The world is changing so rapidly. No wonder the established companies feel innovation is crucial. It is not just executives and managers. Today, even employees are working hard to figure out how to succeed with innovation. After all, innovation drives success. Plus, people will only show interest in buying the stocks of a company for CFD stock trading if it is performing well.
What Does Innovation in Business Strategy Imply?
Innovation in business strategy is all about advancements. It must add something unique to the product or service. The goal is to increase the value of the current product or service. It can mean creating something new to draw customer attention.
Innovation might have a slightly different meaning depending on the industry. It embodies improvement of something that came before. It connotes efficiency, convenience, and effectiveness. The companies that do this best are the ones that sustain success. The long-term success of a company’s strategy depends on its ability to develop new ideas. Executives have come to this realization too.
Speaking on innovation, you must check out the research conducted by Strategy. It says there is no correlation between R&D spending and returns from innovation. This means it doesn’t matter how much money a company spends but how it spends it. Likewise, merely training your employees on how to use lean startup is not enough. You can’t just design thinking methods for them either. Leaders must change how they manage innovation to align with the innovator’s way of working.
A report by PwC on Innovation Benchmark explains how leaders view innovation. It also explains what they are doing to reap the rewards better. Here are some of its key findings:
– Companies are now embracing collaborative models of innovation. They are considering open innovation and design thinking. The expected growth rate of such companies is 15% now.
– 60 percent of companies believe their employees are an important partner for innovation.
– Technology is no longer considered as the way to keep up with the trends or competitors. It’s, in fact, considered to be a key driver of innovation. Even executives now believe that it’s important to innovative the business strategy.
Innovation in Strategy Creation
It’s easy for a company to choose direction. However, only innovative companies can pick a direction that’s different from their competitors. Also, only innovative companies can respond to the accelerating market changes. These changes include trends, customer needs, regulations, competition and more. This calls for developing such a strategy that identifies and understands the business and societal needs. Then, the company must develop a novel approach to meet those needs. This is the core part of the strategy. The rest comprises of the choices made to deliver novel approaches. Only then will a company meet customer needs in a sustainable and profitable way.
Innovation in Strategy Execution
A strategy is like a long-term blueprint for your business. Merely introducing a new idea is not enough. The idea is only successful if its execution is successful. It’s important to plan how you will create an environment that fosters creativity too. The problems which are common among competitors present the organization an opportunity. Using this opportunity, it can differentiate itself. It can innovate by developing unique solutions which the competitors haven’t come up with yet.
Innovation Doesn’t Happen on Its Own – It is fostered
One thing is pretty clear, unless innovation becomes a priority, it won’t happen. Innovation requires risk and where there is a risk, there is a certain level of failure. The best companies are those that create a culture of innovation. They also encourage risk taking. Consider the following examples:
– There was a time when Howard Schultz thought Starbucks has lost it. He made the effort to fly and visit every store around the world. He worked with the store managers in redesigning the café experience.
– Google encourages its employees to spend one day a week on new ideas.
– Gray Advertising has a “heroic failure” award for risky ideas that fail.
These examples show that corporate leaders need to be explicit about the strategic approach. When that happens, all approaches to innovation can work well for a company.
The business world revolves around changes. Those organizations that recognize these changes have an advantage over their competitors. The only way to do that is to innovate. Customers today want the next best thing and innovation will help you get there. Imagine if there wasn’t any such thing as online trading. How would these trading business models enjoy so much success then?