Innovation is an ongoing process that your company should be taking a strong stake in, and as an entrepreneur it should always be on your mind. Why? Because as long as you’re working towards goals so are others, process improvements happen all the time, and new ways of doing things will always keep on evolving. If you’re not evolving, you’re in a way killing your business.
Look at it this way, you may have a technology that at the moment can clean water in a manner that is thus far cheaper and more energy efficient than your competitors, you have a decisive competitive advantage because of this technology, however, you know that there are also engineers out there working on similar products, ones that may be cheaper and more energy efficient than yours? So what do you do, you innovate. You look for different processes, different materials, ways to improve the process that will help you keep that advantage.
Today, we look at that relationship, the one between innovation and strategy. In all there are really three ways in which you can approach innovation within your company, and each is designed to work a bit differently. Read the methods, and think about which one of these works best for your enterprise and how you can most effectively apply in.
1. Strategy Defines Innovation – The company collects CI, looks at the market and then defines a strategy, i.e. in 5 years time we want to be at point X, we want to have Y% of the market and be in Z countries. How do we get there. In this scenario innovation effects are pursued to deliver and ensure value to the strategy, and the goal.
2. Innovation Defines Strategy – The company through the most excellent ideas of its board, entreprenerus and others has developed a number of concepts. These concepts are mapped, and a strategic evaluation is conducted based on CI, market factors, etc.. the selected innovation then fuels the strategy of the enterprise.
3. Innovation and Strategy Inform One Another – This is an ongoing dialogue between the two, Innovation and Strategy both affect each other equally, and the C levels manage the process throughout.
In terms of startups and smaller companies, you will find that option two tends to work the best. Why? Because chances are that you’ve embarked on a business venture due to the fact that you had a few good ideas, and chose to pursue one of them. This is the innovation process for those that are starting, or launching something totally new.
With that, your product, service, what have you can be easily augmented and adjusted to suit market needs, additional products, support products can also be added to your product, this is where No.1 comes in. How do you get from A->B how do you grow, and what and where can you innovate to help your business grow.
The last is the hardest to manage, specifically as it needs constant and ongoing attention which most startups lack do to limited resources. In practice it’s strongly supported by larger companies in high-innovation industries, bio, clean tech, hardware & chip design, etc… However that does not mean you should forget about it, Innovation and strategy should always be informing one another, always.