What is a business innovation and why is it important?

What is a business innovation and why is it important?

Most businesses are known for the fact that they need to invent in order to generate revenue and keep up with the market pace.  In the recent years, we have seen that technology has seen a major shift in almost every prominent sector, however this ultimate fact has made it quite a responsibility for almost every business to be relevant and keep innovating in order to not be left behind.

But, what exactly is business innovation? And how does it work?

To elucidate it in a better and comprehensive way, business innovation is when companies implement new ideas, processes, services or products with the main and sole purpose of boosting and emphasising on the bottom line.  In other words, it is simply a technique through which various implementations are made to give rise to a higher rate of revenue.

A business focuses on brainstorming, design and thinking which can be taken as the integral aspects through which business innovation can be driven and put into effect

New organisations such as Uber and Amazon—which changed processes at the core of their industries in order to disrupt the status quo—as well as stalwarts like Microsoft and Apple, which have been around for decades but owe their continued success to constant reinvention and innovation. Yet, no matter its industry or current standing, an organisation cannot expect to sustain in this competitive era if it does not continuously look forward to bringing changes through constant innovation and reinvention.

Business innovation matters for one simply one reason: its ability to extract value In order for your business to thrive and flourish in accordance with the current competitive environment. It is crucial to continually innovate and improve.

Successful business innovation means finding new revenue opportunities, optimising and analysing existing channels and, ultimately, generating higher and alleviated levels of profits. It should also give companies an advantage over their competitors and give organisations a distinctive identity.

As we commence further, there are three models of  business innovation that we need to take care of-

1. Revenue model innovation

If the business or an organisation has the primary goal of bringing in change in their revenue generation, the first thing that they need to do is reconstruct their revenue model. This may involve re-assessing the products or services or simply looking further into the product strategy of the company.

2. Business model innovation

In this method, organisations take care of their business through looking into processes, methods or services to simply increase an organisation’s money aspect or to gain a little perspective on the companies profitability

3. Industry model innovation

ambitious organisations can opt to change industry completely for the purposes of innovation – or even create a whole new industry for themselves. Indeed, companies can win a new lease of life by following examples such as Virgin’s move from aeroplanes to broadband which was a drastic but an essential stop to bring in profits.

Now, looking more deeper into this, we would see a few industries that have the most innovative companies-

1. Automotive
2. Technology
3. Pharmaceutical
4. Healthcare
5. Biotechnology
6. Law

Let’s further get into the most integral section of this article and decipher it from another perspective.

As business innovation keeps finding its solid ground in various organisations, there are a few technologies that drive or simply simulate the business innovation.

Some of such technologies are-

1. Artificial intelligence

Artificial intelligence has played a significant role in almost every sector by increasing revenue and digitising every domain. Almost every industry and every spectrum of life is set to be transformed by it, with the recent reports published in the year 2020, 95 per cent of all customer interactions will be carried out by the incorporation of AI. When it comes to business innovation, it is one of the most exciting technologies available, with firms such as PwC estimating that it could add $15.7 trillion to the global economy by 2030.

2. Ultrafast internet

Ultrafast internet is the most affluent way through which organisations are communicating and digitising the whole game by emphasising on an alleviated level of commute.

It is vital that business leaders foster and bring into effect an environment where innovation is a natural part of company culture. Leaders need to strive on such an idea wherein every employee is getting the opportunity to put across their innovative idea and have the liberty to share their thoughts and feel constantly validated by it.

Let’s decipher how business innovation can be acknowledged and brought into existence-

• Don’t fixate on goals that are distant

To bring innovation into power, you need to make sure you are not fixating on long term goals and just paying attention to the short term goals and taking every step with effort.

• Give precedence to design

Many businesses still don’t realise this and not only neglect to create a leadership role around design, but also fail to invest in growing design capabilities more broadly in the business. Done properly this will force a company to entirely rethink and analyse how it brings new products and services to market as well as how it runs and organises itself.”

As we look further into the matter, lets see a few benefits of business innovation-

• Improved productivity

Business innovation increases the productivity of a business and gives an organisation a whole new perspective to work upon.

• Reduced costs

Costs are reduced with the inclusion of business innovation as companies can put emphasis on just a single idea without getting influenced and affected by any outside source.

• Increased competitiveness

Increases the competitive nature by giving a business something to look forward

1. Improved brand recognition and value
2. New partnerships and relationships
3. Increased turnover and improved profitability

A few risks are also associated with not innovating in a business, some of them are-

1. Losing market share to customers
2. Losing key staff
3. Reduced margins and profits
4. Going out of business
5. Failing productivity and business
6. Increases lose
7. Inability to scale
8. The increasing cost of legacy systems
9. Absolutely no growth

I hope you find this article helpful and it ends all your apprehensions related to the topic. Happy reading!!