The successful exploitation of new ideas is crucial to a business being able to improve its processes, bring new and improved products and services to market, increase its efficiency and, most importantly, improve its profitability.
Marketplaces - whether local, regional, national or global - are becoming highly competitive. Competition has increased as a result of wider access to new technologies and the increased trading and knowledge-sharing opportunities offered by the Internet.
Business innovation is when an organization introduces new processes, services, or products to affect positive change in their business. This can include improving existing methods or practices, or starting from scratch. Ultimately the goal is to reinvigorate a business, creating new value and boosting growth and/or productivity.
Business innovation matters for one simple reason: value. In order for your business to thrive, it is crucial to be continually innovating and improving. Successful business innovation means finding new revenue opportunities, optimizing existing channels and, ultimately, generating higher profits. It should also give companies an advantage over their competitors.
There is more than one way to innovate and organizations of different ages and sizes will have different reasons for embarking on a process of business innovation. For some it may be a case of re-assessing the ways in which the business generates revenue, for others it may be necessary to move into a different industry altogether - or even to create a brand new one! Before embarking on any innovation cycle, it is important that organizations understand the various different business innovation models available to them.
If increasing profits is the main driver for business innovation, many organizations may choose to change their revenue model as a first port-of-call. This can involve re-assessing the products or services offered or taking another look at the company’s pricing strategy. Innovation does not have to be radical, sometimes changing even one element can yield significant results.
This model of business innovation requires organizations to identify which of their processes, products or services could be improved to boost the company’s profitability. Innovation in this case could refer to forming new partnerships, outsourcing specific tasks or implementing new technologies.
Arguably the most radical model of business innovation, ambitious organizations can choose to change industry completely for the purposes of innovation - or even create a whole new industry for themselves. Indeed, companies can win a new lease of life by following examples such as Virgin’s move from aero planes to broadband.
When done right, business innovation takes stock of where the market is going due to potential disruptors or changing consumer demands. Businesses use that information to make strategic changes and to entice internal employees to be entrepreneurial. Those changes can include building a product or service similar to what new startups are making, buying it from others in the industry, or partnering with the upstarts.
A lot of business innovation happens by making existing business processes less costly, less time-consuming to complete, and more sustainable. Those changes save time and make it easier for an organization to adapt to industry shifts with agility, which cushions against volatility and risk.
More than ever, employees—particularly want to work for mission-driven, fast-moving companies that they believe have a bright future.
Consumers are more willing to buy from companies they perceive to be innovative and socially conscious.
Innovation Leads to Prosperity.