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Use innovation to grow your business
The successful exploitation of new ideas is crucial to a business being able to improve its processes, bring new and improved products and services to market, improve its efficiency and, most importantly, improve its profitability.
Marketplaces - whether local, regional, national or global - are becoming highly competitive, reflecting the ability of companies to access new technologies and further heightened by the power of trading and obtaining knowledge through the Internet.
This guide explains how you can adopt innovation as a key business process and outlines the different approaches you can take. It also gives you advice on
planning for innovation and creating a business environment that nurtures innovative ideas.
Innovation
* It is important to differentiate between invention and innovation.
* Invention is a new idea. Innovation is the commercial application and successful exploitation of the idea.
* Fundamentally, innovation means introducing something new into your business.
This may take the form of:
* Improving or replacing business processes to yield higher efficiency and productivity, or to enable the business to extend the range or quality of existing products and/or services
* Developing new and improved products and services - often to meet rapidly changing customer or consumer demands or needs
* Adding value to existing products, services or markets to differentiate the business from its competitors and increase the perceived value to the customers and markets
Innovation can be a major breakthrough - totally new products or services.
But it can also be a small, incremental change. Whatever form it takes, innovation is a creative process. The ideas may come from inside the business, from the employees and managers, from in-house.
Ideas may come from research and development - or from suppliers, customers, researching the market, links with universities and other sources of new technologies. Success comes from filtering those ideas, identifying those that the business will focus on, and applying resources to exploit them.
Introducing innovation can help you to:
* Improve productivity
* Reduce costs
* Be more competitive
* Build the value of your brand
* Establish new partnerships and relationships
* Increase turnover and improve profitability
Businesses that fail to innovate run the risk of:
* Losing market share to competitors
* Falling productivity and efficiency
* Losing key staff
* Experiencing steadily reducing margins and profit
Innovation in your business can mean introducing new or improved products, services or processes:
* Analyse the marketplace; there's no point considering innovation in a vacuum. To move your business forward, study your marketplace and understand how innovation can add value to your customers.
* Identify opportunities for innovation; you can identify opportunities for innovation by adapting your product or service to the way your marketplace is changing.
* You can also innovate in your business by identifying a completely new product.
* You could innovate by introducing new technology, techniques or working practices - perhaps using better processes to give a more consistent quality of product.
* If research shows people have less time to go to the shops, you could overhaul your distribution processes, offering customers a home-delivery service, possibly tied in with online and telephone ordering.
* If your main competitor's products have a reputation as cheap and cheerful, rather than trying to undercut them on price you could innovate by revamping your marketing to emphasise your quality - and consider charging a premium for them.
* To compare your organisation's culture, management, processes, and performance with leading firms, you can use the innovation self-assessment tool on the DTI website.
Planning innovation
* Innovation must be planned and integrated as part of your business strategy.
* Some ideas may just come out of the blue to you, but, you also need to have a strategic vision of how you want your business to develop. You can then focus your innovative efforts on the most important areas.
Start by considering all aspects of your marketplace. You should:
* Look closely at your competition
* Study trend reports
* Have a strong relationship with your customers
* Involve your suppliers and other business partners
* Follow news in your sector, including reports in trade and professional magazines
Think carefully about what you could do to improve your position in your market.
You need to consider how you can offer your customers added value and better
exploit your strengths. You may want to:
* Compare your organisation's culture, management, processes and performance with some leading firms.
* Use the innovation self-assessment tool on the DTI website.
* Next, consider what a particular innovative step could mean for your business.
Ask yourself:
* What impact it will have on your business processes and practices?
* What extra training your staff may require?
* What extra resources you may need?
* How you'll finance the innovative work ?
* Whether you'll be creating any intellectual property that will need protecting?
Finally, you should include your vision in your business plan. Put down your
goals, both long and short-term, and detail how you intend to achieve them. Link
them to financial targets, such as achieving a specific turnover by a set date.
Review your plan regularly.
Business Link has access to a wide range of expertise and can work with you to build an understanding of your business's needs, and then help you to source the most relevant assistance to ensure you achieve your business goals.
Call Business Link now on 0845 600 9 006 or email enquires@businesslinknortheast.co.uk or alternatively visit www.businesslinknortheast.co.uk to see how you can improve your business performance.
