Over the past year I’ve had the chance to work with a number of small to medium sized companies, mostly private. Coming from a background of working mostly with much larger, publicly-traded organizations, the change has been refreshing. Things happen quicker, ideas flow more freely, and the atmosphere is in general more invigorating.

Still, I’ve detected a sentiment, a feeling, sometimes verbalized, but mostly unvoiced. As business begins to boom, or, more accurately, re-boom, and the danger of survival is replaced with success and more abundant resources, it goes something like this:

Our problem is that the entrepreneurial spirit isn’t quite what is was when we were a start-up. Sometimes it’s completely M.I.A. More and more we seem to need more money, people, and space to innovate. But that’s not how we started. Okay, so we didn’t start in the proverbial attic or garage, but we started with little of everything: money, space, labor. We had a goal, and a passion for reaching it. Those limits made us more creative and resourceful than we are today. Today, the addiction to resources is blocking innovation.

I think there’s a relatively simple (not necessarily easy, mind you) fix. But before I get there, let me try something with you. Ready?

1.  Stand up, feet planted shoulder width apart, arms straight out at your sides, elbows locked.

2.  Twist your torso all the way to right as far as you possibly can go.

3.  Sit down your right arm and mentally mark your stopping point on the wall. Remember that mark.

4.  Turn back around to face front. Now close your eyes.

5.  Repeat the exercise, stopping when you think you’ve met your previous stopping point.

6.  NOW…go a little past it. Open your eyes.

My bet is that you surpassed your previous mark. Point being, we generally don’t know what our potential is until we put our capacity on trial. We don’t stretch as much as we’re capable of. The recession put everyone’s capacity on trial, but as the even keel returns, we need to constantly stretch and re-stretch our capacity in positive ways to move the business forward.

What’s the solution?

I think it’s that we have to treat resources constraints the same way artists do. All artists work within the confines of their chosen media, and it’s the limits that spur their creativity. The canvas edge, the marble block, the eight musical notes—the resources are finite. They always are! So it’s how we view and manage them that makes all the difference. And that’s the billion dollar question: Are limits preventing innovation, or enabling it?

There’s only one right answer.

A team that doesn’t thrive on the challenge of limitations is a red flag. It signals an inherent fear of failure in your company. And that spells danger for innovation, because most real innovation springs from failure and conflict. The bigger and more successful a company gets, the less they have tolerance for either. So they mismanage a valuable source of new thinking by adding a buffer zone: higher budgets, more layers, and lower expectations.

Unfortunately, success usually isn’t what breeds the kind of thinking that produces the extraordinary results needed to add value and keep competitors at bay. In fact, success can often generate a defensive posture that discourages the very behavior that created it. It can absolutely stifle innovation.

Innovation—the specific tool of the entrepreneur—demands exploiting limits, not ignoring them!

So if the entrepreneurial spirit is fading or missing in your business, reset the bar by recreating the kinds of limitations that drive new thinking. Those limitations are called stretch goals—big, hairy, audacious goals. Or, as they are perhaps more commonly known, BHAGs. (Now set them!)

Then trust your team to solve the problem.