The term “innovation” has gone from just an appealing buzzword to a strategic imperative necessary to remain relevant in the business world. Innovation involves the generation and implementation of new ideas. From a business perspective, innovation can increase market share, improve profitability and sustain growth. This article further explores the various ways innovation drives business growth
Facilitates Market Expansion
Innovation is a business imperative and a critical driver of economic growth. Innovation spurs entrepreneurship, opens up a new market for a business to identify untapped market opportunities for a new product or service that meets evolving customer needs. Market expansion, in turn, provides new sources of revenue and drives business growth. As such, it is essential for policy-makers to provide the enabling environment for businesses to innovate, which will in turn lead to economic growth and wealth-creation. By fostering a culture of creativity or innovation, a business can expand their market reach and achieve sustainable growth.
Enhanced Competitive Advantage
Innovation plays a pivotal role in driving business growth by enhancing product development. Through new product developments, a business can differentiate itself from competitors by offering a unique product, service or process altogether. This gives them a competitive edge to retain existing customers and attract new ones who desire new experiences. For instance, Apple revolutionized the smartphone industry with the introduction of iPhone for a niche market with a unique customer experience.
This innovative product not only captured the market’s attention but also propelled Apple as one of the most valuable companies in the world. Another case in point is the introduction of an electric vehicle by Tesla which has given them a competitive edge and a leader in sustainable transportation.
Improving Operational Efficiency
Innovation also serves as a tool for improving efficiency. Thus, through innovation, a business can streamline its internal processes, optimize resource allocation to reduce costs and improve productivity. Indeed, the innovation and adoption of cloud computing software applications is enabling businesses to ensure efficiency and seamless activities.
For instance, FinovatePro®, the new cloud-based and simplified accounting software takes away the hassle associated with manual book-keeping and offers a seamless solution for recording, organizing, and managing your financial transactions. A business can effortlessly track its income, expenses, assets, liabilities and equity transactions all in one place on the innovative FinovatePro® platform. Indeed, FinovatePro® empowers businesses to make informed decisions and deliver unmatched convenience and efficiency
Collaborating and Partnering for Innovation
Innovation allows adaptability and empowers businesses to modify their strategies and operations with agility. It empowers them to respond promptly to evolving market dynamics. As a result, collaboration and partnerships can accelerate innovation by leveraging the expertise of multiple entities.
For instance, to respond to the dynamics of accounting through technological innovations, FinovatePro® was developed with decades of hands-on experience of certified public accountants, insightful business analysts and international software developers. FinovatePro® directly addresses the limitations and hurdles encountered with existing small business accounting software.
In a related development, ReckSoft® reconciliation software has become a game-changer in account reconciliation. The innovative software can handle millions of transactions in a few seconds. It is designed to handle large volume of transactions with speed and accuracy for all account reconciliation needs in all sectors including accounting, manufacturing, banking and finance and utility companies. Others are telecommunications, fintech, electronic payment systems (mobile payments services) providers. Thus, collaborating with a robust accounting software provider enables businesses to obtain new technologies to improve their operations.
Innovation as a Driver of Business Sustainability
Innovation can attract investment and contribute to sustainable economic growth. Entrepreneurs leverage on innovation to develope new products or solutions to meet customer needs in emerging markets. An environment which is very conducive for innovation tends to attract capital inflows and stimulate economic growth. In that regard, innovation requires a cutting-edge research and development facilities, skilled labour and a supportive ecosystem. During a period of economic downturn or financial stress, a business that adopts a new technology or re-designs their products so swiftly are able to sustain their operations. In this regard, innovation proves to be a successful business continuity strategy.
Strategies for Driving Growth through Innovation
A valuable idea is a catalyst for innovation. It can be obtained internally or by leveraging external sources for a broader range of insights. Indeed, innovation can take many forms, and the strategies to drive it are diverse. Business owners need to explore many strategies to stimulate growth. They can:
Collaborate with other leaders of enterprise including those in different industries to exchange ideas and best practices.
Engage customers in the innovation process. Customers’ insights or feedback can help managers to develop new solutions or innovations to improve existing conditions and needs.
Participate in innovation contests (sandboxes) or similar interactive events to generate new ideas and identify potential collaborators.
In the digital age, technology is a major driver of innovation and requires a business to scale-up with upgrades or models to improve operations and enhance customer experience.
Digitize your business operations to improve efficiency and thereby free up resources for more strategic and innovative activities. Businesses need to leverage data analytics to gain insights that can drive innovation.
The rapidly changing business landscape requires continuous learning and skill development. Business leaders need to equip their team with the necessary resources and new skills to empower them to drive innovation.
Despite the enormous benefits of innovation, some business leaders still dread the idea or embrace it. The reasons can be attributed to:
Time Constraints
Innovation requires research and understanding of current market trends to respond effectively. There is the need to allocate a reasonable time to realign with new systems and innovations to be competitive. Nonetheless, many business leaders are struggling to respond to changing dynamics due to their inability to plan and prioritize time to study new findings or research. To change the status-quo and drive innovation, business leaders need to manage their time effectively so that they can foster innovation in the business.
Inadequate Resources
Many businesses consider the fact that they lack or do not have sufficient and the necessary resources by way of time, budget (money) or skilled staff to innovate. They need to start small with the little resources at their disposal because minor and gradual changes can lead to significant improvements. It is also necessary to consider collaborating with other stakeholders to access additional resources and knowledge.
Fear of Failure/Unknown
In fact, change can be daunting. It is often considered disruptive and resisted when the process is unclear. Indeed, the uncertainty that comes with innovation can deter many businesses. On the downside, a business that is unable to adapt its operations to innovative processes experiences decline. It is important to foster a culture that embraces change and views it as an opportunity rather than a threat. That said, business leaders must themselves understand the essence of innovation and clearly communicate the long-term benefits to all stakeholders while involving them actively in the innovation process to reduce resistance.
Siloed Departments
When a business operates in regimented silos, it tends to impede free flow of ideas and collaboration necessary for innovation. Businesses need to promote seamless and interdepartmental collaboration with cross-functional teams or innovation committees to generate and implement innovative ideas.
Conclusion
A business’s ability to innovate and implement new ideas is crucial for its growth and sustainability. Old business models or technological applications are falling apart and to stay ahead of competition in this era, businesses must consistently adopt new systems and software applications like FinovatePro® or ReckSoft® to improve their accounting and reconciliation processes.
BERNARD BEMPONG
Bernard is a Chartered Accountant with over 14 years of professional and industry experience in Financial Services Sector and Management Consultancy. He is the Managing Partner of J.S Morlu (Ghana) an international consulting firm providing Accounting, Tax, Auditing, IT Solutions and Business Advisory Services to both private businesses and government.
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