Business innovation is the improvement of business results by a significant margin over the current state of the art or best practice. Innovation is a process of creativity and aggressive experimentation and change. The following are illustrative examples of business innovation.
The way that a business generates value. For example, a business that opens new markets for sharing underutilized assets such as real estate that sits unused.Pricing structures that customers find more appealing. For example, the cloud computing revolution allowed customers to scale up and down computing without an upfront capital investment.
ProductsProducts that have an advantage over the competition in the market due to factors such as performance. For example, a solar panel with a higher conversion efficiency.
ServicesService advantages such as a hotel with an innovative training program that produces exceptional customer service.
ExperiencesA leap forward in customer experience such as an aircraft design that reduces turbulence by 50%.
EnvironmentsPhysical or virtual environments such as a hotel with innovative architecture that generates significant publicity and status for the location.
MessagesA marketing message that captures the imagination of a target audience that is rarely inspired by marketing messages.Producing more for a unit of input. For example, an electric car with greater range than the competition for an equivalent charge.
CostIn many industries, particularly commodity industries, cost is the primary type of competition. For example, a firm that is able to produce far cheaper solar panels at equivalent performance and quality will likely gain significant market share.The race to be perceived as higher quality than the competition. For example, a fashion designer who consistently produces shoe designs that target markets perceive as being far higher quality than the competition.
Tools and automation that make your organization more productive than competitors. For example, an ecommerce company that can fulfill 1000 orders an hour per employee when the competition struggle to achieve 100 orders per work hour at their distribution centers.Significant improvements to the way that goods are sold and delivered. For example, an ecommerce firm with a geographically distributed distribution network that is able to predict where goods will flow such that they can have items close to the customer when they order.
Business processes that produce superior results as compared with the best results in an industry. For example, an airline that can automatically rebook customers after complex disruptions to a schedule including fulfillment of compensation owed customers such as hotel stays. Processes, policies, tools, automation, information and/or data that produce better decisions such as an algorithm that is unusually good at executing arbitrage strategies on a market.
SystemsSystems that outperform industry benchmarks in some valuable way. For example, a quality control system that allows 1 defect per 100 million units to ship when your competition ships 1 defect per 100 units.
ResilienceArchitecture, design, processes, facilities and structures that are resilient to stresses. For example, a cell production technique that allows a production line to have multiple machine failures on a shift without slowing production.Sustainability improvements such as replacing toxic, controversial or environmentally harmful materials in products with relatively harmless materials.
DifferentiationInnovation that produces highly differentiated products that outperform in the market. For example, a new form factor for home audio speakers that generates significant demand, publicity and word of mouth for the product.Products and services that endure real world conditions better than the competition. For example, a mobile phone that can be dropped onto concrete many times from a reasonable height without any loss of function.
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