A critical factor in introducing innovation into any organisation is an awareness of the need to innovate and an understanding of the benefits innovation can bring. Does the client want to innovate in order to develop their business or as a business advisor have you identified the NEED to innovate? If innovation is already built into your client’s business strategy and culture then the support required will differ from that required if your client has never developed an innovation strategy before.
It is important to spend time with your client to gain an understanding of their motivation for innovating and ensure that they are clear as to the potential benefits. SMEs often don’t see a clear link between innovation management and profitable growth. It is often worth using appropriate case studies of similar companies or industrial sectors to help put ‘innovation’ into context.
There are however some risks to overcome while implementing innovations as there are benefits of course. As such as a Business Adviser it is important to be aware of such benefits and risks in order to be better prepared to assist your client on the implementation of innovative solutions. Here are some examples of the benefits and risks to overcome.
Benefits of innovation
- Profit/Margins increase;
- Product diversification;
- Product differentiation;
- Satisfying consumer needs;
- Costumer fidelization;
- Keeping or increasing market quota;
- Securing a market strategic position;
- Use of new business opportunities;
- Markets development;
- Personalized services;
- Increase of competitive advantage;
- Use of economies of scale.
Risks to overcome
- The product is not accepted by the market;
- To innovate it might imply high investments that are not paid back during the product life cycle;
- Excessive concentration of resources and attention on the new product at the expense of quality and marketing of the existing products;
- The company was overtaken by partners when the innovation is done in partnership / risk of transfer of know-how;
- The company has become dependent on the new product;
- There is no capacity to implement the innovation;
- The competitive advantage of innovation, benchmarking and developing rapidly making an imitation of a more efficient or that exceed the initial innovation by incorporating some distinctive elements.