Innovation: buzzword, or the key to success?

Few words divide opinion - certainly in the business world - as much as 'innovation'.

Is it the key to responding to change and uncovering new opportunities - and therefore securing a competitive advantage? Or has it become a buzzword that's not only lost its meaning, but puts undue pressure on entrepreneurs and small business owners?

First, let's explore its definition - which, in a recent chat between Enterprise Nation founder Emma Jones and Plus X co-CEO Mat Hunter, was settled on. Innovation is about getting ideas to market. The source of new ideas, they said, was better serving people's needs.

So, if your business is serving people's needs in a new way, you're an innovator. And, in a crowded marketplace, this is arguably pretty important if you want to get noticed.

Or is it?

Do start-ups have to be innovative?

In an article for Forbes in 2015, PGi founder and CEO Boland Jones wrote that start-ups "are challenged simply by the pressures of our economic climate to innovate or die. It's enough to drive a budding entrepreneur insane". Why, he argued, should they have to create the next industry-shaping idea?

Sergii Shanin, CEO of eTeam, went so far to say that start-ups "shouldn't be innovative". Writing on the company's blog, he said they "don't have to invent new technology, they [can] bring fresh approaches to solving problems with existing technology".

These "fresh approaches", though, arguably fall within Emma and Mat's definition. A fresh approach constitutes a new idea - one that can go to market and succeed. Being innovative, then, doesn't necessarily mean creating entirely new concepts.

How can small businesses innovate?

The short answer: by serving people's needs via a new product or fresh approach. But this has one glaring omission: the future. How will people's needs change in the next five years? The next decade?

As Emma and Mat said, understanding your customer is key. Bear in mind, though, that they can't necessarily see how their needs will evolve. As Henry Ford may or may not have mooted: "If I had asked people what they wanted, they would have said faster horses."

No one can predict the future, but there are clues as to how things are changing - looking at consumer lifestyle shifts, for example, or seeing how other industries are tackling pressing challenges.

Small businesses are in a fortunate position. They're more agile, adaptable and, arguably, ambitious. If successful large businesses excel at optimising their models, successful small ones can excel at innovating.

A great resource is McKinsey & Company's eight essentials of innovation - a multi-year study that identifies the key attributes necessary to be innovative. It's really for larger companies, but there are some great takeaways. Like, for example:

• Look for insights by methodically and systematically scrutinising three areas: a valuable problem to solve, a technology that enables a solution, and a business model that generates money from it

• Companies thrive by testing their promising ideas with customers early in the process, before internal forces impose modifications that blur the original value proposition

• Resources and capabilities must be marshalled to make sure a new product or service can be delivered quickly at the desired volume and quality

So innovation hasn't lost its meaning?

The pressure to be seen as innovative, to sound innovative, has undoubtedly led to the word being overused and misapplied. This may have watered down its meaning, but its core definition remains. Real innovation exists - you may just have to look a little harder to find it.