When we talk to our clients and workshop participants, most of them have some form of innovation initiative in place. Some have already begun pouring funding into R&D, while others have trained teams and set up new innovation processes.
However, achieving your innovation objectives is more than just putting together ideas and running with them. You first need a key element in place to see it to success — a clearly defined innovation strategy.
Unfortunately, this is something most firms overlook, according to innovation and competitive strategy expert Gary Pisano.
Fortify your innovation strategy by answering these 3 questions:
1. Are our objectives aligned?
The best strategies are usually based upon a clear objective, where vague statements like “we need to innovate now because everyone else is innovating,” or “we need to innovate so we can grow” have no place.
First, it’s important to be aligned on which type of innovation you are looking at.
There are 3 types of innovation:
- Efficiency-based innovation — where you focus on cutting costs, to do more with the same capital, usually a LEAN process, where you are fine-tuning and downsizing.
- Performance improving innovation — where you upgrade your existing products and services.
- Market-creating innovations — creating entire new business models, serving entirely new customers, puts your capital to use and creates the most value from a shareholder perspective.
Ask your team: what does “market-creating innovations” mean to our company?
2. Do we have the Money, Structure and Mandate in place?
There are 3,000 ideas for every one that makes it to market. The problem isn’t the idea. The problem is the system, processes, methods, tools, and resource allocation. If any of these are not in place, you are effectively killing off the ideas as they move down the pipeline.
In our research over the past 5 years, we realized that most innovation strategies that succeed are built upon the holy trinity of Money, Structure and Mandate.
Even if your ideas are brilliant, you will need the money (funding), structure (trained teams and a conducive corporate structure), and the mandate (support from the higher ups) to secure a successful transformation.
Here’s a quick score sheet from the Transformation Architecture strategy tool to help identify where you stand before you hit go. The higher your score, the better your chances at success.
3. What are my next steps if some/none of them are in place?
Now comes the real work. It’s easy if you’ve got the entire package, from funding for new ideas and ventures, trained departments to be responsible for these new ventures, to the thumbs-up from the Board of Directors and top management.
It’s just a tad more challenging if you’re lacking an ingredient or two.
So where should you start? By asking the right questions.
Asking questions will help uncover a framework to start working with, so you can get the Money, Structure and Mandate set up for maximum transformation success.
What are the right questions to ask? Easy. They’re all in the free Transformation Architecture strategy tool that you can download by clicking the button below.
To get a more in-depth understanding of how the tool came about, you might want to take a peek at our lead facilitator Christian Rangen explaining the Transformation Architecture to workshop participants:
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