How to Innovate in the 21st Century

It has never been easier or cheaper to alter the direction of a business, and companies that don't lead and innovate in response to changing market conditions may not survive at all. In an economic downturn, innovation isn't your best friend, it's your only friend. You don't need to be Steve Jobs to come up with a novel business idea. Nor is innovation all about high-tech inventions or new products. As many successful leaders will tell you, incremental ideas can be just as important as breakthroughs.

But how do you find that clear, purposeful frame of mind amid the pressures of modern business life? What makes for an innovative company? How much should owners listen to their employees? Is there an ideal company size for generating good ideas? Does time off get the juices flowing?

Here are some tips from the trenches of modern leaders and innovators.

STEP 1: Look behind you
History can be a great teacher. Try looking back to see what did and did not work. Before you set out to change an industry, know its history.

STEP 2: Lose the routine
Make time to read widely, and cultivate a variety of friends and online groups who send you wacky articles. Jump out of your rut by hitting a trade show or attending a seminar about an unrelated industry. Also try spending a day in the life of your client.

STEP 3: Use the brains you hired
Smart leaders maximize innovation by encouraging everyone to think innovatively about the business. Target diversity. One of the simplest way to help a company think outside the box, is to bring in people who have lived in different boxes.

STEP 4: Get cozy with customers
You can't be too close to your customers. Your customers are your lifeblood. The heart of innovation is understanding what problems they have that you can solve. It's easy to get in a rut with conventional wisdom. Innovative thinking from outside your company challenges the status quo.

STEP 5: Try to fail quickly
Put enough energy into the innovative idea to determine its value. Constantly fail forward by learning from quick failures and driving toward strategic leadership and innovation.

Have you found any other methods that accelerate innovation??