Tuesday, August 18, 2009

Do you need an innovation strategy?

I've thought for a while that it would be great to get a number of bloggers to write about the same topic, which would allow readers to have different perspectives about an innovation topic from noted (well, at least some of us are) experts in the field of innovation. Braden Kelley asked us to write about the need or importance of innovation strategy, so here's my response to his request.

First, let's set out that there is really no such thing as innovation strategy. Strategy is about setting out the vision and goals for your company, and what your long term objectives are. Most firms set out some vaguely worded strategy which does not lock them in too much, and which they ignore and settle into a comfortable middle ground. Innovation, on the other hand, is about finding new opportunities or new markets and creating new products, services or business models. Innovation should be in support of, and an enabler to, corporate strategy. There is no innovation strategy.

Now, once strategic goals are established, a firm should begin to ask itself, "How can innovation accelerate our goals and help us achieve differentiation or discover new markets or needs?" If you want to think of an innovation strategy, think of it as deciding whether the firm desires incremental or disruptive innovation, or open or closed innovation, or how much disruption or change the firm expects or can bear. Too many firms start innovation efforts without defining these parameters (what we call the facets of innovation) and trying to work with the project teams in this lack of definition is like watching tap dancers in a mine field. They rest very comfortably on ground that appears to be safe, and are completely unwilling to risk another step unless pushed.

What do successful firms do in regards to innovation and strategy? They define very clearly what they will and won't do, and what they expect from innovation and from the firm in general, then they empower (I hate that word) the team to do its best. Note that Apple (top down innovators usually in skunkworks) and Gore (bottom up innovators based on core capabilities) both follow this model and have radically different organizations, but expect people within the firm to understand the strategy and to innovate to achieve the strategic goals.

Closing doors by clearly defining your strategic goals is even more important than opening them. Too many firms are afraid to place clear limits and expectations on an innovation team, and so the team flounders from one seemingly valuable opportunity to another. Most firms fail to enunciate their strategies clearly and that hampers everyday operations, and it creates difficult distractions where innovation is concerned. Clarity is called for when the team is doing new, or difficult, or risky things. Leaving the team without an understanding of its mission and how the innovation efforts supports core business strategies or needs is almost criminal, and will usually result in failure.

So, the takeaway is this: innovation is an ENABLER to corporate strategy, and what innovation needs to succeed is clarity about what is important to the business and what risks and scope are offered by the management team for any innovation to succeed.
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posted by Jeffrey Phillips at 5:36 AM


Anonymous Anonymous said...

Interesting, thank you!

I would tend to disagree with your characterization that strategy is about setting goals. Strategy is WHAT YOU DO to achieve your goals.

Therefore, an innovation strategy would simply be the intentional methods and processes whereby you seek to improve the level of innovation and intrapreneurship in your organization. IMHO.

6:01 AM  
Blogger Alex said...

I agree, I think the post is very clear. But in practice it is very difficult to establish what should and should not be done because "Innovation is not predictable". It's often happens in surprising. A tip that I find important, is to create initiatives that can work into evolutionary ideas, disruptive, and imaginative, this can assure it can create good things and sometimes fantastic.

7:05 AM  
Anonymous Mike W. said...

Mr. Phillips is correct in his characterization of strategy. WHAT YOU DO is actually the tactics side of things. Remember: "Strategy without tactics is futile; tactics without strategy is fatal." -Sun Tzu

Where I would disagree, however, is with the idea of setting parameters at the beginning of the innovation process. All innovation efforts must be allowed, at first, to be "disruptive." The parameters come later on, in the convergent phase. When limits are placed at the beginning, this breeds hesitation and fear in individual team members. As we all know, fear is the arch enemy of innovation.

Wild, disruptive ideas are LATER whittled into something workable.
"It is easier to tame a wild cat than to make a kitten roar." - Dr. Bob Eckert

11:00 AM  
Anonymous Anonymous said...

I think you are redefining the term strategy. Your strategy is your action plan... it is what you decide to do from your set of available options in order to achieve your mission/goal. It is NOT about goal setting.


6:59 AM  
Anonymous David Locke said...

The Shepard leader enables, rather than empowers. It's not about power. It's about the ability to get things done, which requires getting the resource needed, and getting the obstacles out of the way.

Some companies are innovative. It expends to the way the company is organized, its cost structure, its policy structure, so yes, innovation is the strategy. Still, there are other companies, typically the cash cow milkers who innovated long ago and now just optimize their income with a company structured in a manner that prevents innovation. For those companies, particularly in a recession, an innovation strategy is critical.

When we look at the heros of industry: Morgan, Carnegie, Sloan, Ford,.... They created something. They did the innovation. Once they moved on, the strategy was the adoption of technology of management. That technology converged well away from innovation. The problems that that technology has with discontinuous innovation centers on that convergence of management science into a mythic orthodoxy you could mistake for a religion. It will take management innovation, and yes, an innovation strategy to escape the errors orthodoxy. Orthodoxy kill innovation.

When you read that innovation failed at company X, it was the management of company X, not the underlying idea that failed. Blaming the innovation gets old fast.

8:07 AM  
Anonymous Greg Kohler said...

Hi Jeffery, you wrote "Too many firms are afraid to place clear limits and expectations on an innovation team, and so the team flounders from one seemingly valuable opportunity to another."

I really appreciate you putting that into words. This is true for biggest corporation or the individual that wants to accomplish a challenging goal. Without a defined strategy a team or individual can't even know what their target is.

5:26 AM  
Anonymous Anonymous said...

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Blogger felicity said...

I think your blog is really insightful...
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7:12 PM  

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