Thinking up new & innovative ideas is vital to a business in order to streamline its processes, design new products and services, crack into new markets, increase efficiency and last but not the least attain more profitability.
There is cut-throat competition in every type of marketplace, whether local or global. Competition today is mainly because of a wider-access to latest technologies and vast trading and knowledge sharing opportunities available on the internet.
In this blog, you’ll learn about why innovation is important? What should be a business’ approach to innovation? And finally, how it can create an environment that encourages idea generation, initiative, and creativity that’s crucial to make innovative breakthroughs.
The Business Case For Innovation
Right off the bat, a business needs to get a clear idea about what is innovation and how it’s different from invention. An invention can be any new idea. Innovation, on the other hand, is the commercial application and successful breakthrough of a given idea.
Roughly, innovation means the introduction of something new into a business. That can be in the form of:
- Improving or altogether replacing processes to attain higher efficiency and productivity or enabling a business to increase its range or quality of products/services.
- Coming up with entirely new products and services to cater to changing customer requirements or make forays into a new market.
- Giving a new identity to existing products/services that makes them stand out in competition
Now, innovation normally relates to a one-off major breakthrough for eg. a premium, flagship new product or services. It can, however, be a series of small, incremental changes. Irrespective of how it happens, innovation remains a creative process. The source of it can arise from:
- Within the business, through employees, managers, the research and development staff.
- From outside the business, customers, suppliers, media reports, market analysis etc.
Success is a result of vetting several ideas, identifying their potential and then dedicating business’ resources to exploit them.
Innovation offers a whole host of benefits as follows:
- Increase productivity
- Decrease costs
- Gain a competitive edge
- Create a brand identity
- Expand business by entering into new partnerships
- Maximize turnover and achieve profitability
Contrariwise, lack of innovation can result in:
- Losing ground to the competition
- A slump in productivity and efficiency
- Loss of talented staff
- Decreasing profits
- Business closure
Approach To Innovation
Innovation in a business can come in a variety of ways, but mostly it’ll relate to your products, services or processes.
Analyse The Marketplace
A great way to discover opportunities for innovation is to mold your products/services to the changing requirements of the market. For instance, if you have a burger’s business, you might think about decreasing the fat content in your burgers to make an appeal to the health-conscious audience.
You also have the option of coming up with a completely new product. Following up on the same burger example, if you were only making non-veg burgers until now, try making vegetarian ones and you may attract a new set of customer.
Other than that, you can also innovate by bringing into use a new technology or a working method – possibly a smart process that brings consistency in the product quality.
If the research reveals that the customers are very busy to visit the store personally, you could bring in more distribution channels. A home delivery option via online or telephonic ordering can prove effective to increase sales.
In case, you competitor has a reputation for offering really low cost or affordable services, then instead of engaging in a price-war, look to highlight the quality of your products in your marketing campaign. That will justify your premium pricing to your customers.
Some innovative ideas can appear out of nowhere. But, you should have:
- innovation as an intrinsic part of your business strategy.
- a strong vision of how you want your business to expand – that can be made easier by keeping a constant eye on the changing trends in your niche and then focusing innovative efforts towards most crucial areas.
Innovation doesn’t only increase the chances of your business’ survival but also creates the perfect setting for it to thrive and make more profits. Here are a few ways to test out whether or not your idea will cut it:
Assess The Competition
Learn who your competitors are and where they’re located or where’s their headquarters. Make use of advertising or business listing websites to search the whole range of products, services, pricing, and other relevant details. This will inform you of the various selling points and a chance to find a flaw in their strategy and come up with your own USP.
Study Market or Industry Trends
A proper knowledge of the industry in which you operate will allow you to plan out your own end-goal more effectively. There’s no shortage of industry-specific information on the internet. There are also various business and trade magazines that feature really great content on the state of the industry.
Build A Connection With Your Customers
Just knowing who your customers are or where they’re located isn’t enough. You have to reach out to them and communicate to build a strong connection. That requires you to listen to their problems, frequently observing their buying behavior and offering innovative solutions that make their lives easier.
Finally, you need to get a clear sense of what outcome that will result from pursuing a given innovative step:
- Impact it’ll have on your business processes and practices
- The extra training your staff would require
- Additional resources you’ll need to spend.
- Your source of financing the work
- If you’ll be creating an intellectual property that needs to be protected.
Wrap up everything by stating your vision in the business plan by:
- Defining your goals, both long and short terms and your strategy to achieve them.
- Syncing up goals with financial targets, for eg. a given turnover by a certain date
- Keep coming back to the plan to stay on course.
Encourage Innovation In Your Business
There are countless ways to help generate new ideas for your business.
Your business partners, suppliers, customers, and even your staff can all make important contributions in bringing about a creative process. Your employees will always be a source of constant support and encouragement so it’s crucial that you create an environment that allows them to express themselves properly:
Steps To Promote Innovation
- Ensure you have the necessary processes and events to capture the ideas. Suggestion boxes, workshops or even outdoor events could be a great way to brainstorm ideas.
- Create an environment where employees feel valued for offering opinions instead of facing ridicule or criticism.
- Motivate experimentation and risk-taking – reward people for their efforts despite their failure.
- Promote an environment of openness between teams and individuals – great ideas should be shared around with others.
- Apprise people at all levels within the business that innovation is a shared responsibility and that everyone should make an effort to contribute their ideas for the good of the business.
- Celebrate innovative ideas in the form of parties, events etc. Reward the influential staff with fitting rewards.
- Finally, when hiring new staff, look for the capacity of innovation and creativity in employees.
We can safely conclude that innovation is absolutely important for the growth and survival of a business. It’s not just the innovative solutions you create, but innovation inside the business, in the processes and the work culture and strategies you form all count. Sometimes, getting hands on the most cutting-edge technology can help you take the edge over your competitors. Now, leading businesses always have their scouts in all the right places, feeding them information on what’s in vogue and what drives customer demand. That’s not to say SMEs are without luck. Internet and access to information have created an open competition. Innovative ideas always find appeal no matter where they come from.