*Updated September 2022
What is innovation?
For most people, innovation signifies the development of advanced tech products, smart home gadgets, and maybe that famous pair of self-lacing Nikes from Back to the Future. But business innovation is not just about innovative technologies and AI.
It's a term that applies to every aspect of running a company – from processes like R&D to marketing strategies and management style. And it turns out that having an innovative approach could be the key to ensuring the success of new and old business ventures.
But how exactly does business innovation impact long-term business success?
According to the Meriam-Webster online dictionary, the word innovation holds two essential meanings: (1) a new idea, device, or method, and (2) the act of introducing new ideas, devices, and methods.
But in the business world, innovation doesn't necessarily have to mean coming up with something new and original. Some of the most impressive business successes of the past century came from creative ways of thinking about already-existing concepts.
A notable example is the McDonald's corporation. Most people think that the success of the fast-food chain comes from its efficient way of food preparation and speed-oriented approach to space design. But in reality, as much as 35% of McDonald's revenue is generated by leasing out real estate to franchisees.
In short, an inventive person on the company's team realized that the best way to make money wasn't to sell more burgers. Instead, it was to buy restaurant buildings. Then, the corporation would lease them at a 40% markup, resulting in the franchisee financing the mortgage and leaving the company with property ownership.
Business innovation isn't merely a process. It's also a state of mind. It's a creative system of thinking about existing and future challenges and a commitment to finding solutions that work.
In other words, it's a formula for success that relies on:
- critical assessments of current situations
- data-driven decision making
- preparedness to shift strategies based on emerging changes in the market
Business innovation as a workplace culture
Running a business requires cutting-edge solutions to be able to tackle a growing number of operational challenges. Without them, progress and success are impossible to achieve. A noteworthy example of how essential business innovation is for the survival of businesses comes from the Coronavirus pandemic.
[Related Article - 6 Ways Companies Can use technology to boost business during the Pandemic]
Having forced half the world into adopting work-from-home practices, Covid-19 proved that the only way for companies to survive during difficult times was to adopt an agile workplace culture that focused on solutions rather than challenges.
Those who learned how to make the most of the situation – whether by adapting their practices or identifying new ones that would work better – thrived. And those who refused to respond to the changes went under. A survey from May 2020 showed that 78% of business leaders expected employee productivity to suffer due to remote work.
Yet, the results showed something much different. According to a report from August 2021, 57% percent of tech company employees reported higher productivity while working remotely during the pandemic.
These numbers perfectly illustrate the potential of an innovative approach to workplace culture. Sure, the pandemic may have disrupted workflows and operations. But it also uncovered areas for improvement in leading a productive workforce.
Companies discovered efficient ways of doing exceptional work with dispersed teams. Brands developed solutions and innovative technologies that eliminated newly-formed obstacles. Employees devised ingenious hacks to make up for less-than-ideal circumstances.
And the best part about the impact of the pandemic on business innovation in the workplace? It's still inspiring ideas geared towards long-term success.
Gartner, for example, argues that to successfully navigate the future of work (which is said to be hybrid), managers must conduct a complete rebalance of synchronous and asynchronous work.
The idea is to think outside the box and improve collaboration by making it purposeful and limiting its time allotment. The resource suggests solutions like core collaboration blocks, limited team meetings, and greater levels of employee flexibility.
To some leaders, these suggestions may seem ludicrous. But to those who understand the value of innovation (in all its forms), they represent an experience-based business decision that promises success plus significant productivity gains.
Business innovation as the key to assessing and mitigating risk
Another great way to look at the role of business innovation in ensuring the long-term success of a company is to think of it as a risk-management strategy.
The process of creating and implementing novel solutions or work philosophies looks toward the future. Consequently, an innovative approach makes for the most effective way to recognize potential setbacks and mitigate risk. Businesses would ideally do this by improving current practices and developing better ones that can drive success.
The idea that business success requires inventive thinking and an innovative approach employed in the service of risk management isn't unusual. The current state of the U.S. job market shows an exceptional illustration of how the two can work together.
According to The Conference Board, 85% of blue-collar industry companies reported recruiting difficulties in 2021. Moreover, 92% of those same companies experienced recruitment and retention difficulties.
Furthermore, the first three months of 2021 saw a 17% hourly wage growth. That's the fastest change in compensation over the past 20 years. The results? – A diminishing workforce in essential industries coupled with a rapidly growing cost of doing business.
So what can affected businesses do to mitigate the risks associated with insufficient work power and high employee turnover rates?
Well, one solution would be to turn towards applying an innovative approach. In addition to traditional contributions to employee job satisfaction, like increasing wages or offering better benefits, employers could also look for new ways to attract and retain the right talent that will not feel the need for job hopping. For example, the state of the tech industry currently shows a worryingly poor level of diversity.
So, one way for business owners to prepare for a changing job market would be to find new methods for offering better support to female and POC employees. Or, to prevent the shortage of qualified workers, employers could consider re-thinking credential requirements. They could even look for ways to eliminate, automate, or outsource cumbersome tasks to make the work more enjoyable.
Of course, HR is not the only area that can see long-term gains from an innovative approach to predicting and preventing operational hurdles. Every single aspect of running a business can benefit from business innovation ideas. Especially when it makes processes more secure, resilient, and self-sufficient.
Implementing and developing new innovative technologies like automated expense management software, for instance, can minimize the chances of human error. AI-powered customer support solutions help answer sudden surges in demand while preventing overspending. Digital whiteboards and project management solutions future-proof workflows and create new spaces for employee growth.
An Innovative approach always pays off. More importantly, they mitigate risk by allowing flexibility and nurturing creative ways of addressing everyday problems.
Innovative technologies as a way to identify market gaps
Finally, discussing the importance of business innovation for long-term success would be impossible without acknowledging that we are living in the times of the Fourth Industrial Revolution.
With new innovative technologies emerging daily, businesses don't just have to keep up with constantly evolving consumer needs. They also have to know how to effectively identify and target market gaps to ensure the profitability of their business decisions. And that means a future-oriented innovative approach to both research and development and a commitment to business innovation.
For example, in 2021, AI and machine learning represent the best methods for identifying market trends. Seeing how these automate data collection processes, business owners can develop custom-made algorithms to gain relevant knowledge they can securely act on to drive their business innovation.
An equally imaginative and innovative approach to research and testing is to use new innovative technologies to make products more effective at meeting consumer needs. Recently, a group of designers decided to use VR technology to plan and examine a new layout for customs gates at Christchurch International Airport in New Zealand. Thanks to innovative technologies, they were able to bring a new dimension to physical space planning and gain valuable feedback from people, which they could use to further improve their design.
As a somewhat more complicated way to employ business innovation for long-term success, organizations can also invest in new innovative technologies that resolve large and small-scale consumer problems.
For example, identifying a common issue in the EV industry, StoreDot decided to innovate EV car batteries by designing a new battery type that uses advanced thermal management and machine learning to reduce charge times from hours to minutes. With 61 granted and 31 pending patents, it has secured its long-term business success, seeing that most car manufacturers plan to go electric in the next decade.
Or, for a slightly smaller scale example of innovative technologies that drive business success, screen protector manufacturer Paperlike recognized the downsides of using digital devices for note-taking. So, it developed its Nanodots technology that uses vibrating microbeads to stimulate the feel of paper when writing and drawing on tablet devices.
There are no limits to the value of business innovation ideas to both consumers and the company itself. Failing to recognize new possibilities and continually improve existing products makes for one of the best ways to drive a business into the ground. Just look at Kodak and how it went from being the biggest name in the photography industry to a complete failure.
Committing to an innovative approach
For entrepreneurs, especially those running small and medium-sized businesses, the idea of business innovation can seem daunting. After all, in its most basic form, business innovation is expensive, time-consuming, and not immediately profitable.
But, it's also true that constant progress is vital for long-term success. So, as a business owner, ask yourself this: How are you investing in the longevity of your company?
Are you keeping an open mind to change, progress, and growth (in any of their forms)? Or are you keeping to old ways, fearing the moment they stop bringing you results? The decision is simple. And luckily, all it takes is a shift in attitude and an innovative approach.
At Valuer, we always look to make the business innovation process a little easier. And we think our newly revamped and revitalized platform delivers on-demand innovation. Using an AI algorithm, the Valuer platform combs over our massive database to get you the results you need fast. It also keeps you constantly up-to-date on the latest innovative technologies and trends in any industry or sub-sector.
Author Bio - Natasha is a lady of a keyboard and a self-admitted geek. She has been working for and collaborating with individual clients and companies of all sizes for more than a decade. Natasha specializes in writing about design, branding, digital marketing, and business growth. She is also addicted to art in all its forms and grilled tofu.