The successful generation and exploitation of new ideas are crucial to a business being able to improve its processes, launch new and improved products and services to market, increase its efficiency and, most importantly, improve its profitability.
In order to drive business growth, stay relevant in changing times, and differentiate from the competition, business leaders must be able to think creatively and embrace innovation in their business models.
What is business innovation?
Business innovation is when companies implement new processes, ideas, services, or products with the goal of boosting the bottom line. It could mean launching new and improved products or services (which can lead to higher revenue), making an existing process more efficient, or solving a current business problem that cuts down on costs and time.
A business focused on brainstorming, design thinking, or the establishment of an innovation lab can drive business innovations. The key element of innovation is that it drives revenue for the company.
Business innovation can mean a single major breakthrough – e.g. a totally new product or service. However, it can also be a series of small, incremental changes.
Whatever form it takes, innovation is a creative process with ideas coming from either inside or outside the business. Then focusing on and applying resources to develop them. Find out more about boosting creative innovation in the workplace.
Why is business innovation important?
Business innovation allows companies to get ahead of any potential disruptors or changes in consumer demands. Businesses use that information to make strategic changes and to entice internal employees to be entrepreneurial. Those changes can include building a product or service similar to what new startups are making, buying it from others in the industry, or partnering with the upstarts.
Introducing business innovation can help:
- Improve productivity & efficiency
- Reduce costs
- Improve competitiveness
- Build the value of your brand
- Establish new partnerships and relationships
- Attract and retain talent
- Increase turnover and improve profitability
Examples of business innovation across industries
Logistics & transport
AI technology and automation are streamlining transportation and logistic processes for better accuracy and efficiency.
Blockchain technology has been specifically designed to transform business operations, record transactions, track assets and create a transparent and efficient system to manage all documents involved in the logistics process. AI is being used to increase passenger safety, reduce traffic congestion and accidents, reduce emissions and minimise overall financial costs.
Fintech
Fast-paced innovation is shaping the way the whole sector does business. Fintech innovations, include mobile banking apps, pay-and-go paperless payments, e-commerce, robo-advisors, smart contracts, peer-to-peer lending services, crowdfunding campaigns, blockchain technology, and cryptocurrencies.
Insurance
Switching paper forms and timely in-person processing for convenient online purchasing of insurance products, online claims, customer service digital hubs and financial literacy webinars.
Retail-eCommerce
Alongside the swift development of fintech, e-commerce has been accelerated with online retail shopping becoming the norm rather than the exception. Retail companies must have an active digital user-friendly e-commerce space along with strategic digital marketing in order to compete and survive in this highly competitive sector. Not to mention the popularity of social commerce.
Types of business innovation
There are many types of business innovation, including:
Product innovation
Product innovation is about creating completely new products that are in alignment with a business’s core offering. Think legacy companies like Facebook launching Metaverse or the crypto movement branching out into other blockchain-powered tokens, popularised NFTs and other tokenised ownership as alternative investment vehicles, or Apple launching smartphones.
Process innovation
Process innovation is about designing a new way to be more efficient within the core business. Examples of this include Amazon using AI-powered robots in their warehouse, or digital banks and e-wallets making transactions easier.
Business model innovation
Business model innovation involves introducing a new way of making or saving money, such as Uber car-sharing subscriptions, Shopify, Foodpanda, or Deliveroo – online platforms giving small businesses the chance to convert their point-of-sale terminals into e-commerce stores for retail, food, etc.
Whatever type of innovation your business embraces, it can only hope to serve growth and profitability in the long-term and keep your business on the winning edge of relevance and success.
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