Business innovation is basically when an organisation develops new strategies, products, or processes to impact positive change in the company. This may involve improving existing processes or practises, or starting from scratch completely. Ultimately the aim is to invigorate a company, developing new value to increase productivity and enhancing growth and/or profit. However, it is often considered a by-product of the overall corporate strategy, which requires the implementation of new business processes.
One of the most critical drivers of innovation business in organisations, especially small and medium sized enterprises (SMEs), is the need to change the way they do things to adapt to the fast-evolving digital market. The speed at which technology is developing and advancing is faster than previously understood and is often much quicker than organisations could process or anticipate. Hence, to compete and succeed, companies need to adopt a range of strategies across all verticals. However, many of these strategies will need to be shaped and developed in isolation, without consideration of each other, the process of which can potentially become highly disruptive to the business model. Business innovation therefore requires a radical overhaul of processes and assumptions that have been the traditional foundation of how the company has conducted business.
Leading companies across the world have established structured strategic frameworks for business innovation that integrate the overall direction and objectives. These frameworks provide guidance for the CEO, who in turn, report back to the board of directors and shareholders. The ultimate goal for any company that wishes to engage in innovation is to become more nimble, competitive and innovative. However, implementing these changes and strategies in isolation will not deliver the desired results. This requires a system that can integrate, drive and synchronise all processes across the board, ultimately producing the kind of synergies, efficiencies and innovation that are required to deliver real change and transform the business. One way that boards of directors can begin the process of developing a structure for corporate innovation is by delegating the function of Chief Transformation Officers (CTOs) to a seasoned business innovation leader, who chairs the board's strategic innovation committee.
Most companies that have adopted Chief Transformation Officers have seen significant improvements in efficiency, cost savings and reaping the benefits of streamlining internal processes. The best candidates for CTO function are executives who have a proven track record of innovation, are highly skilled and are focused on transforming company processes. The CTO should report directly to the CEO with a mandate to lead innovation activities and drive organizational change. In addition, the CTO should work closely with the Chief Executive Officer and Chief Financial Officer to build a "star" team, which is a combination of key people who are focused on building systems to drive innovation and reduce operational costs. The star team should include the business development strategist, marketing, brand management innovator, CFO and financial officer.
For small businesses, it may be more difficult to create a Chief Innovation Officer because many of them have limited expertise in areas where technological innovation is necessary. In order for a company to attract top talent to serve as a CTO, it needs to create an environment where top talent will want to work. To do this, the company needs to host an innovation event that showcases the company's innovation strategy and future projects. To attract top talent to join the board, the company needs to have a successful fundraising campaign to support the Chief Innovation Officer and other innovation leaders. These fundraisers need to demonstrate results before the organization recruits new Chief Innovation Officers.
Innovation activities like fundraisers and events can only be successful if a company is willing to develop a long-term innovation strategy to effectively implement the strategies. The strategy should include the definition of the organization's goals and objectives, its short-term and long-term time frame to achieve those goals, the metrics used to measure business success, and the resources needed to achieve those goals. Achieving an effective and innovative organization requires an overall commitment from the management team and the Board of Directors. This commitment is what will attract the best employees to work for the organization. If the organization fails to commit to developing an effective and innovative business innovation strategy, it will lose the battle for innovation against the many other companies that already use these strategies.