Some businesses consider innovation to be the creation of the next Uber or Apple in their industry. There is, however, more to innovation than this.
In this article, you will learn ten powerful facts that support the power of innovation for organizational growth.
We will cite different studies and statistics that exhibit the capacity of innovation to significantly contribute to the progress and development of a business.
What is innovation?
Innovation is the process of realizing new products, processes, propositions, or business models to create added value for customers and employees. With this, you learn that innovation doesn’t always have to be groundbreaking.
In fact, it could refer to the implementation of something new (not necessarily a product) into action that is unique from previous and existing ideas, designs, or products within one’s organization and industry.
This process frequently includes the conceptualization, experimentation, and execution of ideas, strategies, and processes that are regarded novel by others.
Ten facts that support the power of innovation for growth
By itself, innovation has the power to lead organizations to growth, development, and success.
Here are ten facts that support the power of innovation from various studies and research. Let’s go through them one by one and figure out how they work.
1. Businesses with a high growth rate work with customers in their innovation process.
Customers are essential to innovation. They provide feedback that can help companies fine-tune their products and services, as well as identify new product opportunities.
They encourage companies to test their ideas in the marketplace, which allows them to learn what customers think of their products and services and how they can be improved.
Customers are the key to innovation. They are the first to recognize that innovation is needed, and they are the most innovative when they are given a chance to be creative. Not only are they the ones who pay for innovation. They can also be the ones who can make it happen.
Such is the case of open innovation with customers, where businesses are enabled to share, test, and refine ideas with huge groups of people before releasing them to the market.
This strategy allows businesses to co-develop products, processes, and ideas with their audience — a method that produces innovation for and with consumers.
It not only meets customer wants by providing appropriate products and services. It also encourages customer engagement in the innovation process, which becomes a win-win situation for both parties.
2. 45.2% of businesses used at least one type of advanced or emerging technology, which shows how innovation is in line with business strategies.
According to a CIO article, business automation as a strategy is becoming more prevalent in a number of organizations and firms because of how it allows companies to save time and money on traditional activities.
In truth, automation can be a more precise and speedier means of executing certain fundamental operations of the business.
This offers employees additional time to finish some of the organization’s more challenging, complicated, and lucrative projects. However, corporate automation may be a difficult process. Hence, it must be done carefully and correctly.
To avoid difficulties caused by faulty implementation, managers should execute the tips outlined below:
- Define specific methods to recognize the use cases required for automation.
- Create a proof of concept that monitors and documents results for the realization and guarantee of value.
- Build scalable automation capabilities to appropriately integrate automation into the daily operations of the business.
3. Organizations that are digitally mature allocate a portion of their time at work for innovation.
Lack of time is one of the most prevalent hurdles to innovation. People are simply too preoccupied with their day jobs to experiment with new ideas.
Hence, a leader must make time for innovation to encourage others to come up with and develop excellent concepts and strategies for the business to follow.
- Set the aim and then push them to come up with novel ideas if you want them to be creative.
- Allow them to spend time and resources on testing their ideas — to develop prototypes or research what others are doing.
This is what happens at Google, where people are allowed to spend one day a week thinking about and pursuing innovative ideas.
To others, this probably seems like a waste of time. But for the company, it led to remarkable innovations that many people use today such as Google Earth, and even Gmail.
4. Collaborating with other companies for digital innovation brings digital transformation.
Initiatives for innovation are most likely to succeed not only when collaboration between colleagues happens. But also when creativity, knowledge, skills, and expertise are shared with partner businesses and other third parties.
In a world where fast-paced technological advancements happen, digital collaboration is required for successful digital transformation.
If your organization is not designed to encourage collaboration and information exchange, you will miss out on possibilities to thrive and progress.
The knowledge that employees and other organizations share with one another can result in a new line of products, processes, businesses, and cost savings, particularly in the digital space.
One of the best examples of these would be Apple and Nike — whose collaboration for digital innovation has brought Nike to incorporate activity tracking technology into clothing and gear, to synchronize with iPhone apps to monitor and capture workout data.
This collaboration from two entirely different industries has brought digital transformation to sporting apparel.
Automating processes involves using software to automate repetitive tasks and processes. This type of innovation is useful when it comes to pursuing leads and walking prospective customers through the company’s conversion funnel.
With automation, brands may tailor and personalize the information they send to their potential clients. They can also choose to automate typical answers and schedule communications and other routine responses.
Such may significantly boost the efficiency of sales and marketing activities in companies with a huge client database.
And this fact is proven by a 2018 study from Epsilon Research, where 80% of customers said they are keener to purchase from businesses that provide targeted and customizable interactions.
6. Innovation has increased the USA’s GDP by 50%.
Innovation significantly contributes to economic growth by increasing productivity and yielding bigger results. Because production increases, more products, and services are created.
Basically, as innovative concepts and technologies are formulated and implemented, higher production results from identical inputs. So, salaries and corporate profits are boosted, and the economy expands.
Consumers and businesses gain greatly from increased innovation and productivity. Wages for workers rise as productivity rises. Employees gain more income to spend and can thus purchase more products and services.
Simultaneously, businesses grow more successful, allowing them to invest and hire more personnel.
7. Innovation can lead to 33% growth.
A study from Global Innovation 1000 explains that this growth is 11% in revenue and 22% in earnings before interest, taxes, depreciation, and amortization — which is a gauge of a company’s entire financial status and is used as a substitute for the net income in certain cases.
This growth stems from three distinct areas in which innovation may greatly increase a company’s performance:
Return on Investment (ROI)
Organizations that invest in innovation expect to see a return on investment in the form of increased revenue and cost reductions.
Revenue growth may be achieved through entering emerging and pertinent markets, attracting new consumers, and developing a new or expanded range of products and services.
Productivity and Economic Growth
Innovation boosts economic growth by lowering production costs and enabling increased output. Work becomes more purposeful when output and performance develop since fewer time is wasted on low-impact activities.
The greater effort you can commit to duties that have an immediate effect on your organization, like refining procedures, addressing difficulties, or conversing with customers, the better you will be able to:
- Cut expenses
- Boost turnover
- And give your clients options and alternatives that genuinely help them
Innovation greatly influences organizational culture since it improves the capacity of employees to learn, produce, and use competencies, skills, and expertise.
Innovation methods may contribute to the establishment of a culture of constant development, progress, and self-growth in a workplace, which motivates employees to do their jobs better.
8. Customers like brands that practice social innovation.
The Economist Intelligence Unit reports a 71% increase in internet searches for sustainable items over the last five years. Consumers are interacting with ethical, socially responsible, and sustainable companies in a previously unanticipated manner.
The same study reports that this is not a trend limited to first-world countries. But that customer satisfaction in emerging and rising countries is closely linked to environmental concerns.
And many people want businesses to contribute to the conservation and protection of nature and its ecosystems.
Through social innovation, bands gain a strategic opportunity to produce great social innovations that address new consumer wants in unexpected ways while also bringing comfort and respite to a conflicted planet.
Consumers value innovation. In fact, 84% of consumers believe that it is essential for them to purchase from innovative brands. In essence, this means that customers are willing to spend more for a product that they believe is innovative.
For this reason, product innovation is essential for businesses as it helps them to carve out new markets in an otherwise congested industry.
By detecting difficulties and other loopholes, you may discover an entirely new segment or target audience whose demands and preferences you can serve via a novel and inventive approach — projecting your brand as a great alternative in a specific industry.
For numerous organizations, particularly those in highly competitive sectors, creating brand equity has long been a key priority.
As proven by previous and existing research, customers buy from brands that provide them with distinctive selling factors through new products and services.
However, despite the importance and need of product innovation in determining an organization’s performance, only a little research has been conducted on its influence on brand equity.
This research shows that product innovation has a significant positive impact on total brand equity and its components, such as brand awareness, loyalty, image, and leadership.
Invest in innovation today
The ten facts written above provide three reasons why companies need innovation:
- Your company’s growth depends on innovation. Growing your company implies raising your revenues. Successful innovation allows you to add significance to your company and improve earnings; if you don’t innovate appropriately, your company will stop growing.
- Staying ahead of the game needs innovation. There are more competitive enterprises than ever before because of globalization and a fast-changing market. Innovative thinking may assist you in anticipating market trends and meeting client demands. If your company does not innovate, you’ll find yourself scrambling to stay up as inventive firms bring new concepts to market.
- You may benefit from different technologies with the aid of innovation. Technology (particularly artificial intelligence) is changing at a breakneck pace. It means there may be new, more efficient solutions available to help you create better goods, offer services, sell your company, or measure your success using statistics. You’ll be able to optimize your business and obtain a competitive advantage over your competitors by making use of these new technologies for process innovation.
Learn how to implement innovation in your organization today. Download our innovation ebook now or try out our software and see how it could help you.