It’s that time of year when organizations close the books for the current year and start focusing on the next. As you work through your annual planning, it’s important to consider your annual innovation strategy as well. This type of planning makes innovation projects far more effective and helps ensure ongoing support from leadership.
Preparing Your Annual Innovation Strategy
The first thing to do when preparing an annual innovation strategy is to carefully review what you did in the past year. Start by reviewing results against expectations.
Next, look at what obstacles and roadblocks you encountered as well as instances of positive progress. Consider the successful impacts that the completed innovation projects both quantitatively and qualitatively. With this information, you’ll be able to look back on last year and gain information that will be vital to creating your next successful innovation plan.
Then, set the foundation for the new year by setting goals that have a positive impact on current customers, future customers, stakeholders, shareholders, and employees. Are you looking to improve on a business process and increase productivity? Perhaps you’ll transform a product or service that you currently offer to increase accounts and reduce churn. Setting the right goals helps you identify where your innovation efforts should be focused.
Once goals are set, determine what personnel and funding are needed and who will need to approve those expenses. Set a timeframe that starts at the intended completion date and work backwards. Allowing a little bit of a buffer in the schedule helps to reduce the impact of unforeseen roadblocks and is a great risk mitigation technique.
As you set up your innovation strategy, you want to plan for different types of horizons. According to Harvard Business Review, 70% of all innovation efforts focus on core/incremental change and only 10% of transformative changes. However, the return on investment is exactly the opposite. You only get a 10% return on incremental change, but you get a 70% return on transformational change.
Obviously, you’ll want to allocate resources based on your product roadmap, but don’t forget to look beyond it. To do this, use incremental changes to create momentum and progress that can be used to invest in transformational, long-term change.
Systematizing Your Innovation Strategy
Every innovation project has several stages. By estimating and planning how and when each project stage will occur, you’ll have a much better idea how many resources and team members you’ll need. This will allow you to plan in advance to make sure they’re available. The different stages that you’ll encounter include:
- Ideate: collecting ideas from your source community.
- Build Team: assembling team members to evaluate and champion the most promising ideas.
- Refine: refining the best ideas and gathering additional details.
- Estimate: cost and resource estimation for the short and long term.
- Review: the final decisions on which ideas “win” and will move on to be implemented.
- Fund: the winning project is implemented and funded.
- Archive: archiving the ideas, progress, obstacles, and lessons for future reference.
Without a comprehensive innovation strategy, it’s likely that your organization won’t create a consistent habit of continuously innovating. Despite your best intentions, you won’t have access to the people, resources, and funding you need simply because you didn’t plan ahead.
A written, well-thought-out innovation strategy is much more than a list of best practices you try to see what sticks. When you have an end-to-end innovation strategy for each year, you ensure that the mistakes of the past aren’t repeated and plan carefully for the future. As you wrap up another innovative year, you’re planning and strategizing for an even better one. Our newest e-book, Developing Your Annual Innovation Strategy is sure to help you get there.