What is innovation? (2023)

While it has become a buzzword, innovation does play an important role and is a key lever that helps companies survive and thrive.

Why is innovation important?

Innovation keeps your company competitive.

Walkowiak said the most important question for business owners is "If we don't innovate, where will we be?"

The question is rhetorical. A company that doesn't innovate risks becoming irrelevant, reducing itsproductivity, lost customers and eventually went out of business.

Innovation requires taking stock and measuring impact, whether through qualitative means, such as interviews to assess customer satisfaction, or quantitative means, such as sales metrics.

Innovation: How can it help your company?

1. Transform your existing business model to adapt to the changing environment
2. Satisfy an existing but unresolved market need
3. Bring new technologies, products or services to market
4. create new markets
5. Responding to Market Disruption

Three Types of Innovation: Incremental, Scaling and Disruptive

For companies looking to change, there are three levels of innovation you can implement:

1. Incremental innovation

These are small changes that improve the efficiency of the current business model.

"For example, you can adjust your processes, increase your digital offerings, cut costs or upgrade your products and services,"Walkowiak says, adding that this type of innovation is usually ongoing and can be accomplished in the short term.

Walkowiak suggests that small businesses shouldspend 60%Their efforts—whether monetary or human—incremental innovation.

2. Expand innovation

This is the change that comes with exploring new ideas. The aim is to maintain and grow the company over the long term.

"Here, we're exploring new depths, areas our competitors won't go,"Walkowiak says.

Expansionary innovations are usually related to science and technology. Many of the innovations we see today will use artificial intelligence or be part of the Internet of Things.

Extensive innovation also means testing and prototyping, as well as evolving business models. it can take12 to 24 monthsimplement. A company should focus onabout 30%its efforts to expand innovation.

3. Disruptive innovation

Disruptive Innovation: This is what people think of when they think of innovation. People are talking about new products and services.

Disruptive innovation is an innovation that creates a new business model, providing a novelvalue proposition.

"In practice, it means inventing or reinventing a product or service,"Walkowiak says"While the payoff can be big, it comes with a lot of uncertainty. This type of innovation, if successful, takes three to five years to develop. Most companies shouldn't invest moremore than 10%What they did for this innovation. "

real worldinnovator

Whatreal worldAn example of innovation?

whatsapp–in 2009, WhatsApp launches messaging service and platform. The company is targeting anyone with a smartphone and an internet connection, regardless of device and location. It disrupted the highly competitive messaging market dominated by telecommunications and free desktop messaging (like Yahoo!). Messenger and Skype. The company operates on an extremely low cost structure and benefits from the growth in smartphone usage.year 2013, WhatsApp service200000000only users50 employeesmember.Year 2014, Facebook with more than$19 billion.

sales force–Year 1999, Salesforce disrupted the customer relationship management (CRM) world by offeringCRM-as-a-Servicethrough the Internet. Its goal is to make enterprise software easy to use. Salesforce was visionary in anticipating the potential of the cloud, allowing it to scale easily and at minimal cost to organizations of all sizes. The company invests in hosting, monitoring, customer support and account management, and benefits from recurring revenue from service subscriptions.

Source: Invincible Company,Alex Ostwald,Yves Pinel,Fred Etienne Bull,alan smith

business model innovation

business modelInnovation happens when there is a shift in the processes a business uses or the way it brings its products to market. It's a challenging innovation that's often foisted on a company that has no choice but to change radically. This is not an incremental change, but one that could threaten elements of a company's brand.

Airbnb, Uber, and Spotify are examples of companies that disrupted the hotel, taxi, and music industries, respectively. As a result of these innovations, many large enterprises have had to completely rethink their business models.

How can a CEO lead innovation?

The CEO plays a strategic role in innovation. They can be real drivers of innovation, but they can also be obstacles to innovation.

"To spur innovation, CEOs need to articulate to employees what they want to achieve. Too often, we forget why we do things,"Gutman says.

The CEO should allocate the budgetAnd allow their teams some freedom to explore solutions. Innovation, like entrepreneurship, requires a certain level of creative trial and error. The team or the lead employee needs to have some autonomy to think differently.

What are the three stages of innovation?

Innovation projects generally go through three phases: design, test, and scale.

1.design phase: Now is the time to come up with ideas where you can imagine a new business model or a solution to a product or service innovation. Then you design a prototype that will become yourminimum viable product, which means it will have enough features to attract early adopters or investors.

2.testing phase: this is youQuickly test different versions of your innovation. "The faster you can test your ideas with potential users and customers, the faster you'll learn what's working and what's not,"Walkowiak says"It gives you the opportunity to tweak your solution before you go too far and make it harder to make changes. It's really a risk-reduction strategy."

3.scaling phase: Once design and testing show that your innovation solves a real problem, you can scale it up. In practice, this meansDevelop a detailed business planMake your product or service available to more people and launch a dedicated marketing strategy based on evidence.

Protect your innovation

Merely innovating is not enough. You also need a strategy to protect your innovation and ensure you get full value from your investment.

use thisFree Intellectual Property Strategy Assessment, developed by the Canadian Intellectual Property Office (CIPO) in partnership with BDC to help guide your developmentIntellectual Property Strategy.