To stay competitive in today’s quickly changing markets, businesses need to be proactive instead of reactive. The best way to be proactive is through innovation.
However, growth though innovation requires a delicate balance. Companies must innovate whilst delivering actual results in the day-to-day business.
What is Innovation in Business?
Business innovation is when companies introduce new services, products, or processes to effect a positive change within the business.
There are two types of innovation: new innovation that starts from scratch and innovation that focuses on improvements.
The Aim of Business Innovation
The aim of innovation is to create new value and to protect businesses from being negatively affected by outside change they have no control over.
Innovation is especially important when you first take over a business. Long established companies are normally run by myths, legends and the phrase "we have always done it that way."
It is fine to do the same thing if a business works well, but it is also worth challenging the status quo to find better and more efficient ways of doing things.
Innovation vs Pioneering
It is important to note that innovation and pioneering are very different things.
Pioneering is doing something that has never been done before, like when the Wright brothers first flew a plane.
Innovation is doing the same thing better, like when Boeing releases a new more economical passenger plane.
Balancing Innovation with Maintenance
Businesses are profitable by being consistent, so it is important to continue to deliver profit whilst innovating.
You can’t keep changing and jumping on the next band wagon, and expect a business to be successful.
The best way to balance business with innovation is to set up a regular cadence of measurement of your key goals. This allows you to get a broad overview of the "health" of the company.
It also means that if something goes wrong, you can identify the problem and put measures in place to prevent it from escalating.
Top Tips for Innovation
Innovation is challenging because it requires resilience, an open mind, and an appetite for risk.
As a result, innovating in a board-room is not effective. Board-rooms are where people make decisions based on facts and figures, the exact opposite of innovation.
The best way to tease company changing ideas out of your employees is to do something different. Bring people outside of their comfort zone to help them consider ideas they would normally reject as impossible.
Here as some ways I have inspired innovation over the years.
Quarterly Think Tanks
Quarterly think tanks are a low-cost way to innovate. They are a great space to think broadly about where new markets can be found. They present a springboard to innovate without affecting the day to day running of the business.
Team-building exercises create trust, improve communication, and increases productivity. They also provide an avenue for people to contemplate ideas they would normally reject.
Some excellent team building events that don’t feel corporate are: an afternoon of golf, an escape room, and a sporting event.
If your business can afford it, I believe that excursions and work trips are even more successful than isolated team-building activities.
Around twice a year, I like to take my executive team on a long weekend trip somewhere like a ski resort. The sole purpose of these trips is to do a 360 analysis and come up with completely new ideas.
We consider new markets we could enter and problems that we can solve by changing a product or introducing a new product.
I strongly stand by the belief that these kinds of trips are investment, and not an unnecessary splurge. Innovation is expensive, but if you do it right, it is definitely worth it.