How to be – and stay – innovative
Global competition has made innovation more vital than ever. But how can small-business owners – especially those launching a new product or service – be innovative and sustain that momentum over time? The first step is to implement an innovation strategy, then make innovation part of a continuous process.
Defining an innovation strategy
“An innovation strategy helps identify the business potential for an innovation before investing in it,” explains Adam Froman, CEO of Toronto-based Delvinia, a data-collection company focused on stimulating business innovation. “It also allows you to measure the commercial viability, either directly or indirectly, to an organization. Many innovations end up being simply research and development because they are either an idea without a business case or they are too far ahead of the market to be successful.”
Crafting an innovative strategy
“You start by putting the business case down on paper, which can be as simple as a PowerPoint document, and identifying the market potential,” says Froman, who estimates this stage should take up to two weeks. He says after visualizing the potential of an idea, you should answer two questions: how will it make money or help the business? And how does it help your business scale? “Being clear on the answers helps you justify an investment and gives you a story to take to other investors.” Delvinia’s own framework, called Innovation OS, offers some tips.
Making innovation a continuous process
Froman says the rate at which technology and the adoption of technology is changing are unprecedented. Having a sound strategy about how to approach innovation requires being able to identify and assess new opportunities as they emerge, and to have an understanding of the impact they’ll have on your business and products.
Many startups don’t spend time preparing and maintaining a strategy, he says, “because they are typically cash-strapped and chasing customers.” He says sustaining innovation is a mindset that starts at the top of a business and filters down. Staying focused on innovation increases the probability of returns: “Or at least sees the cliffs well in advance.”
Froman also advises a customer-centric approach, which looks at the impact of innovation from the customer’s perspective. “That’s key to creating new value, as opposed to an innovation-driven approach, where you have a solution looking for a problem. Solving a need and putting a commercial value to it is always the first key step to being innovative.”
Froman says the only constant in today’s business environment is change, and the ability to sense and anticipate that will keep you competitive. “There are no long-term business models that rely on executing a service or product for many years. While the fundamental use of a product or service may remain the same, business owners today always have to maintain an understanding about how technology is affecting how their customers use their product or service. Once you embrace that perspective, you welcome innovation as a way of never being left behind.”