How to Define a Great Innovation Strategy
By Jeffrey Baumgartner
So, why do you want to innovate? The answer to this should be your organisation's innovation strategy in a nutshell.
Good answers to this question include:
- "Because we want to release a steady stream of new products that define the cutting edge of our industry."
- "Because our company wants to provide 100% renewable energy to the entire country."
- "Because I want to provide the very best innovation methodologies to global organisations like yours."
If you cannot provide a single, concise answer to the question, it suggests that your company either does not have an innovation strategy or the strategy is too vague. In this case, it is vital that you rethink your innovation strategy.
Even if you do have a strategy, it is worthwhile revisiting it every couple of years to see if it is still relevant. You do not need me to tell you the business world changes quickly these days.
Here are some guidelines for defining your company's innovation strategy.
Align with Strategic Vision
Your reason to innovate should always be in line with strategic vision. Indeed, your innovation strategy statement will likely be very similar to your strategic vision statement. After all, innovation is essentially a tool to follow your vision. Unfortunately, a lot of organisations have vague, generic strategic visions, like "providing the best products at the lowest prices" − as if their competitors strive to provide mediocre products at ridiculous prices.
If your company does not have a concise vision statement, you should probably put the innovation strategy aside and work on that vision statement. However, assuming you do have a vision statement, you may find it is virtually an innovation strategy statement as well.
If the vision statement is fluffy, you will probably need to de-fluff it and make it more precise. For example, if your vision statement is to "Build the best cars in America" you will need to define "best" rather better. Does "best" refer to quality, engineering excellence, comfy seats or something else?
Your corporate values must also play a part in your innovation strategy. Does your company employ only local craftspeople? If so, outsourcing production to a developing country in order to reduce costs should never be a part of your innovation. Does your organisation strive for environmental sustainability? If so, your innovation strategy needs to reflect that.
Corporate values define the nature of your organisation and upholding them should be a matter of pride. Moreover, keeping values a key part of the innovation strategy discourages overly ambitious managers from crossing the line of ethical behaviour in order to pursue innovation-fueled growth.
Last, but not least, your innovation strategy needs to reflect the reality of your operations. You cannot expect to build cutting edge products that define the state of art in your industry if you are stingy with your research and development budget or if senior management will not approve risky new product ideas. You cannot expect to deliver the ultimate in social media marketing if your Twitter feed is boring and your Facebook page is full of empty slogans.
Unfortunately, the reality of your operations is often a major stumbling block to defining and succeeding with a cool innovation strategy. If this is the case in your organisation, you have three choices in declining order of desirability.
Change the reality. Invest in research and development or buy a competitor with a strong research and development vision. Defang approval committees or, better still, defenestrate them. Do what needs to be done to get reality behind your innovation dream; or
Tone down your innovation strategy so it fits with reality. If you cannot deliver cutting edge products in your sector, let another company do that and focus on something more realistic, like more affordable products using tried and tested technologies; or
Ignore reality, define an innovation strategy that is super sexy and blame others when it does not work. (I do not recommend this option)
With this information, it should be an easy matter to draft an innovation strategy statement for your organisation. Do it. Get it approved and communicate it across the organisation and to all stakeholders.
An innovation strategy statement will make it easy to define actions you need to take in order to pursue innovation successfully in your organisation. It also provides a ready means for evaluating ideas that colleagues propose.
Best of all, once you have an innovation strategy statement, you can stop thinking about the word "innovation", which gets bandied about way too much these days, and start focusing on the words in that statement.
Innovation Strategy Facilitation
If you would like a little help defining an innovation strategy statement, I would be delighted to facilitate a workshop to define a realistic innovation strategy as well as (optionally) an action plan for communicating it and defining innovation actions. Contact me and let's have a confidential discussion.
Want to Discuss This With Me?
If you enjoyed this article, please share it with your followers:
Questions you should ask when an innovative project fails
You can learn a lot from the failure of an innovative project, but you need to ask the right questions. Here are those questions. -- Read the article...