Sergio Hernández
President and CEO
CIAL Dun & Bradstreet

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Expert Contributor

Innovative Companies Are the Future

By Sergio Hernández | Tue, 07/26/2022 - 16:00

Innovation-conscious companies act under a single motto: adapt or perish. This has been the driving force behind the companies that have transcended throughout history. Why? Because this is the only way to achieve profound changes in their operations. But what do we mean when we talk about innovation?

In short, innovation is the pursuit of new ideas, methods, and products. It is an always-on challenge against the status quo that triggers behavioral change and eventually leads to increased revenue and productivity.

To innovate from a company's internal point of view, four pillars are fundamental: technology, human resources, a conducive culture, and a favorable external environment. 

Combining technology with the human factor is what really makes innovation emerge successfully in any market environment or circumstance. It becomes part of the mindset of decision-makers, becoming necessary to cope with the pace driven by new data, analytical capabilities and driving industries at unprecedented rates.

However, creative thinking by itself doesn't produce feasible solutions. Therefore, innovation must be done with specific purposes, such as building trust, transparency, impartial selection, and a customer-centric mindset.

Nine out of 10 executives state innovation will drive a greater share of companies’ organic revenue growth.

Also, eight out of 10 say that innovation strategies implemented by companies have achieved successful results. 

On the other hand, failure to innovate will result in complacency and overconfidence that will end up giving an advantage to the competition, thus causing financial and talent damage.

Innovation: Path to a Brighter Future

A company that wishes to remain relevant and sustainable for the long term must constantly innovate. Otherwise, competitors and new players will transform and surpass them.

Innovation can arise in three domains. First, product innovation: generating new ideas, or changing existing solutions, to gain more market share and increase sales and profits.

The second is process innovation, which, simply put, is doing the same thing but more efficiently. If it used to take three steps to make a product, with new technology, it can be done in a single step, improving production, lowering costs and saving time, effort and resources.

Finally, the third major type of innovation involves a radical change in the business model. When a company innovates in one of the three areas, it generates a positive effect that boosts economic development and benefits the ecosystem.

Such is the importance of this ecosystem that there are reports that highlight the most business-friendly cities and compare the pros and cons of each. This is the case with the Global Business Cities 2025. New York, Paris, Tokyo, Singapore, Shanghai and London are at the top of this list. The common denominator among all these cities is that they attract investment, talent and, therefore, innovation.

Suppliers an Integral Part of Business

Innovation triggers different needs in the chain of suppliers, business partners, and customers as if it were a virtuous circle.

How relevant are suppliers? At the end of 2021, 60.9 percent of companies operating in the country will use supplier financing, almost double the amount granted by commercial banks.

Suppliers are an integral part of any business, so having the best allies makes all the difference. Platform-based innovation will help to select the most appropriate companies to work with in order to understand the sector and mitigate risks. 

As mentioned above, micro-level businesses evolve thanks to their possession of the aforementioned pillars: technology, human talent, innovation culture, and the fact that it is a company that eventually contributes to economic development.

Simply put, an innovative company is not only viable, profitable, sustainable and valuable, but it also has a very powerful and multiplier effect on its immediate environment of investors, customers, suppliers and employees. The change is so deep that it has a positive impact on the ecosystem, driving its economic development and that of the communities where it operates.

Photo by:   Sergio Hernández