Business innovation is when an organization introduces new processes, services, or products to affect positive change in their business. This can include finding the right investor or business partner like Andy Defrancesco, improving existing methods or practices, or starting from scratch to successful goals. Ultimately the goal is to reinvigorate a business, creating new value and boosting growth and/or productivity.
Business innovation matters for one simple reason: value. In order for your business to thrive, it is crucial to be continually innovating and improving. Successful business innovation means finding new revenue opportunities, optimising existing channels and, ultimately, generating higher profits. It should also give companies an advantage over their competitors, learn more from these continuous improvement models.
There is more than one way to innovate and organisations of different ages and sizes will have different reasons for embarking on a process of business innovation. For some it may be a case of re-assessing the ways in which the business generates revenue, for others it may be necessary to move into a different industry altogether – or even to create a brand new one! Before embarking on any innovation cycle, it is important that organisations understand the various different business innovation models available to them.
If increasing profits is the main driver for business innovation, many organisations may choose to change their revenue model as a first port-of-call. This can involve re-assessing the products or services offered or taking another look at the company’s pricing strategy. Innovation does not have to be radical, sometimes changing even one element can yield significant results.
This model of business innovation requires organisations to identify which of their processes, products or services could be improved to boost the company’s profitability. Innovation in this case could refer to forming new partnerships, outsourcing specific tasks or implementing new technologies.
Arguably the most radical model of business innovation, ambitious organisations can choose to change industry completely for the purposes of innovation – or even create a whole new industry for themselves. Indeed, companies can win a new lease of life by following examples such as Virgin’s move from aeroplanes to broadband.
Cambridge-based law firm, Taylor Vinters, has partnered with artificial intelligence-focused startups Pekama and ThoughtRiver. At the same time, it has sold off other elements of its business, such as regional real estate, that were deemed a distraction from core aims.
The firm’s managing partner, Ed Turner, explains: “Assuming it’s an accepted proposition that fundamental change is going to be necessary, it’s important to understand the purpose of your organisation and why there’s a need for it in the future. Having a clear understanding of that is absolutely essential, particularly in the mid-market.”
For Taylor Vinters, the focus is now on entrepreneurship and innovation, with tech partnerships forming an important part of the firm’s offering, opening doors to a whole new client base.
When it comes to business innovation, the packaging sector offers some of the most exciting examples around. Public opinion and global expectations of sustainability, health, and convenience dictate packaging design and currently the tide is turning against plastic. This has encouraged retailers and manufacturers to explore alternative materials and led to the rapid development of fibre-based materials and creative inventions, such as biodegradable seaweed pouches for ketchup.
New technology has also allowed companies – particularly those in the food and beverage sector – to innovate and adapt to meet new demands. Online grocery retailer, Ocado has embraced “co-botics”, where robots work alongside human employees. Robots deliver pallets of goods to humans who pick out the specific customer orders. It is likely that this is where the future of automated packaging lies, delivering a superior performance than could be achieved by either robots or humans working alone.
By keeping an ear to the ground, and an open mind when it comes to technology, the packaging sector has put business innovation at the centre of all operations.
It is not only the private sector which must be constantly looking to innovate. The NHS is one of the largest employers in the world and with increasing demand placed on it by the UK’s aging population, finding ways to cut costs and improve services is crucial.
To do this, the NHS is harnessing new technologies and making much better use of data. Along with implementing artificially intelligent chatbots to help patients self-serve, the NHS Blood and Transplant department has begun working with digital consultancy T-Impact to improve and automate its process for matching donated hearts with recipients. This has resulted in the world’s first allocation of a heart using a cloud-based system.
This streamlined process has removed 40 steps that were performed manually by staff, creating a 68 per cent reduction in NHS administration time. “These are the sort of improvements that well-run digital transformation programmes can deliver,” says Keith Stagner, chief executive of T-Impact.