Innovation Increases the Likelihood of Success
Developing new, creative ideas within your company
Innovation is the practical implementation of a new method, process, strategy, or idea, which results in the introduction of new goods or services, such as the Apple iPhone, e-commerce solutions, or glass and fenestration fabrication software. Howard Schultz, the CEO of Starbucks describes innovation as “disruptive. And by disruptive, I mean disruptive. You gotta fracture and break the rules and disrupt.”
Innovation reinvigorates a company toward new growth opportunities essential to stay ahead of your competition and take advantage of new technologies.
What is revenue-model innovation?
Traditionally, there are three types of innovation:
- business-model, and
- industry-model innovation.
Today we are focusing on revenue-model innovation, which occurs when the business implements new, innovative products to meet a specific need, such as e-commerce software, tracking or smart factory software, robotic solutions, logistics software for effective deliveries, etc. With revenue-model innovation, you might stop selling one product, implement changes to your supply chain, sell to new customers, or change the price of your offerings. These are all opportunities to rethink the business and continue growing it before a product cycle, for example, wanes.
Each example of revenue-model innovation implies that the company develops new, creative ideas sourced from within the company or externally from customers. In a shortened version of the process, you will gather all ideas and start narrowing them down allowing you to eventually develop a strategic plan to implement the new offering. Before this is possible, a culture/system of innovation is essential to success.
Creating a culture of innovation
Janice Yglesias covered the innovation system and its key elements in her NGA blog called “Revisiting Innovation.” She reminds us that many companies without a culture of innovation “are unlikely to innovate successfully, regardless of how promising the ideas are.” This article also helps lay out a simple innovation process in six bullet points. I recommend you read this blog to better understand the key elements of the innovation process.
For each company, the revenue-model innovation can be different. For example, if you implement a new e-commerce solution to address a need in the market or compete against a competitor, you could meet your customers where and when they shop for glass or fenestration products.
Why might an e-commerce solution be a quality revenue-model innovation? According to multiple sources, global e-commerce sales are expected to hit $5.5 trillion in 2022 with roughly 76 percent of U.S. adults preferring to shop online. The pandemic accelerated this trend potentially putting the glass and fenestration industry behind the curve. As the trend expands, there is greater acceptance in the market by consumers and thus opportunity to implement an e-commerce solution to expand your sales and address the worker shortage at least on the sales side.
By fostering an atmosphere of innovation, you increase the likelihood of success. Innovations come from multiple sources, so allow your employees to take risks within reason, of course. Not all innovation will succeed, so learn from mistakes through documentation and open discussions.
When businesses innovate, they risk failure but also huge success. Innovation enables your company’s future success through increased customer loyalty and, in turn, revenue/sales. Focus on cultivating an atmosphere of innovation, be willing to sacrifice something now for greater revenue tomorrow, and remember that some innovations carry less risk than others. Innovation will continue to disrupt our industry, so why not lead and take share from your competition before they disrupt your business?