Posted on: November 7, 2024
Balancing Maintenance and Innovation: A Must for SMEs
Hey, SME owner, pat yourself on the back. According to the Reserve Bank of Australia, SMEs spend 25% more on research and development (aka innovation) than big business. In fact, SMEs account for 55% of total R&D spending.
That kudos is great, but… chances are your business may feel like it’s all about chasing the next big thing. Shiny new products and cutting-edge processes are exciting. However, the relentless pursuit of innovation sometimes comes at a cost.
Think of your business like a house. You can spend all your time designing a fancy new extension (innovation), but if the roof leaks and cracks appear (maintenance), your whole house will be in trouble.
Why Maintenance Matters
Maintenance might not be as glamorous as innovation, but it’s the foundation of successful businesses. It’s akin to operational mastery, excellence, or business continuity. Maintenance is about keeping the core elements of operations running smoothly – your IT systems, supply chain, customer support, and equipment servicing, for example.
Add staff loyalty to that list.
A recent example comes from the behemoth tech company, Amazon. Management encourages staff to ‘think like a startup’, but in late September also issued an edict to end work from home. Not long after, news reports revealed 75% of Amazon workers were actively looking to jump ship. In short, if you’re not looking after your staff to nurture loyalty (maintenance), then demanding they have a ‘startup mindset’ (innovation) may not be fruitful in the long term.
Pitfalls of not getting the balance right
So apart from staff attrition, when you focus solely on innovation, you risk neglecting the day-to-day functions that keep your business afloat. Risks include inefficient operations, costs spiralling up, and even your SME failing to meet customer demands.
US author and technology expert, Ivan Novak argues that over-innovating means your business loses its core value, confuses users and adds new bugs and issues. But there are problems if your business over-maintains, too. You risk stagnation, draining resources, and missing out on market opportunities. Remember that after innovation comes maintenance and repair.
Finding the Innovation-Maintenance Sweet Spot
So, how do you strike the right balance? Try these approaches:
- Develop a clear innovation roadmap: This will help align innovation with your business strategy.
- Hire a diverse team: Rather than predominantly recruit ‘ideas people’, ensure you achieve a balance of innovators and the maintainers that suits your unique business.
- Culture matters: Ensure your workplace culture values both innovation and maintenance. Celebrate successful problem-solving alongside groundbreaking ideas.
- Reward and recognise your maintainers: Don’t risk your ‘engine room crew’ feeling underappreciated. Offer competitive salaries, perks and recognition for the critical role they play.
Consider how you can realistically and effectively build innovation and maintenance into each job description.
Actionable Tips for Your SME
The above are the big-picture goals, so how can your business build up to them?
- Regular audits: Schedule regular check-ups for your operational systems. Identify any weaknesses that need attention.
- Invest in maintenance tech: From software for tracking equipment performance to cloud-based inventory management systems, there are plenty of tools to streamline maintenance.
- Factor feedback into your processes and policies: Make that explicit so staff feel comfortable adding their two cents’ worth.
- Cross-training: Help your team understand the importance of both innovation and upkeep, by encouraging them to see the bigger picture.
- Get your teams talking: Set up cross-function collaboration, such as across sales, customer support, product development, operations, etc., and ensure your business collaborates with others in your sector, too, and
- Plan for the long term: Meld your innovation goals with plans to improve infrastructure to support future growth.
Linking it Back to Insurance: Your Safety Net
Understandably, even the best-maintained machines can break down. That’s where insurance can help as your safety net, to protect you from the unexpected. For peace of mind, consider investing in:
- Property damage is essential for protecting the physical assets of your business, including buildings, equipment, inventory, and other valuable property.
- Business interruption insurance to cover lost income if unforeseen events disrupt your operations.
- Equipment breakdown insurance, which can pay for repairs or replacements when your essential equipment stops working, and
- Cybersecurity coverage to help protect your IT systems from cyberattacks, a key threat in today’s digital world.
Off-the-shelf insurance policies assume one-size-fits all, but that may not be right for your business. As your insurance broker or adviser, we can customise a policy package to exactly what your business needs, based on your risk profile and appetite for risk. Getting the right coverage means you can focus on what you do best – innovating, growing and maintaining your SME.
Remember, innovation has its place, but not at the expense of maintenance. Ensure you keep your SME’s ‘lights on’, so to speak. By striking the right balance and partnering with us as your insurance broker or adviser, you can foster a thriving and resilient business for the future.
