The risks of a lack of innovation in companies

When you say no to innovation, you say no to the opportunity to achieve better results for your business.

It's true that every change creates risks, and at the business level, this fear is understandable. As a director or business owner, it's normal to consider the factors that could affect your company.

However, choosing not to be part of the technological change currently engulfing us can bring more significant losses to your organization. The risks of not innovating out of fear of failure can be more damaging than implementing new processes.

Many companies today continue to carry out their procedures using outdated, limited-function systems that create more obstacles than benefits.

Some people prefer the devil they know to the devil they don't know, choosing to stick with the same old thing rather than take a risk and try something innovative, for fear that it won't work and that it will lead to failure.

The irony is that turning their backs on technological innovation may be slowly leading them to fall behind and, consequently, to decline. Nokia, Blockbuster, and Kodak are some of the best-known examples of companies that have declined due to a lack of innovation, a lack of daring to change their traditional work models.

Many factors influence the success or failure of an organization, but a clear example of the consequences of not innovating is found in a business's productivity.

A case in point is Mexico, where the main productivity problem for eight out of 10 companies located there is a lack of innovation, according to data presented by José Luis Solleiro, an expert in Innovation Management at the National Autonomous University of Mexico (UNAM).

On the other hand, companies with a culture of innovation are 32% more productive, reduce the risk of employee turnover by 14%, and can increase their annual revenue fivefold, according to the study " Innovation Culture Model ," prepared in 2019 by the consulting firm Great Place to Work.

But that's not all. What else can your business lose when you turn your back on change for fear of taking risks?

1. Spending more money than projected

Losses and financial losses are among the main risks of not investing in innovation in a company. If every time a need arises in one of your organizational areas, you invest in isolated systems that put out small fires, you will always spend more money than projected.

The option of purchasing a system with limited features for each department—one system for accounting, another for sales, yet another for human resources, etc.—leads you to risk exceeding your budget just to solve minor problems, and worse yet, only temporarily.

The solution that can bring the most benefits to your business could be to invest in more comprehensive, innovative programs that offer long-term solutions, such as a cloud-based ERP system.

2. More time spent on the same tasks

If you're worried about investing in better tools that make your business's daily tasks easier—perhaps because you don't know how they work or think they might fail—but aren't worried about paying overtime for excess work, you're missing out on many opportunities to grow your business.

When your employees spend hours performing repetitive tasks, you waste skills that could be used to develop new, more profitable projects for your business. And all this because you keep them busy doing tasks that could easily be replaced by comprehensive business software.

A business management system can help you save time and money, and use human resources more intelligently.

3. Clients. Yes, you can lose your clients.

It's normal to do everything possible to get more clients for your company, but what about the ones you already have in your business portfolio? Are they receiving adequate follow-up? Do you know if they are satisfied with the treatment and service they receive?

Selling for the sake of selling doesn't lead to long-term success. A loyal, satisfied customer is your best selling point, and a system with limited features will hardly help you cultivate a smart acquisition and retention process.

A program has the power to improve or completely ruin a customer's experience, so implementing innovative systems is more of an investment than an expense.

If fear of failure is the barrier that keeps your company from innovation today, taking that risk may be much smaller than the ones you take every day by settling for outdated solutions.

Innovation isn't just about putting out-of-the-box ideas into practice; it starts with a shift in mindset and the implementation of better systems.

Technology gives you the opportunity to choose more and better options for your business. Today, the greatest risk of innovation is not being part of it.

With over 20 years of experience in the market, Oracle NetSuite is a reliable, adaptable, and rapidly deployable cloud solution that empowers businesses with digital transformation.

“An entrepreneur sees opportunities where others only see problems.”

Michael Gerber