By Noushka Green
Although the term is often used to describe the latest technology, the true definition of business innovation refers to driving revenue
Most companies know they must innovate to keep up with the market’s pace of change. With technological advances disrupting all industries, companies must innovate in order to stay relevant and not be left behind.
In fact, innovative companies are rewarded not only for being ready for the future, but also with top talentt and increased consumer demand. .
But what does “business innovation” mean, exactly? And what are some examples of it in practice? .
What is business innovation?
Business innovation is when companies implement new processes, ideas, services, or products with the goal of boosting the bottom line. It could mean launching new and improved products or services (which can lead to higher revenue), making an existing process more efficient, or solving a current business problem (both of which cut down on costs and save time). A business focus on brainstorming, design thinking., or the establishment of an innovation labg can drive business innovations. The key element of innovation is that it drives revenue for the company.
What business innovation is not
Innovation has become such a hot topic that its true meaning is often lost in the noise. While some use it as a catchall buzzword for simply using the latest technology or making change for change’s sake, the definition of “innovation” is limited to changes to the core business of an organization that leads to growth.
Why is business innovation important?
Innovation offers companies four main benefits:
1. Getting ahead of potential disruption
When done right, business innovation takes stock of where the market is going due to potential disruptors or changing consumer demandss. Businesses use that information to make strategic changes and to entice internal employees to be entrepreneurial. Those changes can include building a product or service similar to what new startups are making, buying it from others in the industry, or partnering with the upstarts (known as the “buy, build, partner” model).
2. Increased efficiency
A lot of business innovation happens by making existing business processes less costly, less time-consuming to complete, and more sustainable. Those changes save time and make it easier for an organization to adapt to industry shifts with agility, which cushions against volatility and risk.
3. Talent attraction and retention
More than ever, employees—particularly millennials and Gen Z—want to work for mission-driven, fast-moving companies that they believe have a bright future.
4. Brand perception
Consumers are more willing to buy from companies they perceive to be innovative and socially conscious.
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Examples of business innovation across industries
Legal
The traditional way of doing legal work involves manually sifting through thousands of documents. Now digital tools, such as software from the startup Legal,8.help lawyers do that more efficiently, so they can focus on higher-value tasks.
Transportation
This industry impacts almost everyone and contributes as much as 29 percent to greenhouse-gas emissionss in the U.S. The seriousness of the problem has led to innovative solutions such as electric carss and micromobility solutions such as electric-scooter rental service Birdd.
Finance
Fintech, has transformed the way people handle money. Rather than standing in line to make deposits, open a bank account, or invest, people can now do that securely wherever they are, directly from their smartphones.
Education
Online classes and educational software companies mean students—whether they be teenagers or mid-career employees looking to transition—can access educational opportunities. A host of startups, including Flatiron School, offer those services.
Insurance
Digital tools have changed how customers interact with their insurance companies, making it easier to find what they need and file claims. Health-care innovator Oscar Health,2 for example, has an app with personalized concierge teams to help members find a doctor, navigate costs, and access free, 24/7 telemedicine services.
Consumer
Supply chains have evolved due to a trend to manufacture more sustainably. In addition, companies now offer more sustainable products in response to consumer trends. Spare Food Co, for example, transforms food waste into new products, and Loomia embeds technology into wearable textiles.
Types of business innovation
Business innovation can, but doesn’t have to, involve the creation of a new product or service. There are many examples of innovation in business, including:
Product innovation
Creating a completely new product that’s adjacent to a business’s core offering. Think of Dyson extending into hand dryers or Apple launching the smartphone.
Process innovation
Designing a new way to be more efficient in the core business. Examples of this include Amazon using robots in the warehouse, or Chase Bank implementing mobile check deposit.
Business model innovation
Introducing a new way of making or saving money, such as Zipcar launching car-sharing subscriptions, or Rent the Runway offering a subscription service for clothing rental.
