How important is innovation in an established business?
Very. But not because every business needs to invent something new. Innovation matters because the problem your customer is trying to solve doesn’t stand still.
In this week’s Business Builders Podcast, @Pavlo Phitidis answers a question submitted by a business owner about the importance of innovation and why it should start with the customer, not the next big idea.
Innovation Is About Creating More Customer Value
A useful way to think about innovation is through two questions:
- Can you give your customer more value for the same price?
- Or can you deliver the same value at a lower price?
If you can achieve either, you’re innovating. And the best place to find those opportunities is often not inside your own business, but in the changing problems your customers face.
When Customer Needs Change, Your Business Must Adapt
Every business exists to solve a problem for a customer. But customer problems change. So do their expectations, buying behaviour and ability to pay.
Your product might still work perfectly. Your service might still be excellent.
But if it no longer solves the customer’s problem effectively, or they can no longer afford it, your business risks becoming less relevant.
Standing still is not neutral. It’s a decision to become less relevant.
Where Should You Look for Innovation Opportunities?
Innovation doesn’t always require a new product or technology.
It might mean changing:
- How you manufacture or deliver your product or service.
- How your solution is packaged or purchased.
- How much of the solution customers actually need.
- How you reduce costs while preserving customer value.
The objective is to make your business more useful to the customers you’ve chosen to serve.
Three Questions to Keep Your Business Relevant
Rather than asking whether your business is innovative enough, ask:
- What problem did our customer hire us to solve?
- Has that problem changed?
- Has the customer’s ability or willingness to pay for our solution changed?
If the answer to either of the last two questions is yes, innovation becomes essential.
Building an Asset of Value™ requires a business that can keep adapting as its customers and markets change.
Innovation isn’t about chasing novelty. It’s about ensuring the value you create keeps pace with the world your customer lives in.
Listen HERE and subscribe to Business Builders Podcast wherever you get your podcasts.
Have a business-building question for Pavlo? Send it to businessbuilders@aurik.com Your question could feature in a future episode.
