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Most business owners strive for sustained profitability and growth. One way to ensure it happens is to make innovation a priority. Approximately half of the nearly 2,800 small business owners responding to the April 2017 Allstate / USA Today Small Business Barometer say they’ve experimented with new business practices to provide their customers with additional goods or services. And roughly two-thirds say their businesses are doing well.

How to Encourage Innovation

How does a company become an innovative one? It’s sometimes assumed that innovation requires limitless resources or is solely the province of those in technical or research roles. But developing an innovative business culture typically has more to do with allowing — even encouraging — employees to explore ideas and make mistakes. For instance, it’s a good idea to:

Encourage employees to look for problems to solve and questions to answer. What problems do customers talk about? Equally important, what problems are customers not discussing, or perhaps not even aware of? According to the Boston Consulting Group’s (BCG’s) report The Most Innovative Companies 2016, leading innovators cite customer suggestions as frequent sources of new ideas.

Encourage employees to observe and engage in conversation with their customers — whether those customers are paying clients or the departments they support within the company — and watch for ways to improve goods and services.

Boost innovation from all parts of the organization. It’s not just the IT or research departments that can come up with new ideas. Every group, from accounts payable to human resources, can come up with ways to innovate.

Hold brainstorming sessions. Innovation is rarely a straight shot. Outrageous, unworkable ideas may be the genesis of concepts that ultimately prove both viable and profitable. Employees need to be confident they can suggest ideas without fear of ridicule. One way is through brainstorming sessions. The goal is to help employees become comfortable considering even wacky ideas, without censoring themselves or others. The BCG report found that, within leading innovative companies, employee ideation forums were the sources of new product ideas 68% of the time.

Work across departments. People tend to feel comfortable with co-workers they’ve known a while. At the same time, outsiders often provide another perspective. They can help employees question their assumptions and view accepted wisdom from different angles. In pursuing innovation, it often helps to assemble teams that include both colleagues who’ve worked together before and those who are newer to the group.

Look outside the company. Ideas can come from customers, suppliers, data and partners, among others. Innovators in the BCG study leveraged all these sources.

Celebrate both blockbusters and incremental wins. A big win — an innovation that turns an industry upside down — can change a company by granting it a commanding place in the market, which in turn enables it to charge more for products and attract bright, eager employees.

Although every innovation isn’t necessarily a blockbuster, each breakthrough can be celebrated. Steady improvements in processes, products and services can boost your bottom line and employee morale. In the long run, small improvements also may serve as catalysts for more revolutionary innovation down the line.

Other Strategies

Companies striving for innovation need structures that foster it. It’s important to build policies that promote research and development. For example, performance reviews should incorporate measures of innovation.

Employees also need time and space in which to develop ideas. If possible, schedule periods of time in which they can shift from their daily responsibilities to focus on generating new processes and projects. In addition, your budget should account for innovation costs.

Keep Going

Innovation is a never-ending process. Building an innovative company requires sustained effort and the willingness to accept short-term failures as the price of long-term success. Of course, it’s important to make certain that new ideas are tested and sound. But encouraging innovation can ensure your company remains flexible and responsive to changing conditions and market demands.