Innovation isn’t easy. It requires time and resources.
The cost of innovation shouldn’t disqualify it as an option. On the contrary, Harvard Business School emphasizes the need for innovation in the modern business landscape. It enables growth, adaptability, and separation from the competition.
The question is, when should you innovate? Here are three key filters to keep in mind as you assess when your company needs to innovate.
Innovation can be an incremental process as well as a completely disruptive activity, so start by assessing what kind of innovation you’re talking about in any given scenario. Are you trying to improve or build on a successful activity? Or are you analyzing a larger trend or concern that requires a bigger, more disruptive solution?
There’s a great example of innovation in the shipping industry if you look at how pet transportation has made a space for itself. Richard Obousy, founder and CEO of CitizenShipper, recognized a need for innovation after spending more than a decade developing a high-profile transportation network that melded the concepts of ridesharing and shipping. Over time, there arose a need to enter a new sector of the industry. “We saw an opportunity in the pet transportation space,” Obousy said. “It’s a highly fragmented market with infinite opportunities for innovation and creation.”
Innovation isn’t limited to new companies still figuring out who they are. You can always change and improve along the way. When considering innovation, it’s important to differentiate what you’re looking for. Do you need incremental innovation that builds on what already works? Or are you seeing the need for larger innovative shifts that will address shortcomings and concerns?
Innovation may revolve around originality, but it doesn’t have to start there. On the contrary, one of the best ways to identify the need for innovation is by seeing others innovate.
If you’re wondering if the need for change is on the table, one of the best ways to assess the accuracy of that need is by looking around. What are other companies in your industry doing? Are they making changes to adapt to your collective circumstances?
One of the nice things about assessing external innovation is that you can also see the initial reactions that those changes generate. Are consumers and target audiences reacting positively to a certain change? Is a company operating more profitably or gaining better brand awareness?
A good example of this is the recent shift toward electric cars. Major brands like Tesla have been blazing the trail toward electric vehicles. The reaction from the public has been overwhelmingly positive. This has led many others in the industry to invest heavily in an electric future. Consumer Reports lists several major companies, including BMW, GM, and even Jaguar, that are going all in on electric vehicles.
If you’re not sure if it’s time to innovate, look around. What are your competitors doing? How are things working for them?
Innovation can push your company forward and establish you as an industry pioneer. It can also serve as an essential tool to address issues and concerns that are holding back your brand.
Regarding the latter, Dr. Andree Bates, founder of the biopharma AI strategy brand Eularis, points out that a little introspection is a good idea. “To determine where to start innovating, consider the company’s pain points — places where customers, clients or even employees have complained or offered negative feedback.” Bates goes on to explain how these pain points can help spark innovative solutions, “Taken in context, those points can reveal reasons a company or service is losing ground to competitors, failing to engage with users and customers, or missing chances to support its workers.”
Innovation doesn’t always consist of dramatic forward-thinking or company-wide initiatives. It is also something that can start small and from within. Are there pain points that your team needs to address? If so, encouraging an innovative internal company culture can be a solution.
The need to innovate has always driven business — and never more so than in the present. However, the application of innovation is an essential element that can make or break your team’s efforts. With each situation that you face, consider things like competitive novelties, internal pain points, and the kind of innovation required before you put any plans into action.