Do innovations matter?💡💸

In business there are two ways of creating the added value — improvements and innovations. Gradual improvements are aimed at optimizing an existing product, process, or service. They mean the current product or service does solve customers’ problems but it can be done better, faster or cheaper.

Innovative solutions help cope with the task 3-5 times better, cheaper, or faster than before. Therefore, a new product/service is created or quality changes are made.

Innovation path
In order to make your innovation happen, you have to deal with technical, technological, and cultural contradictions. Once you handle them, you can solve a problem in a brand-new way. However, you can’t know most of these difficulties in advance. They emerge as you work on the problem.

Some things seem innovative today though, originally, they looked absolutely different. For instance, Uber used to be a service for limo ordering and BMW initially produced aviation engines.

So when working out an innovation, it’s not clear what it will look like in the end. As you keep refining your innovation, you can gradually see the overall picture of it.

The mechanism of incremental improvements is quite simple. A current solution ➡️ its metrics ➡️ ideas of how to improve it ➡️ testing and implementation of a new solution. Such improvements enable businesses to grow with minimal risks.

However, any solution has its improvement limit. Besides, as you sophisticate the product or service, its further improvements will be more expensive.

Innovations always mean risks. Therefore, only those startups who are not afraid to lose can afford them. The bigger the business, the more responsibility it bears.

Any uncertainty is a potential risk. That’s why large companies make strategic plans for 5-10 years, allocate budget for all the initiatives, and thoroughly examine the market before taking actions.

Nevertheless, such an approach doesn’t contribute to innovations since they require some space for risks and experiments.

To sum up, you should maintain the balance between risks and stability. You will never know whether you innovation will bring success. However, until you roll the dice, you won’t earn big.

Would you take a risk for innovations or stick to a proven strategy? Comment below 👇