What is an innovation strategy? An innovation strategy is a plan you set in place to initiate and align policies and behaviors. These must individually and together, move you in the direction of a specific innovation goal.
Think of it like this, you wouldn’t start a game of Risk without at least a vague strategy of how to take over and hold Asia. And you wouldn’t attend the family Christmas dinner without a well-thought-out strategy for how to avoid sitting next to your slightly alcoholic and vastly inappropriate aunt Bea.
Research shows that the reason innovation fails is not a lack of execution but a disconnect of core-business and innovation activities.
So why is it that far too often companies venture into innovation with little to no idea of what they’re trying to achieve? How come that surprisingly few managers know what a successful innovation project would even look like to them?
Actually, research shows that the reason innovation fails is not a lack of execution but a disconnect of core-business and innovation activities.
While many companies are good at consolidating their other activities into comprehensive and well-thought-out strategies, strategic innovation is lagging. Part of the answer has to do with a common notion that innovation is a creative process and as such is supposed to be messy and hard to control.
That, my new-found innovation friend in armor, is a gross misunderstanding, and here’s why:
Why are You Destroying Your Innovation Efforts Without a Strategy?
In these times, technological advancements are claimed to be ever-changing or even exponential, we cannot even begin to guess at what the new Netflix, Uber or Airbnb will be. And with a state of mind, not unlike the 1800 California gold-fever, we are all sifting through different startups and technologies in the hopes of uncovering a unicorn or the key to disruption.
For many companies, this has resulted in a frantic chase on buzzwords such as AI, machine learning and IoT.
In our excitement and fear of disruption, we heedlessly throw ourselves into projects involving foosball tables and AI,
Sadly, many of these otherwise powerful technologies fail in their application. Oftentimes, either due to a lack of goals and overarching innovation strategies. A friend of Ideanote works for a Silicon Valley tech giant. She once recollected how companies would phone her asking her to come to talk about AI. Most conversations would go like this:
Manager: Can you come to give a talk about AI?
Friend: Sure, what kind of AI are you interested in?
Manager: Well, just something about AI... You know
Friend: Well, there are many different angles and ways to apply AI, what are you pursuing with AI?
In other words, in our excitement and fear of disruption, we heedlessly throw ourselves into projects involving foosball tables and AI, because that’s what the cool kids do. With equally big dreams and budgets, we brave the waters of radical innovation without a map or a compass.
Don't Worry, It's Not Just You...
This transgression is not exclusive to the more traditional corporations; Facebook, commonly known as an innovative and forward-thinking company, is, in fact, guilty of such an innovation gaff. Shortly after its release in 2017, Facebook was forced to scale back its AI-powered messenger bot. In an attempt to keep up with forward-thinking live-chat customer services such as Drift, Zendesk, and Intercom, the tech giant rushed to release its newest B2B addition. However, it didn’t go as planned. In fact, the bot failed in 70% of all instances of customer requests – even the simple ones.
When there is no shared innovation strategy present, different parts of an organization can easily start to pursue conflicting priorities
Like Facebook, we can all be caught up in the riveting innovation movement. Workshops, talks, expensive consultants, whatever it takes to soothe our eager and itching hands. Staying clear of being eaten alive by the great disruptive monster. Yet, as with most projects that come from a place of panic, this not only results in ill-thought and executed projects but also stifles innovation across departments.
When there is no shared innovation strategy present, different parts of an organization can easily start to pursue conflicting priorities. The product team sees new possibilities in technologies. Customer Success begins pursuing the product improvements they heard from their clients. Marketing starts to explore new channels and markets. Back-office starts looking into efficiency and cost-cutting opportunities. While diversity in perception and perspective is crucial in innovation, the lack of alignment between departments will result in self-defeating efforts on a company-wide level.
So you get the gist; don’t waste your budget and don’t set your people up for failure by not having a consolidated goal and strategy for your innovation. But how exactly do you go about creating an innovation strategy?
Here’s How You Settle on an Innovation Strategy (and make it work)
There’s nothing wrong with learning from others but, don’t go out and copy paste Google or Apple’s innovation strategy, If your innovation strategy should work beyond the boardroom, you need an explicit innovation strategy, that is tailored to your company.
A good place to start is by asking yourself these three questions:
1. How will this innovation create value for either new or existing customers?
2. How will you as a company capture the value generated from the innovations?
3. What types of innovations will allow the company to create and capture value and what resources should each receive?
Moreover, you need to consider what type of innovation you are going for. Incremental product improvements? Radical new innovations for a new market? Component innovations? This piece tells you more of the different types of innovation. The infographic below shows how different innovation types rend different types of outcomes.
Coming clear of the target outcomes can help you decide what type of innovation to pursue, who to involve, what activities to undertake. In other words, it’s a way to start building a feasible innovation strategy.
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