Why Innovation is Crucial for Business Growth

The request or need to develop an innovation strategy can either strike panic or excitement depending upon how you think about it. It’s a nebulous term that sounds good but can leave you thinking “Where do I begin?” However, I’d suggest that the need for innovation should be an exciting endeavor that can breathe new life into a business.

But let’s start by defining why you might need innovation in your business. A company needs an innovation strategy for several reasons:

1. Staying Competitive: In today's rapidly changing business environment, an innovation strategy helps a company to identify new opportunities that can lead to the development of new products, services, and processes for competitive advantage.
2. Growth: Innovation is often a key driver of business growth. By developing new products, services, and processes, companies can expand their market share, increase revenue, and reach new customers.
3. Cost Efficiency: Innovation can also help companies to reduce costs by improving efficiency, streamlining processes, and reducing waste.
4. Futureproofing: An innovation strategy helps a company to prepare for the future by identifying and investing in emerging technologies and trends.

Overall, an innovation strategy can help a business to be better prepared for any disruptions that may arise in the industry.

How to Define Innovation

I’m hopeful at this time that we can agree that defining innovation in your business is a worthwhile effort. So now the question is “Where do I start?”

Admittedly, I initiated an effort to define an innovation strategy for a SaaS company. To establish context, this is a software application that had enjoyed steady growth as a leader in the market but was now being challenged by “me-too” competitive products. Perhaps, more importantly than the fact that the company was struggling to hit that 30% YOY sustainable growth trend, the team felt stagnant without a sense of urgency in addressing issues and opportunities.

To breathe life into the situation, I introduced an innovation strategy leveraging an approach offered by the Harvard Business Journal published in June 2015 that I believe is still applicable today. It’s like an easy tutorial to align your thoughts to introducing innovation in your business.

The following is how HBR so eloquently defined innovation.

Case Study:  Software-as-a-Service

To the example that I referenced, I defined innovation for this SaaS business starting with Routine, moving to Radical and Disruptive and finally, a specific plan for Architectural Innovation. Not that you must pursue your innovation strategy in this order but that this is how one company was able to methodically and strategically invest in innovation.

So as not to give away the “secret sauce”, the following are high-level examples of each type of innovation introduced.

To state the obvious, the introduction of innovation to your business will eventually require additional investment in resources depending upon the pursuit. Resources might be hiring additional support or process SMEs, defining a product roadmap and hiring new engineers that can deliver on a future value proposition, or engaging with a marketing consultant or fractional CMO to define your innovation strategy with third-party objectivity. Or investment might be the time requested from your Board of Directors to allow for business transformation with meaningful updates on a quarterly and/or defined timeline.

Additional Benefit of Innovation – Attacting and Retaining Talent

An innovation strategy can also help companies to attract and retain talent. In a competitive marketplace, talented employees are often drawn to companies that are innovative and forward-thinking. Specifically, innovation can attract and retain employees for several reasons:

1. Excitement: Innovation is exciting because it involves creating new ideas, products, and services that can make a difference in the world. Employees who are passionate about their work are more likely to stay engaged and committed to their jobs.
2. Growth opportunities: Innovation often leads to growth opportunities for employees, whether it's through learning new skills, taking on new responsibilities, or advancing their careers. This can be a strong motivator for employees who are looking for ways to develop their careers.
3. Competitive advantage: Companies that are innovative are often able to gain a competitive advantage over their rivals. This can lead to increased profitability, job security, and long-term stability for employees.
4. Positive work culture: Innovation often requires collaboration and teamwork, which can create a positive work culture. Employees who feel that they are part of a dynamic, forward-thinking team are more likely to be satisfied with their jobs and stay with the company.
5. Sense of purpose: Many employees want to work for companies that are making a positive impact on the world. Innovation can provide a sense of purpose and fulfillment for employees who feel that their work is making a difference.

Back to my practical example, the result in introducing innovation was a more engaged team of support, engineering, sales and marketing professionals. That’s where I’d suggest is the exciting part of innovation – being a part of creating and introducing true value to customers and employees.

So, my humble advice is not to shy away from introducing innovation but to be intentional in taking the initiative.

Source: https://hbr.org/2015/06/you-need-an-innovation-strategy

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