A bold new idea is the genesis of many business startups. But it's not always enough to keep them healthy over the long term, says Peter Lawler, Ontario senior vice-president of financing and consulting for the Business Development Bank of Canada.
"A business that starts with an innovative concept will thrive initially," he says, "until competitors come into its space. This is very common."
Toronto's Il Fornello has experienced these twists and turns in the marketplace. It established a successful niche for itself on the restaurant scene with its wood-fired pizzas. But when other establishments adopted a similar model, its management began making major changes, including closing some locations, opening others outside the city core and rethinking its business concept and menu.
Any business facing major challenges needs to step back and consider what made it a success, then innovate to recapture momentum, Lawler says. "There is no status quo. A continuous cycle of innovation and change is essential in any business." Changing to meet market demand includes "benchmarking what you are doing and what you need to do to stay ahead of your competitors."
One of the most effective ways to do this, Lawler says, is to involve your management team, staff and clients. Innovation should be a collaborative process.
"In many cases, it involves bringing in outside professionals and advisors. A fresh set of eyes can give new insights. As part of any innovation plan, you also need to look at the whole cycle of continuous improvement and have an investment strategy to support it," he says.
The basic principles that contribute to success in any business are good products that are competitively priced and high levels of service, he says. "Service is absolutely critical to success. It is important to consider how to improve the service experience to continue to attract clientele."
But more than anything else, a business has to give customers good reasons to support it. "That value proposition may change over time. Making sure it is always in line with customer needs is part of the innovation cycle."
Lawler emphasizes that innovation does not necessarily mean a complete change of direction or the implementation of new technology.
"The vast majority of innovations are incremental. Moving forward by making small regular changes constantly and having innovation embedded in the culture of an organization can lead to long-term success."
-- Financial Post