Everyone is always talking about innovation. But why is it so important?

In business terms, innovation is defined as “the process of translating an idea or invention into a good or service that creates value or for which customers will pay.” The reality is, if you are not innovating, your competitors are.

According to the Nomura Institute, we have entered into the Creative Era, meaning that the “speed of innovation is the only source of sustainable advantage.” We often hear the phrase, “if it’s not broke, don’t fix it.” However, this does apply to business. You only succeed when you are offering a product or service that your competitors cannot provide. And when your competitors figure out how to offer the product or service that you provide, then you enter into the commodity realm, in which the only way you can win is by lowering your prices.

Take for example BuzzFeed, ranked by Fast Company as 2016’s most innovative company. Founded in 2006, BuzzFeed is an internet media company that “has grown to include 11 editions–from Australia to Mexico–and has raised $300 million in capital.” The company is known for its news posts, quizzes and “listicles,” but has evolved into the production of “deep political coverage, personal and critical essays, and breaking and in-depth global news.” According to Fast Company, BuzzFeed’s ability to reinvent itself is “almost protean.”

So the question remains, how do you innovate? By keeping your finger on the pulse of your industry, in other words, use market research. Understanding the pain points of your customers, the actions of your competitors, and advances in the technological inputs and outputs of your industry are critical to evaluating what your market needs. How do you plan to innovate?