Skip to main content

How to foster innovation in your business

1st January 2022

Information Icon

Everything we publish on Business Talk is provided as general information only. It isn’t advice or an insight into the views of TSB or any of our Partners. This is for information only and should not be relied upon as offering advice for any set of circumstances. Please think about getting independent financial advice if you want help with your personal situation. While we make every effort to make sure the content is accurate and up to date, no liability is accepted by TSB Bank for any loss or damage caused by relying on any statement or omission. Links to external content are provided for information purposes only and not a TSB recommendation of any brand or service.

How to foster innovation in your business

January 2022

Have you ever thought that innovation is a bit overwhelming? That it’s only for big companies or it’s just about inventing the latest technology? Well, you’re not alone. But, if we just called it improvement, or coming up with new ways to do things, it doesn’t seem so complicated does it? That’s all innovation is and it’s important to help your business grow and stay competitive.

This article takes a brief look at the different types of innovation, how you can make innovation a core function of your business and how you can build an innovative culture.

What is innovation?

Innovation is basically the development and application of ideas that improve the way you do business, what you produce, or what you achieve. And it’s not just open to those with big budgets. A simple idea on how to get a better rate from a supplier can be classed as innovation. In fact, whenever you adopt something new to improve your business - trying out better processes, developing new products, implementing new strategies or adopting new technologies - you’re practising business innovation.

These innovations can help your business grow by increasing productivity, reducing costs and attracting new customers – all of which helps you stay competitive.

What are the types of innovation?

It’s important to realise that innovation does not always have to mean giant strides in performance, your business can gain a competitive edge from small improvements. The four main types of innovation are:
1. Process innovation

This includes improvements in any one of a number of ways you produce, market, deliver and support a product or service. For example it could include changes in equipment and tools, how your product is delivered to customers, or even as simple as updating accounting methods.

2. Product or service innovation

This is the most familiar form of innovation and is often the result of new technology. It could be a completely new product (e.g. a mobile phone), a new feature in an existing product, (e.g. adding a camera to a mobile phone) or the enhancement of an existing feature (e.g. improving the quality of photos from a mobile phone’s camera).

3. Business model innovation

This is the most challenging type. It’s not about the product or the process, but about how the product or service is brought to the customer. It is best explained using examples such as Spotify or Uber who completely changed how music and taxis were made available.

4. Marketing innovation

Marketing innovation is the implementation of new methods of marketing including: product design, packaging, promotional activity or pricing. These are designed to benefit your business by helping to give customers what they want, gain new customers or make your product or service stand out from similar ones on the market.

Four ways to get innovative

Innovation doesn’t just happen. It needs to be encouraged. Everyone involved with your business, whether they’re employees, suppliers or customers, can – and should – be encouraged to have ideas. Here are some of the ways you can make innovation part of your business culture.

Build innovation into your business – set goals to improve products or services, like finding better ways to communicate with customers. Allocate time, set deadlines, be accountable.

Seek suggestions for improvements of product or processes – talk to people who know your business and use your products or services. What ideas do they have? What changes/improvements would they like to see?

Involve your team – Make ideas part of staff meetings, have a suggestion box, reward good ideas, hold regular innovation/ideas workshops.

Invest in innovation – Invest in technology that improves operational efficiency, invest in equipment that increases productivity, invest in R&D for new products and services.

Have a read of our article about tech for small businesses for handy hints on the right technology for your organisation.

Key actions

  • Seek suggestions for improvements

  • Encourage innovation from your staff

  • Invest in innovation

Let’s talk. We’re Britain’s bank for small businesses. Our Business Banking experts are here to help you with your business, with 25 months’ free day-to-day business banking, as well as 1 year’s free expert business advice from Enterprise Nation. Call 0345 835 3858 or contact us via your business bank account.