How to Embrace Innovation for your Business?

It seems there is a new way of doing business being created every week. Disruptive, technology driven, new business models are constantly being developed by the likes of Uber, Skype, Amazon and Air BnB.

Your business might hold an established position in the market today but that doesn’t mean that you and your management team can be complacent.

Disruption and commoditisation have impacted most industries and we are now seeing new players coming into traditional markets and establishing a disruptive model and capturing significant market share. This trend is only going to continue.

So what can you do, as the leader of your business, to minimise the impact of a potential disruptive new player entering your market?

It is difficult to constantly create new products or services. However, perhaps you could consider how best to commoditise some of your firm’s existing product or service offerings in order to increase profit margin and efficiency. This could also help you to improve customer experience – by making your services faster, easier to access and so forth.

When it comes to innovation, you don’t have to constantly re-invent the wheel. While creativity is usually associated with thinking outside the box, the fact is that few ideas are 100 percent original. The most brilliant (and often most profitable) business ideas are usually variations of an already existing theme rather than completely new concepts.

Netflix didn’t create a new industry. They just took the business model that had been so successful for Blockbuster Video and created a new way for customers to rent films - online instead of through a video shop. As Steve Jobs once said, “Creativity is just connecting things.” What sets creative people apart is that “they are able to connect experiences they’ve had and synthesize new things.”

If you want to embrace innovation in your business, you need to develop an environment that encourages creativity. Your staff should be empowered to explore new ways of delivering products or services.

Experimentation should be encouraged and your office should have collaborative workspaces in order to allow people to sit down together, work as a team, solve problems collectively and create new solutions.  In addition to this, your business should celebrate innovation through recognising those team members who find new ways of doing things. Whether that is a bonus for implementing a new innovation or perhaps celebrating the delivery of new innovations with a team night out. The key is to encourage your team to be creative, find new and better ways of doing things and keep innovating.

What Can We Learn From Disruptive Innovation?

Disruptive innovation is a term, created by Clayton Christensen, to describe a new invention or product that alters its market. It typically refers to innovation that results in changes on a large scale. For example, the digital camera which replaced Kodak's traditional film cameras or digital streaming services which have effectively replaced CDs as the primary way to consume and listen to music.

With each innovation, there is risk taken on by the firm that introduces it and there is disruption faced by the users. The businesses that promote the new product or service innovation face uncertainty in not knowing if it will succeed since they are challenging an established market. They are introducing an alternative, which, if it catches on, will mean that users have to adjust and accept a new way of doing things.

 

So, what can we learn from disruptive innovators which we can then apply to our own businesses? For a start, not all innovation has to be on a large-scale; small changes can make all the difference. For example, process innovation could have a positive impact on the profitability and efficiency of your business. Aim to create a benefit to your business; e.g. to reduce the time it takes to produce a product or service or a new, more efficient way of delivering your end product or service to your customers.

 

As with any innovative development, your employees will probably see a disruption to their day job. Perhaps they have to learn a new way of doing things or even learn how to use a completely new system. The business is taking a risk in changing what has always worked and the employees may be unsure as to how the changes will impact them. They will need time to become accustomed to new ways of working and this could create a degree of disruption across the firm. 

 

That said, with appropriate training and change management processes, you should be able to ensure that your new innovations are adopted quickly and with minimum fuss. And as with any change in business, success is all about planning.