Innovation is about putting a new idea or approach into action.
Innovation is commonly described as 'the commercially successful exploitation of ideas'.
Successful innovation is mainly about creating or adding value. It does so either by:
- Improving existing goods, processes or services (process innovation), or by
- Developing goods, processes or services of value that have not existed previously (product innovation)
However, both kinds of innovation require a business to:
- Challenge the status quo in a market
- Have a deep understanding of customer needs
- Develop imaginative and novel solutions to how those needs might be met
Innovation can come in many forms:
- Improving or replacing business processes to increase efficiency and productivity, or to enable the business to extend the range or quality of existing products and/or services
- Developing entirely new and improved products and services - often to meet rapidly changing customer or consumer demands or needs
- Adding value to existing products, services or markets to differentiate the business from its competitors and increase the perceived value to the customers and markets
Whatever form it takes, innovation is a creative process. The ideas may come from:
Inside the business – e.g. from employees, in-house designers, sales staff
Outside the business, e.g. suppliers, customers, media reports, market research insights or from contacts at local universities or other research organisations
Successful innovation comes from filtering those ideas, identifying those that the business will focus on and applying resources to exploit them.