Why Innovation is Crucial for Business Success
Innovation in business is the difference between a being leader and a follower. Read our guide to solve problems no one else can see
In today’s fiercely competitive business climate, the importance of continuous innovation cannot be overstated.
Quite simply, if you fail to innovate, you stand still – and others will leave you for dust.
Innovation need not be a complete overhaul of your business, however; it can take more modest forms, like the refinement of your existing offering.
Sometimes, though, it will be necessary to take a complete leap of faith.
In this article, we examine the different forms innovation can take, as well as where to find inspiration for change; both within your own business and without.
What opportunities for innovation in my business exist?
There are always areas in which you can innovate, even if you think you are doing well as a business.
Broadly, there are three areas you should look at when considering areas for improvement:
- Can I improve my processes? For example, consider whether you can make your product in a different way, or change the way you recruit staff.
- Can I improve my product? Perhaps you could try repackaging it to appeal to a different target audience, or discover a new use for it.
- Can I create something new entirely? Otherwise known as ‘quantum leap’ innovation, you could create an entirely new market with a novel product.
What is standing in the way of innovation in my business?
Innovation is not something that happens organically.
As a business owner it’s likely you will be preoccupied with the day-to-day running of the business, so you must recognise innovation as a priority and set aside time for it.
Your employees can also stand in the way of innovation. Most workers are well-versed in meaningless management-speak about innovation, so show them how your plans will actually affect them, and incorporate ideas they have suggested to increase receptiveness.
More generally, raise the profile of innovation within your business by impressing upon senior employees the consequences of doing nothing, and consider circulating a bulletin or email outlining your plans.
How do I plan for innovation in my business?
Before you start narrowing down which products or processes need improvement, it is a good idea to step back and examine your overall strategy for the business. Where is your business going, and what does it need to do to improve?
Make sure to consider the sector you are in as this will be extremely relevant. What can your business do to improve its position within the sector? Consider the opportunities or demand for change in the market.
Perhaps try focusing your efforts on a particular niche you see yourself fulfilling, and consider partnerships with other businesses to take advantage of particular opportunities.
Assess your business’ offering and whether your existing product or service needs refinement. You may need to do something new altogether. Consider the cost and training implications of improvements in this area.
Think about your business processes. Where does your business work best – and could those methods be used elsewhere in your organisation?
When you have come up with a strategy, write down your vision in your business plan.
Break down your goals into short- and long-term goals; for example, if you plan to increase turnover to £5m over the next three years, set yourself a year-end target of £250,000.
Remember to keep them achievable.
Where do I find inspiration from outside my business?
When looking externally for ideas, your starting point should always be to look at the market you are in and the opportunities it offers. Follow these simple steps:
- Examine your customers. Allow your customers to provide feedback on the product or service you offer, either through meetings or questionnaires. Try and talk to your competitors’ customers (trade shows and exhibitions are a good time to do this) to find out why they chose them over you.
- Be aware of your business environment. Keep on the lookout for legal and economic changes or market trends that could signify an opportunity.
- Examine your competitors. What products or services do they offer and how do they differ from yours? If they are more successful than you, why?
- Seek out experts. Experts in your field can be an invaluable inspiration for change. Find ways to seek them out and talk to them.
- Consider benchmarking.Benchmarking is where you compare your business performance to others – find out more here.
Where do I find inspiration from within my business?
Remember that as your eyes and ears on the ground, no-one knows more about your business than its employees. Use them to their full extent to help drive real innovation in your business.
Hold regular meetings to run ideas past employees and get their own input. Try and pick up on the office environment and general mood in the camp. Walk around your business – look and listen to what your staff are doing.
If suitable, use a suggestion scheme or appraisal system to further canvass staff ideas. However, remember to keep hierarchies simple – a complex chain of command will stifle the sharing of ideas.
As well as your employees, there are numerous other ways you can source inspiration from within your business. Examine your product and see can you identify any obvious or possible. Can it be improved in any way?
Encourage experimentation within your staff. You could start a system of rewards or incentives for employee innovation, or perhaps follow Google’s lead and allow staff to take part of their working day to work on their own innovative projects or simply make use of internal benchmarking.
How do I improve my processes?
If you have identified your processes as an area that needs improvement, there are a number of areas you need to consider.
Ask yourself which processes have the biggest effect on customers as the most impactful ones should be your starting point for innovation.
It’s important these processes are done as efficiently and cost-effectively as possible. Think about how you can improve them in a way which brings tangible benefits to customers.
Paramount to any improvement though, will be any advantages you can make with regards the technological or production side of your small business. This could be new machinery or systems, or elements on your website that could automate customer queries and cut down on staff workload.
As employees may have helpful suggestions to improve processes, make sure to get them involved. Incentivise or motivate them to make the changes work.
Large overhauls might be necessary to push through your innovation goals so you should always have a plan on how to restructure the business if necessary.
Finally, meet regularly with any suppliers and discuss progress with them.
How can I improve my product?
You might be tempted to skip over this question if you consider yourself a service-based business – don’t. A ‘product’ doesn’t have to be a physical thing; whether it is data analytics or insurance, if you develop and sell something to consumers, it can be considered a product.
Ask yourself these questions:
- Is there a market for my product? Avoid having to establish a market as well as a product. Research whether anyone will actually buy a new product before spending money developing and trying to sell it.
- How can I put together a team to develop my product? Most product development these days requires you to put together a ‘virtual team’, often involving people from outside your company as well as within.
- Have I come up with a concrete plan to bring the product to market? Make sure you have meticulously planned how you will conduct every stage of the process, from researching to selling your new or improved product.
- Do I need to protect my intellectual property? If you’ve come up with something completely new, you might need to protect yourself with a patent, trademark or design registration.
How can I nurture innovation in my business?
It is vitally important to follow through on your goals, and foster a culture of innovation within your business.
Failed or abortive projects will lower staff morale and undermine your ability to drive change in the future.
To help prevent this type of failure, there are a number of steps you can take.
Train managers to lead innovation. Impress upon them the benefits an innovative culture could bring, and try and banish any fear of failure.Involve your employees by communicating and share your ideals.
Let staff feel they have a stake in your vision. Keep them updated on your goals in team meetings.
Plan for innovation and set yourself sales and profit targets on new products, and integrate innovation into your core business plan.
Who do I contact for support?
There are a number of different bodies who can help you in fostering innovation within your business. For general support, contact:
- Enterprise Europe Network – help for small businesses to make the most out of the European marketplace
- Department for Business, Innovation and Skills – general support and guidance for UK businesses
- Your local trade association
- The Forum of Private Business (FPB) – national business support group, membership required
For support related to intellectual property, see:
- The Intellectual Property Office (IPO) – advice articles and support, online forms, and patent, trademark and design search
For grant finance, see: