The journey of business innovation — why it’s necessary to undertake
In order to establish themselves in the highly competitive market space, businesses must be willing to adapt and innovate. What no one actually explains here though is, what actually is business innovation, and in which area of business should you innovate?
Explaining business innovation
Innovation is when a startup or an established business introduces new processes, services, or products to affect positive change in their business. This can include improving existing methods or practices, or starting these processes again from scratch. Ultimately, the goal is to reinvigorate a business, creating new value and boosting growth and/or productivity.
Let us understand business innovation with the help of an example. Launched in the year 1997, Netflix is one of the best examples of how a business should innovate. From offering video subscription in the year 1999, the company now boasts of 117 million subscribers across 190 countries. They have moved from licensing most of the content on the platform, to creating content in 2011 and then launching a mobile app to hook the customers. Netflix’s aim wasn’t to appeal to a broader audience like the traditional broadcasters — rather, it was to appeal to the taste of individual audiences. The video streaming company wanted to capture every individual hooked to the platform by offering them a show or movie they can’t live without.
While Netflix is a successful example of how innovation helps business grow and thrive, there are several other companies which have not been able to successfully drive the innovation train. Nokia, Polaroid, Sun Microsystems, and Yahoo, despite massive investments in terms of time and money, have failed in their pursuits.
Why does business innovation matter?
Business innovation matters for one simple reason: value. In order for your business to thrive, it is crucial to be continually innovating and improving. Successful business innovation means finding new revenue opportunities, optimizing existing channels and, ultimately, generating higher profits. It should also give companies a distinct advantage over their competitors.
What business innovation is not
Innovation has become such a hot topic that its true meaning is often lost in the noise. While some use it as a buzzword for simply using the latest technology or making change for change’s sake, the definition of “innovation” is limited to changes to the core business of an organization that leads to growth.
Is it so hard to innovate for a business?
We believe, and we all agree, that the innovation journey for a business is definitely not an easy one. One of the essential aspects that can make or break this journey is the failure to execute. The problem with innovation improvement efforts is rooted in the lack of an innovation strategy.
It is one of the reasons Akeo launched Akeo Tech-Start. With this unique service, we cater to both startups and established businesses to help them strategize in alignment with their business idea. Our focus remains on clarifying objectives as well as setting priorities and helping businesses focus their efforts around them. Startups like Adress App, Cycled, and Wakandi, and established businesses like TouchSoft, are such examples wherein we have defined and worked from scratch the entire business strategy (their scope and positioning), and specified how various internal and external functions — such as operations and marketing- will support it.
Models of Business Innovation
There is more than one way to innovate, and businesses of different ages and sizes will have different reasons for embarking on a process of business innovation. For some it may be a case of re-assessing the ways in which the business generates revenue; for others it may be necessary to move into a different industry altogether — or even to create a brand new one! Before embarking on any innovation cycle, it is important that businesses understand the various different business innovation models available to them.
· Revenue model innovation
If increasing profits is the main driver for business innovation, many businesses may choose to change their revenue model as a first port-of-call. This can involve re-assessing the products or services offered, or taking another look at the company’s pricing strategy. Innovation does not have to be radical — sometimes changing even one element can yield significant results.
· Business model innovation
This model of business innovation requires businesses to identify which of their processes, products or services could be improved to boost the company’s profitability. Innovation in this case could refer to forming new partnerships, outsourcing specific tasks or implementing new technologies.
· Industry model innovation
One of the most radical models of business innovation, ambitious businesses can choose to change industry completely for the purposes of innovation — or even create a whole new industry for themselves.
Reasons innovation is important for businesses
· Innovation grows your business
Business growth means, ultimately, increasing your profits. Successful innovation allows you to add value to your business so that you can increase your profits — if you don’t innovate well, your business will lag behind.
· Innovation helps you stay ahead of the competition
With globalization and a rapidly changing market, there are more competing businesses than ever before. Innovative thinking can help you predict the market and keep up with customer needs. If your business doesn’t innovate, you’ll watch innovative companies bring new ideas to the marketplace, and you’ll have to scramble to keep up.
· Innovation helps you take advantage of emerging technologies
Technology is forever evolving which means that there may be new, more efficient technologies to make better products, to offer newer or better services or to market to newer audiences. By taking advantage of these new technologies for process innovation, you’ll be able to optimize your business and gain a competitive advantage over your competitors.
