What Is INNOVATION STRATEGY and How Does It Work?
An organization’s strategy is critical to both its long-term and short-term sustainability. Its strategy outlines how it will accomplish its mission as well as progress towards the vision of its leadership. The organization’s strategy also supports how things will get done within the organization, specifically how innovation will be achieved. Having an innovation strategy is particularly valuable for organizations that want to approach innovation in a systematic way.
STRATEGY is defined as a plan of action or policy designed to achieve a major overall aim. In the diagram below, above strategy is the method by which a business organizes its guiding principles of what, who, how, and why (Watkins, 2007) .
Many believe innovation can be represented by two different ends of an innovative continuum - radical and incremental - but, in fact, these categorizations reflect steady states that could have had their conceptual beginning from a myriad of sources.
RADICAL innovation, also referred to as explorative, changes the way industry and businesses within its ecosystem interact with its customers and how success is measured. Ultimately, it changes the way the competitive environment maneuvers.
INCREMENTAL innovation, also referred to as exploitive, does not quite evoke the same response as radical. Fundamentally, it changes how functional tasks are done on a daily basis with incremental improvements on efficiency and , cost saving, as well as customer and employee engagement. Radical innovation is more disruptive in nature and is bent toward creating new clients, markets, and industries.
The ideal innovation strategy will include both categories of innovation as a comprehensive approach to establishing, cultivating, or bolstering an innovative culture. There are a number of popular innovation strategies available to business leaders:
The determinants of the right innovation strategy depends on the resources that can be invested into the strategic approaches. With less resources, leaders can rely on more creative approaches and leverage the talents of current workforce. While resources are important, a more determining factor can be the leaders’ innovative intent as a key initiator of the strategy application.
INNOVATIVE INTENT is described by Bodley-Scott (2011) as the expected consequence of a culture that supports a business strategy that communicated throughout the organization transparent and impactful objectives. Check out this infographic for more innovation strategies.
“The proof is in the pudding" is a phrase that comes to mind when one thinks of how to measure the impact of an innovation strategy and the results of an approach that falls within the strategy.
EXECUTION VS STRATEGY are different points on the same spectrum. Like the thought that precedes the action, the strategy precedes the execution in business environments. Particularly important in the discussion of execution is the quality or the effectiveness of execution as it relates to the firm's strategy. Managers need to be concerned with the degrees of separation between their strategy and execution to assess its effectiveness. A robust innovation strategy is greatly amplified by eliminating gaps in work flows and assets as well as reducing degrees of separation.
An innovation strategy is substantially important to the growth of any organization. It allows for leadership to highlight the need for continuous financial performance improvement. Additionally, employees are engaged in the execution of the innovation strategy through the value co-creation process with clients. An innovation strategy collects the innovative intent of leadership and summarizes the target areas that managers need to execute to develop and operate a consistent pipeline of innovations.
Considering the integral nature of innovation strategy, careful planning is vital and critical. Our expertise encompasses both knowledge and experience in innovation strategies for enhanced results. Contact us for a free and friendly chat on how we can help your company leverage its resources for an effective innovation strategy.
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Bodley-Scott, S. (2011). Linking innovation to strategy. Training Journal, 64-66. Retrieved from https://www.trainingjournal.com/
Watkins, M. D. (2007, September 10). Demystifying Strategy: The What, Who, How, and Why. Harvard Business Review. Retrieved from hbr.org