What Are the Steps to Creating a Lasting Innovation Strategy?

Your innovation strategy needs to be aligned closely with your business strategy. The strategy should explain how innovation creates value for customers, how it captures that value, and what kind of innovations your company must pursue.

Step 1: What’s Your Business Strategy?

Innovation is rooted in what your organization does, so any innovation strategy starts with what your business is hoping to achieve. Understanding business strategy is, therefore, where you start.

Write out each goal, short-term and long-term, and consider how different innovation strategies might help. Different goals require different forms of innovation; you’re unlikely to pioneer a new form of vehicle to ship products, but you likely can draw from the experience of the logistics team to reduce the time it takes to get products out the door.

Tie each part of the strategy to something your team is already doing. Despite the struggles to form an innovation strategy, very few companies are actively ignoring new ideas and approaches; people innovate daily. A strategy is about focusing that innovation into a more productive and visible form. In particular, look for alignments between innovation goals and goals between different departments and aspects of your organization.

Anticipate possible challenges and concerns. This again should be tied to broader threats and weaknesses identified in steps like a company SWOT analysis or internal surveys.

Step 2: Determine The Right Kind Of Innovation

Every organization has a different culture and a different client base, even if they’re otherwise similar in their industry. As a result, each needs a different kind of innovation strategy. For example, in an industry with small profit margins, the best form of innovation will likely be directed towards internal practices that reduce costs or maximize productivity.

This doesn’t mean there’s no value in collecting ideas to improve products or to open new markets, simply that this focus will better meet the company’s needs at the moment and give it the room to think bigger.

The right kind of innovation will evolve over time as a result. As good ideas permeate, and make an organization better, that builds an energy all of its own.

There’s also a tendency to overvalue certain kinds of innovation, particularly “disruptive” innovation. Leaving aside the fact that “disruptive” innovation is rare, it’s also incredibly hard to capture and often the result of other forms of innovation. Even small ideas can be surprisingly disruptive in the long-term as they collect speed, interact with other ideas, and the changes they cause ripple through.

Step 3: Find The Value

Innovation is ultimately all about value; it allows you to do something better, faster, more cost-effectively, or more easily. The question is, what, precisely, is the value and who benefits from it?

There are two broad stakeholders here, internal and external. External stakeholders, your clients and customers, likely are already telling you what innovations they’re most looking for through speaking with sales teams, filling out satisfaction surveys, and through how they spend their money and where.

That said, surveys and asking more questions can help, and consulting with those who interact with customers regularly pays dividends.

Internally, you have to ask many of the same questions. Why do people come to a department, what functions does that department perform that they most need, and how can it be improved? What pain points are there as you do the work? Why are those in place?

Remember also that these two groups interact. Even an incremental innovation focus internally will benefit external stakeholders in ways they may not be conscious of, but will notice.

Step 4: Determine Value Capture

If you’ve ever read a list of best practices, every item was at some point an innovation. Most likely, each one started inside a company and quickly spread as the benefits became obvious. Imitation really is the sincerest form of flattery.

This illustrates that most innovation isn’t something you can patent or otherwise keep “in-house,” at least not forever. So any innovation strategy should focus instead on what value you’re going to capture from that innovation for your clients.

Be sure that this is something valued in the first place. We’ve all had the experience of being forced to update software to add features we’re never going to use, and good innovation avoids that feeling. While there are some changes everyone will appreciate, others will be more narrowly targeted.

Look for downstream benefits. Innovation almost inevitably has unexpected results down the road, so looking ahead can help determine value.

Don’t forget that innovation and its value compounds as more innovations are added. Again, look to best practices in your industry twenty, ten, or even five years ago, and compare it to today’s; you’ll likely notice that, as changes gained momentum, they collected even more innovation.

Step 5: Reiterate and Repeat

Good innovation strategies are constantly evolving. Few organizations can really rest on their laurels for any meaningful length of time, even if they deliver ideas that literally change the world.

Place change as a cornerstone of your strategy. Ask for feedback from those who participate, look at what ideas worked and which didn’t and why, and add tools and approaches as needed.

Embrace criticism and the change it inspires. Doing so is both part of the innovative spirit and adds to the transparency of your work.

Be flexible by design. As we’ve noted, needs for certain types of innovation will ebb and flow depending on the fortunes of the organization and industry, and the impact from more creativity flowing through. It will also help you deal with disruptive innovation, inside and outside your organization.

Work to place innovation at the forefront of everything your organization does. Some of the most successful innovation platforms tap into everybody’s creativity, both to find ideas and to refine them into something effective. And as the program expands, you’ll be better able to reiterate.

Innovation strategy is most effective with the right tools. To learn how IdeaScale can help you build a more innovative culture, schedule now.