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What Is Innovation In Business & How Could it Help You?

what is innovation in business

Innovation in business revolves around the introduction of new ideas, methods, products and services that create additional value for the company and it’s customers. The most successful businesses usually have the best marketing campaigns, quality services and products, and huge brand loyalty or customer base due to the innovative methods they adopt. 

This article discusses everything about innovation, how it can promote your company and the benefits it brings to your business. 

Understanding Innovation

Innovation is beyond having new ideas. The perfect definition is crafting great ideas and bringing those ideas to reality. The process of transforming conceived ideas to reality is crucial and often the challenging phase. It involves careful planning, strategic thinking and effective execution.

Innovation in business is defined as the ability to create, conceive, deliver and develop new ideas into better products, services or more effective business models for customers. A company can carry out different types of innovation to address various areas of their business and stay relevant in the fluctuating markets.

A quick evaluation of some of the most successful companies in terms of innovation includes big names like Amazon and Uber. These companies are recognised for how much they have evolved since their initial launch.

For example, Amazon started as an online bookstore but is now a leading retailer in the world. Uber is another example of how a business implemented constant innovation to revolutionise the taxi industry.

Uber introduced a seamless and less expensive method of ordering a ride from smartphones. Of course, it was a move that did not please the local taxi drivers who failed to evolve but completely pleased passengers in search of comfort.

Other examples like Apple and Microsoft proves how much technological and marketing innovation can improve a business. Their stories are more inspiring considering how both companies faced some critical challenges in their development phase.

The Apple-Microsoft Partnership

Apple remains a top reference point for explaining how innovation in business could significantly improve a business fortune. The perfect example is how Apple was on the verge of collapse and strategically saved itself by a surprise partnership with Microsoft. That significantly changed Apple’s organisational role and resulted in the innovative release of the iMac.

The Apple-Microsoft partnership was only a little beginning of greater things as both companies further collaborated to manage some risks. That brought about the production of iPods, iPhones, Macbooks, Apple watches, and iPads. They also produced the iTunes platform that has permanently transformed the music industry.

How can Innovation Help Businesses?

Innovation can help businesses to achieve their true potential. The common phrase that says “You move with time or you get left behind” has always proven to be true with the many examples of business innovations around us. Advancements in technology have greatly impacted the increased competition across industries and businesses with the flexibility to try out new ideas are often far more successful than those who don’t adapt. .

Here is a summary of some of the common ways that innovation has affected businesses:

  • Enabled businesses to reach an increased audience with their products and services
  • Providing flexible options like remote working to help organisations manage a global employee base
  • Provision of platforms like online reviews and social media comments to allow customers to express their choices or complaints
  • Foster business collaborations within the industry especially with international partners and customers. Teams can now directly engage via email or video conferences

The Four Phases of Innovation

There are four phases of business innovation which are: ideation, development, implementation and diffusion.

The first stage is  ideation which refers to the creative and systematic methods for generating valuable ideas and grouping them into multi-stage processes. Ideation starts with brainstorming sessions involving employees, test users, clients, experts, service providers or external agents.

The goal is to generate new ideas for products or how to approach new market opportunities. Creativity is highly valuable at this stage and every possible idea is welcomed.

Development is the next phase and involves combining all received ideas. Every thought process is examined including the possibility of testing them in a real-world or simulated environment. The development step also includes more research, vetting the little details of each suggestion and proper risk assessment strategies.

Implementation is where the real deal starts. Every idea, suggestion, or concept has been thoroughly developed and ready for testing. The previous steps all contribute to the implementation plan that includes discovery, reframing and conceptualisation.

  • Discovery defines the opportunity
  • Reframing is about taking a broader look at the creative ideas
  • Conceptualisation unites the best ideas around an actionable plan

The best approach to the implementation stage is to organise all received ideas and explain the end goals to every team member. You should also establish measures to evaluate progress made. There is room to make adjustments to tested ideas that do not give desired results or meet customer needs.

Finally, we have the diffusion stage where you already have your innovation but need to establish it on the market. That can be challenging, especially since you are trying to have people change their current perceptions and embrace your new invention. It requires an effective marketing strategy to create awareness among the target customers.

There is also the hurdle of making the innovation easily accessible to people and training them on how to use it. The other challenges associated with diffusion happen after the business innovation is more popular and requires further improvement based on feedback.

Sustaining Innovation VS Disruptive Innovation

We have two types of innovation in business. They are the sustaining and disruptive innovation.

Sustaining innovation is when a company creates a better version of its product and sells it for higher profit to its best customers. It is a typical strategy among companies that already have successful products within their industry. “Higher profit” is the motivation for this type of innovation. For example, imagine Apple decides to add a new feature to an iPhone series that makes it perform better than the previous one. That is sustaining innovation.

On the other hand, disruptive innovation occurs when a company that has fewer resources upgrades its services to challenge an incumbent business. Compared to sustaining innovation, the disruptive strategy is more progressive and maybe aggressive. A perfect illustration is how Uber transformed the taxi industry.

ow do you decide which innovation type is more suitable for your business? It depends on various factors like the company’s size, financial situation and brand authority within the industry.

What are the Three Main Benefits of Ongoing Innovation?

There are many advantages of innovation for any business setup. We classify them into three main benefits as discussed in this section.

1. Innovation Will Help Your Company Grow

No company can remain relevant or grow without innovative business ideas. The most successful companies are those that consistently come up with new ideas to create better products and services.

A quick case study is how Apple enjoyed increased sales and higher market share with its release of the iPhone in 2007. The iPhone launch led to the establishment of Apple across new industries like App development.

The following are some of the reasons to invest in innovation for your business.

  • Create new revenue streams
  • Increase market share and stakeholder value
  • Improve customer satisfaction and brand loyalty
  • Create new jobs and opportunities

2. Keeping Your Company Relevant

Constantly innovating new ideas for your business helps to stay updated and keep up with technological advancements. By offering improved products, your products or services remain in demand and the customer retention rate is high.

For example, imagine a food manufacturing company that has been selling the same recipes for years. Eventually, a point is reached where the loyal customers gradually lose interest and can decide to try out new options (competitors). The business loses those customers not for bad products or services but because the market has been evolving and it has been left behind.

Businesses must take note of this point. Be flexible to change and improve if you want to effectively compete and stay relevant in the industry. There are other suggestions for companies interested in business innovation.

  • Frequently provide new and unique products or services 
  • Implement the latest technologies 
  • Focus on the customer wants and don’t hesitate to get their feedback
  • Be more active on all social media profiles of the business 
  • Constantly develop a strong brand identity 

What was in demand yesterday might not be in vogue today. Therefore, stay updated on current trends and consistently strive to always stay ahead of the competition with innovations.

3. Helping You Stand Out from the Competition

You can only stand out from the competition when you offer something unique and new. Try to provide something that other businesses do not have and be sure to gain loads of interested customers.

Here are some strategies to help with that:

  • Have a strong brand identity
  • Include completely new product features
  • Prioritise improving customer experience 
  • Constantly enhance the quality of your products and services

Who Should Drive Innovation in Your Business?

It is the responsibility of the employer or company management to drive innovation within the business. However, employees must also be aware of their contributions.

Here are some strategies to get your employees involved with the innovative idea process:

  • Promoting open communication platforms
  • Allow employees to observe and freely give their suggestions
  • Encourage a safe and productive work environment that respects all
  • Acknowledge and reward unique innovations of employees

The above strategies aim to strengthen the manager-employee relationship to bring out the best in your staff. A company that properly interacts with employees has higher chances of keeping them motivated and working committedly to suggesting innovations that can boost the growth of the business.

Are there any Potential Risks with Innovation?

There is no innovation without risk but what matters is how well you minimise the chances of failure. The common risks associated with innovation in business are:

  • Investing money into a new product/service idea that eventually fails
  • Making wrong assumptions during the market research phase
  • Marketing an innovation before it becomes reality
  • Adding new product or service features that do not work as intended
  • Introducing too many innovations that leave customers struggling to catch up

These risks can all be minimised with proper case studies and market research on the target customers.

Final Thoughts

Innovation in business is undoubtedly essential for every company that wants to maintain relevance in a competitive industry. Innovations keep customers excited and always anticipating new product announcements or market launches. An innovative approach can also bring out the full potential of your employees, especially when the bar has already been set high.

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