Modern businesses grow and succeed in today’s corporate climate for a myriad of different reasons. Some are known for their products, others for their services, and others still for less easily-defined factors such as strong brand loyalty or captivating ad campaigns.
If you were to look at the organizations that truly stand out from the pack today as clear leaders within their industries, however, it would be clear that they all have one common factor: they all embrace innovation.
These innovative leaders include relatively new organizations such as Uber and Amazon—which changed processes at the core of their industries in order to disrupt the status quo—as well as stalwarts like Microsoft and Apple, which have been around for decades but owe their continued success to constant reinvention and innovation. Yet, no matter its industry or current standing, an organization cannot expect to maintain a competitive edge if innovation is not part of the overall business strategy.
Read on to explore the concept of innovation in business, examine what makes innovation so critical, and learn about the steps you can take to become more innovative in your career.
What is Innovation?
Innovation, as a concept, refers to the process that an individual or organization undertakes to conceptualize brand new products, processes, and ideas, or to approach existing products, processes, and ideas in new ways.
In the world of business, there are many different types of innovation that a company might pursue. These are often tied directly to individual products, internal processes or workflows, or business models. Some companies even embrace all three in an effort to spearhead growth while adapting to the ever-changing market.
Apple is a great example of an organization that effectively embraced innovation at multiple key points in its lifetime. In the ’90s, for example, the company was on the verge of bankruptcy, but managed to stave it off by partnering with Microsoft—a company long seen as the enemy. This move effectively shaped Apple’s entire corporate philosophy and led to the introduction of the iMac, which was an overall turning point for the company.
However this was only the beginning for Apple, the partnership with Microsoft kick-started an era of innovative risk-taking, which led to the invention of tech products many consider staples of their lives today—including iPods, iPhones, Macbooks, Apple Watches, iPads, and more—alongside the invention of iTunes, which effectively reshaped the music industry as a whole.
Why Is Innovation Important for Business Success?
We’ve all heard the phrase “adapt or die” and for businesses to achieve success in today’s modern world, this is a universal truth. Take, for example, the massive expansion in technological advancements in the past decade; because of this extreme growth, businesses have been forced to adapt and expand more than ever before.
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This increasing need for growth and change also provides a great deal of opportunity for businesses. Nearly half of Americans agree that growth in technology has been the biggest improvement to life in the past 50 years, and, as a result, companies that embrace innovation have a had sizable advantage in ultimately meeting the demands of their customers.
Simply put, companies cannot afford to stay afloat if they do not embrace innovation and change. Here are three critical factors on the importance of innovation in business.
1. Innovation Helps Companies Grow
As mentioned above, if you want to grow your business in order to become more successful and profitable, there are a few ways that you can go about achieving that goal.
Though it will be a slow path forward, you might choose to plod along your current path, growing incrementally as you perfect your existing products and business models. Instead, you might choose to grow your business by merging or acquiring others, which is faster, but also typically a much more expensive avenue for growth. Or you might choose to evolve by rethinking your product or business model—or both—from the ground up, which is a process that can lead to rapid expansion and allow you to scale your business very quickly.
This potential for growth is likely the reason that, in a recent survey conducted by The Boston Consulting Group, 79 percent of surveyed executives claimed innovation ranked among their top three business initiatives—the highest percentage since the survey began almost a decade ago. Furthermore, the BCG notes that organizations consistently earning high rankings in the annual “top 50 most innovative companies” all have a common focus on science, technology, and development. These companies continue to grow while staying one step ahead of the competition because they value the positive impact of innovation.
2. Innovation Keeps Organizations Relevant
The world around us is constantly changing, and in order for your business to remain relevant and profitable, it will eventually need to adapt in order to meet these new realities.
Technology continually proves to be a driving factor in the need for change. To quantify the recent impact, look at the facts:
- 90 percent of the world’s data has been created in the last couple of years.
- More than 570 new websites are created every minute.
- 8 billion devices will be connected to the Internet by 2020.
These changes have led to a new age of innovation across business models and industries, allowing new businesses to enter the market and disrupt incumbents in serious ways. In fact, executives today believe 40 percent of Fortune 500 companies will be wiped out in the coming decade due to this level of digital disruption. Just as a start-up often innovates in order to break into an industry, established organizations need to innovate in order to fend off competition and remain relevant in this changing environment.
3. Innovation Helps Organizations Differentiate Themselves
At the core, innovation is about doing something differently from everyone else operating in your space. If your organization is using innovation on its products, for example, then the goal is to develop or update the products until there is nothing else on the market like it. If your organization is using innovation on its processes, it’s because doing so will save you time, money, or other resources, and give you a competitive advantage over other companies stuck in their systems. In either scenario, your organization is taking the time to try something new because sticking to the status quo simply isn’t working.
While the natural success that this brings can be reward enough for many companies, it would be a mistake to overlook another key advantage: innovation helps an organization differentiate itself and its products from the competition, which can be particularly powerful in an oversaturated industry or market.
While delivering value to your customers should always be a company’s main focus, doing so in a way that is memorable and different from everyone else can become a standout element of your brand identity and business strategy, as well.
How to Embrace Innovation
In order to drive business growth, stay relevant in changing times, and differentiate from the competition, business leaders must be able to think creatively and embrace innovation into their business models. This doesn’t mean that a willingness to innovate is the only ingredient for success, however: leaders must also have a solid understanding of how to go about bringing that innovation to life.
One way to do this is by gaining experience working on exciting, challenging, and innovative projects, as doing so will expose you to the skills needed to become an innovation driver within your organization. A master’s degree in innovation is designed to not only help you hone these specific skill sets, but also provide you with real-world, hands-on experiences that will make you an effective innovator.
Learn more about how you can embrace innovation and have a real, lasting, meaningful impact on the direction of your organization with our guide, “How to Introduce Innovation Into Your Organization.”