Innovation Strategy
When considering an innovation strategy it is important to note that the innovation process is not a single event and should be managed as such and that the influences on the process can be manipulated so as to affect the outcome.
Innovation is basically the introduction of a new or significantly improved product, service or method and is no longer confined to people dressed in white lab coats in research and development laboratories. In fact, in more recent times most individuals within an organization end up having touchpoints with one or more parts of the innovation process.
Innovation usually leads to competitive advantage and growth and therefore many organizations place a lot of emphasis on an innovation strategy.
When it comes to business, strategy is about planning for the future direction of an organization. This usually involves careful consideration of the organization’s core competencies, purpose, resources and how it interacts with the environment in which it operates. Most innovation strategies should incorporate the following:
Empowering Your People
It is people who innovate – people are your key resource when it comes to innovation and therefore you should ensure that your people have relevant and wide-ranging job-related skills that are continually improved on and enhanced by training.
Providing your employees with access to a suite of online, on-demand training is beneficial. Ensure the suite of courses includes elements that promote an entrepreneurial culture.
Allocation Of Resources
Once you have an idea put forward that shows potential and has been approved quickly put a team together with the passion and drive to see the project through to fruition. Ensure the team has the resources and ability to succeed by allocating an appropriate level of funding to the project. Innovations are inherently risky so budgets should be set and monitored closely to help safeguard against failure.
Knowledge Management
Make knowledge management tools and online document repositories available where subject matter experts from geographically dispersed locations can collectively work together and collaborate on projects. Having quick and easy access to a wealth of knowledge is very important in the innovation process. Obstacles that the team encounters may have been already solved on different projects by different teams within the organization.
To implement a successful innovation strategy then you obviously need the technical resources (people, finance, equipment, knowledge) but you also need the organization to be capable of managing them.
Some questions to ask should include:
Have you got the organizational innovation capabilities to manage the future whilst simultaneously allowing creativity to take place?
Have you considered the lifetime values of your customer base?
There were a number of broad innovation strategies put forward by Freeman in 1982 and Maidique and Patch in 1988.
Leader / Offensive
This strategy is all about getting your product or service out before anyone else. It provides you with a monopoly until variations of your innovation appear on the market. It usually requires significant research and development costs and a significant amount of marketing personnel.
Fast Follower / Defensive
This strategy relies on a significant technology set and an agile quick to respond development team in order to quickly follow companies who are performing a leader / offensive strategy.
Cost minimization/ Imitative. An example would be the many companies who came up with variations of tablet computers after apple released their iPad tablet computer.
Cost Minimisation / Imitative
Is about being the lowest cost producer and success is usually determined by achieving economies of scale in the manufacturing process.
Market Segmentation Specialist / Traditional
This strategy focusses on a niche by ensuring the detailed requirements for a particular market segment are met.