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Australian small businesses must innovate to win

Innovation: it’s a buzzword commonly heard in the realm of business, and for good reason. Entrepreneurs are encouraged by their mentors to innovate; the word appears in slogans and taglines across the web. So just what is innovation, and why is it so critical to the success of your small business?

What is innovation?

Most people understand that innovation entails coming up with new ideas. What you may not realise is that innovation doesn’t have to involve dreaming up a revolutionary new product or a completely unheard-of service. Even the Oxford English Dictionary’s definition hints at its scalability, calling innovation “a change made in the nature or fashion of anything”.[1] As a small business owner, you don’t need to reinvent the wheel to be an innovator. You just have to think outside the box.

Entrepreneurs often discuss two types of innovation. “Radical” or “new-to-the-world” innovation includes those aforementioned reinvented wheels and other entirely novel goods or services. It’s the second type of innovation, called “incremental” innovation, that seems more within reach. This incremental innovation is defined as “making modest improvements to existing processes, products or services”[2].

Incremental innovation is all about making small changes to create big results. By tweaking or adapting something that already exists, you can create a brand new experience to help your small business thrive.

Five ways to stay innovative

  1. Keep up with industry trends and competition
    Examine industry reports, trade journals and studies to stay informed of innovations that are already happening in your sector. Get inspired by the good ideas of other entrepreneurs, and don’t be afraid to expand on an idea or adapt it to your own business.
  2. Use your network
    Build, maintain, and utilise a wide network of professional peers. Your colleagues are likely eager to exchange ideas and discuss partnerships. You may even collaborate to create something neither of you would have come up with alone.
  3. Take advantage of new technology
    Sometimes your business can reap the benefits of innovation, even if you aren’t the innovator. One important aspect of incremental innovation involves automating tedious processes, and there are plenty of companies who have built tools designed to achieve exactly this. Take time to explore and try the host of new mobile and web apps, powerful software, and upgraded hardware that is released on a regular basis.
  4. Focus on improving what already exists
    Being an incremental innovator involves taking a close look at your business’ protocols and methods and asking yourself, “is there a better way to do this?” For example, if you have a certain function or process that requires customers to call your business and speak to you or an employee, can you create a self-service tool for your website to accomplish the same task? This small innovation will not only make customers happy, but reduce costs associated with servicing customers via the more time-consuming and expensive channels.
  5. Listen to your team
    Maybe you can’t afford to have employees spend 20 per cent of their time working on new ideas like Google can, but you can surely afford to listen[3].  Your employees should feel not only able but empowered to share their innovative ideas. After all, they’re often the ones interacting with customers, and have probably made observations and received feedback that gives them much insight.

Don’t allow the fear of change or the perception of effort stop you from embracing incremental (or even radical) innovation in your small business and watching your profitability accelerate!

In need of Business Insurance?
Allianz offers a range of small business insurance packages, which you can tailor to suit your industry, occupation and budget. Get a quote and buy online today or Call 131000.

[1] http://www.oed.com/view/Entry/96311


[3] http://www.businessinsider.com.au/google-20-percent-time-policy-2015-4
Insurance issued by Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL 234708 (Allianz). We do not provide advice based on any consideration of your objectives, financial situation, or needs. Terms, conditions, limits and exclusions apply. Before making a decision please consider the product disclosure statement which is available by calling us on 131000.


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