 50% recognising that innovation is essential if they want to maintain or grow their market share. Less than 7% of the respondents have increased their investment in R&D since the recession started in 2008 and 14% said they had cut their R&D budget dramatically.
Tony Egerton, the sales and marketing director at Portal, said cutting costs is essential in a downturn but reducing the spend on R&D is a form of business suicide.
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Image: innovation – 3 by nyoin
