Corporate innovation is all the rage these days and most better selling business books at least address the issue of innovation. Nevertheless, less bandied about are reasons for companies to become innovative. After all, turning your company into an innovative company requires substantial changes in operations, changing the way employees do jobs, substantial investment in idea management tools and more. It is a lot of work and a lot of money. What are the benefits? Here are five:
1) Our own research has shown companies can expect an increase of 5to 10% or more on pre-tax profits by implementing an innovation culture combined with a cross-enterprise idea management tool (youcan even check your own RoI – return on ideas – with the ROI Calculator at http://www.jpb.com/jenni/roi_calculator.php). A study by Arthur D. Little and BDI (Association of German Industry) on innovation excellence also found that: “On average innovation excellence can increase the EBIT (earnings before interest & tax) margin by 3.6 per cent while front-runners achieve up to 11.4 %increase.”
2) People take pride in working for companies that are perceived as being innovative and dynamic. If your employees take pride in working for your company, you can expect more loyalty and higher levels of productivity.
3) When people become accustomed to thinking creatively, they will see problems as challenges waiting to be solved rather than disasters that need to be blamed upon someone else. When people focus on problem solving rather than blame sharing, problems are solved faster and more effectively. And that translates into more efficient operations.
4) Becoming more innovative also makes your organisation more flexible. The organisation will readily be able to come up with new ideas to accommodate changes in the market. Your company will be ableto review threats, devise solutions and implement them faster than before. With today’s rapidly changing market trends, such flexibility is critical.
5) Innovative companies make the news. Innovative companies get talked about. Managers at innovative companies are invited to speak at top conferences. In short, being an innovative company results in great public relations and substantial press coverage, all of which is terrific publicity. Moreover, that publicity tends to build upon itself: good publicity generates more publicity with relatively little effort on your part.