Innovation for Profit

May 21,2015

Innovation for Profit
Introduction
   The main reason businesses exist is to make a profit. However, sometimes they need to innovate in order to do so. This means that if a business doesn't do this, it could shrink. If it fails for too long, it will die. Just like starting a business, good innovation can sometimes be difficult. That's what this article will hopefully be helping with.
Bad Innovations
   The first thing you need to realize when talking about business and innovation is that innovation doesn't always mean profit. Some examples of failed innovations that were expensive but didn't create much profit are the The Edsel, New Coke, and the Apple Newton. There are many more examples of poor innovations by successful companies which didn't turn much of a profit. Most people don't like change, so if your idea is too innovative, it could be hard to convince others it is worth investing in.
Social Influence
   You not only need to win over the investors with your innovation, you also need to win over fellow employees. You also need to win over the customer or focus group in some cases. Basically, innovation is always a gamble. The greater the potential for making a bigger difference, the higher the odds may be against you. However, there is also a greater possibility for higher dollar amount of profit if you win.
Innovation Programs
   With such a risk in achieving innovative success, it's not surprising that there have been many feeble attempts at making innovation programs. These are designed to achieve incremental improvements of products and product lines, but at the same time creating large amounts innovation. It is sometimes hard to mix the both together. This means that sometimes the innovation needs to be small in order to have an incremental improvement. This will then help with creating a larger potential of success in bringing the product to the marketplace.
Necessity of Improvement
   Although it may seem that Innovative Programs may be a good idea, they sometimes fail at the root. In other words, you can't always have both great amount of innovation as well as incremental improvements. There are two approaches to this challenge. You can either talk a lot about innovation but limits activity to safe incremental improvement; or you can acknowledge that no matter how effectively worded your companies mission statement may be, businesses need profit. Devising ways to minimize risk to profitability is a good way to avoid damage to the company.
Innovation Competition
   There is another risk involved with innovation. Small startup companies with less to lose could come up with an amazing innovation that could make your innovation obsolete in no time. In order to avoid this risk, a little Insurance Creativity is a good idea. Insurance creativity is playing with scenarios where you predict that your business model for an innovation becomes obsolete. Then you you begin to attempt overcoming that predicted scenario. This can help to ensure that you will be prepared for any competition that may come your way.