Great branding, well-thought-out marketing campaigns, and a high-quality product at the heart of its operations can help propel your business straight to the top of your niche. However, if you fail to nurture creativity and innovation in your organisation, you will have a hard time staying in the leading position.
Many entrepreneurs believe that creativity is exclusive to artistic tasks and thus tend to overlook its importance in a business setting. In reality, anyone can be a creative thinker, regardless of their personal or professional background. For example, managing to stretch your budget until the first of the next month without amassing debt certainly requires some creativity. Problem-solving is also synonymous with creative thinking, and that’s likely something you have to do a lot of as a business leader.
Creative thinking is required in many areas of your life, but what exactly does it entail?
How Do You Define Creativity?
The Oxford Dictionary defines creativity as the ability to come up with new and original ideas using your imagination. Synonymous with inventiveness, creativity means being able to produce fresh, sometimes unusual ideas or make something imaginative and previously unseen – at least in that same form.
Creativity stems from a combination of intellectual factors, including knowledge, imagination, and curiosity. It comprises the following three elements:
Drive – wanting to make something new happen
Experience – knowledge related to the problem at hand
Creative thinking – seeing a problem from a different perspective
Creative thinking is most often defined as the ability to approach a problematic situation in a new and perhaps unusual way. In a business setting, creative thinking would involve assigning roles in a group project based on some new criteria or tackling a conflict between employees using innovative methods.
How Creative Thinking Drives Innovation
Innovation describes the introduction of something – a product, a concept, or a method – that is new and different from anything that came before it. Often seen as a combination of knowledge and ideas with a specific purpose in mind, innovation is the direct result of the creative thinking process. Its goal is to generate value, as well as to create room for further innovation that will generate even more value.
By analogy, business innovation is defined as the introduction of brand new processes, practices, or products or the improvement of existing ones with the goal of bringing positive changes to a company, whether by helping improve its efficiency or strengthening its position in the market.
Applied to business, innovation comprises several key elements, including a challenge (to provoke it), creativity (to spark it), contemplation (to come up with an idea), focus on the customers (to sharpen this idea), and communication and cooperation within the team (to facilitate the whole process).
3 Types of Business Innovation
Innovation is always driven by value. However, there are multiple ways for organisations of different sizes and maturity to implement innovation. Based on what businesses stand to gain from the process, there are three types (or models) of business innovation.
1. Enterprise Model Innovation
The enterprise model of innovation focuses on the organisation itself. It aims to pinpoint all the services, products, and processes that could be enhanced to allow the organisation to optimise its operations, improve the efficiency of its team, and boost its profitability as a result. Examples of this model include the adoption of new technologies, strategic business partnerships, and outsourcing.
2. Revenue Model Innovation
As the name suggests, the revenue model of innovation aims to increase the profit an organisation generates. To achieve this, companies may re-examine and adjust their prices, update their revenue model, or review their portfolio to upgrade products and services that aren’t bringing as much money as the powers that be were hoping for. This is typically the simplest model of business innovation as it doesn’t involve extensive changes. In many cases, tweaking just one element is enough to reach the goal.
3. Industry Model Innovation
The industry model innovation goes beyond just changing an organisation’s revenue model or making their processes more efficient. Instead, companies that opt for this model aim to disrupt the whole industry or even create a new one for themselves. In doing so, they are usually driven by innovation itself but also the gains they stand to make from adapting their business model. Examples include Virgin’s shift from an airline to a broadband internet provider and Google entering the self-driving car business.
Who’s in Charge of Business Innovation Management?
Although introducing a new product or updating an existing one may bring the desired results, business innovation isn’t just a one-off project. On the contrary – it is an ongoing process that involves constant improvements and optimisation of your operations and your portfolio. As your business grows and the interests of your customers evolve, you will constantly have to find new ways to keep them on board.
As a business leader, you are the main innovation manager of your organisation. However, because a lot of business innovation is based on technology, your IT department also needs to actively join your efforts to innovate, while closely collaborating with the entire team, yourself included.
Some businesses have introduced new managerial roles whose job is to plan, execute, and oversee technological innovation in the workplace, among other things. These positions include chief data officer (CDO) who, as the name suggests, manages the data that informs innovation, and chief transformation officer (CTO) tasked with implementing technology in order to optimise an organisation’s processes.
Innovate Today for a Brighter Tomorrow
The rapid development of information technologies, increased availability of ultrafast internet, growing investment in artificial intelligence, and direct communication between business and consumers facilitated by the social media are just some of the factors that are driving business innovation right now.
As an entrepreneur, it is your duty to encourage innovation and creativity in your team. By identifying your company’s pain points, motivating your team to come up with creative solutions to them, and using technology to your advantage, you can future-proof your business and ensure its lasting success.