Innovation - the word brings up images of scientists in lab coats and entrepreneurs with revolutionary inventions. Although these scenarios are an important part of the picture, being innovative today should be seen in a much broader context.
Innovation is really about responding to change in a creative way. It's about generating new ideas, conducting R&D, improving processes or revamping products and services. At another level, it's also about a mindset in your business: one where your staff, whether in the executive offices or on the shop floor, are always focused on continuous improvement and constantly thinking outside of the box.
It helps to look at examples where other entrepreneurs have made or are making their mark. Innovation can be a larger-scale venture where a new product or service, such as Google, has changed fundamentally how we do business. Or it could be a low-cost internal initiative such as improving a process in your business that can lead to dramatic savings in overhead costs.
However you define it, an important thing to remember about innovation is that it should increase your company's value in the marketplace.
There are many types of innovations your business can implement:
- New ways to get your products to your clients
- A new design to respond to customer demands
- Improved use of technology to update your ordering processes and improve interaction with suppliers and customers
- A more efficient plant layout to lower your production turnaround time
- The design of products that meet green standards
- An increase in your product or service range to reach more targeted customers
- A new concept or a new way of doing business
- The business case
In a highly competitive business environment, companies can no longer compete simply on tangible assets such as the latest equipment, or by offering the lowest cost to customers. The ability to innovate also affects your market potential and provides you with a means of competing against emerging markets, a shrinking labour force and accelerated technological change. In fact, innovation has become a key strategy to attract and retain your customers in a fickle market.
If your company doesn't innovate, it risks falling behind in productivity, losing customers and market share or simply disappearing.
What do you do first?
One of the first key steps is to take stock of your company's innovativeness and see where you can improve. For instance, begin with a complete business diagnostic of your innovation potential and an inventory of the opportunities in your "innovation portfolio" - basically all of your innovative initiatives, both large and small.
How can an advisor help?
A consultant could help you analyze the marketplace, see where you can add value and identify opportunities for innovation, whether internal or external. For example, an analysis could point to your need to improve your distribution methods to reach more clients. Or research might show that you can improve your products and services to target a specific audience. A key benefit of dealing with an external advisor is that you can avoid being too emotionally attached to one "creative" idea. A third-party point of view can help you stay in touch with market needs and ensure that you don't lose sight of your original objectives.
Set your strategy
Once you have taken stock of your innovative potential, you can assemble the members of your team, determine your specific strategies and figure out what you need to do to be more innovative. Start with the basics:
- Identify the initiatives where you'll see your best return on your investment, and identify which resources you'll need
- Initiate research-driven changes in your products and services
- Develop better business processes to meet your needs
- Provide employees with better tools to work smarter
- Train people to learn and implement the new processes
- Assess specific issues such as intellectual property considerations
The core of innovation in your company is really your staff and their attitude. Smart businesses encourage their employees to think creatively, always. For example, set up a means for employees to bring their innovative ideas to the table, whether it's a suggestion box, employee forums or face-to-face meetings to brainstorm ideas. Or appoint an "innovation" champion who can spearhead innovative initiatives and follow up on them; this encourages accountability.
It is essential that you allow your team members to take calculated risks and think of alternative routes; people need to know that they have the support of the company when they're thinking outside of the box. For example, if an employee tries a new process, be sure that the company is ready for success or failure; that's a part of the creative process. Successful innovation should also be rewarded with incentives such as bonuses or other compensation. It will help you keep your most creative and innovative people.
The people behind your innovation initiatives are the make-or-break factors of your success.
Content in this section is provided in partnership with the Business Development Bank of Canada. BDC provides entrepreneurs with financing, venture capital and consulting services. To find out more go to BDC.ca.