A Strategic Advantage Your Firm is Missing: Innovation | Extraordinary Business
Where do you see your company in the next ten years? At the same place? Larger? Perhaps in more markets?
If you are like most business owners, you have some vision for where you would like to take your company. The thing is: growth doesn’t happen by accident, and staying in business doesn’t happen by staying the same. Whatever your vision, you will need to gain some level of strategic advantage, and innovation is one of the tools that firms can use to gain it.
New products and services, or new features for existing products and services are all examples of innovations that could produce advantages for a company. More often than not, when many people think about innovation, it is most often linked to the idea of development of a new product or service. Innovation shouldn’t be limited to just “product development” (more on that later); sometimes it is a simple innovation that can create separation between your firm and others in the marketplace.
If you haven’t introduced a new product or service in a long time, you are more than likely missing out. Your competitors may be doing so in order to gain advantage over you…which means that their goal is to take YOUR customers and gain market share. Small, yet pivotal innovative enhancements to an existing service offering can boost your sales and give you a sustainable competitive advantage.
Being on the Offensive
As a business leader, you know that the best defense is a strong offense. Contributors Ram Charan and A.G. Lafley of Fast Company talk about how innovation puts businesses on the offensive. They give the example of how P&G and Colgate drove Unilever out of the US oral-care market by effectively leveraging innovative tactics with the goal of gaining advantage – which they did. They further describe how companies that are unable to innovate are on the path to obsolescence. This is why innovation needs to be an essential part of both your company culture and its strategic planning.
Maintaining a Culture of Innovation
As expert business consultant Scott Edinger points out, the best businesses don’t just focus on innovating to address a problem; rather they raise the bar by creating a culture of innovation. When your top management realizes that innovation isn’t just limited to a specific technology, department or product, nor is it only for top management/leadership, tapping into a motivated staff may introduce a steady stream of creative and innovative ideas that the Company might consider.
This will ultimately cultivate a multifaceted strategic advantage in your company. Your goal should be for every department and every employee to bring their innovation A-game to work every day. From better products to better service, the innovation will reflect in all kinds of advantage for your company over the long term.
Perception of Your Business as an Innovator
Being perceived as an innovator in your company’s marketplace is a rare and therefore very powerful strategic advantage of innovation. Being branded as an innovative company can be a strong attractor for your firm, potentially increasing your customer base and attracting excellent employees. Creating raving fans that both buy and promote your products and services is a highly potent by-product of innovation.
We live in a world where people like to associate themselves with companies that are forward-thinking and innovative. Take Apple or Tesla for instance. These companies enjoy a respect and reverence that few other companies in the world do and they have a culture of innovation to thank for it.
Forbes contributor Susan Reid discusses diversifying risks as one of the advantages of product innovation. Innovation inherently reduces risk. Whether it’s by introducing a new product/service, or by improving the distribution channel, innovation has a way of translating into diversified risk. This is one lesson that even big companies should never forget.
In conclusion: To stay competitive and relevant in the marketplace, your firm needs to embrace innovation both as part of its culture and part of its operating model. This practice equips your firm to gain strategic advantage – not just in the short run with a single innovation, but rather, as one who is driven forward to gain marketplace leadership as long as it continues to innovate and innovate well.
Fatima Mansoor is a writer at Aepiphanni, a small business operations and strategy consultancy that exists to help small business owners CREATE | DESIGN | BUILD extraordinary businesses. She is a freelance blogger, specializing in business & entrepreneurship, digital marketing, and health & fitness. Her focus is on creating compelling web content for small and medium businesses form diverse industries. She mostly writes for entrepreneurs and marketing agencies across the US, Australia and UK.
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