Innovation Insights: What is an Innovation Strategy?

 The question is simple: Can an organization innovate without an innovation strategy?  

 Of course it can. However, there is a but - without an Innovation Strategy:  

• The innovation efforts are very likely to be scattered  
• Year after year, results can become unpredictable because of the lack of consistency between innovation launches 

• And ultimately, overall financial returns will underperform

On the other hand,  with a clear Innovation Strategy: 

• An organization can clearly define where it wants to focus its innovation efforts. It will likely result in a significant impact on sustained innovation and coherence across innovation launches   
• When the efforts are focused on a few key strategic arenas, the results are more predictable given that they’re planned within a three to five-year innovation program 
• Finally, as the organization is able to develop competencies per strategic arenas, it can leverage them within the overall innovation program. For example, an in-depth market study conducted in Year one could be used for a few years to support innovation development.  Therefore, it maximizes the financial returns by optimizing the reuse of knowledge and platform development 

We can see here the representation of structured resources allocation based on a clear innovation strategy.

Three Components of an Innovation Strategy 

To make things very simple for senior management and innovation stakeholders, there are three components:  

• First, Goals and objectives: to quantify the organization’s ambition.  
• Next, Strategic arenas: to clearly define where to spend efforts and ultimately reach economy of scales, as you will better understand the customer and the market context of each strategic arena. You can also reuse what was previously developed, which is a practice known as Platform Development. 
• Lastly, an attack plan per strategic arena: to clearly state the vision, the roadmap, and the potential business outcomes of the project portfolio 

Innovation Strategy - From the Top Down 

 The corporate strategy defines the organization’s growth, goals, and objectives.    

An  innovation strategy  can be summarized on one page, and includes the goals and objectives, a few strategic arenas (no more than 4-7), with its own defined vision and roadmap, an attack plan per strategic arena comprised of: a long-term vision, a 3-to-5-year roadmap, and business outcomes based on the project portfolio.  

Ultimately, all the strategic arena business outcomes are summed up and compared to the objectives to ensure that the strategy supports it.  

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. 

Download it here for free!