Why You Need an Innovation Strategy
Innovation Drives Progress within OrganisationsInnovation can be small improvements or big changes that create new things. It can disrupt the market. Innovation can focus on brands like Virgin and Disney, or on processes like Zara. It can also be a combination of both, like Apple. What we know from our vast experience in the corporate, government and start-up worlds, is that innovation, in all its shapes and sizes, is crucial for growth and for delivering greater value to the customer. COVID19 has shown us a corollary to the importance of innovation is that speed of implementation is vital. Those organisations which can continually assess their value proposition and their business model, pivoting when necessary, will survive, even flourish. Those without innovation strategy and drive will wither. Perhaps not immediately. But often gradually, then quickly. And, in hindsight, inevitably.
The 5 Elements of an Innovation StrategyNo doubt your organisation has an HR strategy and a marketing strategy. Most likely, if commercial, it has a sales strategy. The likelihood of a finance strategy is very high, with budgets and projections into the future. But do you have an innovation strategy? If you don’t, then you cannot expect your organisation to survive and flourish in an age of change.
Here are the 5 elements your organisation needs to highlight in its innovation strategy:
Customer CentricityThe first step of any innovation strategy is really putting the customer at the centre of the organisation. Most organisations talk about this, but few have a strategy to do so. We very often work with organisations that send out surveys or measure NPS scores. If asked about their customers’ experience with the organisation, one often hears “Well, we get few complaints so it must be working”. The customers are nowhere near the centre unless the organisation makes it their business to put them there. Smart organisations today are investing in meaningful customer research using professionals to carry out the engagement. This research is followed up by ideation sessions to distil the insights and brainstorm on ideas for both enhancing/finessing the customer journey and creating a new journey that will absolutely delight the customer.
Rapid PrototypingOnce opportunities present themselves, innovative organisations will be nimble to rapidly produce prototypes and running cheap, fast experiments to validate/invalidate the opportunities. Gone are the days of a three-year business plan that may or may not work. The key here is to foster a culture with a mindset disposed to run short, meaningful experiments, using a whole variety of techniques such as landing pages, social media, interviews and mock-ups. Meaningful metrics have to be established upfront. Tools need to be deployed to efficiently run these innovation experiments. There are three outcomes from such experimentation: Persevere, Perish or Pivot. These outcomes trigger further experiments and lead to the formulation of innovative business models. Measuring innovation is essential for it to be effective.
Building a Culture of InnovationA true and meaningful culture of innovation is essential for any innovation strategy to work effectively. Elements of an innovation culture include trust, rewards and recognition, and a “yes and” approach to ideas not a “yes but” approach”. Building a culture of innovation takes training. The board and the senior leadership team need to buy into the idea of culture change, and their commitment is greatly bolstered by exposure to innovation experts in workshops. Within the organisation, innovation champions need to be nominated or volunteer themselves to form a “guiding coalition”. This team needs a 3-day boot camp to learn about customer focus, quick testing, and changing the organisation’s culture. Finally, the entire organisation needs to be taken through a process of innovation training, demonstrating to them how their organisation is changing from a traditional organisation to one with an innovation focus and a clear innovation strategy.
Capturing and Acting on IdeasResearch has shown that the best ideas come from the employees and the customers. So how do you capture and act on those ideas for new products and services? Many organisations set up electronic “suggestion boxes” where they ask employees to post their ideas. But such mechanisms usually fail to support a culture of innovation. They fail for a number of reasons. First, there is no time structure set or stated or problem to be solved, and there will often be an early flurry of random ideas that gives way to a trickle. Second, there is no well-defined process for evaluating and nurturing ideas, and ideas then languish in the process, resulting in employee cynicism: “See, no-one takes us seriously”. And third, there is no funding to help incubate the idea. Executives often assert that funding will be available if the idea merits it. In our experience, the funding rarely materialises. Idea-to-execution strategies work only if there is a recognised process of consideration and funding. We have been managing many such idea-to-execution processes over the past fifteen years, and we know what works, and what does not. While everyone gets excited about capturing the ideas, real effort needs to go into the backend, the funding, the internal comms, and the pipeline management.
LeadershipNone of the above four elements will succeed unless the leadership of the organisation embraces a culture of business innovation and the will to walk-the-talk and encourage innovation across the entire organisation. There are simple and effective ways in which this can be achieved. Strong leadership that puts the customer first not just in name, but in action, is required. Rewarding someone at a company meeting when they have attempted something new even though it has failed changes the game. Over the past fifteen years we have been able to distil what can make a difference in each element of a culture of innovation and the role of leadership within an innovation strategy.
Bringing Innovation into your companyIt takes years to truly transform your organisation by embedding innovation into the culture. Success might actually start with a one-day facilitation, but we encourage all companies to go further and look to achieve your organisational objectives using design thinking. Creating real positive business impact through design led projects is the best path towards organisational adoption. The next time Innovation Strategy is part of your organisation to-do list, look for your largest problems and start talking about how placing the customer at the centre of the organisation can help you solve these problems. It’s only when you and your organisation’s leaders see real impact from your customer’s lens that you will understand the real possibilities of innovation. Developing an innovation strategy is not difficult for an organisation when the insights and guidance of The Strategy Group is on hand to assist. We have extensive experience in all the essential elements of creating an innovative organisation. Many of our engagements start small – and that’s great ,as they enable us to demonstrate tangible benefits quickly With many of our clients we are their long-term strategic partner. With some, there is a specific goal – to validate a new venture, to assist in spinning out a startup, to train the leadership and staff in innovative organisational culture, to uncovering the customer journey so that our client can work out how to delight their own customers. We pride ourselves in tailoring our skills to each clients’ need, specific or organisation-wide, as we help them develop the innovation strategy that is crucial for any organisation to survive and flourish in an age of disruptive change.
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