Strategy is commonly defined as choosing among any number of options in order to have the best chance of succeeding, and using innovation is one of the ways to achieve your goals. Without strategies and innovation, the chances for long-term success are hardly possible — look at the companies and industries that didn’t survive tectonic shifts in the business world, such as video rental stores, publishers and big box retailers, just to name a few.
Innovation, a noun, is defined as “something new or different introduced.” Business leaders have been asked, “What is innovation?” and the answers vary from person to person, but all have a similar theme, as shown below:
“Innovation distinguishes between a leader and a follower.” — Steve Jobs
“The true sign of intelligence is not knowledge but imagination.” — Albert Einstein
“Software innovation, like almost every other kind of innovation, requires the ability to collaborate and share ideas with other people, and to sit down and talk with customers and get their feedback and understand their needs.” — Bill Gates
“There is no innovation and creativity without failure. Period.” — Brené Brown
OK, so now we start to see a theme here. Innovation (in the general sense) is introducing something new and/or different; but in a business sense, it’s a two-pronged process — about bringing something new and innovative to the customer base while adding value to the company. So, in the big picture, it’s a real win-win, helping both the company and the customer.
The word “strategy” is defined as “a plan, method, or series of maneuvers or stratagems for obtaining a specific goal or result.” So, now that we’re familiar with the words “strategy” and “innovation,” putting them together gives a whole new meaning to them. According to Planview.com, an innovation strategy is defined as “a common innovation mission and a detailed plan that aims to create new value for which customers are willing to pay. It includes a set of policies or behaviors geared toward achieving future organizational growth.”
There are four different types of innovation strategies. They are the following:
When considering an innovation strategy, understand that it is simply a commitment by the company to develop a set of policies or behaviors that point to a specific, predefined goal. In most instances, the goal is to develop a product and/or service that will grow market share, create value and ultimately help develop or strengthen brand loyalty.
Striving to create value for your customer base is a key motivation to innovate. It can help a current product work better, become more valuable or indispensable or even less expensive. Of course, what you do and/or offer is largely dependent on your sector, competition and customer base. Companies must consider how their products and services retain customers and strengthen brand loyalty. For example, Apple has developed an “ecosystem” for its users, so that customers with a Mac and iPhone can easily integrate one of its other products, such as an Apple Watch or iPad, into their lives.
Knowing your customers, their wants and needs, and even anticipating their wants and needs, is a vital component of developing an innovation strategy. Therefore, turning customer input into innovation is one of the important ways of developing new (or of tweaking existing) products and services.
An effective innovation strategy contains the following elements.
The business world is chock full of innovation examples, particularly in the tech world. Here are three companies that are notable for successful innovation strategies.
Amazon broke the mold from the word “go,” and continues to do so on a regular basis. Creating Amazon Prime — a program that includes free two-day (or in some instances, faster) delivery, streaming audio and video content, free access to a large library of Kindle books, and free photo storage, among other perks, was revolutionary in the business world. These innovations challenged others in the same space, and the strategy remains one of the most popular of Amazon’s many innovations.
A cloud-based software company with headquarters in San Francisco, Salesforce is a leader in the customer relationship management (CRM) space. Its corporate culture and its strength in keeping its eye on the marketplace and exactly what its customers want and need (and predicting those wants and needs) is what has kept Salesforce on Forbes’ list of innovative companies since the inception of the list in 2011.
As you’ve probably realized, innovation strategy is absolutely essential for any viable business to not only grow, but to survive. Knowing the market, where your company fits and where your industry is going are all key elements to developing a winning innovation strategy.
Business textbooks are loaded with examples of companies that didn’t respond to changes in the market (or acted too late in the day), missed out on opportunities or simply failed to evolve. These cautionary tales — including Radio Shack, Blockbuster and Pan-Am, along with scores of others — should be enough to convince every company that an “evolve or die” mantra should be an indispensable part of its corporate culture.
Chris Capelle is a technology expert, writer and instructor. For over 25 years, he has worked in the publishing, advertising and consumer products industries.
Harvard Business Review - You Need an Innovation Strategy
Forbes - The Most Innovative Companies of 2020 According to BCG
e-Careers - 10 Businesses That Failed to Adapt
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