What is Business Innovation?
Business innovation is an organization’s process of creating new products and services, coming up with new ideas, workflows, etc.
The term innovation doesn’t always have to be a major breakthrough in your business model. It can be anything that helps you improve your business.
This could mean launching a new product or an improved version of an existing one, adding a new feature to your products, or even a minor improvement in your customer service.
Basically, the idea is to do something new in order to boost sales and revenue generation.
Why is it important for businesses?
Business innovation is important for various reasons. One of the major reasons why you need to focus on it is because it helps you introduce factors that make your business sustainable over a longer period of time.
Besides, it plays an important role in helping your business stay relevant. But these are not the only factors why you should implement it. Let’s look at some of the other reasons why business innovation is important.
1. Improved brand perception/image
By implementing business innovation, you can improve the way your audience looks at your brand. This happens because when you use your ideas to demonstrate innovation in your business, your customers start considering you as an expert.
It helps you boost their trust, and your business starts gaining more credibility. This, in turn, positively impacts your brand image and makes it stronger in the market.
Having a positive brand image is very important if you want to boost, get more customers and achieve your conversion goals.
2. Attract talents
Another amazing reason why business innovation matters is because it attracts top talents to your company.
That happens because when you are engaged in innovating new ideas, products, features, etc., you are also creating an exciting, dynamic, and challenging work environment.
Top talents love such workplaces because it helps them explore new possibilities, which in turn can offer new opportunities.
So they are automatically drawn toward it. Hiring top talents can help your business in several ways. For example, it will enhance creative thinking in your team.
This, in turn, will help you implement their ideas to create better products and services for your business. So your business will start improving and generating better results.
3. Retain employees
Business innovations help your employees stay engaged, motivated, and excited about the work they do.
By introducing dynamic ideas, processes, technologies, etc., you are actually creating a more engaged and stimulating work environment that motivates your employees to stay.
Such practices help retain employees and increase their loyalty towards the organization too.
4. Boost efficiency and productivity
As mentioned before, business innovation helps create a more stimulating and exciting work environment. This is very important to keep your employees engaged and motivated.
When your employees love what they are doing, their efficiency increases. This helps improve their productivity, which helps in the overall growth of your business.
Types of Business Innovation
Business innovations are of 4 types. Let’s discuss each of them briefly in this section.
1. Sustaining, or incremental innovation
In sustaining or incremental innovation, businesses mostly focus on improving their existing products or services to ensure that they can sustain the competitive advantage and position as a market leader in an existing market.
The smartphone is one of the best examples to explain sustaining or incremental innovation. There are so many smartphones coexisting in the market, each with various versions of the same model. Every year we see companies launching upgraded versions of an existing model. This is done solely with the intention of sustaining a competitive advantage in the market.
2. Breakthrough innovation
Breakthrough innovation is totally different from sustaining or incremental innovation. In this process, there’s a significant alteration in the way an industry or society operates or creates entirely new markets and industries.
So you create or innovate something relatively new. It’s something that was unthinkable before or didn’t even exist in the past. It can be a new technology or even a new product. So when the internet was invented for the first time, it was a breakthrough innovation. Similarly, when the first mobile phone was invented, it was a breakthrough innovation.
3. Disruptive innovation
Just as the name suggests, disruptive innovation is the process of disrupting an existing idea, model, method, etc., and replacing it with a completely new one. This creates a new market or value in the market.
This type of innovation can be categorized into two different types:
- Low-end disruptive innovations: This type of innovation typically targets price-sensitive consumers at the bottom of the market.
- New-market disruptive innovations: This type of innovation usually targets consumers who previously had no access to a product and opened up a new market.
Related: Learn what is what is Platform as a Service and the benefits it can bring to your company.
4. Basic research
Any kind of innovation starts with research. Only with research can you come up with new ideas that offer problem-solving solutions, methods, or techniques.
Most big companies will set up research labs, accelerators, etc., where this basic research can be conducted.
Examples of Business Innovation
The world has advanced a lot since the internet was invented. Ever since its inception, we have seen hundreds of business innovations coming up every day.
But only a few of them can make a significant impact and stand out from the rest. Artificial Intelligence is one such example. It has been used by people across industries to simplify their tasks through automation.
Many use it to optimize their supply chain, improve their customer service, and do things that previously couldn’t be done that easily.
Other such examples include Social Media, the Internet of Things, and Cloud Computing, amongst several others.