Although innovation plays a crucial role in any business, it can be one of the hardest aspects to get right. According to a survey by McKinsey & Company from 2019, 94% of executives agreed that they were dissatisfied with their company’s ability to innovate effectively.
It is essential for companies to constantly evolve and innovate. Not only can it help a business to stay ahead of its competitors, but also continue to deliver satisfying experiences for customers and identify areas for expansion and fresh revenue channels. Knowing when it’s time to innovate can be a challenge, but there can be clear signs that innovation is a logical next step — take a look at these three signs, if they look familiar it may be time for your business to innovate.
1. Stagnant growth
If your business is struggling to identify fresh revenue channels, it is time to innovate. A 2023 report by Accenture, entitled ‘Breakthrough Innovation’ found that firms that plan to adopt next-generation AI and advanced computational methods are 2.6X more likely to increase revenue by 10% or more than companies not pushing toward the leading edge in these areas.
Innovating for growth can take many forms — whether it is developing new products, improving marketing strategies, or adapting technologies to speed up processes. By putting time and effort into exploring innovation, businesses can create new revenue streams and reinvigorate their growth.
2. Industry disruption
Another sign that it’s time to innovate is when there is significant disruption in your industry. This could be due to new technology, changing customer preferences, or new regulations. Innovation based on industry disruption can move quickly, with businesses keen to capitalise on new ideas to stay ahead of the competition.
For many businesses, the biggest technological disruptors include cloud computing, AI and the metaverse. The Accenture report states: “While the megatrends of cloud, AI and metaverse represent three technology ‘S-curves’ that are disrupting businesses, they are also catalysts for productive business change. Legacy technologies limit an organization’s ability to change and innovate, but a strong digital core built on cloud, AI and metaverse enables continuous reinvention — embracing reinvention as a strategy in itself.”
For a real-life example of how technology adoption can prove rewarding for businesses, look no further than the 2020 Covid pandemic. Almost overnight many businesses suddenly found themselves having to adapt their practices and build fresh models based on remote working. The technology adoption didn’t stop once the lockdowns did; Instead, it proved something of a catalyst for further investment in technology to drive business growth.
3. Customer demands
Another crucial indicator of the need for innovation can come from your customers. A report by Salesforce found that 84% of customers say that the experience a company provides is as important as its products and services. Furthermore, according to an article by Forbes, 96% of customers say that good customer service is key to influencing their brand loyalty.
The most forward-thinking businesses are always looking for ways to meet demands and provide better service to their customers. For example, brainstorming ways to use technology to speed up delivery times, or how to use data to personalise products and services.
A solid innovation strategy can also help businesses take advantage of new opportunities that are important to their customers. For example, if your industry is moving towards more sustainable practices, you could innovate by developing eco-friendly products or adopting more environmentally friendly business practices.
Innovation is essential for businesses that want to stay ahead of the competition and by looking out for these signs and investing in innovation, you can ensure your business takes advantage of new opportunities and drive growth.
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