One of the most common myths when leading innovation in medium enterprises is that you should strongly focus efforts on product innovation, as the ultimate goal is to have the next big thing. Though the reasoning is understandable, if you want to improve your odds of success, try not to miss the bigger picture.
Companies today must keep the pace with the fast changes in technology and consumer behaviour, but it is possible – and essential – to add value to your customers without necessarily changing what you do or sell in a radical way. All it takes is a bit of creativity, either by innovating new solutions or improving existing products in order to drive growth and profitability.
Also, product innovation isn’t just about inventing new products; it also comprises improving the design and function of existing products, and using new technologies, manufacturing processes and materials to ensure they stand out from competitors.
Product innovation can deliver increased market share (if a product meets the needs of the consumer and disrupts the target market), increased profit (by developing a unique, innovative product that is superior to that of the competition) and success in failure (when a “failed” product in one target market can be applied successfully to another target market).
Besides product innovation, however, there are other types of innovation that, when focused on specifically, can be a more effective and strategic innovator. They include:
Process innovation can include reengineering and improving the internal operation of business processes, which involves technical design; R&D; changes in the equipment and technology used in manufacturing; management, accounting and customer service methods; and commercial activities.
This process is typically the lowest-risk type of innovation, and generally helps to reduce costs of production rather than drive an increase in revenue.
Market innovation entails implementing a new marketing method involving significant changes in product design, product placement, product promotion or pricing. Its goal is to meet customers’ buying preferences through market mix and market selection.
As companies shift their attention to digital marketing in order to engage and involve customers, this type of innovation allows companies to open up new markets with their existing product portfolio and know-how. Of course that also means that, thanks to the online marketing tools available to businesses, competitors are also able to reach potential customers instantly.
The concept of organisational innovation is part of the concept of innovation and development, highlighting new ideas and propensity for change within organisations. It encompasses implementing a new organisation method in the undertaking of business practices, workplace organisation or external relations.
Culture plays a big role in organisational innovation, with the advantages being improved workplace dynamic, engaged workforce, and a breeding ground for creative and innovative thinking.
In this vein, innovation doesn’t necessarily have to be radical either; incremental innovation (i.e. a series of small improvements or updates that don’t differ significantly from current practices) is more affordable and makes ideas easier to sell.
Above all, investment in innovation must be ongoing, and this is more easily developed in medium-sized companies where the people are closer and more reachable to the board level, creating an innovation culture that manages to involve all employees.
Learn more about this and three other myths keeping medium enterprises from innovating here