How important is innovation to your company?
Without innovation, the future of that company would be uncertain and bleak – hence, the importance of investing in a company as a going concern. Surprisingly, there are quite a number of ways to be innovative in a company, but many companies have missed out due to myopic misconceptions surrounding it. Executives are burdened by company growth demands and obviously; innovation is the way to go. However, they are at a loss on how to begin.
Let’s start by understanding what innovation really is. Innovation is generally misconstrued as activities within research and development, which births new products and services without constructive changes or improvements in systems and processes, norms and best practices.
Companies need to differentiate between product or technological innovation and business innovation. Technological and product innovation do not necessarily translate to consumer marketability or increased profitability. Innovation should be holistic and strategic whilst factoring in all possible aspects of the business system in order to achieve the anticipated outcomes. True Innovation is systemic and more focused on creating ‘new values’ for customers and improving the company rather than merely creating ‘new products’.
The test of a successful innovative investment or venture is the response and outcome; the customers’ willingness to pay for it, which ultimately leads to increased margins. So, basically, customers are the final point of call.
In addition, Innovation is dynamic not static; it can take many forms within a company’s business system such as improved internal processes e.g. turn-around time or improved customer experience and value-added services.
An in-depth research was carried among a group of global leading companies and it was discovered that there were up to twelve ways companies can find and utilize opportunities for innovation. Interestingly, innovation was summarized under four major questions, which consist of all aspects of consideration within a company’s business system.
The questions include:
WHAT value the company has to offer?
WHO are the target market or customers?
WHERE to position the value for easy access?
HOW will the company process and adjust to produce and execute this value?
There are eight other sub-factors, which are WHAT (platform and solutions), WHO (customer experience and value capture), WHERE (networking and branding) and HOW (organisation and supply chain).
When considering innovation opportunities along the path of what the company offers, you also need to factor in improved customer experience and added value such as introducing new products and services. Here, you strategically develop an additional product or service that would better serve and be of great use to your customers for which they would be willing to pay for even if you need to make it affordable.
Under this, there are the platform and solution considerations. Platform involves making clever modifications whilst utilizing common or existing materials or components to carve out a niche product that would serve a particular target market without incurring more or investing in totally new equipment. This puts a company’s efficiency to the test. While solution is developing a set of products and services that work hand-in-hand to solve all aspects of customer problems or needs.
Innovation opportunities along the path of ‘who’ factors in the customer or target audience. Looking inward and searching for new or untapped customers, and serving those specific targets with the new value can determine these. While considering this also, a company might need to improve on its customer experience feedback through efficient turn-around times, improved customer satisfaction, cheaper products etc., all in a bid to attract and maximise this niche market. At the same time, through value capture, companies need to ensure a return benefit after serving customers in these areas. In other words, make adequate returns from additional services rendered.
While looking at innovation in line with ‘how’, you would be considering internal or operational processes. Here, companies need to readjust the organization and supply chain processes within their core business operations. For instance, questions such as how they can become more flexible and efficient in delivering on their promises will be answered. For instance, some processes can be dissolved or merged for ease of transaction and quicker service delivery time so as to focus on core activities that directly impact and benefit the business. Companies can also restructure and reassign roles and responsibilities of employees or partners.
Finally, when considering innovation along the path of where, companies are dealing with how best to push forward their products and services to the right and final consumers. They have to explore increased channels of distribution in order to increase their presence. Branding and networking have a far-reaching effect in both introducing and keeping your product in the minds of new and existing customers to gain top-of-the-mind awareness.
When it comes to innovation, it is common to see companies tilted towards the ‘known’ but companies that think outside the box usually become more successful.
Photo: Alphaspirit | DepositPhotos.com
Author: Toyosi Akinoso
Toyosi is the Content Manager and Editor for 234Finance.com