BISNIS INNOVATION

How to Form an Innovation Strategy
Posted by Scott Anthony on August 19, 2008 9:06 AM
Companies just starting innovation efforts often begin by getting a group of people together and telling them "It's innovation time!" I've never seen efforts like this succeed in meaningful ways.
Instead, we suggest that companies begin innovation efforts by creating an innovation strategy that details clear targets and tactics.
Clear targets help internal innovators know what they're shooting for. A reasonable starting place is to imagine what success looks like five years in the future. Are you seeking to double your business? Hold it steady? Something else? Setting a target that is several years in the future can help to de-politicize a potentially charged discussion.
Then think about the sources of growth. How much can you reasonably expect your core business to contribute? In some industries your five-year contribution might be below today's contribution, and that's okay.
Next, look at what's already in your development pipeline. What can you reasonably expect that pipeline to contribute in the future? One tip here: make sure to risk adjust your pipeline. If you assume all of your projects will succeed, you are being wildly optimistic.
Now, calculate the gap (it will almost always be a gap) between where your projections suggest you will be and where you want to be. That gap is your target for new innovation efforts.
Then think of the tactics that are on and off the table. A lot of people think that creativity and chaos are friends. We disagree. Instead, we find it helpful to carefully consider what you want innovators to do, what you'll consider, and what you don't want innovators to do.
One way to make the tactical options tangible is to use this "Goals and Boundaries" visual (from Chapter 1 of The Innovator's Guide to Growth).

The figure (download it
here) represents the "goals and boundaries" of innovation. Note how the figure includes a diverse set of elements, such as steady-state revenue, channel, business model, and brand. Customize the vectors for your context, and gain consensus about what's clearly in bounds, what's on the fringes, and what's clearly out of bounds.
Gaining consensus on this visual will help you to evaluate ideas and to guide innovators in their exploration efforts.
Formalizing targets and tactics is a great way to kick-start your innovation efforts. Start allocating resources to support your strategy, and you are on your way to innovation success!
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