Businesses today grow and become profitable for a wide variety of reasons. Some companies are known for fantastic ad campaigns, others for customer service, and others for their products and services. However, if you were to walk upon high to see the corporate world below, one factor would eventually become crystal clear to you.
Those businesses that are apparent leaders in their industries and that separate themselves from the herd have all embraced the spirit of innovation. Well-known companies might fill your vision. For instance, there are relatively new companies that everyone’s already talking about, like Amazon and Uber. WeWork was considered as innovative as they come until its spectacular fall from grace. Then there are old behemoths like Apple and Microsoft who have dominated their space for years due to their innovative capabilities.
With that said, each and every business listed above is at risk of falling if they don’t commit to innovation. If another company comes along, seizes untaken opportunities, and disrupts the market, you may find that company dominating the market and the news cycle instead.
If you’ve ever wondered what innovation in business is, what it entails, and why it’s so vital to a company’s long-term success, then read on.
What is innovation in business and why is it important?
Innovation is all about the process that an organization or individual embarks upon to dream up new techniques, products, services, or a new approach to those things. It’s about adapting to realities in the market, too. For instance, with the explosion of new technologies across the spectrum, businesses have been forced to adjust their work practices to stay current with the marketplace’s needs. Early adopters positioned themselves for early success while those who refused went out of business. (Sears comes to mind.)
Change and growth present you with opportunities. If you can recognize an upward trend and capitalize on it, you have a better chance of meeting the demands of your customers before your competitors do.
How does business innovation work?
There are four ways that innovation can manifest itself in a company. According to the Organization for Economic Co-operation and Development (OECD), these are:
- Organizational innovation
- Marketing innovation
- Process innovation; and
- Product innovation
Organizational innovation
Organizational innovation relates to broad, organization-wide changes a business can make to improve its performance. This could be an external change related to how it interacts with other companies, or it could be an internal change.
Marketing innovation
Marketing innovation refers to the way services or products appear to your customers. For instance, maybe you come up with a way to drop prices for customers while maintaining your profits, or perhaps you come up with packaging that causes more customers to desire the product than before.
Process innovation
Process innovation speaks of new ways to deliver your products or services. It could encompass new and exciting changes in techniques, software, or other equipment.
Product innovation
Product innovation is about offering customers products that are either brand new or substantially improved. This could entail creating a new product that people find easier to use, or it might be the same product but made with better materials.
Benefits of business innovation
There are three huge benefits to business innovation as described in a 2019 report by Northeastern University. These are:
- Better growth
- More relevance; and
- Increased differentiation
Better growth
Unless you have a business account with an insane amount of capital that you can use to purchase other companies and grow that way, your options may be limited as to how much innovation you can muster to attract new customers and thus grow your share of the market.
More relevance
In an ever-changing, global environment, your chances of becoming irrelevant to the masses are high. That is unless you can keep yourself ahead of the curve through innovation.
Increased differentiation
Innovation helps to solidify you in the minds of your target audience as a business that’s different from your competition. The more you’re able to do things that haven’t been done before, the more unique you appear to the public. By standing out, you can help make sure that you’ve got an advantage over all the other “me too” businesses.
How to embrace innovation
Remember that innovative businesses are often rewarded with increased consumer demand, which increases sales and profits and the cream of the crop when it comes to employees. Everybody wants to work with a company that rises to the top and maintains its place at peak performance.
To sum up, you can drive business growth, differentiate yourself from the competition, stay relevant in an ever-changing market, and be seen as a leader in your industry if you commit to a policy of constant innovation. Innovation isn’t the only element your company needs to survive and thrive, but it’s a significant component that you mustn’t neglect.
