We’ve all been there. The CEO slams her hand on the boardroom table and exclaims “We need more innovation”. Thus empowered, product teams and business units scurry to create more “innovation”, whatever that is. Innovation teams pursue new product ideas, customer needs or technologies that seem promising, that will open up new markets and drive new revenues.
But when the ideas are presented to the senior executives for approval and funding, the ideas are a hodge-podge of products and services and business model ideas that aren’t aligned to the corporate goals and strategies. While the ideas are potentially valuable, they don’t match up to the skills, focus or intent of the business.
Innovation is not a strategy
This statement should be engraved on every CEO’s office door. Innovation is not a strategy. While a firm may become more innovative over time, innovation by itself isn’t a strategy. Innovation is an enabler to corporate strategies like revenue and profit growth, product and service differentiation, new product development and the ability to disrupt other markets or industries. When innovation is targeted to help achieve these strategic goals, it can deliver incredible benefits. When innovation is focused on simply being “innovative”, the result is often misaligned with corporate objectives and misses the mark.
Why this is a mistake
You don’t get a lot of chances to make a first impression. If the first “innovation” activity your team completes produces ideas that aren’t aligned to corporate goals, or the ideas don’t seem important, relevant or valuable, it will be much more difficult to get a second chance. Innovation must produce results that drive corporate outcomes and performance, not simply discover interesting ideas that the firm will struggle to implement.
This should be simple, but it often isn’t. While every company builds strategic plans, they are often poorly communicated or simply vague. Executives who want more innovation, and want innovation to deliver business results need to state their objectives clearly and communicate them consistently. Next, innovators and their sponsors need to define the innovation goals and outcomes carefully. Should innovation drive incremental change to existing products, or create disruptive new business models? What is the size, shape, and breadth of the innovation outcome? Next, innovators should ensure their focus and efforts are pursuing innovation goals that support corporate objectives. For example, should innovation deliver better operational efficiencies, or new products and services, or increased customer intimacy? Which is most important from a corporate perspective? Once that is understood, does the innovation focus and investment reflect that prioritization?
Need help linking innovation to strategic goals?
OVO in partnership with Agility Innovation created the Executive Workmat, a framework targeted to executives who want to sponsor innovation and create an environment where innovation can thrive. We offer the Workmat as an assessment and a baseline to define the components necessary to develop an innovation environment that can sustain innovation activities. Contact OVO to discuss your needs and discover how we can help you and your team.
Next Post: Mistake 2: Failing to define the appropriate innovation scope
In the next post we’ll discuss why failing to define an appropriate scope or set of boundary conditions is fatal for innovation.
You can read the white paper 20 Mistakes Innovators Make or purchase the Kindle edition of 20 Mistakes Innovators Make.