Innovation Insights: What are Two Case Figures When Kickstarting the Definition of an Innovation Strategy?
Nov 11, 2024
What is an innovation strategy?
It’s a component of, or flows from, the corporate strategy and deals specifically with new products, services, technologies, processes, customer experiences, and business models. Its main purpose is to define goals and objectives as well as to identify the strategic arenas in which an organization will focus its innovation efforts.
Case #1
The first case usually seen with members is that the innovation strategy supports the implementation of an already planned corporate strategy. It’s referred to as a top-down approach. It defines clear growth goals and a few strategic pillars or axis for the organization. The innovation strategy states how the innovation will support the corporate strategy. For example, it clarifies which portion of the growth goal will be supported by innovation if it’s not already stated in the corporate strategy.
Let’s take the case of a member targeting a 5% annual growth; the innovation strategy could then state that 50%, then 2.5% should come from innovative offerings, and that the innovation strategy will result in a 2.5% annual growth. However, we still need to know which strategic arenas it will come from, and on which projects it will be based. The projects’ projects 'estimated value can then be summed up to compare the projects’ portfolio values to the corporate objectives.
Case #2
The second case is when the innovation strategy supports the development of a corporate strategy. This is referred to as a bottom-up approach.
Sometimes, an organization doesn’t have a defined corporate strategy. And so, the intent will be to define the innovation strategy, which will then serve as a starting point for the corporate strategy. In this case, the innovation objectives are based on historical data. After identifying the strategic arenas and adding the various project values based on innovation capacity, it can be determined whether or not the portfolio supports the objectives set. Once this is done, the corporate strategy can be defined with these innovation objectives in mind.
In other cases, some members start by creating their innovation strategy without first having a corporate strategy. The good news is that they at least have a clear innovation plan. This is often true with younger organizations who define themselves through innovation offerings. In this case, the innovation strategy becomes the organization’s main strategy.
Image Sources: Innovation Leaders Club
The Innovation Leaders Club is a private, elite club aiming at establishing productive interpersonal exchanges centered on sharing knowledge, experience, and best practices, about topics previously chosen by participants.
We have developed a 60-page visual guidebook on how to develop an innovation strategy. It is a fully illustrated step-by-step guide to building the foundation of an innovation system.
