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What is innovation?

What is innovation?

Innovation is a commonly used term in the business industry, but what does this exactly entail and how can business owners use this to their advantage? MyBusiness explores innovation and how it can affect businesses.

Innovation is the transformation of an idea into a specific product or service from which profit can be gained. Innovation can be anything from new features on smartphone applications to new ways of providing affordable health care systems for marginalised communities.

Innovation and entrepreneurship naturally goes hand in hand—a lot of business ventures have innovation as its foundation. However, innovation should not only revolutionise a certain industry but also must be able to satisfy a need within its industry,.being cost-effective and replicable at the same time.

Commercial value versus social value

Innovations can be broken down into two: those of commercial value and those with social value.

Commercial value innovations are those which are primarily created and reproduced as a means for businesses to gain profit. These innovations are limited to people with proper industry knowledge.

Social value innovations are innovations whose main purpose is to impact social change while revolutionising industries. Solar bottle bulbs created using water and bleach are examples of social value innovations.

Social value and commercial value innovations might seem like polar opposites, but social value can actually crossover to commercial value and vice versa. Innovations whose primary target is to create profit can be tools for inciting social change, while social value innovations can also be used as a means for businesses to gain profit.

Business owners must strike a balance between these two to maximise the potential of these innovations. Learn more about driving innovation here.

What does innovation mean for businesses?

In the business industry, businesses must be able to be a step ahead of their competitors. This may be done by prioritising the ideation and development of innovative strategies.

A prime example of this are social media platform sites. These platforms are constantly updating  to gain an edge in the social media industry: from Instagram stories to Facebook Messenger.

While spearheading technological innovations in today’s modern digital age is of utmost importance, being innovative means that business owners must be able to prioritise the best interests of their customer base. When brainstorming business innovation ideas.,listen and understand customer feedback.

This aligns all possible innovation with customer preference: creating products and/or services that are more suited to their tastes. Learn more about innovation as a mindset here.

Risk is also an important part of innovation: taking calculated risks are necessary for businesses to grow and develop innovations that will benefit their audience. Businesses should be ready to fail lots of times before finally creating the perfect innovation that will make their business stand out and become more profitable.

Common innovation mistakes and how businesses can avoid them

A lot of business owners fail to prioritise customer feedback when it comes to innovations, resulting to innovations that are not received well by the public.

Another common mistake is putting all effort into a certain idea which might not be as realistic as planned, with businesses ending up not utilising the idea into an innovation.

Sit down and brainstorm with key personalities in a business  with a solid process flow for brainstorming to maximise all ideas—thus transforming them into useful innovations.

Businesses also tend to focus more on product/service innovations instead of innovating internal facets of the business, such as process and workflow.

While the importance of innovation in business mostly lies in developing products and services that are crucial to the profitability of the business, business owners should also take time to review internal processes and introduce innovations in these areas.

Innovations are basically the lifeline of any business, since constant developments keep companies working and business owners at the top of their game. Business owners should always be open to exploring new ideas and take risks for the sake of business development.