What is exactly innovation, and how it boosts a business?

For startups, innovation is a creative way of thinking to accomplish a victory, and it is a creative application and making novel ideas useful. Innovation can solve an issue and be disruptive when, the solution introduced is unique, targets new customers and sells with low-end prices. Entrepreneurship literature shows us amazing stories that emerge from innovation. In this article, I want to explain the innovation concept, discuss related issues, and how it influences startup success.

Exploiting new ideas

Innovation is the exploitation of fresh ideas, and it is a form of applicable creativity that turns novel ideas useful. This process enables firms to stand out from the crowd in the market and strengthens their competitive advantages. Innovation is a significant practice for creating either a new or improved product and unique process. Yet, it requires a robust culture that motivates people to create, think and solve problems and brings values to the organization or customer. The Boston Consulting Group defines business innovation as a function of unique knowledge, allocating resources, taking risks, and focusing on customer needs. Innovation can bring several benefits to firms including increasing market share, reducing costs and selling price, growing sales and creating competitive advantages. It can be incremental, i.e. improving product functions or features, or disruptive. Disruptive innovation brings to the market a new product, or new customers, or a cheaper product or a combination of these.

Ways of innovation

Many roads lead to innovation, including research, entrepreneurship, technology and benchmarking. Research and development is a scientific approach to solving problems and discovering new products or processes. Entrepreneurship is a way of thinking, focuses on creating unique values customers want. Technology is a significant platform to increase customer experience, improve core capabilities and create values. These benefits are powerful to make an innovation. Whilst benchmarking sets industry standards, against which a firm will monitor its progress and achievement. There are many tools to encourage and practice innovation, including lean-startup approaches. These tools are helpful to practice innovation and create unique benefits to customers and enterprises. These approaches include design thinking, lean startup, Google SPRINT, business model canvas, lean canvas, traction, outcome-driven innovation and growth hackers.

The value of innovation

Innovation is proven successful if it results in a unique solution, or at an affordable price, or it dominates and controls the market, or it brings a new product and attracts new customers. These benefits are unique values for customers and the organization. For the customer perspective, it can bring solutions to challenges and reduce selling prices. Innovation also brings benefits to the firm by creating commercial gains, strengthening the competitive advantages and enforcing the market positioning. Sources of innovation include the market, technology, people and the system. In the market, innovation can bring unique solutions to pressing problems that a large group of customers are facing in the market. And any new technology produces opportunities for innovation. For example, internet technology has created several disruptive businesses such as Google and social media platforms. Talented staff can also be a brilliant source of innovation. Besides, the innovation management system that includes policies, procedures and work instructions, encourages and governs innovations.

Validating innovation opportunities

Innovation requires a feasibility study and testing in the marketplace before it becomes successful. Innovation concept must successfully pass the tests of desirability, feasibility and viability. Desirability test examines the customers’ approval of the new product, and feasibility test examines the possibility of transforming an innovative idea. While the viability test examines whether such innovation is profitable. A business owner who wants to validate creative opportunities, can also consult a business mentor, investor or expert and seek their advice. Or he/she can observe and talk to potential customers whether they need innovation and will buy it. Or by attending shows or exhibitions to confirm a real demand for such an innovation.

Innovation intelligence

It is searching for an innovative concept before investing more resources in developing that innovation further. Innovation intelligence includes searching Intellectual Property (IP), technology and market intelligence. IP intelligence is searching the registered IPs at the allowed IP registration office. Technology intelligence is searching for any existing technologies that can substitute or complement your innovation opportunity. It also ensures that you have chosen the fittest technology to pursue your innovation opportunity. Market intelligence is searching for the market to ensure that your innovation is desirable to customers and viable.

Final note

This article is extracted from my new book- Mastering Enterprise Skills for Potential Entrepreneurs, which can be found in The Book. If you want to receive more information about the book and our activities, you can register in our newsletter by using this link.

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Munther Al Dawood

Enterprise Expert

Grow Enterprise 

http://www.growenterprise.co.uk

maldawood@growenterprise.co.uk

Reading, UK

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