Innovation is more than just new product development. It also involves improving internal processes and the organizational structure of a business. It can even include a radical change of corporate direction. Companies need to innovate to keep up with the needs of their customers and survive in the marketplace. Innovation can take many forms, including combining existing products, simplifying processes, creating a better experience for the customer, and increasing efficiency.
Innovation doesn’t just help a company to stay relevant, but can be used to improve society through various means. Examples of this are technological innovations such as smartphones, but it can also include social innovations such as crowdfunding platforms, which can enable people to support projects and charities. Innovation can also be a way to improve education, solve problems in health, make society more secure and encourage remote working.
A common mistake that companies make is to think that innovation only refers to ground-breaking, revolutionary changes. However, small changes over time, with the right learning and adjustment, can have a big impact. This can be achieved through co-creating with customers, or simply trialing new approaches. For example, LEGO’s recent return to success was largely down to a combination of innovation and collaboration with its loyal customers.
Companies can encourage innovation by setting clear goals and making it an integral part of their strategy. They can do this by putting innovation targets on the balanced scorecard and by linking it to growth aspirations and financial discussions. They can also encourage employees by rewarding innovative ideas and ensuring that staff feel safe to experiment.