If 2020 taught us anything, it is that the future is never certain. In 2019, no one could ever have predicted that a global pandemic would change development trajectories across the world.

However, to set goals, to devise strategies, and to stay relevant as a business, one must work around challenges by looking and moving forward to bigger and better ideas and learning how to maximise them.

The Relevance of Innovation in Business

By now, we know for a fact that for any organisation to thrive in the modern age, it has to have innovation at its core. More importantly, it is crucial to be clear about what innovation entails for every company.

In one aspect, innovation can mean replacing or revamping existing business processes to increase productivity, efficiency, scale, and scope. In another, it can also mean developing entirely new and improved products and solutions to meet constantly changing market demands. On another plane, innovation can mean adding value to a business’s existing flagship services and products in order to stand out from competitors and increase its value proposition.

Australia, in particular, acknowledges innovation’s significance in driving wider economic growth. In turn, the Australian government bumps innovation’s importance higher up on their long-term prosperity agenda to ensure they maximise its role in realising collective goals.

Where Big Business Struggles

What is interesting about innovation is that it should not only be prevalent in one area of operations but also permeate into every aspect of the institution. Despite massive investments of management time and money, big companies still either lag behind when it comes to prioritising innovation or struggle with bridging the gap between strategy formulation and strategy implementation.

With big businesses more positioned to drive bigger research and development initiatives, why do they shy away from pushing for innovation?

Sometimes, higher turnovers, bigger profits, and wider scopes can work against big businesses when it comes to innovation and staying ahead of digital disruption simply because they have a lot more to lose.

When the stakes are high, big business executives — especially those from traditional, long-established companies — become risk-averse and tend to stick to safe yet outdated initiatives compared to young, shiny scaleup executives who have built their companies on the principles of smart risk-taking.

This “don’t fix what isn’t broken” mentality has caused even household names like Nokia, Yahoo, and Hewlett-Packard to struggle with sustaining peak performance in markets they have monopolised for decades.

We believe that big businesses should start investing in a more innovation-friendly way of life if they are to keep exceeding organisational goals and shareholder expectations. Here are 3 reasons why:

1. Innovation Sustains Competitive Market Relevance

Putting all resources on a single product increases the risk of a business getting outshined by its competitors — something we have been seeing more and more of as consumers become more particular with and vocal about what they want and need in a product or service. Those businesses that listen rise to the top as they create brand loyalty and drive more profits. Those that do not are often left behind or catapulted into obscurity.

Innovation is the leading force behind competitiveness, growth, and profitability. It also drives the creation of value proposition since maintaining relevance in highly cutthroat and ever-changing markets becomes exponentially difficult if businesses stick to the status quo and remain stagnant.

One way big businesses can successfully strengthen their market relevance is by fostering collaboration with startups and scaleups. Research shows that rates of innovation and market growth in large companies were higher when they collaborated with smaller, more agile businesses. The reasons are quite straightforward: Big businesses gain access to new skills, ideas, talent, working models, and markets, while scaleups and startups tap into the former’s large customer bases and distribution networks.

2. Innovation Drives Both Profits and Additional Capital

Consumers are looking for the next best thing to address their needs and demands and are willing to shell out good money for it. Research has found that businesses that innovate repeatedly had a significant increase in their profitability — with a total average sales return of $2 per $1 spent on innovation measures by Australian businesses.

Innovation is also one of the key motivators for venture capitalists, angel investors, banks, and other financial institutions when evaluating a potential investment opportunity. This is because innovation, by nature, finds untapped markets where needs remain unmet, presenting multiple opportunities for both businesses and investors to create staggering profits.

3. Innovation Fuels Efficiency

What organisations are realising nowadays is that effectively targeted innovation strategies can achieve more than simply driving greater revenues. It also delivers on a much-needed, company-wide efficiency overhaul, leading to bigger, better returns than traditional practices.

This is especially true when it comes to application modernisation and management. While legacy IT systems have worked well in the past, they have become too expensive and tedious to maintain. Old IT systems also do not provide the flexibility necessary to develop new products and services.

By transitioning existing applications into a more innovative, high-tech foundation, they become easier and more affordable to support and operate as well as less susceptible to issues and downtimes that impact the organisation and its customers. This drives down management costs and risks significantly while improving workplace productivity in the process.

Much can be said about the benefits of investing in innovation, but one thing we can all agree on is that innovation is the panacea to every business’s growing pains as they continuously compete for market relevance, drive profits, raise capital, and strengthen efficiency. It is the way of the future. Without it, all businesses — big or small — will falter.

We at BeingIconic are a seasoned team of scale-up specialists who have successfully fostered innovation for big business through the creation of accelerators and venture development. Partner with us today to find out how we can do the same for you.

Published by Peter Brocklebank in blog, Staying Relevant

‍