What is business innovation?
Literally translated, business innovation means “novelty ” or ” change “. But the translation alone does not explain what is meant by the term business innovation – it requires a definition:
Business innovation is a process that renews and updates an existing market, a product or a service by applying new processes, introducing new technologies or establishing successful ideas.
Today, the term business innovation is used almost inflationary and has thus almost become a buzzword. But what does this actually mean in business? For many companies, business innovation means taking existing products and changing details. The color, the form, the functionalities, the size, etc. This form of incremental innovation ensures the competitiveness of companies in existing markets. In future markets, incremental innovation is often no longer sufficient. Companies must radically reinvent products and services. This is called radical innovation. To ensure their long-term innovation capability, companies worldwide have established an innovation management system that provides a structured approach starting with the development of an innovation strategy and ending with its implementation via innovation processes. The development of an innovation culture is also an important topic.
What are the types of innovation in business?
There are different types of innovation in business. Incremental process improvement, which many companies refer to as idea management or continuous improvement, product line extensions, business model innovations, and radical system innovations such as iTunes and Google Android. These are often referred to as “digital disruption: Innovations that change the logic of existing markets. The methods of innovation management are as diverse as the types of business innovation: traditional innovation processes, open innovation, innovation labs, etc. It is important to select the right tools for innovation projects and to build up the innovation culture and innovation capability of a company.
In the free study, you will learn how companies can successfully implement different types of innovation. You will learn about the various definitions of the term “innovation” based on scientific research.
Importance of innovation in business
Why do companies have to deal with the question “What is innovation? Innolytics® Managing Director Dr. Jens-Uwe Meyer writes in his scientific paper “The Innovation Capacity of Companies”:
The competitive factors of companies are in a phase of upheaval. While competitive advantages for companies can traditionally be attributed primarily to factors such as costs and quality, today and in the future there are also innovations, regardless of whether the economic situation is currently in an upswing or a recession. Accordingly, the terms innovation, creativity and development are among the most frequently used terms in company management. Although innovation has always been one of the driving forces in competition and has always been a primary competitive dimension, the numerous studies and publications of recent years show that the speed of change is increasing.
This makes business innovation one of the most important drivers for the long-term success of companies. Accordingly, methods of collaboration and teamwork are increasingly being used in numerous companies, for example, to promote digital innovations and overcome the challenges of digital change. Companies are also increasingly using modern idea management software and innovation management software to manage innovation efficiently.
Why do companies need to manage incremental innovation?
For companies, setting up innovation management is important in order to keep pace with changing customer needs. Incremental innovation provides competitive advantages in terms of production costs, functionalities or equipment. Conventional innovation management often does not go beyond incremental innovation: products are improved, but not reinvented.
With methodologies like the Stage Gate Model for the innovation of process and product development, however, companies quickly reach their boundaries – especially in supersaturated markets. Particularly in times of digital change, in which new customer needs emerge, companies must be able to develop more far-reaching forms of innovation and bring them to market successfully.
Learn more about innovation management on our information page. We offer you an overview of the significance of innovation management as a driver for competition, as a catalyst for product and process innovation and also beyond the limits of classical innovation management.
Why is radical innovation important?
Companies that want to drive innovation forward need to take a different direction and take a revolutionary path in addition to traditional methods. More and more businesses are realizing that different approaches are critical to long-term growth. Innovation has to be more radical in the future. This requires a rethinking. New management techniques are being sought. More courage and willingness to take risks are necessary. The result of such management methods, such as those presented in our article “Radical Innovation“, are promising new products and services for tomorrow’s markets. Business models that are still impossible to imagine today will emerge. Small teams that can act flexibly develop innovative concepts faster to market maturity.
Establishing a culture supporting business innovation
The implementation of innovation processes and an innovation culture can be supported by appropriate software tools. The Internet offers new possibilities for communication and collaboration. For example, innovation teams can create workspaces for different innovation projects, jointly develop ideas and make them ready for implementation. Innovation tools also ensure that an innovation culture is created in the company. By establishing the right culture, employees perceive innovations as positive changes and support innovation with motivation and enthusiasm.