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Head: What is innovation strategy and why is it important?

by maria
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Dr North- Managing Director at The Big Bang Partnership Ltd

She uses her unique background of academia – with a PhD looking at entrepreneurs and innovation – and her hands-on experience working in multiple sector-leading businesses at board level to implement complex projects. She uses this dual experience to mentor entrepreneurs, senior business leaders and whole teams to innovate, enact business strategy and use creativity in business.

What is innovation?

Innovation is about coming up with great new ideas that make a positive difference to the world, using those ideas and putting them into action to achieve something purposeful.

Innovation isn’t just about the tech. A lot of people associate innovation only with technology and going digital when it’s about much more.

What’s included in an innovation strategy?

  • How you are going to develop your products and your service experiences
  • The systems and processes your business use
  • The company culture you have

When developing your products and services you should consider how you are going to be relevant to the market in the future and continue to stay aligned with what customers are going to need. You also need to consider how you position your products and services, and design your business model to deliver them – business model innovation.

Innovation includes thinking differently about the behind-the-scenes systems and processes you use, for example using automation for speed and better data insights, or decarbonizing your business operations as you work towards becoming a net zero organization.

Cultural innovation means being creative about how you attract retain and engage people, to make sure that people love coming to work, align with the business’ mission, and contribute their best performance. Here are some tips on how to build an innovation culture in your business.

Why does your business need an innovation strategy?

An innovation strategy is a plan to grow your business by taking a fresh, new, purposefully creative approach to product, service, organization and business model development.

An innovation strategy sets the direction that you want to travel in, giving you a roadmap to help plan your cash flow and the resources that you’ll need on your journey. Your innovation strategy provides you with clear focus for your decision-making and investments.

What is a purpose-driven innovation strategy?

Businesses that are purpose-driven versus being solely profit-led aim to make a positive difference to the customers that they serve or the communities they are located in. They are in business for reasons that go beyond simply money-making.

According to Deloitte research, purpose-driven companies experience higher market share growth and grow, on average, three times faster than their competitors. Plus, purpose-driven companies have higher employee and customer satisfaction.

Customers value buying from purpose-driven businesses they know that they’re also contributing towards something good.It benefits employees, too. Doesn’t it feel greater to work for an organization that’s doing something meaningful, beyond just wanting to make a profit?

How to create a successful innovation strategy

To create a successful innovation strategy, make sure that it delivers value for your customers on three levels, by:

  1. Solving the customers’ problems in the right way. Your innovations need to be useful and achieve what they are designed to deliver.
  2. Being consistent with the values of your target market, aligning with customers’ perceptions of who they are, what they stand for and who they want to be.
  3. Achieving products and services that your customers will happily exchange their time, money, and effort to buy into.

Whichever area of innovation you look at, it is important to make sure that you focus on achieving these three types of value.

Value plus intelligent action leads to successful innovation strategy

Steps for creating an innovation strategy from scratch

When you’re taking the first steps towards creating your own innovation strategy from scratch, begin by looking outside your business. Take in what is going on in the outside world, identify the changes, trends and developments, and look ahead to future scenarios. Ask yourself questions such as:

  • How are people changing behaviours and expectations?
  • What’s happening with the economy?
  • How is technology changing the industry that you’re in?
  • Are there any new regulations that are due to come out?
  • What’s happening with climate change and how that might affect how you need to do business?

1. Spot external trends for your innovation strategy

2. Be purpose-driven

3. Identify specific innovation opportunities

4. Collaborate to innovate

What challenges are there in creating an innovation strategy?

Time

I work with so many different sorts of businesses, but the one consistent reason for not innovating and not innovating successfully is ‘we just don’t have the time.’

We’re so busy doing the day job, we don’t have time to innovate.

We need a mindset shift on this, because if innovation is in the DNA of our business and built into how we think, then it’s an integral part of our mindset. This means we will be innovating constantly, always looking for opportunity and picking up on ways to improve. The aim should be to achieve something, however small, every single day to take us towards our innovation goals.

Money

Another challenge can be money: cash flow and funding. There are exceptions, of course, but when we’re innovating, we usually need to invest upfront before we get a return. That can have implications on cash flow, or create a need for inward investment.

Risk

Risk aversion and fear of failure can be a challenge of innovation. But it’s just as risky, if not more so, to stand still.

If you’re not innovating, you’re not moving forward and falling behind your competitors and what your customers want and need from you. So, weigh up the risk.

Perfection

People worry about innovation being perfect, but it never is, and rarely needs to be. Having the mentality of always being in beta helps.

Constant change

Some people challenge the point of having a strategy when everything’s always changing.

But I’m with Winston Churchill: “plans are of little importance, but planning is essential”.

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