Innovation. It's a term all too often used to describe the latest technology, as if it's synonymous with invention. But, in reality, invention is only ever one aspect of innovation in the business world.
Business innovation is all about finding new, disruptive and more effective methods in the name of boosting the bottom line. It's implementing new ideas, products, processes and more in order to increase revenue.
Innovation isn't Something to Forget About
Most businesses know innovation is key to keeping up with current market trends and surviving beyond a single idea's life cycle.
As Maria Ferrante-Schepis, the managing principal of insurance and financial innovation at Maddock Douglas has said, "...if you aren't innovating, you're just waiting for the expiration date on your business." Quite literally, if you want your business to have any shot of lasting, you need innovation at the forefront of your business.
Successful business innovation allows you to get ahead of disruption, increase efficiency, attract and retain talent and improves your brand perception. Innovation (or the lack thereof) is embedded in the success of every aspect of your business.
The problem is innovation has become such a buzzword, its meaning and application have become skewed.
What Innovation Really Looks Like
It's important to realize that innovation is a process with many different methods.
Jacob Beckley, SVP of Innovation at Fusion92, has described it as "[embodying] the improvement of something that's come before, it's the evolution of convenience, efficiency, and effectiveness."
Take the company Nest. They looked at a thermostat and asked, how can we make this better. By answering that question with the modern consumer in mind they completely transformed what's been an otherwise stagnate industry. Nest evolved something that's been around for quite a long time and made it sing in the current market.
Another great example is the Dollar Shave Club. They didn't really change the product. Instead they:
- Found a way to provide a significantly lower price point
- Made a more convenient way for customers to get the product
- Focused on innovative advertising
Then you've companies like Polaroid who took something long seen as outdated and simply re-branded it for the new generation. They took something old and made it new without reinventing the product itself.
All of these examples show not only how much impact innovation can have but also there're in fact many different ways to innovate.
Different Types of Innovation
Open innovation is used to describe when companies use both internal and external ideas in order to improve upon their operations. This means not only do they rely on their own talents but they'll look across industries differing from their own for ways to improve.
The goal, as always, is to improve revenue. However, the focus is on reducing operational costs, accelerating time to market and creating new revenue streams.
Disruptive innovation is the transformation of an existing market with a focus on simplicity, convenience, accessibility and affordability where the status quo is complex and expensive. It's called disruptive because this type of innovation overtakes what was done before.
The Dollar Shave Club is a good example of disruptive innovation as it's forcing the industry to compete.
Incremental innovation is when companies make small changes and updates to products to build upon them over time. By doing so they keep themselves competitive in the market without entirely overhauling the product or creating something completely new.
We see this all the time with new editions of cars and phones coming out regularly. Even the razor has slowly progressed from a single blade to six with all sorts of bells and whistle options.
Also known as radical innovation, breakthrough innovation is the development of completely new concepts. They aren't built off of any existing products, services or operations. One of the clearest cut examples of breakthrough innovation is the internet.
And again, this type of innovation isn't reserved for invention! Breakthrough innovation comes into play with everything from products, finance and delivery to marketing and business models.
Innovating to Drive Success
In order to innovate, innovation needs to be a part of the core of your business. Shaping innovative thinking into your workplace culture is vital to encourage and inspire innovation.
This becomes especially true as breakthrough innovation is seen as a little riskier. No employee is going to stick their neck out with new ideas if it's not encouraged or even allowed. And that's a recipe for a rut and the expiration date on your business being called up. It's why having innovation as part of your work culture is so important.