5 Reasons Why it is Time to Innovate

Business and industry can easily be equated to one big game. There are different players, strategies, plot twists and evolutions. The comparison is not aimed at trivialising your work but drawing attention to the fact that the most evolved players usually do the best.

At any given time, the next most brilliant invention might render many companies obsolete. It has happened before and will happen again. Just take a look at cell phones. Nokia, Motorola and Siemens ruled the roost for a very long time but who leads the dance now? None of them.

Innovation — What and How?

Radical Innovation: Radical refers to one business bridging out into new fields, developing revolutionary technologies and dynamic new changes to their business models. It paves the way for huge advancements in all sectors and gave birth to the likes of Google Maps, Toyota Prius and John Deere tractor sensors.

Incremental Innovation: Incremental innovation is what we see in every evolving business. It refers to the introduction of many small improvements compounding into a significant impact over time.

Disruptive Innovation: If radical is the creation of a new industry, disruptive is the creation of entirely new value chains . It is disruptive change that allowed smartphones to overtake all others in the industry or that forced all new car makers to develop an electric option.

What time is it? Time for change

1. Rate of Growth is Decreasing

A business can typically pinpoint the time to consider innovation when sales volumes begin to plateau. This occurs for a number of reasons most notably stagnation in comparison to competitors who have made improvements or changes and the saturation of a market. In order to renew a positive rate of growth, doing something new and innovative is required.

2. Tightening Profit Margins

3. The Market is Changing

Customers are only so willing to tolerate certain inconveniences before demanding a change. Truth be told, they are often just waiting for a provider to hear their pains so they can switch. It is the reason for the successes of Uber, Skip the Dishes and Amazon. The previous value chains had inconveniences that customers had accepted until they were served up a pioneering option.

What are your industries biggest sources of friction with your customer base? What do they dislike or put up with? If a new player came into the market to eradicate this area of frustration, how much market share would they attract? These are the questions every company needs to ask. Nobody is irreplaceable so you need to figure out what is the next value chain improvement.

4. Alarming Staff Turnover

The churn rate should be more concerning in more skilled roles as unskilled labor is usually more replaceable. Without sounding disrespectful, it is easier for employees in unskilled roles to move between alternatives. Specialists are choosing between fewer options.

5. Branding or Association Issues

With the recent social movements, we have seen the demand for branding and supplier changes from many well-known companies. , Washington Football and many others felt the need to change labelling under the weight of social pressure. MEC Canada even surveyed customers regarding certain equipment suppliers before cutting ties due to social stances.

A simple awareness of your public image and your associations that may impact your customer base is becoming a necessity. Thoughtful innovation may be a requirement to stave off any potential backlash.

Conclusion

Someone will always be out front innovating and creating new value. You might believe you don’t have the time but this is a fallacy. Delaying innovation only hurts the business in the long run as someone else will get there first. If you are still in the growth stage or entering a plateau, what can you do to offer new value? How do you intend to shape the future of your business and industry?

Originally published at https://ramireda.org.

A second-generation business owner, Rami Reda has created hundreds of jobs and raised millions in capital across his career as an entrepreneur. ramireda.org