What Is Innovation In Business & How Can You Master It?

by Laura Winkler | July 21, 2021
Innovation is a word you’ll hear a lot in the business world. But what is innovation in business? And how can you master it?

MBA students learn to welcome business innovation through real-world examples

This article was first published on Business Because and written by Shannon Cook

Innovation is at the heart of any successful business. Through creative and out-of-the-box thinking, organizations can more readily identify a solution to a problem or gain a competitive edge.

Practicing innovation is a must for businesses that want to produce disruptive products or services—and MBA programs equip students with the skills and experiences necessary to embrace innovation themselves.

But what is innovation in business? And how can you practice it?

What is innovation in business?

Innovation is the practice of thinking up ways that new products or services can disrupt the status quo of the market or add value. Simply put, it’s about leveraging ideas to either address a gap in the market, solve a current problem, or update an existing product or service.

Many startups have offered a creative solution to a meaningful problem and reaped success as a result. Just take Vancouver-born Slack, for instance. Although there was nothing novel about the idea of an online chat platform, few had conceived of a way to take workplace communication from emails to a user-friendly instant messaging service that grouped coworkers into subject-specific teams.

On the other hand, tech companies like Blackberry famously failed to innovate, ignoring the demand for touchscreen devices, allowing tech giant Apple to swoop into the market and knock Blackberry off its perch as a leading mobile phone provider.

This need for innovation within the tech and digital sector is something Professor Claudia Lehmann, chair of digital innovation in service industries at HHL, recognizes. “The digital sector tends to have comparatively short product life cycles and, therefore, companies need to innovate frequently to be able to compete continuously.”

Due to HHL’s strong links to entrepreneurship, the HHL MBA is heavily invested in educating students on how to leverage digital innovation tools to grow a business. Whether you’re launching a venture or practicing innovation within an organization, you’ll learn to navigate the everchanging business world during courses like ‘innovation management and corporate entrepreneurship.’

Mastering Innovation: Thinking from the perspective of a customer

It’s usually the case that businesses who’ve successfully innovated, such as Slack and Apple, are those who’ve placed themselves in the shoes of the customer.

“Innovation is concerned with determining customer needs and choosing the correct inventions to address them,” explains Claudia.

This is something you’ll learn about on the HHL MBA, which allows students to experiment with innovations that they can apply in the business world. For instance, in the entrepreneurship and agile working methods class, you’ll have the chance to identify a customer issue and create a new product or service based on the potential demand.

In one such course, an innovative brainstorming session led HHL MBA graduate and data and artificial intelligence (AI) strategist at energy company E.ON, René Rivero (pictured), and his group to devise a virtual interior design service that used augmented reality to display the designs in clients’ homes. René’s group recognized that similar services were being offered in the US, but not across Europe, despite many Europeans’ interests in interior design.

“Businesses are like people, they age,” believes René, “Innovation implies considering how your core business activities and services can stay relevant for consumers and society in general.”

As a result, innovation should start with identifying the customers’ pain point and then creating a marketable product that addresses this need. This process is something you can gain practice in and receive valuable feedback on in your MBA.

Moreover, through HHL’s Digital Space there’s ample opportunity to engage with other students when exploring digitalization and entrepreneurship. Through this open platform, you can receive support and guidance from experienced entrepreneurs when developing your business idea.

Mastering Innovation: Keeping up to date with market trends

You’ll need to keep updated with what’s happening in the market to practice innovation. But with so many new digital tools and technologies available, it can be tricky to figure out which tools can aid innovation.

HHL offers a course in disruptive technologies for this very reason, providing students with a grounding in technologies like AI, big data, advanced manufacturing, and virtual reality.

“Having a general awareness of the market and its changes can be an important competitive advantage,” notes Claudia.

After learning the theory behind innovative tools, the student consulting project will put your knowledge to the test. Here, you’ll have the chance to solve a real-life innovation problem a company is facing, analyzing digital trends within the company’s target market, and strategizing which tools could help the business conquer the market.

“One of the aspects I most appreciated about my MBA was that it doesn’t end in simple classes or a book; you also have the chance to practice innovation through these immersive projects,” reports René.

In his current role, René uses data and advanced analytics to analyze E.ON’s different business units across various countries, pinpointing new technologies, such as blockchain, AI, and robotics, that he can use to improve business processes.

Armed with the theoretical and practical knowledge about innovation from his MBA, René says he’s been able to thrive in his role and stay on top of the latest digital trends.