When developing a business, you can never stop thinking about innovation. For many business owners this is an intimidating notion – that the status quo, especially when the business is thriving, just isn’t good enough.

There are many examples of once successful businesses that no longer exist because they didn’t believe they were vulnerable, and therefore refused to innovate.

Remember Eaton’s? This retail institution couldn’t believe shifting consumer trends and competitors like Wal-Mart would adversely affect their business. And where are they now?

Many business owners operate under the “if it ain’t broke, don’t fix it” philosophy. They believe making changes to their business, especially if things are going well, is risky.

But the opposite is in fact true. Peter Drucker, widely regarded as the “father” of modern management, stated: “defending yesterday - that is, not innovating – is far more risky than making tomorrow”. Because of the very nature of the way a capitalistic system works, as soon as something works, it’s obsolete.

To be truly market driven, which is based on an “outside-in” approach, a business must be committed to innovation, which may be driven by factors such as:

• changes in consumers, technology and competition,

• new knowledge or ideas,

• emerging opportunities.

Innovation shouldn’t be limited to your products or services. Any number of areas can be innovated, resulting in a significant impact on business results. They include:

• Service Delivery: Why do people spend up to 10 times more to have a package delivered by FedEx versus the post office? Reliable service.

• Marketing: When American Airlines first introduced a Frequent Flyer Program, it had a tremendous impact on revenues and revolutionized the airline industry.

• Technology: There are more than a few on-line gambling billionaires who realized they could combine an emerging technology, the Internet, with man’s insatiable appetite for gaming.

• Product Packaging: Dutch Boy developed a paint can with a spout that doesn’t make a mess when you pour. The paint itself is the same. Their sales increased.

• Customer Service Strategies: Enterprise Rental Car “will pick you up”. Their customer service strategy has made them unique and increased their market share.

• Guarantees: Great companies stand behind what they do. The Asian automakers continue to push the standard for quality, and this is reflected in their warranty policies. The Big Three American auto makers continue losing market share to the Asian manufacturers.

• Business Processes: Wal-Mart is legendary for their logistics expertise. It’s what makes them dominant, even though they carry the same products as other mass merchandise retailers.