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What is Strategy Driven Innovation?

  • October 25, 2018 1:51 PM
    Message # 6873436

    When the word innovation is brought up, the common thought process is to get a group of people in a room, brainstorm lots of ideas, some practical and some crazy, choose a few, and hope that you find the next big idea.  People struggle to define what innovation is in an organization.  Peter Drucker, the guru of strategy, wrote that “Purposeful innovation results from analysis, systematic review and hard work, and it can be taught, replicated and learned. Purposeful innovation begins with analysis of opportunities.”  

    As Drucker put it, the “analysis of opportunities” is a critical part of the strategy development process.  In our work with business leaders, we cause them to think differently about their business to find ways to improve customer experience and build competitive advantage.  We systematically dissect the business performance, its products, services, markets, competitors, customers, etc. while challenging past and current strategy.  We evaluate potential future “opportunities” and recommend changes that will make a significant difference to the business. Drucker continues, “Innovation is change that creates a new dimension of performance.”  

    What is required of business leaders to drive strategy driven innovation?  Consider the following as you strive for innovation in your organization:

    Strategy driven innovation requires deep dive analysis.  During the strategy development process, leaders need to be sensitized to the realities of the past and current environments, both internal and external.  Leaders need to challenge the status quo, questioning what might be considered “sacred cows.”    

    Strategy driven innovation should not be done in a vacuum.  Don’t presume you and your team have all the answers. Share the analysis and conclusions with your senior executives, peers outside the company, qualified advisors.  Tell them to be brutally honest and keep an open mind to change.  

    Strategy driven innovation is about making choices.  After all the discovery and development work is completed, you have to decide.  There will be alternatives to choose from and the challenge is to establish a level playing field to evaluate and select the most promising opportunities. Leaders should require that all innovation initiatives that are selected be supported by a robust fact-base and plan document.

    Strategy driven innovation requires leadership with clear authority to drive innovation to the finish line. Appoint a champion with responsibility and accountability to make the most of the opportunity.  Actively manage your innovations and make it a regular top agenda item for your management meetings. Get out in front of risk by starting small and keep it simple.  This approach allows time to learn, adjust and have multiple opportunities in development at the same time.  By keeping resource requirements low until you understand the risks, you build confidence to invest in those opportunities that will succeed.

    Is your strategy driving innovation in your organization?  Have you applied these basic principles to achieve “purposeful innovation?”  Let us know what your experiences have been driving innovation in your organization.  We’d like to hear from you. 

    QUOTE

    “Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth.” Peter Drucker, from his 1993 book Innovation and Entrepreneurship

    "The Googly thing is to launch [products] early on Google Labs and then iterate, learning what the market wants — and making it great."  Marissa Mayer, Vice President, Google

    Dick Albu is the founder and president of Albu consulting LLC, a strategy management consulting firm focused on engaging and energizing leadership teams of middle market private and family businesses. With offices in Stamford, CT, the firm is dedicated to helping its clients formulate robust business strategies and follow through on execution of key strategic initiatives. Dick Albu can be reached at 203-321-2147 or RAlbu@albuconsulting.com. Rob Krist, Managing Director can be reached at RKrist@albuconsulting.com.  Please visit Albu Consulting’s website for more information at www.albuconsulting.com.

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