If you’ve already embraced digital transformation, then you’re probably starting to accrue huge amounts of data and pick up on numerous patterns and trends that you may not have been able to see otherwise. With this data, it can sometimes feel that you know more about what your customers want than they do! And that’s definitely a good thing. However, it’s only valuable if you’re using these insights in the right way.
Analysing data and gathering insights is pretty pointless unless you’re using these insights for good; using them to adapt to meet the needs of tomorrow’s customer; using them to realise new revenue models that can boost your value and grow your market share.
Insight alone isn’t enough. Insights must be actionable, driving innovation that delivers.
But there’s an important question that every business should be asking…
‘How can we be sure we’re innovating and moving forward in the right way?’
Innovation isn’t something you can go into blindly. If you do, it’s a bit like having a bunch of ingredients and no recipe, just mixing them all together and crossing your fingers. You want peace of mind that you’re taking the best action, right? That’s where a bespoke business innovation strategy can help, guiding you in the right direction.
What is an Innovation Strategy?
Savvy organisations today are developing a business innovation strategy that essentially spells out how a company will develop new solutions or adapt their process to remain relevant, stay competitive, and continue meeting the needs of its customers.
An innovation strategy brings together research, development, activity, and execution plans into a single document that acts as your comprehensive guide to innovation.
A good innovation strategy will try to answer questions relating to three areas:
- Your customers
What does your target customer look like?
What gets them through the door?
What keeps them coming back?
- Your business
What are they key roles in your organisation?
What part do these roles play in your brand?
Where does your business stand amongst competitors?
- Your resources
Where will the innovation budget come from?
How will the innovation budget be spent?
How will you target the most profitable customers?
When these questions are answered, and when you have your innovation strategy in place, it should be easier to determine what the most important opportunities are for your business, and move quickly to ensure you’re grabbing opportunities as they arise.
Embracing Innovation
Sounds great, doesn’t it? And it’s so tempting to want to dive right in. But let’s not get ahead of ourselves here. There is a vital prerequisite for building an innovation strategy:
Getting the business onboard.
No matter how hard you try, innovation isn’t something you can carry alone. It’s got to be carried out with cooperation and collaboration from the rest of the business. After all, if the board doesn't understand innovation, then there won’t be any innovation.
And so the very first step to developing a business innovation strategy is to create an innovative mindset with the senior operational leaders in your organisation.
This can sometimes be trickier than it sounds. But there is a technique that can help.
Let’s face it. If you’re thinking of creating an innovation strategy, you probably already have some sort of idea about how you want to innovate. But at this initial stage, it’s important not to get too specific or caught up in a single idea. Instead, pitch innovation in the broader sense, communicating how it can bring value to the wider organisation.
That’s really what the board wants to see, right? They want to know that, whatever you’re up to, it’s going to bring value and set you apart from the competition. So use that to shape your presentation, and try to align innovation plans with business goals.
Developing an Innovation Strategy
As much as we’d love to say ‘this is how you do it’, we can’t. The truth is that there’s no ‘one size fits all’ when it comes to an innovation strategy. It’s got to be based on your own needs, and answer your own customer, business, and resource questions.
But don’t worry, we can get you started! There are two core elements that must come together to form the strong foundations of every good business innovation strategy:
- Gap Analysis
The first element is gap analysis. There’s absolutely no point getting started if you don’t have a grasp on what’s already working for you, and where there’s room for improvement. That’s how you’re going to know where to focus your innovation efforts.
The best way to do this is to know how to measure innovation in a company. When you can identify and track the right key performance indicators (KPIs), you can get a pretty good idea of where you are and where you need to be to maximise your value, and start innovating in a way that really helps you to bridge this gap… however big.
- Team Assembly
The second element is perhaps the most important aspect of any innovation strategy: making sure you have the human resources you need to investigate different ideas speedily, and align them to the main goals and objectives of the organisation.
Testing ideas quickly and generating a culture that makes innovation a natural part of day-to-day operations is key to success. But not even the best strategy will help with that… that’s where your people come in. Building the right innovation team is how you’re going to action your strategy and translate it into real life opportunities.
Building Your Innovation Team
One of the most common mistakes that businesses make is that they assume that just because they have a strong workforce, that they also have a strong innovation team.
That’s not always the case.
The skills needed to perform critical roles within an organisation will often be very different to the skills and the confidence needed to challenge the norm, to dare to try something different, and to be bold enough to drive and implement change.
Think about it. You walk into work every day and you’re confident you’ve got the skills needed to do your job. Tasked with working differently? It can be nerve wracking!
Your workforce might be great at what they do. But do they have what it takes to activate people and get them to step out of their comfort zone? Can they successfully move people away from traditional processes? You need people who strive for action.
Quite often, businesses will find that despite having strong production teams and support staff, they actually have insufficient capacity to innovate quickly.
So… does your workforce have what it takes?
The best way to answer that question is to make sure you know what you’re looking for. When building your innovation team, there are two important aspects to consider:
- The purpose of your innovation
There are many different types of innovation that drive your short-term and long-term business strategies. For example, product innovation can be used to hit short term profit goals by attracting new customers and re-engaging existing ones, while organisational innovation can be used to develop stronger foundations for longer term future growth. The direction you’re heading in will definitely shape your resource requirements; you must have the right people to help you achieve the right goals.
- The diversity of your workforce
Innovation is all about doing something different, so it’s important to make sure you have people that don’t all necessarily have the same ideas. A good innovation team should be made up of people from a range of professional, educational, and personal backgrounds, who can propose different concepts, and approach innovation from different perspectives. A diverse workforce benefits company innovations by making sure you’re considering developments from various angles and standpoints.
So if you don’t have the people you need… where can you find them?
Overcoming the Resource Challenge
If you’re looking at your workforce and you’re not entirely sure if you’ve got a full innovation team there that ticks all the boxes, there are some options available.
The two main options when it comes to rapid innovation are internal and external research options to help you quickly come up with new ideas for growth.
Internally, there are multiple ways you can mobilise your existing workforce, promote innovation, and really start hammering down on this idea of an innovation culture. If there are a good number of employees who you think can help you action your innovation strategy, then it might be worth building a dedicated research and development (R&D) department. Alternatively, you could look into ’intrapreneurship’ which elevates specific individuals with innovation mindsets into growth positions.
Externally, you have a pretty equal number of choices. There’s the more traditional solutions such as freelancers, contractors, interns, consultants, and agencies. These established methods are hugely popular, although as business needs evolve it’s becoming increasingly difficult for many of these solutions to modernise and keep up. Then you’ve got the more contemporary external solutions to consider, such as on-demand, as-a-service problem solvers that come in to tackle a particular challenge.
Once you’ve got your team together, they can begin actioning your strategy.
Actioning Your Innovation Strategy
Whether you choose to go down the internal or external route - or even use a mix of both - the most important thing is that you have people onboard who can action your innovation strategy with precision and confidence; who understand how to implement innovation in the workforce, change crucial organisation systems quickly, and develop a strong culture of innovation that really drives the organisation forwards.
Actioning an innovation strategy can be tricky. But if it’s not actioned properly, the organisation is likely to stagnate because your ideas can’t be developed. So it’s really important to try and action it in the right way. And that often means starting small.
The best way to get your strategy off the ground is to focus on ‘lighthouse projects’; small size innovations that have a big impact, acting as a guiding light for future innovations. They’re essentially the innovation equivalent of the quick win campaigns that your marketing department runs, delivering tangible, inspiring results quickly.
That’s what’s important here: tangible results. If your organisation can’t see real results and just coast along under this concept of change, the innovation mindset will soon drift away. Concrete execution, on the other hand, gets people excited about change - they can see what it has the potential to do - through practical, tangible results.
The Importance of Quick Wins
The ability to implement these quick win solutions is key. Especially as an ingrained preference for established processes is one of the primary factors slowing down innovation processes. We need to be proactive in getting out of old mindsets.
Fixed company structures, fixed processes, fixed perspectives, fixed people, fixed cultures, fixed resources, fixed budgets… these are all aspects that help a business do what it *should* do… but at the same time they’re aspects that limit what a business *could* do. They create tunnel vision. Lighthouse innovations that immediately demonstrate the potential of doing things differently are what’s going to drive change.
And this is perhaps one of the biggest contributors to the widespread shift from internal to external research options. Internally, there’s a lot riding on innovation. So much so that internal innovators usually focus on the chance of failure, making the ‘safe’ choices that don’t have that ‘lighthouse’ quality. External innovators who don’t have the same connection to the organisation are more likely to see innovation as a chance to get things right, and may make more difficult decisions that generate major results.
And this is where the advantage of external research options really shine through. However, organisations thinking about adopting external research options should know the best questions to ask to ensure they’re bringing in the right people at the right time.
Asking the Right Questions
There are a few things that are important to know about research process outsourcing for your company innovations. If you’re thinking about bringing in external support, there are some questions to ask to ensure you're making the best decision:
- Do I really need external support?
- What support options are available?
- How long does it take?
- How much does it cost?
- What’s the return on investment?
- How does it work?
- How is quality guaranteed?
The Importance of Developing an Innovation Strategy
Innovation is exciting, isn’t it? And when you decide you want to grow and develop, it’s tempting to just dive in head first. Who needs to draw up an innovation strategy, right?
We all do.
You can’t wing innovation. Especially if you’re aiming to hit the ‘golden trifecta’; the 3 lenses of innovation that are key to ensuring we grow in a way that brings value.
These three lenses are:
- Desirability - We need to innovate in a way that customer’s want
- Feasibility - We need to innovate in a way that we can actually achieve
- Viability - We need to innovate in a way we have the resources for
That’s why we can’t approach innovation randomly. We need a roadmap that guides us through all three lenses - and that roadmap comes in the form of a strategy.
With help from the right people, at the right time, your innovation strategy can be your ticket to success; your guide for growing and developing in a way that gives you a competitive edge and ensures you’re bringing the most value to your audience.
