Thursday, February 25, 2010

Innovation and Strategic Intent

Gary Hamel isn't an innovation "expert", he's a strategy and management expert, which you'd know if you've read Competing for the Future or The Future of Management.  However, since there's a significant amount of overlap between innovation and strategy, you'll find that Gary has a lot to say about innovation.  If you haven't read The Future of Management, go out and get a copy, read it, and then consider your options.  But this post didn't come to praise Gary, it came to bury poor strategic management.

In his earlier book, Competing for the Future, Gary suggests that every firm needs a clearly communicated Strategic Intent.  When we at OVO train our clients on the relationships between strategy and innovation, we borrow heavily from Gary in this case.  Here's Gary's definition of "Strategic Intent":

An ambitious and compelling dream which provides emotional and intellectual energy for the company and defines the journey to the future.
Strategic intent is your firm's ability to create a clear and compelling statement or vision for itself, and to communicate that vision to its employees, shareholders and most importantly, its customers.  When anyone in a firm asks "why are we here", it should be easy to answer.  Does your firm have a compelling dream that provides emotional energy and defines its journey to the future?  If not, how can you possibly expect to innovate?

We at OVO believe that firms innovate best when they have a clear strategic intent, and when they innovate within that strategic intent.  Good examples here are, unfortunately, Apple and Google.  I say unfortunately because these are two of examples always used about innovation, but in this case they offer beneficial lessons about what to do, and what not to do.  Apple's strategic intent is based on user experience.  Apple didn't invent the MP-3 player, or the cell phone.  It simply improved on those products and amplified the user experience.  However, Apple's failures are insightful.  The Newton and the Lisa were two examples where Apple failed to innovate around the customer experience.  Firms innovate best when they innovate within the context of their strategic intent.  Hutch Carpenter explores some of these successes and failures at Apple and Google in a good post.

This is true because a well communicated strategic intent helps customers and business partners understand your value proposition.  Ideas that augment and extend your value proposition are more easily consumed, while ideas that violate or seem unaligned to your value proposition are difficult for employees to understand and difficult for consumers to accept.

So, there are two important possible failures when innovating when it comes to strategic intent.  The first is the failure to define a strategic intent for your business, but that's not really an innovation failure.  You may think many firms have this, but few firms have a clear, concise description of their strategic intent.  Most prefer to leave the issue a bit ambiguous, which makes innovation difficult.

The second failure is having a strategic intent and working on innovations that dramatically ignore or violate your strategic intent.  If, like Apple, your value proposition is around user experience, then your best innovation opportunities lie in extending user experience.  And where Apple has been successful, that's exactly what they've done.  And when they've failed, many root causes of the failure can be linked back to ignoring Apple's strategic intent.
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posted by Jeffrey Phillips at 5:51 AM


Anonymous Jana Görs said...

Hi Jeffrey,

thanks for your article. :-)

We often experience the lack of an innovation strategy and even a strategy at all.

Therefore the companies have to overcome many obstacles like motivation, wrong ideas, inefficiency ...

It could be so easy. ;-)

Do you have a good B2B / industry example for innovation strategy?


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