Innovation is often associated with creating new products or services in your business. But it can also be about changing the way you do business.

Innovation embraces:

  • new technologies and their uses
  • improved industry methods
  • meeting changing customer demands or needs
  • better systems and processes

Your business competitiveness and survival is directly linked to your ability to innovate. But to be successful, innovation needs to be supported by everyone in the business, including you, your staff and any other business partners.

Benefits of innovation

Creating an innovative business culture  will ensure everyone in the business is working towards improving business practices, efficiency and performance.

Some of the other benefits include:

  • increased competitiveness – offering higher quality products more efficiently and at a lower cost
  • improved staff retention – staff like to work in jobs that promote teamwork and problem solving
  • proactive approach to business – your business is able to keep up with changes in your industry
  • more customers – offering new or improving existing products or services, or entering new markets
  • more efficient use of all resources

Your approach to innovation will be driven by your business strategy, capability, market understanding and commitment to the process. Often, these processes will add capacity to your business with little or no additional costs.

How to create an innovative environment

Your employees are one of your most productive assets. You can help them become more productive by fostering a culture that encourages creative thinking and action in the workplace. This can inspire your employees to share their knowledge, experience, skills, suggestions and recommendations.

Here are some ways you can promote an innovative environment in your business:

1. Make innovation a core value

You want everyone in the business to recognise the idea that not trying anything new is often the biggest risk.

So, encourage your employees to:

  • be honest and open
  • share ideas
  • explore initiatives without fear of retribution

2. Hire people with different perspectives

When hiring, look for employees who:

  • understand your vision
  • align with your culture, but aren't necessarily the same as you
  • may have different perspectives
  • come from diverse backgrounds
  • have passions
  • have different abilities

Having employees with a different set of ideas or approach to problem-solving will easily generate an innovative approach.

3. Give employees time and space to innovate

Be open and approachable to new ideas, and set aside spaces for employees to create and share ideas.

Many large companies often allocate time for their employees to break from routine roles to inspire new thoughts. This could be an employee retreat, allocated time each day or a day out of the office.

You can also support innovation by setting up:

  • meetings to share ideas
  • suggestion boxes
  • a suggestion area on the staff intranet
  • dedicated times or rooms

4. Encourage collaboration

Create work practices to encourage employees to work together and openly discuss ways to improve. For example:

  • allow job swaps that foster new perspectives from different employees
  • hold process improvement brainstorming sessions with employees from different parts of the business
  • introduce a new ideas or 'what if?' section to your regular meetings

If you can, provide a dedicated area that will promote employee interaction. Ideally, an open space where they can sit and chat in a relaxing environment. Informal discussions often lead to improved employee relationships and trust, which encourages teamwork and leads to innovation.

5. Have a feedback process

Ensure there's a process that everyone understands for assessing each new idea. Employees will be encouraged to suggest or recommend ideas if they're confident that it will be appropriately considered.

Be sure to acknowledge every suggestion in a timely manner and give feedback on the idea.

6. Implement ideas as soon as possible

Put employees' ideas and suggestions into effect as quickly as possible. When employees see they're influencing the direction of the business, they'll be motivated to:

  • continue to share ideas
  • work towards the success of the idea
  • encourage the productivity of other employees

7. Reward employees for their ideas

Use rewards to encourage your employees to suggest all ideas, even if they're not carried out. You can offer these rewards to individuals, teams or the whole workforce.

The important thing is that employees see that you appreciate their efforts to improve the business.

8. Offer training

Offer training to employees that will inspire new thoughts and approaches to the business. Employees will gain experience and the business will benefit from any new ideas and approaches your employee has learned.

9. Invest in resources

Innovation is an investment in the future of your business – not an everyday expense. It might not seem like a priority but having an innovative business will help you:

  • keep up with customer demand and industry best practice
  • grow your business and increase profits
  • motivate your employees.

Ideas can only go so far, so make sure you set aside the resources to act on them including:

  • time
  • finances
  • employee support
  • leadership

Funding for innovation

The Victorian Government's Future Industries Fund could help your business become more innovative.