After OpenAI launched ChatGPT, Stability AI launched its Stable Diffusion, an AI image generator. Google released its chatbot, Bard, and China’s Baidu announced plans to unveil its chatbot, Ernie.
That’s how stiff and swift competition can be in the marketplace. Therefore, failure to embrace business innovation crumbles your business like falling off a cliff into a river till it drowns and never get heard again.
Not frightening yet?
Remember the smartphone battle? How Apple displaced Blackberry and Nokia, sending their products and revenues spiraling down a black hole with a snap of Thanos’ finger. This gives a clear picture of why you should innovate quickly.
Every sector including military, technology, world order, and business thrives with innovation. But this article will focus on leveraging the power of innovation in your business and the benefits.
What is Business innovation?
When organizations develop new and improved products or services to create value or improve revenue, that’s business innovation.
As little as making simple upgrades on existing products or as big as coming up with an entirely new product and market, the aim is simply to solve customers’ problems, make the product more efficient and grow the company’s revenue.
Innovation in business produces growth, efficiency, productivity, profit, and positive change in their business.
To understand this concept better, you must become familiar with the three innovation types.
Types Of Business Innovation
Product and Performance Innovation
Product and Performance Innovation focuses on a business creating a product from its core offering. It’s either improving its existing product to perform better or bringing a new product to the market.
The emphasis is the products and how they perform in the market.
For example, Apple improves its iPhone performance by upgrading it from 13 to 14 series. While Uber developed new services like Uber Freight and Uber Eats.
A company designs a new way to be more efficient. This may include improving the production process by adopting new and faster means to sustain production.
Introducing assembly lines to make production faster and lower costs is a notable example of industry process innovation. This improves the market prices of their products.
For example, Tesla selling its cars online is an innovation that breaks the supply chain, reduces prices, and forms a new way of interacting with customers.
While Amazon uses robots in its warehouse to make production swift and cheap.
Business Model Innovation
Every business has a model of making a profit when it starts. Still, organisations must identify which processes, products, or services can be improved to boost their company’s profitability.
Business model innovation examples include forming new partnerships, outsourcing tasks, or introducing new technologies.
For example, Google initially had a business model that negated ads, but they had to improve their business model sooner, and advertising became its major revenue. While X, formerly Twitter, shifted its business model from advertising to users, to paying for verification. Subscription to this verification entitles the user to ad revenue.
Benefits of Innovation in Business
Solves complex business problems
Every customer has a problem or need, and companies take advantage of this opportunity by solving those problems.
As older problems get solved, new ones emerge. But the end result is transforming your customers’ lives to near perfection.
There’s no better way to solve customer satisfaction and add value to a product than through innovation.
Adaptability overcomes challenges of change
No one saw the pandemics coming or the war in Eastern Europe, and even if you’re sure World War III will happen, you can’t tell when, unless you have a nuclear football in your hands.
Perhaps, you could be Dr. Doom, Peter Schiff, not Victor Von Doom, who can predict the next economic crisis and how much damage it’ll cause. Whichever way, we know, for sure, that the market is not static. Change will always occur and such occurrences must come with its challenges.
One must adapt to these changes and navigate through the challenges. Innovation offers a winning strategy and escape route before the wave sweeps in.
Competitive advantage separates your business from competitors
There’s bound to be market competition in free economies.
As Clay Christensen said, “Every successful and established company will one day be overtaken and threatened by a revolutionary newcomer.” The only way to achieve or survive this prophecy is through business innovation.
Apple products have stood strong for decades because of its competitive advantage. And decades may become centuries, and centuries, millennia if it maintains this advantage.
A debate has ensued over the years: Is Apple too big to fail? Can Apple’s iPhone go into extinction when it stops innovating?
Somewhere within this article holds the answer to those questions.
A company that innovates consistently will be ageless. However, innovating is not reckless; your product must appeal to your market audience, which will give you an upper hand in the market.
Foster Growth and Efficiency
When you create value, you grow.
Productivity and performance are crucial to staying relevant, providing a means to save time and money.
Your business must have a growth strategy.
Brand Perception attracts employees and customers
Who loves it when favourite brands come up with something new?
Every customer loves it.
Innovation is good for the brand. It proves customers’ loyalty.
But it doesn’t apply to customers only but employees too. Most talents in the automotive industry want to work for Tesla because of its innovative culture. It doesn’t matter how much they’d earn; they know they’ll grab the chance to change the world.
Approaches To Innovation in Business
Innovation starts with ideas but must proceed to examination, strategy, and execution.
Leaders or innovative entrepreneurs consider each idea’s business viability, feasibility, and desirability. This process is called Design Thinking.
Innovation follows a thorough process because it must appeal to the market audience. You’re either like Apple’s CEO, Tim Cook, who said, “Our whole role in life is to give you something you didn’t know you wanted. And then once you get it, you can’t imagine your life without it.”
But we’ve seen companies take this risk, and it backfired either because the product was way ahead of its time or the customers simply weren’t ready to make the shift. NuvoMedia’s Rocket eBook is one good example.
So, except you have a bitten apple on your company’s logo, the best way is to clarify your customer’s problem through research and observation.
After pinpointing their key pain points:
- Frame the problem in a way that allows you to solve it.
- Come up with ideas that solve the problem.
- Explore the solutions generated during ideation until you’ve found the solution that addresses the problem.
- Communicate your developed ideas for adoption and track the performance after execution.
Why Companies Take Innovation Seriously
AI Ries and Jack Trout assert through their positioning paradigm that there’s only room for three products in a consumer’s head, and if your product isn’t one of them, then you must deposition one product to take that slot.
If you’re in an industry that’s not competitive and you’re enjoying monopoly, then, beware of the villain paradigm. There’s competitive positioning in every villain paradigm.
A villain can arise from another product category altogether as an indirect competitor and disrupt the industry, displacing your business.
This played out in the smartphone industry when Apple’s iPhone displaced Blackberry and Nokia.
Threats are lurking everywhere; you can’t choose to be complacent but rather take innovation seriously.
Who drives innovation in a company?
Every company must have an innovative culture and environment. Moreover, who drives innovation in your company should be clearly stated.
Sadly, Digital McKinsey research shows that a third of company executives do not know which leader is responsible for digital and technology functions within their business; there’s always a tussle between customer, technology, chief information, digital, data, digital transformation officers, and marketing.
Jason Dormieux says a successful CTO should be the person to take up responsibility for driving business innovation. But he added, “Regardless of title, all companies need people whose obsession is around what products and services they can build to help their customers take advantage of the opportunities that this disruption brings.”
Mira Murati, now CTO of OpenAI, led the development of Tesla’s Model X before joining the AI research lab turned company in 2018. Her achievements in that role exemplify why you must fix an innovator in your company.
Establishing an innovation lab will drive business innovation. Data analytics and business intelligence can also drive discovery and innovation. An example is the IT department, which has close working relationships with every part of a business, allowing them to drive innovation and improve collaboration across the organization.
Business innovation is doing something new that has not been seen before to solve a problem or reach new customers. It is meeting consumers’ changing demands and having the chance to transform the world through your products and business innovation ideas.
According to Jeff Bezos, it’s not enough to ask customers what they want, some of them don’t know what to ask for. We have to tap into our inner imagination and invent on their behalf.
Businesses must take this seriously, create system(s) that caters to innovation or risk losing everything they’ve worked for in the long run.