By Andrew Watson
Innovation seems to be the buzzword at the moment – you hear it everywhere you go. But when people hear innovation they normally think of ground-breaking inventions when most of the time, innovations are small changes that deliver large rewards.
Here are three areas where export businesses should seek to innovate.
1. Find ways to innovate your business model
New business models have the power to overturn established players and reshape entire industries. Businesses such as Amazon, Google and Apple have revolutionised the advertising, books, music, and retail industries with powerful digital platforms that can be used to deliver products while sidestepping traditional distribution channels.
But it is not only the Googles of this world which can use innovative business models to disrupt their competitors. Small businesses across Australia are also exploring new business models which make them more competitive.
Melbourne-based family owned company Marand Precision Engineering is a great example of how evolution of a business model can win new customers.
Founded in the mid-1950s, Marand has an established reputation as an engineering services provider to clients across the automotive, steel, aviation and aerospace sectors. But in the early 2000s, a downturn in car manufacturing began to affect the company’s revenues.
Marand responded by adapting its business to create a new offering for clients in the fast-growing mining sector: a fully automated workshop to maintain the rolling stock that miners rely on to transport their commodities to market.
With $10 million in financial support from Efic, Marand was able to win multinational customers including BHP and Rio Tinto, and employ 100 new staff in the process.
Putting it into practice:
- Analyse your existing business model and identify the areas where you add the most value for your customers
- Consider how you can re-engineer your current model to deliver value more simply and directly
- Look for adjacent sectors and customer segments you can reach by adapting your existing business model to deliver new products and services
2. Explore ways of improving business processes
Process innovation can yield immediate results by reducing costs, and improving customer service and speed to market. It can also be relatively simple and inexpensive to execute, especially as new technologies become more accessible and affordable.
Small businesses should consider ways in which they can automate and streamline internal systems to increase efficiency and drive down costs. For example, connecting an online ordering platform directly to accounting, stock control and order management systems can help reduce data errors, cut administration overheads and speed up satisfaction while reducing inbound calls.
Small businesses should also consider upgrading or modifying equipment used to produce products, so they are easier to operate and cheaper to run. It can also make sense to outsource non-core activities to external providers, leaving staff to focus on value-adding activities, rather than administration.
Putting it into practice:
- Analyse your existing processes to identify operational and production chokepoints, then find ways to eliminate them
- Modify or replace equipment to speed up production and reduce costs
- Integrate front and back-office systems to streamline administration
- Consider outsourcing low-value activities
3. Consider how to innovate the marketing function
An essential element of export success is the ability to adapt the marketing approach to appeal to customers in different locations. The first step is to analyse the tastes and buying behaviours of key customer segments in each destination and then adapt the brand and marketing strategy accordingly.
Small businesses should also consider how digital technologies and social media can make it easier to market products and services internationally at lower costs. For example, a recent McKinsey study found that tapping into existing Facebook networks can help businesses gain immediate access to communities across national borders.
Putting it into practice:
- Take advantage of digital and social platforms to maximise cross-border exospore at minimal cost
- Use data to understand your target market and create tailored messages based on their needs and behaviours
- Test and learn. Experiment with different messages, channels, imagery and copy – and monitor the results to understand what works.
Becoming a successful exporter
There are many ways in which small businesses can drive growth through innovation. Whether it is by exploring new business models which disrupt the competition, streamlining processes to reduce costs, or by using new technologies to modernise the marketing function, there are already great examples of small businesses across Australia tapping into their innovation potential.
How innovative is your business? Use this checklist to identify gaps and potential opportunities for your business.
- Do you have an innovation strategy that sets out your objectives and priorities?
- Do you have a process for capturing new ideas and creating an innovation pipeline?
- Does your business leadership champion innovation?
- Do you actively collaborate with outside organisations and experts to capture new ideas and technologies?
- Do you have funding in place to make innovative ideas a reality?
- Do you seek out talented people with innovation experience and skills in areas like design, user experience and process re-engineering?
- Do you make innovation part of staff key performance indicators and rewards innovative activity?
- Do you have metrics to measure and improve your innovation performance?