Increase efficiency to maximise your profit
Increase efficiency through innovation
Innovation doesn't always involve developing new products or services. It often focuses on improving what already exists, for example your business' workflow, production or sales process. Such innovation can lead to great improvements in business performance and efficiency.
What is efficiency innovation?
Efficiency innovation often assumes the form of a process improvement or a more efficient business model. It enables businesses to:
- simplify and streamline their existing processes
- produce their existing products at a lower cost
- sell their products or services to their existing customers at lower prices
This type of innovation can have a major impact on a business. It can raise its productivity and competitiveness, optimise its resource allocation and increase bottom-line savings and profits.
Efficiency innovation examples
Many innovative solutions could help you increase efficiency in your business. For example:
- waste minimisation technologies and processes could help reduce costs
- business process improvements could help increase productivity
- standardisation in supply chain (eg through lean processes) could increase your competitiveness or add value to existing products or services
- finding cheaper materials to make existing products could boost your savings
Technology can play a key role in improving efficiency through innovation. See examples of digital innovation in business.
Improve efficiency through innovation
The inspiration for innovative ideas can come from both within your business and externally - from customers, suppliers, technological advances, etc. The key is to filter the ideas, so that you end up investing in those ideas which are most likely to deliver the best returns.
The following are some suggestions to help encourage an innovative atmosphere within your business:
- Share knowledge - Businesses are more innovative when staff know and understand what's happening in other areas. Someone may have an idea that could also benefit another department.
- Encourage ideas - Make sure people feel able to share their ideas without risk of them being criticised or ridiculed. You could also capture ideas using brainstorms, workshops and/or suggestion boxes.
- Involve everyone - Recognise that the winning idea could come from anywhere or anyone within your business. Encourage everyone to contribute their suggestions.
- Reward success - Offer incentives to staff for coming up with ideas that increase your bottom line.
- Accept risks - It's impossible to innovate without taking risks. If an idea fails, don't blame the person who made the original suggestion or this may discourage staff from contributing ideas in the future.
See also seven more ways to encourage innovation in your business.