What is business innovation? (Definition, types and careers)

By Indeed Editorial Team

Published 3 January 2022

Innovation is a common concept among businesses that allows them to adapt to market changes, build their brand and increase revenue. There are many ways in which organisations of all sizes can approach innovation, for example, by modernising their processes or improving their products. Learning about common types of innovation in business can help you determine what changes you want to implement to help your department or employer thrive. In this article, we explain what's business innovation, discuss its importance and provide information about key technologies and careers that fuel innovation within companies.

What is business innovation?

Business innovation is the process of introducing new processes, services or products within organisations. The primary goal of an innovation of this type is to inspire positive changes that can happen internally, for example, to increase that company's revenue. When a company invests its resources, such as people or money, towards innovation, it can improve its market value, create a better environment for growth and boost employee productivity.

Related: The pros and cons of working at a startup

What's the importance of innovation in business?

Innovations help companies improve how they operate internally and what they offer to their customers. Here are some important benefits of implementing innovative solutions to a business's operations:

Increasing efficiency

A lot of businesses implement innovative solutions to make their internal and external processes more efficient. This means that innovation may result in minimising costs and making a company's operations less time-consuming or more sustainable. Depending on the size of a company and its organisational goals, the company may accomplish that by updating its equipment or using modern technology. By increasing efficiency, companies prepare for unexpected shifts and changes in the market.

Attracting top talent

Attracting top talent is a priority for companies that want to improve their operations and increase revenue. To make working at that company more inviting, management and leaders use innovation to create healthy and modern work environments that nurture work-life balance and offer their employees attractive employee benefits. This is because highly qualified professionals often want to work for mission-driven companies where they can develop new skills and learn.

Related: 11 effective recruitment strategies for attracting top talent

Reacting quickly to market changes

Business innovation solutions allow companies to grow, regardless of potential changes in consumer demand or unexpected disruptions in the industry. Companies often choose to invest in innovation by buying solutions from other businesses or entering into partnerships with other business entities. They may also prepare their employees for any disruptions by providing them with tools for improving productivity, creativity and entrepreneurial skills.

Improving brand image and perception

By introducing innovative solutions to their operations, businesses can shape how consumers and competitors perceive them. This can be a smart move for most companies, as modern consumers are more likely to trust brands that they see as innovative. Innovation that aims to improve a brand's image may come in many forms, for example, in a form of social consciousness or sustainability.

Related: How to build your employer brand in 6 simple steps

Key technologies that drive innovation

Some technologies can drive innovation more than others. Here's what many businesses invest in to appear more innovative to their consumers:

Artificial intelligence (AI)

Artificial intelligence is one of the most inspiring technologies that can produce innovative solutions for companies operating in almost every industry. AI helps companies change the way they interact with their customers. By using AI to simulate human intelligence processes, companies can produce interactive and intuitive machines and computer systems and make users' lives easier.

Machine learning (ML)

Companies may use machine learning, or ML, to make accurate predictions and intelligent decisions using historical and current data. By measuring potential consumer changes and interests, machine learning algorithms can help them decide which innovations to focus on. What's great about machine learning is its ability to continuously learn based on new sets of data that companies gather, making its predictions even more accurate.

Internet

Investing in a fast, reliable Internet connection is an important factor that companies use to fuel innovations that help them streamline processes and, as a result, save valuable time. Many businesses choose to use digital services over traditional ones, for example, in a form of SaaS (Software-as-a-Service) or IaaS (Infrastructure-as-a-Service) solutions. Through commissioning things such as server maintenance and security, they can focus on producing better results. It also helps them eliminate limitations such as location or time difference. For instance, by becoming a remote-first company, companies can attract highly qualified talent from all around the globe.

Common types of corporate innovation

Innovation is a broad business concept that companies can apply to almost all of their operations. There are many types of innovation in business, including these:

Product innovation

The term 'product innovation' refers to a situation when a company focuses on developing new products or updating existing ones. The primary goal for product innovations is to make products compatible with more networks and devices while allowing customers to take advantage of modern tech advances. A good example of product innovation are LED light bulbs or smartwatches with LTE compatibility.

Revenue model innovation

Revenue innovation is a process of adjusting or changing a company's revenue model. In other words, it's redefining how a company makes money. When investing in revenue innovation, companies may change their pricing strategy or change another factor that, in the long run, may significantly impact their revenue.

Process innovation

Process innovation is not what a company does, but rather how it does things. By redesigning their processes, companies can become more efficient or position themselves as experts on the market. A good example of a process innovation is a small retail shop implementing mobile payments in-store and online. This move allows that store to make their customer experience more convenient for people who use modern payment methods and devices.

Business model innovation

Focusing on business model innovation allows businesses to determine if there's anything they can do to improve how effective their products or services are while boosting that company's profitability. For example, some companies undergoing a business model innovation may choose to outsource some processes or form partnerships with other companies. In general, a business model innovation can be anything that supports a company's financial viability through developing new and unique business concepts.

Delivery innovation

Delivery innovation refers to a situation when businesses develop new ways of interacting with their audiences, including past or potential customers. Similarly to process innovations, innovating delivery methods allow companies to make their business offering more convenient for the customers. As a result, it can become more profitable. For example, a good example of a delivery innovation are car manufacturers who decide to make it possible for customers to purchase cars online.

Industry model innovation

Although industry innovations are the most challenging for companies, they can also bring the biggest results and change. This refers to a situation when a company decides to change industries for the purpose of innovation. In some cases, a company may even decide to create a new industry.

Careers that fuel innovation within organisations

If you're interested in how companies use innovations in business, you may consider pursuing a career that would allow you to participate in developing and implementing those innovations. Here are three careers that fuel innovation within an organisation:

1. Chief data officer

National average salary: £64,375 per year

Primary duties: A chief data officer (CDO) is a professional responsible for corporate governance and utilisation of databases as an asset. Their primary responsibilities involve data processing, mining and analysis. This is a relatively new role within larger organisations, including international corporations. Aspiring CDOs are usually people who can easily look into the future and use historical information to predict how information trading may develop.

2. Senior IT engineer

National average salary: £38,669 per year

Primary duties: A senior IT engineer is usually the head of the IT engineering department within an organisation. They're responsible for developing and maintaining IT systems and networks across the entire company. They may communicate with the company's clients or leaders, develop project budgets and oversee the work of various IT departments.

Related: How to become an IT engineer (with practical steps and career info)

3. Transformation manager

National average salary: £50,846 per year

Primary duties: A transformation manager is a professional whose responsibility is to ensure a seamless transformation across the company's departments and processes. They oversee innovation and transformation of every process and help companies determine and anticipate any obstacles or opportunities that may result from a change. Transformation managers usually report to the chief transformation officer (CTO).

Salary figures reflect data listed on Indeed Salaries at time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location.

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