3 steps to innovating without denting profit

HOW can an organisation be more innovative, without sacrificing profits? This question, I imagine, is top of mind for small-and-medium-sized enterprise (SME) owners in Singapore as they grapple with business uncertainty and the government's exhortations to improve worker productivity and transform Singapore into an innovation-driven economy.

In fact, a recent survey, conducted by the Singapore Chinese Chamber of Commerce and Industry and NUS Business School academic Sarah Cheah, found that only about half or less of the 233 SMEs surveyed are trying to innovate, with less than 35 per cent having invested in innovation in the past two years.

For typically resource-stretched SMEs, it is challenging to juggle short-term profit needs with longer-term aspirations of capitalising on new opportunities. Consequently, many companies may just focus on incremental improvements that improve efficiency and quality, and neglect investing in innovation that can bring about future gains.