What is an Innovation Strategy and Why Should You Have One?
Innovation is a bit of an enigmatic term. Everyone wants to be more innovative, but practically speaking, how do we do this? We talk with Maria Zubeldia, Head of the Entrepreneurship Centre, at Saïd Business School, part of the University of Oxford, and a certified facilitator for the FORTH innovation methodology.
Innovation can feel a bit intangible. What exactly is it?
Innovation is doing new things or things in a new way. It requires significant effort and is high risk, but it brings the profits of tomorrow. As an organization, if you want to have a long-term vision, you need to embrace innovation.
There is a frequent misunderstanding that innovation means R&D. Therefore, no one is concerned about innovation because that's R&D's job. This is a big misunderstanding.
Innovation is not a person or a department. Innovation is a culture, a way of thinking which opens you up to the world around you. It's about learning from mistakes, sharing information to spark new ideas, and giving you the energy to take action. Innovation is a mindset.
So, this is why when you delegate innovation to a person, or a department, quite often, nothing happens. Innovation needs to affect the total internal value chain. It’s about creating an innovative culture. Everyone needs to be involved.
Can you provide a little more detail on how to approach an innovation strategy?
A key source of inspiration for me is Gijs van Wulfen, the founder of the FORTH innovation methodology, which is the method I facilitate. He always shares key lessons from his experience, and I will share one of my favorite ones.
He says, ‘Organizations often frustrate their most innovative employees.’ Organizations have many rules, regulations, and procedures, which is entirely understandable. As an innovator, you are always thinking about shifting the status quo and coming up with new concepts.
Innovators can sometimes get the impression that everyone in the company is trying to frustrate them instead of giving them a hand. Innovation is always a struggle, and you have to learn to love the struggle.
Is a company able to start with simply hiring a single innovator?
Van Wulfen also has this great quote, “You can invent alone, but you can’t innovate alone.” Just think about how many people you need in an organization to get a new concept from idea to market. This requires a large number of people from different departments. So, my advice is to get your colleagues involved with your innovation project from the start. Then they become co-creators and supporters.
A good innovation is a simple solution to a relevant customer need. The best innovators are need-seekers. Apple and Procter & Gamble have both made a point of engaging customers directly to generate new ideas. They have developed new products and services based on excellent user understanding.
Many studies show that following a need-seeker strategy creates greater potential for superior performance in the long-term. I work with a lot of entrepreneurs. One of the biggest reasons for failure is building a solution that nobody needs.
What is an innovation strategy exactly
For a company to innovate successfully, there needs to be a process and a system in place. This dictates how the company searches for relevant and novel solutions and how it then turns these ideas into new business concepts or new products or services.
As part of this strategy, it’s crucial to include how the company selects which ideas are going to be funded. To make innovation happen often requires a broad and interdepartmental effort, so without a clear strategy to support it, the impact will decrease significantly.
Your innovation strategy should set a particular goal. Let’s say, for example, you want to move into new markets or to explore new services. This goal needs to be embedded into the business's overall strategy. It’s imperative that these align and that the goals you set for innovation support the overall plan.
Shifting company culture can be quite hard. What steps can you take if you want to build a culture of innovation?
Changing a company’s culture is one of the most challenging things to achieve. Firstly, you need to align your innovation strategy within your overall business strategy. Once you’ve put an innovation process in place, the next step I would suggest is to get your hands dirty.
Start with an innovation journey. The FORTH innovation methodology is one of those innovation journeys. By the end of it, you will have some business cases that you can start to implement.
In parallel, you need to set the core values for the company. These are important as they need to encourage innovation, and you need to stick to those values.
As an organization, the more consistent and coherent you are, the quicker the culture will transform. To innovate successfully, you also need full support from the top. I’ve seen many innovation directors struggling because they had someone at the top who wasn’t fully supportive of innovation.
Companies like Apple and Procter & Gamble can afford to innovate.
But for small companies, who don’t have extensive resources, what advice do you have?
For smaller companies, it’s easier to innovate. The larger the company is, the more fragmented. There are multiple departments and divisions. At a smaller company, employees are closer to the customer and each other, which is advantageous.
Resources are one of the most important things. It is essential to have some funding behind innovation. The problem is that we often find the opposite. When there is a big crisis, like now, we see the first place companies cut costs is innovation, but this should be the opposite. You can always find new business cases and ideas that are cost-effective.
Picking the right moment is also a crucial success factor, and the right moment to innovate is now. During a crisis, there is a huge sense of urgency. Everyone sees that the market is shrinking. Companies need to act. Now is one of the best moments to innovate.
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