Since you’re reading this, you’ll already know that innovation is the driving force for growth in any type of business.
Growth comes in many forms – but it’s almost always driven by business model innovation:
- Innovation that enables companies to offer new and improved products and services
- Innovation that helps them break into new markets
- And innovation that’s required to stay ahead of the competition
In today’s rapidly-changing business environment, innovation is more important than ever. Here are five ways that business model innovation can drive growth for your company.
Same Customer, Different Problem âž¡ Developing New Products and Services
One of the most obvious ways that innovation can drive growth is through development of new products and services. This could involve improving existing products to make them more appealing to customers, or creating completely new products that address unmet needs in the market. In the Business Model Canvas, the customer stays the same, but your key activities and value proposition change. In either case, growth comes from introducing new products and services that can increase the lifetime value of existing customers and potentially attract new ones too.
Same Problem, Different Customer âž¡ Expanding Into New Markets
Another way that innovation can drive growth is through expansion into new markets. This could involve entering a new geographic region, or targeting a new demographic or customer segment. In the Business Model Canvas the customer box changes, the Value Proposition stays the same. The key to success here is to identify adjacent markets with similar pains, goals and values to your existing customers.
By diversifying your customer base, you can reduce your dependence on a single market and mitigate the impact of any downturns.
Improving Processes and Operations âž¡ Higher Margins, Lower Costs
Contrary to what most people think, innovation doesn’t always have to involve creating new products or services. It can also involve improving existing processes and operations to make your business more efficient and cost-effective. In the Business Model Canvas, the boxes to look at are Key Activities, Key Resources, Key Partners and as a consequence, Cost Structure. You could for example, consider implementing new technologies (Key Resources), streamlining processes (Key Activities), or finding new suppliers (Key Partners).
By making your operational processes more efficient, you can improve your bottom line and drive growth.
Collaborating with Other Businesses âž¡ Broader Reach, New Ideas
Innovation can also come from outside your company. Collaborating with other businesses, whether through partnerships, joint ventures, or simply sharing ideas, can help you tap into new sources of innovation. This could involve working with suppliers to improve the quality of your inputs, or partnering with complementary businesses to offer new products or services. Similarly to the previous section, the boxes to look in the Business Model Canvas are Key Partners, Key Activities and Key Resources. The difference though is how you approach the innovation. In the previous section you’re looking to drive efficiency in your existing operations. In this approach you’re looking for any kind of innovation with the key distinction that it’s being driven by the ideas or technology of a new partner.
This type of partner collaboration can help you access new skills, expertise, and resources, which can drive growth for your company.
Investing in People and Innovation âž¡ Ongoing Culture of Self-Improvement
Finally, investing in the innovation skills and capabilities of your employees can provide a long-lasting business advantage that competitors simply cannot copy. This will likely involve conducting market research to identify new opportunities, developing prototypes of new products, and conducting experiments to improve existing processes.
As a result, you’ll have the opportunity to create completely new lines of business – which means the relevant boxes on the Business Model Getting are all of them! Get started here by skilling your people in innovation skills. We’d recommend this business innovation course to get you the best return on your investment.
Wrapping Up
In conclusion, business innovation is a critical driver of growth. It allows companies to develop new products and services, expand into new markets and improve operations. Only by systematically embracing innovation can companies stay competitive and thrive in today’s rapidly changing world.
