Driving innovation in your business the new normal -Part 1

In our previous article we spoke about the need for SMMEs to focus on preserving and maximising cash in a bid to survive the negative impact of lockdown restrictions. This articles now shifts its focus to the long-term imperatives for SMMEs.

The next 2-5 years is filled with uncertainty as we transition into the new normal. This may require that businesses re-evaluate their business models and look to drive change/innovation in order to remain relevant and competitive. Innovation is nothing new, but what COVID-19 has done is to accelerate the need for change, or at the very least the reassessment of how things are done.

The case for innovation

While the focus, in short term, will be on survival, coming out of the COVID-19 crisis many businesses simply cannot operate as they have in the past.

What made the SMMEs successful in the past may no-longer be possible under the new normal.

Customers may struggle to pay; channels used to reach customers may have shifted to accommodate new constraint or new regulations may have potentially created opportunities that never existed before.

Examples of shifts that COVID-19 has brought to the business

1. Changes to sales models

Business that relied on in-person sales would have had to change their operating models. Sales approaches have been redefined as businesses discover that virtual technology allows them to do things that were nearly impossible previously— but now within the realms of possibility.

2. Need for new offerings

The entertainment industry has generated new content such as, live streaming of events e.g. Channel O lockdown house party or sports documentaries and interviews to fill the void in programming created by the suspension of sports leagues. Food distributors that traditionally supplied restaurants are setting up digital direct-to-consumer channels as the crisis decimated their core restaurant sales.

3. Rapid changes in customer behaviour

Physical distancing and hygiene practices are likely to continue and will see consumers making fewer trips to the shopping malls, opting to make use of digital channels.

What does this mean for SMMEs?

Businesses can gain a long-term advantage by understanding such shifts and the opportunities they present.

How to think about innovation

There are many ways to think about innovation, but a good place to start is by looking at the basic business value chain:

Driving innovation requires SMMEs to look at the entire value chain to identify threats and opportunities. Broadly there four different categories/areas where SMME could consider driving innovation:

1. Product/service innovation

Creating an offering that is either new or an improvement to an existing offering.

2. Experience innovation

Improved customer touchpoints and interactions that complement your offerings.

3. Process innovation

Creating a new approach to develop, manufacture, distribute, or deliver an offering.

4. Business model innovation

Changing the value chain, diversifying profit streams, or changing the delivery model for an offering. This essentially means an entire revamp of how the business operates.

Each of these areas will require different levels of investment, capabilities and resources to execute. For example: experience innovation requires investment in online capabilities such as online stores or mobile apps for people to order products; process innovation may require investing in new machinery that produces your products more efficiently or partnering with new players for distribution
As you look out for part two of this article, let us have a chat about innovation in your business.