Process innovation is perhaps the “classic” form of innovation. Finding a better way of accomplishing necessary business tasks is low-risk, can lead to other types of innovations, and helps companies maintain and sharpen their competitive edge.
Developing innovative ways to accomplish necessary tasks results in greater efficiency, higher labor productivity, lower production costs, shorter lead times, and ultimately better customer relationships. Typically, it involves changing the techniques, equipment, or software used in processes, but it is more than making minor tweaks to existing processes or simply replacing old equipment.
Ideally, process innovation should be built into the company DNA. Innovating once isn’t good enough, because of constant change in the marketplace, technologies, and resources. Process innovation should be as fundamental to a business as its name or its primary product or service.
Process Innovation to Streamline Workflows
Businesses develop workflows whether they do so intentionally or not. The problem, particularly with startups, is that early workflows may not be efficient due to lack of resources or personnel. But as soon as resources permit, process innovation should be put to work. One of the most common ways to do this is to take manual processes and automate them in part or completely.
Suppose you start out in your new business by writing down customer orders by hand. It’s cheap, and works fine as long as your business is small, but the problems show up quickly as your business grows. Therefore, you may implement an online or computerized order processing system — a process innovation — that is faster, shows ROI quickly, and allows your business to grow without growing pains.
One of the best ways to find out which workflows make the most sense to improve is to ask the people who carry out those workflows. They can usually tell you exactly where bottlenecks and slowdowns are, so you can implement innovative automation strategically.
Process Innovation to Save Money
When your more highly-compensated professionals, like engineers or designers, spend more time than necessary on repetitive, non-automated tasks, not only do those tasks cost your business more to complete, your professionals are spending less time doing the tasks for which you hired them.
An example of a process innovation that can save significant money would be implementation of video conferencing to cut down on travel costs, allow easier collaboration and sharing, and help projects move faster.
Another example could be a centralized project management system that allows authorized users to document progress in a centralized location. You can even innovate the process of innovation itself, through systems that allow sharing and evaluation of ideas, and developing the best of them for implementation.
A Step-by-Step Plan to Process Innovation
Process innovation is a multi-step process:
- Developing a thorough understanding of a challenge or problem
- Articulating the problem to be solved and the outcome desired
- Brainstorming and evaluating potential solutions to determine the best approach
- Designing a prototype system for solving the problem
- Thoroughly testing the innovation under many conditions to refine it before deployment
This approach can be used for challenges of all sizes, across all departments. Process innovation may mean using new software, hiring strategically, cutting out unnecessary steps, or communicating online rather than on paper. The benefits may seem small at first, but cumulatively, they add up to greater efficiency, higher productivity, lower costs, and a better competitive advantage.
Process innovation is one of the keys to remaining competitive and having the time and motivation to innovate in other areas, such as products or business models. We invite you to get the Innovation Starter Kit as a great first step to building innovation into your company’s DNA.