If you are a start-up or SME and you seek to grow and or scale your business, then your company’s overall business plan and growth strategy must be driven by BUSINESS INNOVATION.
This can seem very daunting for start-ups and SMEs, so in this blog I’ll walk you through;
- What is business innovation
- The critical success factor to win in B2B
- The impact of business innovation on your startup or SME
- How to learn more-Join my webinar on 29 May 2019
What is Business Innovation?
If you ask any of our fellow start-up founders or SME business owners what they think innovation is, they will probably tell you it is about creating new products or leveraging new technology often digitally based to conduct business. While these are both good examples, innovation is more than just creation a digital business platform or a new sexy new product that customer line up for days in advance.
Innovation can be defined as introducing something new or making a significant improvement in one or more of these areas:
- Products and services: the offerings delivered to customers
- Organizational methods: the structure of the business
- Marketing practices: how the business positions and promotes itself
- Business processes: processes that reduce costs, improve efficiency, meet customer needs
Innovation viewed in this broader context is called business innovation.
Business Innovation=Value Creation
Business innovation is more about creating value than creating new things. It is about focusing on:
- WHAT YOU PRODUCE (i.e. Product, Services and Solutions)
- HOW YOU PRODUCE
- HOW YOU MARKET IT
In order to grow or scale your start-up or SME, you must think of innovation in this broader context of BUSINESS INNOVATION where innovation can be applied through your business operations from product/service development to customer service and support through to customer engagement and management. As innovation expert Mohan Sawhney points out, viewing innovation too narrowly “blinds companies to opportunities and leave them vulnerable to competitors with broader perspectives.” (Source: “The 12 Different Ways for Companies to Innovate,” MIT Sloan Management Review, 2006)
The Critical Success Factor to Win in B2B!
When determining ways to business innovate within your start-up or SME, you must ensure that any proposed innovations are BUYER DRIVEN!! Remember in B2B markets particularly when targeting mid-size and corporates, buyers and users are not the same. Typically, on average there are 6-8 people that will form the buying group. These decision makers quite often never see nor use your product or service. Nevertheless, it is critical that you continually identify ways to deliver value to buyers based on their needs, challenges and strategic priorities. This is how you will not only be able to successfully sell to larger business customers but your start-up or SME will become their trusted advisor and partner resulting in longer term relationships, revenues and advocacy to further drive the growth of your business.
If you do not adopt this broader (and BUYER DRIVEN) view of innovation, your start-up or SME will likely succumb to the following:
- You will be less likely to access key decision makers in larger organizations as you will not be in their “consideration set” as they will not view your start-up or SME as being able to help them achieve their goals and solve their key challenges
- Your competitors will pursue the same customers with similar offerings and innovate in the same ways with the same undifferentiated capabilities. This is particularly problematic in technology industries where innovation is focused primarily around product innovation resulting in the commoditization of product and service offerings
The Impact of Business Innovation on Your Start-Up or SME
Business innovation leads to greater earnings. Studies have shown that:
- Innovating in one area resulted in an average improvement of $386 000
- Innovating in two areas resulted in an average improvement of $392 000
- Innovating in 3-4 areas resulted in an average improvement of $763 000
(Source: Unlocking Everyday Innovation, CommBank Business Insights Report, Commonwealth Bank of Australia, 2017)
Furthermore, studies of high growth firms (firms that have 20% or more annualized growth for 3 consecutive years or more) have shown that these firms innovate across at least 2 areas and generate higher revenues. Therefore, in order to grow or scale your business, it is critical that you must BUSINESS INNOVATE across multiple areas
Innovation goes beyond developing products and new technologies. Using the 4 types of business innovation can significantly grow your business.
By going beyond product and service innovation, your company can differentiate itself to not only compete but acquire large business customers which will enable you to achieve the growth and success you seek.
The key to effectively business innovating is making sure that every innovation is delivering value both to BUSINESS BUYERS as well as your business.
WANT TO LEARN MORE HOW TO USE BUSINESS INNOVATION to Drive B2B Sales and Business Growth??
Attend my free webinar, Slaying Goliath: Empowering Start-ups and SMEs to Breakthrough and Gain Business Customers on May 29th. For details and to register here.