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Innovation can be the cornerstone of business. Think of the new products that have changed their manufacturer’s business model, the prime example being the iPhone. These innovations can bring about market domination. They are all not the norm though.

Most businesses cannot innovate on a critical scale all the time. It is relatively rare that they come up with a product that takes over the market and defines it like the iPhone. Despite that, here are four reasons why innovation is critical to building company value and should always be a central focus:

  1. Innovation can provide a reliable test of the actual product. Smaller projects can offer a company a method of doing their own market research. For example, when Pixar had blockbuster films like “Finding Nemo” and “Toy Story”, they came only after a series of short-films that tested the market for them. It wasn’t until those films proved successful at engaging customers, creating sales and developing interest that they put efforts into full-length movies.
  1. Innovation can build trust in the market. A new innovation isn’t a one-man creation. It usually takes the entire company’s commitment—from the CEOs to the secretaries. This shared experience fosters true trust and reliability from within the core of the business. Nothing can substitute for it and it is a necessary part of building the team for later projects.
  1. Innovation as a commitment. Innovation isn’t always about making a new idea the latest product and hoping for success. Consider Toyota’s Prius. When it was introduced as a “new product” it was immediately panned by consumers and for good reasons—it was poor on gas mileage, it wasn’t powerful and it just didn’t have any consumer support. Toyota even admitted that they would be losing $10k for every model they sold. Still, there we a purpose. They kept at it though and in 2015 alone they sold 1.2-million units.
  1. Innovation can maintain your place in the market. If you already are a dominant player in the market, you might be tempted to “wait and see” what arises and then take it on as competition. Bad move! It’s smarter to use innovation as a means of communicating with customers and staying relevant. Consider that innovation is a means of maintaining your place in the market and keeping customers engaged with your brand.

It would be nice for every innovation to be a blockbuster hit but the reality is that most aren’t. For example, Microsoft Surface has more than a 50% share of laptop-tablet segmentation and by 2020 will likely have 75%. When it was originally released in 2001 you would have never known it thanks to poor sales. Don’t limit innovation. Let it work as a way to define your expertise, but also to bring an important value to your company.

Reasons to innovate – you need a process behind the innovation process – take a look at or Strategy Workshop Facilitation to see if this can help

For an interesting and innovative perspective on Strategy Execution, take a look at the article by Jeon De Flander: The Definitive Guide To Boost your Strategy Execution Skills