Tuesday, 23 March 2021

Creating an innovation strategy

Written by
Creating an innovation strategy

Nothing propels a company more quickly than innovation, breaking barriers and thinking outside the box. Nurturing a culture that allows for innovation is the key to success.

Innovation is critically important when it comes to your business strategy. It can assist in increased business growth, reducing costs, eliminating competition and even creating new markets.

What is an innovation strategy? 

An innovation strategy is a commitment to a common innovation mission and a structured set of activities which aim to support the future growth of your business. 

Good strategies are simple, clear and easily understood and should promote alignment among the different departments in a business, offer clear objectives and priorities, and help focus efforts around these goals.  

An innovation strategy can help your business in the following ways: 

  • Improve existing products and services
  • Developing new products and services
  • Optimising revenue
  • Optimising costs  

Your strategy should address how innovation creates value for potential clients and customers and how the company will share in that value. 

Creating an innovation system will dictate how the company searches for novel solutions to problems, how ideas are translated into business concepts and product designs and how to select innovation projects to pursue and develop. 

Osidon offers steps for creating an innovation strategy to help you achieve your goals. 

Define your goals and approach to innovation

As with any other strategy, the planning process of your innovation strategy starts with defining your objectives, purpose and content.  

Ask yourself what you want to achieve through innovation. Think about your long-term business goals and the things that are most likely to drive your business forward.  

In determining your innovation strategy, you must consider the following: 

  • Get buy-in from leadership and stakeholders
  • Define your growth ambitions
  • Determine your plan to implement and manage innovation 

Know your market

Make sure you define the market you’re operating in and the segment you’re offering value for. It is critical that you know what is happening in the market.  

To be able to innovate and to respond to your customers’ needs, you should listen and understand what your customers really want. 

Define your value proposition

Your company’s unique competitive advantage and value proposition should dictate the innovation strategy you pursue. It is important that you identify both the barriers and enablers for innovation in your business.  

Because the purpose of innovation is to create competitive advantage, you should focus on creating value that either saves your customers money and time or makes them willing to pay more for your offering, provides larger societal benefit, makes your product perform better or more convenient to use, or becomes more durable and affordable compared to the previous product and others on the market. 

There is no one system that fits all companies equally well or works under all circumstances. There is nothing wrong with learning from others, but don’t think that what works for one business is necessarily going to work for yours.  

Create your own innovative systems and methods

In order to execute your innovation strategy in a scalable and integrated manner, you should determine what systems need to be in place. This includes research and development, especially as it relates to technology, training and education in innovation, as well as the production, marketing and finance systems in your business. 

You also need to determine the set of capabilities that need to be in place, consider culture, research and development, knowledge and skills. The ability to connect and develop these capabilities is key to innovation. 

Without a clear innovation strategy, different departments can wind up pursuing conflicting priorities. Make sure you keep your team in the loop and integrate and align their various perspectives around common priorities. Providing clear communication, direction and guidance can help you to make innovation a part of your team’s daily routine. 

Implement your innovation strategy

An innovation strategy is only successful when it is set in motion. After you have chosen your strategic approach to innovation and compared all the most important elements related to it, you have to roll up your sleeves and get started. Make sure you strive for continual innovation and systematic improvement, not instant perfection.  

Assess performance and adapt accordingly

To determine how your innovation strategy works in practice, you should measure your performance regularly and systematically. Select the optimal metrics and set the right expectations to monitor your progress. 

It’s okay to fail as long as you learn from your mistakes and correct them as quickly as possible. 

As a leader, you must recognise that the strategy, like the process of innovation itself, requires continual experimentation, learning and adaptation to achieve better outcomes in the future.