Today, business innovation is the first pillar to build a successful business. Understood as a lever for transforming models, processes and corporate culture, it is the focus of high-growth companies when it comes to driving initiatives and scaling the business.
The relentless digital evolution has led to the emergence of business giants that have redefined paradigms and business models. Examples such as Argentina’s Mercado Libre, a comprehensive e-commerce ecosystem, or Mexico’s Kavak, a fully digital platform for buying and selling used cars with artificial intelligence, show that innovation is not limited to technological development. It requires a combination of technology, ideas and the implementation of new ways of managing at all levels of the business.
Innovation, from disruptive products to process improvements and business models, is emerging as the engine of business growth and resilience. In the words of one of the most studied examples in business schools, Steve Jobs, “innovation is what separates a leader from the rest.” There are many tools and strategies entrepreneurs can use to achieve this.
Different tools for different types of innovation
For entrepreneurs, innovation can manifest itself in different ways, depending on the specific needs of the market and the characteristics of each company. These types of innovation are not mutually exclusive and are often intertwined in the company’s overall strategy. The right combination of these approaches will make the difference in value creation.
Product innovation
This refers to the creation of new products or significant improvements to existing products. It can include innovations in features, functionality, design or technology. An example would be the launch of a smartphone with revolutionary features that change the user experience. Computer-aided design (CAD) platforms such as AutoCAD, product simulation, rapid prototyping and product development tools such as SolidWorks could be used for this.
Process innovation
This involves improvements in production methods, distribution or any other internal company processes. The aim is to increase efficiency, reduce costs and optimise operations. Examples include implementing new technologies in the supply chain to streamline production and reduce delivery times by using supply chain management (SCM) systems, such as Odoo or Oracle SCM, process automation or data analysis to identify areas for improvement.
Another useful tool for process innovation is financial software. These technological solutions help to streamline accounting processes, track expenses in detail, generate accurate reports and facilitate decision-making.
Business model innovation
This consists of significant changes in the way the company creates, delivers and captures value. It may involve adopting new approaches to the value chain, monetisation or client relationships.
Different business models with a focus on innovation have become popular depending on the target audience (business to business, business to consumer, peer to peer), the client relationship (subscription, freemium, loyalty) and the way revenue is generated (pay per use, unit rate, affiliation).
In the first case, Software as a Service (SaaS) stands out. It offers users the ability to connect to cloud-hosted applications over the Internet, redefining the way businesses deliver and consume services. Dropbox is a well-known example.
In relation to the client, an example could be the transition from a traditional sales business model to a monthly subscription model, for which business model analysis platforms, revenue model prototyping tools or strategic management software would be used. Examples include Amazon Prime or Spotify. In other cases, such as Google or Facebook, the product is free to users and revenue comes from third parties, mainly through advertising.
Organisational innovation
This involves changes in organisational structure, corporate culture or decision-making processes to foster a more collaborative, flexible and creative environment. One example is the adoption of flexible methodologies, such as Scrum, to improve flexibility and speed of project development.
ERP systems also help make this type of innovation a reality by addressing aspects such as inventory management, human resources and even project planning. They can improve efficiency by providing a holistic view of business operations, facilitate cross-departmental collaboration and enhance strategic decision-making. Their implementation can lead to greater coordination and efficiency across the organisation, with a positive impact on the company’s ability to innovate and adapt.
Marketing innovation
This focuses on innovative strategies for promoting and positioning products or services in the marketplace. It can include changes in branding, advertising approaches or distribution channels through creative use of social media and influencer marketing to reach new market segments.
To implement these strategies, it is necessary to use data analysis tools, such as Google Analytics, to evaluate the performance of campaigns and analyse their effectiveness in order to adjust them and optimise the results.
Open innovation and corporate venturing, a strategic alliance
Open innovation is giving rise to a new model of innovation management based on collaboration, making it a new strategic pillar in the business world and marking the collaboration between large corporations and startups. This collaborative approach has become an essential catalyst for driving innovation.
BBVA Spark stands out in this scenario by promoting collaboration with startups, offering the possibility of carrying out proofs of concept or pilots to validate technologies and business models, and exploring potential collaborations with different parts of the bank.
In the business ecosystem, and within this new innovation model, corporate venturing emerges as a form of dynamic collaboration through various processes and mechanisms, challenging the traditional notion of competition. According to an IESE report, some of the most common mechanisms are:
- Hackathons. These are collaborative events where programmers, developers and other creative professionals come together to work intensively on software or hardware projects.
- Venture clients. This refers to a strategic collaboration between an established company or client and a startup or emerging company. In this model, the established company acts as a client for the startup, actively using its products or services and often participating in the joint development of solutions. This relationship goes beyond a typical business transaction, as it involves an ongoing collaboration from which both parties benefit. The start-up has the opportunity to validate and improve its product in a real-world environment, while the established company gains access to innovative and flexible solutions.
- Corporate incubators. These are internal programmes designed to support the development and growth of new companies or projects. They provide resources, financial support, advice and access to the parent company’s network to help overcome initial challenges and achieve commercial viability.
- Accelerators. These are programmes designed to support the rapid development of startups, usually through an intensive, short-term approach. They provide startups with access to mentoring, funding, shared workspace and connections to investors and industry experts.
From the introduction of revolutionary products to improvements in processes and business models, innovation is the catalyst for business growth and resilience. Entrepreneurs need strategic vision to apply the right tool at the right time.
