One of the solutions to any successful business is being able to come up with new ideas to keep operations, products, and services fresh. The process of bringing those ideas to reality is called innovation.
Business innovation is an organization's process for introducing new ideas, workflows, methodologies, services or products. Everyone can innovate. Innovation means coming up with new ways of doing things. Bringing innovation into your business can help you save time and money, and give you a competitive advantage to grow and adapt your business in the marketplace. Business innovation should improve on existing products, services or processes; or it should solve a problem, or it should reach new customers.
Innovation refers to creating more effective processes, products, and ideas. For a business, it could mean implementing new ideas, improving services or creating dynamic products. It can act as a catalyst that can make your business grow and can help you adapt in the marketplace. By innovation, we mean changing your business model and making changes in the existing environment to deliver better products or services. Successful innovation should be a part of your business strategy, where you can create a culture of innovation and make a way for creative thinking. It can also increase the likelihood of your business succeeding and can create more efficient processes that can result in better productivity and performance.
For that, business owners need innovation and creativity to find new things. Try adopting and creating new ideas that will help you grow beyond your competition.
Like IT innovation, which calls for using technology in new ways to create a more efficient and agile organization, business innovation should enable the achievement of goals across the entire organization, with sights set on accomplishing core business aims and initiatives. Innovation often begins with idea generation, wherein ideas are narrowed down during brainstorming sessions, after which leaders consider the business viability, feasibility, and desirability of each idea. Innovation can increase the likelihood of your business succeeding. Businesses that innovate create more efficient work processes and have better productivity and performance.
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. This guide explains how you can make innovation a key business process and outlines the different approaches you can take. It gives you advice on planning for innovation and creating the right business environment to develop your ideas. It also outlines the help and support available to innovative businesses.
Difference Innovation and Invention.
Innovation and invention are closely linked, but the two terms are not interchangeable. An invention is an entirely new creation. The process of business innovation can produce an invention, but the term is broader in scope and includes the application of an existing concept or practice in a new way, or applying new technology to an existing product or process to improve upon it. In its purest sense, the invention can be defined as the creation of a product or introduction of a process for the first time. Innovation, on the other hand, occurs if someone improves on or makes a significant contribution to an existing product, process or service. To better understand the difference, consider this: The telephone is an invention, but the smartphone is an innovation.
If ever there were a poster child for innovation it would be former Apple CEO, Steve Jobs. And when people talk about innovation, Jobs’ iPod is cited as an example of innovation at its best. For example - The iPod wasn’t the first portable music device; the iPod wasn’t the first device that put hundreds of songs in your pocket (dozens of manufacturers had MP3 devices on the market when the iPod was released in 2001); and Apple was actually late to the party when it came to providing an online music-sharing platform. (Napster, Grokster, and Kazaa all preceded iTunes.) What made the iPod and the music ecosystem it engendered innovatively wasn’t that it was the first portable music device. It wasn’t that it was the first MP3 player. And it wasn’t that it was the first company to make thousands of songs immediately available to millions of users. What made Apple innovative was that it combined all of these elements — design, ergonomics, and ease of use — in a single device, and then tied it directly into a platform that effortlessly kept that device updated with music. Apple invented nothing. Its innovation was creating an easy-to-use ecosystem that unified music discovery, delivery, and device. And, in the process, they revolutionized the music industry.
Most important steps towards business innovation.
Find areas and ways to innovate in your business through research and planning:
1. Conduct an analysis of the trends in the market environment, your customers’ wants and needs and your competitors.
2. Consult with customers and employees for ideas on improving processes, products, and services both internally and externally. Find out more about connecting with customers for ideas.
3. Ask advice. Use available resources such as business advisors, grants and assistance to drive innovation in your business. This may include seeking Intellectual Property (IP) protection to commercialize your ideas. Learn more about local collaboration and international collaboration with researchers.
4. Be exposed to new ideas and adaptive to change.
5. Develop a strategic, responsive plan, which promotes innovation as a major business process across the entire business. Learn about creating an innovative business culture and developing a strategy for innovation.
6. Motivate and empower your employees to think innovatively from the top down. Remember, innovation is the key to a competitive advantage for your business.
Approaches to innovation.
Innovation in your business can mean introducing new or improved products, services or processes.
1. Analyze the marketplace.
There's no point considering innovation in a vacuum. To move your business forward, study your marketplace and understand how innovation can add value to your customers. For more information on analyzing your marketplace, see the page in this guide on planning innovation.
2. Identify opportunities for innovation.
You can identify opportunities for innovation by adapting your product or service to the way your marketplace is changing. For example, if you're a specialist hamburger manufacturer, you might consider lowering the fat content in your burgers to appeal to the health-conscious consumer.
You could also develop your business by identifying a completely new product. For example, you could start producing vegetarian as well as meat burgers.
You could innovate by introducing new technology, techniques or working practices - perhaps using better processes to give a more consistent quality of the product.
If research shows people have less time to go to the stores, you could overhaul your distribution processes, offering customers a home-delivery service, possibly tied in with online and telephone ordering.
If your main competitor's products have a reputation for being cheap and cheerful, rather than trying to undercut them on the price you could innovate by revamping your marketing to emphasize the quality of your merchandise - and consider charging a premium for them.
Promote innovation in your business.
There are many sources you can use to help generate new ideas for the business. Suppliers, business partners, and business network contacts can all make valuable contributions to the creative process, as well as providing support and assistance. Your employees are also a vital asset in generating innovative ideas. To get the most from them, you need to create an innovative environment and encourage creative thinking.
Steps to promote innovation:
1. Make sure you have processes and events to capture ideas. For example, you could set up suggestion boxes around the workplace or hold regular workshops or occasional company away days to brainstorm ideas.
2. Create a supportive atmosphere in which people feel free to express their ideas without the risk of criticism or ridicule.
3. Encourage risk-taking and experimentation - don't penalize people who try new ideas that fail.
4. Promote openness between individuals and teams. Good ideas and knowledge in one part of your business should be shared with others. Teamwork, newsletters, and intranets can all help your people share information and encourage innovation.
5. Stress that people at all levels of the business share responsibility for innovation, so everybody feels involved in taking the business forward. The fewer the layers of management or decision making in your organization, the more people feel their ideas matter.
6. Reward innovation and celebrate success. Appropriate incentives can play a significant role in encouraging staff to think creatively.
7. Look for imagination and creativity when recruiting new employees.
Remember that innovative thinkers aren't always those with the most impressive list of qualifications.
Funding innovation.
There are a number of ways you can fund your growth through innovation, either by using your own funds or tapping into external funding such as loans or equity finance. However, any route to external funding will need a high-quality business plan that describes your business and sets out detailed forecasts of where it's going. Businesses often turn to their banks for a line of credit or loans for additional finance, depending on their borrowing needs. If you're willing to relinquish some control of your business to external investors, you could consider using equity finance. The two main routes for this are investment from business angels and venture capital firms:
1. Business angels are wealthy individuals who invest in private companies, typically from $30,000 to $500,000.
2. Venture capital firms provide higher levels of investment in return for shares in the business.
3. Government programs. You may also wish to consider applying for a government program. This will only usually cover part of your project, but you will retain control of the shares in your business. Consult Programs - R&D and innovation.
Classification of business innovation.
Business innovation can also be classified as either revolutionary or evolutionary. Revolutionary business innovation yields a drastic change in a product, service, process, etc., which often destroys or supplants an existing business model. This is also known as radical innovation. Evolutionary or incremental innovation involves smaller, more continuous improvements that, while important, are not drastic enough to shift a company or market into a new paradigm. Disruptive innovation is a category that emphasizes the destructive aspect of revolutionary innovation; this term applies to business innovation that leads to the creation of a new market that displaces an existing one or, similarly, a significant upheaval in a category of products or services.
The positive and negative sides of business innovation.
Business innovation, like most business initiatives, has both benefits and risks. Organizations should recognize on the negative side that the business innovation process can be a costly undertaking that does not always produce a return on investment (ROI); that ideas deemed likely to succeed could still fail; and that stakeholders whether they're employees, customers, partners or others -- could fight the changes required to be successful. On the different hand, organizations need to weigh those risks against the benefits of business innovation. Those benefits include the development of improved products and services, increased revenue and market share, organizational growth and new opportunities.
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