Most companies know they must innovate to keep up with the market’s pace of change. With technological advances disrupting all industries, companies must innovate in order to stay relevant and not be left behind.
In fact, innovative companies are rewarded not only for being ready for the future, but also with top talent and increased consumer demand. At WeWork Labs, my team helps companies identify their unique business needs, and then creates custom programming to tap into innovation and deliver on key outcomes.
But what does “business innovation” mean, exactly? And what are some examples of it in practice?
What is business innovation?
Business innovation occurs when companies implement new processes, ideas, services, or products with the goal of boosting the bottom line. It could mean launching new and improved products or services (which can lead to higher revenue), making an existing process more efficient, or solving a current business problem (both of which cut down on costs and save time). The key element of innovation is that it drives revenue for the company.
What business innovation is not
Innovation has become such a hot topic that its true meaning is often lost in the noise. While some use it as a catchall buzzword for simply using the latest technology or making change for change’s sake, the definition of “innovation” is limited to changes to the core business of an organization that leads to growth.
Why is business innovation important?
Innovation offers companies four main benefits:
1. Getting ahead of potential disruption
When done right, business innovation takes stock of where the market is going due to potential disruptors or changing consumer demands. Businesses use that information to make strategic changes and to entice internal employees to be entrepreneurial. Those changes can include building a product or service similar to what new startups are making, buying it from others in the industry, or partnering with the upstarts (known as the “buy, build, partner” model).
2. Increased efficiency
A lot of business innovation happens by making existing business processes less costly, less time-consuming to complete, and more sustainable. Those changes save time and make it easier for an organization to adapt to industry shifts with agility, which cushions against volatility and risk.
3. Talent attraction and retention
More than ever, employees—particularly millennials and Gen Z—want to work for mission-driven, fast-moving companies that they believe have a bright future.
4. Brand perception
Consumers are more willing to buy from companies they perceive to be innovative and socially conscious.
Examples of business innovation across industries
Legacy companies have a lot to gain from being innovative. Here are examples of business innovation undertaken by WeWork members in a host of traditional industries:
The traditional way of doing legal work involves manually sifting through thousands of documents. Now digital tools, such as software from the startup Legal, help lawyers do that more efficiently, so they can focus on higher-value tasks.
This industry impacts almost everyone and contributes as much as 29 percent to greenhouse-gas emissions in the U.S. The seriousness of the problem has led to innovative solutions such as electric cars and micromobility solutions such as electric-scooter rental service Bird.
Fintech has transformed the way people handle money. Rather than standing in line to make deposits, open a bank account, or invest, people can now do that securely wherever they are, directly from their smartphones.
Online classes and educational software companies mean students—whether they be teenagers or mid-career employees looking to transition—can access educational opportunities. A host of startups, including Flatiron School, offer those services.
Digital tools have changed how customers interact with their insurance companies, making it easier to find what they need and file claims. Health-care innovator Oscar Health, for example, has an app with personalized concierge teams to help members find a doctor, navigate costs, and access free, 24/7 telemedicine services.
Supply chains have evolved due to a trend to manufacture more sustainably. In addition, companies now offer more sustainable products in response to consumer trends. Spare Food Co., for example, transforms food waste into new products, and Loomia embeds technology into wearable textiles.
Types of business innovation
Business innovation can, but doesn’t have to, involve the creation of a new product or service. There are many examples of innovation in business, including:
Creating a completely new product that’s adjacent to a business’s core offering. Think of Dyson extending into hand dryers or Apple launching the smartphone.
Designing a new way to be more efficient in the core business. Examples of this include Amazon using robots in the warehouse, or Chase Bank implementing mobile check deposit.
Business model innovation
Introducing a new way of making or saving money, such as Zipcar launching car-sharing subscriptions, or Rent the Runway offering a subscription service for clothing rental.
Implementing a new way of interacting with customers. This happens when a company like Zappos puts customer service first, or Tesla makes it possible to buy cars online.
These types of business innovation enable companies to become more efficient, forward-thinking, and hopefully more profitable. The good news for companies is that there are practical steps to jump-start innovation.
That could involve aspects like updating their office space, or creating forward-thinking and collaborative innovation labs. Or it could be implementing internal innovation programs to tap into the creative energy of their employees, and surface and execute the best ideas. Learn more about how to drive innovation in the workplace.
Noushka Green is a senior business development manager at WeWork Labs, which connects the world’s largest enterprises with a global community of startups. She has more than seven years of experience in enterprise sales and partnerships. Prior to WeWork, Green worked at Merrill Lynch in private wealth management, helping individuals and family offices with estate planning, retirement planning, and investment strategy.