Innovating with your business: opportunities and risks
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Innovating with your business: opportunities and risks

In this dynamic world, innovation is essential to survival as a business. Whether you are a start-up, scale-up or established company. Society is changing and new technologies are rapidly emerging. You have to follow trends and developments and anticipate things to come. For me, innovating means discovering new opportunities, realizing dreams and making an impact. In my work, I meet many people who are working on innovation. Unfortunately, most innovations don't make it. This means that there are also risks involved in innovating with your business. So what pitfalls should you watch out for?

How can you innovate?

Innovation is complex and has a different meaning for every entrepreneur. Introducing a new product is the most familiar form. But you can also innovate with your company in other areas, such as revenue model, product-market combinations, organization and business processes. To anticipate the rapidly changing world as an entrepreneur, innovations in all these areas are important.

Is innovating with your business a must?

It may be an open door, but innovate a must for every business! I regularly encounter companies that are successful today but do not innovate. The question is how these companies will fare in a few years. As an entrepreneur, you need to be constantly alert to new trends, developments and technologies. Research shows that an innovative company differentiates itself better, competes more effectively and makes better use of new market opportunities. These are important factors for business survival. So consider how you try to anticipate developments and what the future holds for your business.

Innovating: the risks and pitfalls

But how do you go about this? After all, effectively innovating with your business is certainly not easy. It takes time and money, with no guarantee of success. And therein also lies the risk. There are all kinds of pitfalls, so failure is lurking. In this blog, I have made a list of common mistakes and failures from my experience. If you know how to avoid them, you will be well on your way to successful innovation with your company.

1. No clear ambitions, vision or strategy

In my work, I meet many entrepreneurs who are engaged in innovation, whether well prepared or not. But when I ask what their goal is and when the innovation is successful, I usually get no or a vague answer. It is very important to know what you want to achieve. What is the future of your company and the dot on your horizon? Don't just focus on short-term results, set a course for the long term.

2. Too little action and decisiveness

Too little action and decisiveness is something that is very common. For example, entrepreneurs are aware of a certain threat but do not anticipate it. Or there is much and long talk about innovation, but the step to get started is not taken. Another common pitfall is getting caught up in the issues of the day or getting distracted by other "urgent" developments. As a result, you don't make time and space to innovate with your business. And then there's always a reason to prioritize daily activities and operational matters over innovating. Better to just start and get things done. In other words, "Get Things Done!

3. Lack of innovation culture

The ability to innovate with your company depends heavily on the corporate culture. Often the right mindset and energy is lacking. It takes not only vision, but also boldness, entrepreneurship and creativity. In the team, you need people with guts. People who are not afraid to change, experiment, make mistakes and show personal initiative. Innovating does not fit with fear of failure, doom-and-gloom thinking and risk avoidance. The entire organization must get behind the vision, strategy and new direction and dare to let go of the status quo. Are you someone who innovates or just sticks to the status quo? See how you can increase your innovativeness and power to innovate.

4. An inadequate team

A common pitfall is the composition of the team. After all, you can't innovate alone! Make sure that all necessary expertise is present in your team. In addition to internal employees, involve external parties such as customers, stakeholders or role models. Precisely a mix of knowledge and competencies works best. You need creativity, critical eyes and guts. A team that dares to think differently. In addition, make sure that expectations are clear, both within the team and in the organization! This will prevent that only a small club is working on innovation and that disappointments arise. Let the organization come up with new ideas, and give people the space and above all the responsibility to do so. This often leads to surprising perspectives and insights.

5. Insufficient creativity

Creativity is incredibly important if you really want to be innovative. This can be very difficult. What I often see happen is that people stick to their own perceptions and fixed patterns. Managing the creative process too tightly can also be prohibitive. Try to let go of your own frameworks and step outside the box. And expect the unexpected! On the other hand, I often see unrealistic innovations; do try to stick to reality. And dare to make choices from all those ideas. Think about the last time you left your comfort zone.

6. Wrong assumptions and estimates

A major risk is innovating from false assumptions. This is perhaps the most common pitfall. You make a wrong assessment of competitors, trends, developments or threats. Or you base yourself on your own perception of what the customer finds important or experiences as an obstacle. You then rely on assumptions and opinions and not on observations and facts. Researching, experimenting, testing and validating is therefore essential. No good market validation or product-market-fit is one of the most common pitfalls when it comes to innovating. Avoid bringing a product or solution to market that no one is waiting for or willing to pay for. And don't stick with your original idea if it turns out not to work, but dare to change course.

7. No good timing

By doing good customer research and paying attention to your market validation, you also avoid developing a solution that the market is not ready for. Wrong timing is a regular occurrence and is perhaps the most difficult thing to properly assess. Companies bring a wonderful technology or innovative product to market, but several years too early. For example, YouTube was certainly not the first online video channel and Facebook was not the first social media platform. Timing is crucial. Conversely, a competitor may introduce an innovation where you had been working on it for some time. Timing is tricky, but at least something to consider.

8. Not having the right tools or resources

Innovating with your business takes time and money. You also need the right resources to develop your innovation. Not all entrepreneurs have sufficient capacity, resources and time to truly innovate. Many SMEs see the need to innovate, but lack the financial clout, resources or personnel. And they have difficulty finding their way to financial resources. It is important to think early on about what you need and what opportunities are available. Consider not only funding, but also knowledge, partners, technology or testing and production resources. And also take into account possible setbacks and delays; I regularly see companies running out of funds halfway through and even going bankrupt as a result. So do you have a good plan of action for your innovation and how you will finance it?

9. Wanting to do too much at once or going too fast

It can be tempting to want to do everything at once. Or you may feel the need to set the bar very high. The risk of this can be that you get stuck at the drawing board, or spend too long experimenting and prototyping. On the other hand, you shouldn't want to move too fast either, causing you to skip important steps. I come across creative sessions to come up with a new innovation in two hours. However, it is not wise to want to come up with a solution right away. Give innovations time to develop and do good research. Try to set up an innovation process thoroughly, with an appropriate time frame. Realize that it is better to take small steps that are manageable and fundable. A good method, for example, is Design Thinking or the Lean Startup.

10. Poor planning or organization

Good planning, structure and preparation are obviously very important. These should be efficient, effective and purposeful. Keep in mind that you will have to deal with different opinions and interests. Don't get distracted from the end goal. What also often happens is that risks are not identified and mitigated in time. So be sure not to skip this step. But also ensure sufficient flexibility in your planning and management. Innovation is not a linear process and you will have to deal with unexpected outcomes or events.

These are some of the pitfalls I often encounter in practice. Do you have plans of your own to innovate with your business and just want to spar? Then get in touch with Kyra Weaver. I would love to help you get started!

Want to read more about innovating and funding for innovations? Then download our free white paper "From innovative idea to commercial product.

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From innovative idea to commercial product

In this white paper you will learn:

  • What the innovation process looks like and what challenges you face along the way
  • What opportunities there are to fund this early stage of your idea/product
  • In what ways NOM as an investor can help you

    Please note that this whitepaper is only available in Dutch at the moment. We are in the process of translating this whitepaper.