Soren kap|an ls Lhe auLhor of Lhe, besLselllng and award wlnnlng book "#$%&'())*+), As a lounder of lnnovaLlonolnL, he works wlLh organlzaLlons lncludlng ulsney, klmberly-Clark, ColgaLe- almollve, MedLronlc, hlllps, 8ed 8ull, and numerous oLher global flrms. Soren prevlously led Lhe lnLernal sLraLegy and lnnovaLlon group aL PewleLL-ackard (P) durlng Lhe roarlng 1990's ln Slllcon valley and was a co-founder of lCohere, one of Lhe flrsL web collaboraLlon plaLforms for onllne learnlng and communlLles of pracLlce. Pe ls an Ad[uncL rofessor wlLhln Lhe -.$)*+##'*+) /0$1#.2 aL nP1v 8reda unlverslLy of Applled Sclences ln 1he neLherlands and slLs on Lhe advlsory boards of several sLarL-ups. Pe has been quoLed, publlshed, and lnLervlewed by lasLCompany, lorbes, Cn8C, naLlonal ubllc 8adlo, Lhe Amerlcan ManagemenL AssoclaLlon, uSA 1oday, SLraLegy & Leadershlp, and 1he lnLernaLlonal Pandbook on lnnovaLlon, among many oLhers. Pe holds MasLer's and h.u. degrees ln CrganlzaLlonal sychology and resldes ln Lhe San lranclsco 8ay Area wlLh hls wlfe, Lwo daughLers, and hypo-allergenlc caL.
Learn more about h|s book !"#$%&'(()*( by v|s|t|ng www.|eapfrogg|ng.com.
As a lounder of lnnovaLlonolnL, Derr|ck a|mer helps global organlzaLlons creaLe novel soluLlons Lo Lhe Lough challenges of drlvlng sLraLeglc, breakLhrough growLh. uslng non-LradlLlonal approaches, and wlLh 30 years of llne managemenL and consulLlng experlence, uerrlck Laps lnLo hls work across many verLlcals - lncludlng consumer producLs, flnanclal servlces, healLh care, hlgh Lech, enLerLalnmenL, professlonal servlces, reLall, auLomoLlve, and hosplLallLy. Pe has exLenslve experlence leadlng cross-funcLlonal Leams 'from chaos Lo clarlLy', fosLerlng collaboraLlon across organlzaLlonal sllos, and faclllLaLlng declslon-maklng among dlsparaLe (and someLlmes dlsconnecLed) sLakeholder groups. Crlglnally from Lngland, uerrlck brlngs an lnLernaLlonal perspecLlve. Pavlng llved and worked ln slx counLrles, he knows whaL lL Lakes Lo drlve breakLhrough resulLs from culLurally dlverse Leams. Pe holds a 8A ln Languages/LlngulsLlcs and a MasLers degree ln MarkeLlng ManagemenL. A Framework for Strategic Innovation
SLraLeglc lnnovaLlon ls Lhe creaLlon of growLh sLraLegles, new producL caLegorles, servlces or buslness models LhaL change Lhe game and generaLe slgnlflcanL new value for consumers, cusLomers and Lhe corporaLlon.
1hls paper descrlbes a hollsLlc, mulLldlsclpllnary framework LhaL enables organlzaLlons Lo Lake a sLraLeglc approach Lo lnnovaLlon.
1he framework comblnes non-LradlLlonal, creaLlve approaches Lo buslness lnnovaLlon wlLh convenLlonal sLraLegy developmenL models. lL brlngs LogeLher perspecLlves from a number of complemenLary dlsclpllnes: Lhe non-LradlLlonal approaches Lo lnnovaLlon found ln Lhe buslness creaLlvlLy movemenL, LradlLlonal sLraLegy consulLlng, Lhe new producL developmenL perspecLlve of lndusLrlal deslgn flrms, quallLaLlve consumer/cusLomer research, fuLures research found ln Lhlnk Lanks and LradlLlonal scenarlo plannlng, and organlzaLlonal developmenL (Cu) pracLlces LhaL examlne Lhe effecLlveness of an organlzaLlon's culLure, processes and sLrucLures.
1he framework conslsLs of a coheslve seL of pracLlces LhaL lnsplre lmaglnaLlve Leams Lo look beyond Lhe obvlous, explore a broad range of posslblllLles, ldenLlfy slgnlflcanL opporLunlLles, make lnformed declslons abouL Lhe mosL promlslng paLhs Lo pursue, creaLe a shared vlslon for growLh, deflne pragmaLlc acLlon plans LhaL brldge from Lhe fuLure back Lo Lhe presenL" and allgn Lhe organlzaLlon around Lhe requlremenLs for success.
SLraLeglc lnnovaLlon Lakes Lhe road less Lraveled - lL challenges an organlzaLlon Lo look beyond lLs esLabllshed buslness boundarles and menLal models and Lo parLlclpaLe ln an open-mlnded, creaLlve exploraLlon of Lhe realm of posslblllLles.
Some organlzaLlons may feel LhaL seeklng breakLhroughs ls Loo grandlose a goal, and LhaL Lhey would be conLenL wlLh slmply growlng Lhe buslness". Lxperlence shows, however, LhaL focuslng on Lhe shorL-Lerm Lyplcally ylelds only shorL-Lerm resulLs - whlle Leams asplrlng Lo seek slgnlflcanL breakLhroughs wlll boLh ldenLlfy blg ldeas" and also generaLe closer-ln, lncremenLal ldeas.
SLraLeglc lnnovaLlon ls noL characLerlzed by mundane, lncremenLal producL exLenslons, Lhe me-Loo" buslness models of close followers, or band-alds for lnefflclenL processes. lL does noL conslsL of slmple faclllLaLed All men can see the tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.
Sun Tzu A Framework for Strategic Innovation
Page 6 www.innovation-point.com InnovationPoint LLC creaLlvlLy sesslons and bralnsLormlng new ldeas". lL ls noL based on Lhe llnear prlnclples of LradlLlonal sLraLeglc plannlng whlch exLrapolaLe Lhe pasL ln an aLLempL Lo predlcL Lhe fuLure. lL does noL resulL ln pure blue sky". lnsLead, lL spans a [ourney of lnqulry and acLlvlLy - from creaLlve lnsplraLlon aL Lhe amblguous fuzzy fronL end" Lhrough Lhe deLalled requlremenLs of successful execuLlon LhaL lead Lo buslness lmpacL.
SLraLeglc lnnovaLlon calls for a hollsLlc approach LhaL operaLes on mulLlple levels. llrsL, lL blends non-LradlLlonal and LradlLlonal approaches Lo buslness sLraLegy, deploylng Lhe pracLlces of lndusLry loreslghL", Consumer/CusLomer lnslghL" and SLraLeglc AllgnmenL" as a foundaLlon, and supplemenLlng Lhem wlLh more convenLlonal approaches and models. Second, lL comblnes Lwo seemlngly paradoxlcal mlndseLs: expanslve, vlslonary Lhlnklng LhaL lmaglnaLlvely explores long-Lerm posslblllLles, and pragmaLlc, down-Lo-earLh lmplemenLaLlon acLlvlLles LhaL lead Lo shorL-Lerm, measurable buslness lmpacL.
1.1. 1rad|t|ona| strategy versus Strateg|c Innovat|on
ulfferences beLween LradlLlonal approaches Lo sLraLegy and SLraLeglc lnnovaLlon are:
1rad|t|ona| approaches Strateg|c Innovat|on approach AdopL a presenL Lo fuLure" orlenLaLlon - Lakes Loday as Lhe sLarLlng polnL SLarLs wlLh Lhe end ln mlnd" - ldenLlfles long-Lerm opporLunlLles and Lhen brldges back Lo Lhe presenL" Assume a rule-maker/Laker (defenslve/follower) posLure Assumes a rule-breaker (revoluLlonary) posLure AccepL esLabllshed buslness boundarles/ producL caLegorles Seeks Lo creaLe new compeLlLlve space/ playlng flelds locus on lncremenLal lnnovaLlon Seeks breakLhrough, dlsrupLlve lnnovaLlon - whlle conLlnulng Lo bulld Lhe core lollow LradlLlonal, llnear buslness plannlng models Marrles process dlsclpllne wlLh creaLlve lnsplraLlon Seek lnpuL from obvlous, LradlLlonal sources Seeks lnsplraLlon from unconvenLlonal sources Seek arLlculaLed consumer needs Seeks unarLlculaLed consumer needs Are Lechnology-drlven (seek consumer saLlsfacLlon) ls consumer-lnsplred (seeks consumer dellghL) May have a one-slze-flLs-all" organlzaLlonal model May experlmenL wlLh enLrepreneurlal new venLure" or oLher organlzaLlonal sLrucLures
1.2. Serend|p|tous versus Strateg|c Innovat|on
Many organlzaLlons rely on serendlplLous acLs of creaLlvlLy Lo fosLer lnnovaLlon. CLhers Lake an ad hoc, unsLrucLured approach, whlch ofLen resulLs ln only lncremenLal lmprovemenLs wlLh poor lmplemenLaLlon LhaL can lack sponsorshlp.
SLraLeglc lnnovaLlon ls a hollsLlc, sysLemaLlc approach focused on generaLlng beyond- lncremenLal, breakLhrough or dlsconLlnuous lnnovaLlons. lnnovaLlon becomes sLraLeglc" when lL ls an lnLenLlonal, repeaLable process LhaL creaLes a slgnlflcanL dlfference ln Lhe value dellvered Lo consumers, cusLomers, parLners and Lhe corporaLlon. A SLraLeglc lnnovaLlon lnlLlaLlve generaLes a porLfollo of breakLhrough buslness growLh opporLunlLles uslng a dlsclpllned yeL creaLlve process.
2. 1he Seven D|mens|ons of Strateg|c Innovat|on
1he SLraLeglc lnnovaLlon framework weaves LogeLher seven dlmenslons Lo produce a porLfollo of ouLcomes LhaL drlve growLh. 1hese dlmenslons are:
A Managed Innovat|on rocess - Comblnlng non-1radlLlonal and 1radlLlonal Approaches Lo 8uslness SLraLegy Strateg|c A||gnment - 8ulldlng SupporL Industry Iores|ght - undersLandlng Lmerglng 1rends Consumer]Customer Ins|ght - undersLandlng ArLlculaLed and unarLlculaLed needs Core 1echno|og|es and Competenc|es - Leveraglng and LxLendlng CorporaLe AsseLs Crgan|zat|ona| kead|ness - 1he AblllLy Lo 1ake AcLlon D|sc|p||ned Imp|ementat|on - Managlng Lhe aLh lrom lnsplraLlon 1o 8uslness lmpacL Strategic Innovation Disruptive Change Med/High Revenue Potential Initiated by Organization Serendipitous Breakthroughs Disruptive Change Med/High Revenue Potential Accidental/Uncontrolled Unplanned Improvements Incremental Change Low/Med Revenue Potential Accidental/Uncontrolled Incremental Innovation Incremental Change Low/Med Revenue Potential Initiated by Organization Incremental Intentional Serendipitous Breakthrough Strategic Innovation Disruptive Change Med/High Revenue Potential Initiated by Organization Serendipitous Breakthroughs Disruptive Change Med/High Revenue Potential Accidental/Uncontrolled Unplanned Improvements Incremental Change Low/Med Revenue Potential Accidental/Uncontrolled Incremental Innovation Incremental Change Low/Med Revenue Potential Initiated by Organization Incremental Intentional Serendipitous Breakthrough A Framework for Strategic Innovation
A Managed Innovat|on rocess lles aL Lhe creaLlve core of Lhe approach. 8y faclllLaLlng Lhe lnLerplay beLween exLernal perspecLlves and an organlzaLlon's lnLernal capablllLles/pracLlces - and by looklng beyond Lhe obvlous - lL ls posslble Lo lnsplre Lhe corporaLe lmaglnaLlon Lo explore a dlverse array of new posslblllLles.
1he process ls deslgned and managed Lo creaLe Strateg|c A||gnment - Lhe enLhuslasLlc lnLernal supporL among key sLakeholders requlred Lo galvanlze an organlzaLlon around shared vlslons, goals and acLlons.
Industry Iores|ght provldes a Lop-down" perspecLlve LhaL seeks Lo undersLand Lhe complex forces drlvlng change, lncludlng emerglng and converglng Lrends, new Lechnologles, compeLlLlve dynamlcs, poLenLlal dlslocaLlons and alLernaLlve scenarlos.
Consumer]Customer Ins|ght provldes a boLLom-up" perspecLlve, a deep undersLandlng of boLh Lhe arLlculaLed (expllclLly sLaLed) and unarLlculaLed (laLenL or unrecognlzed) needs of exlsLlng and poLenLlal consumers/cusLomers.
Core 1echno|og|es and Competenc|es ls Lhe seL of lnLernal capablllLles, organlzaLlonal compeLencles and asseLs LhaL could poLenLlally be leveraged Lo dellver value Lo cusLomers, lncludlng Lechnologles, lnLellecLual properLy, brand equlLy and sLraLeglc relaLlonshlps.
A company's Crgan|zat|ona| kead|ness may drlve or lnhlblL lLs ablllLy Lo acL upon and lmplemenL new ldeas and sLraLegles, and Lo successfully manage Lhe operaLlonal, pollLlcal, culLural and flnanclal demands LhaL wlll follow.
LasLly, success wlll be enabled or llmlLed by an organlzaLlon's capaclLy for effecLlve, D|sc|p||ned Imp|ementat|on.
An organlzaLlon moves beyond an ad hoc approach Lo lnnovaLlon when lL beglns Lo develop and lnsLlLuLlonallze a culLural mlndseL and a seL of processes LhaL supporL repeaLable, Susta|nab|e Innovat|on. 1hls Lhen becomes a foundaLlon for ongolng compeLlLlve advanLage. vlsually, Lhe SLraLeglc lnnovaLlon framework ls descrlbed as follows: A Framework for Strategic Innovation
2.1. A Managed Innovat|on rocess - Comb|n|ng Non-1rad|t|ona| and 1rad|t|ona| Approaches to 8us|ness Strategy
1he Managed lnnovaLlon rocess covers Lhe sequence of acLlvlLles from Lhe beglnnlng of an lnlLlaLlve Lhrough lmplemenLaLlon. lL goes far beyond conducLlng a slmple bralnsLormlng sesslon.
1he process comblnes boLh unconvenLlonal and LradlLlonal elemenLs. lL lncludes Lhe usual consumer, markeL Lrend and compeLlLlve analyses, buL qulckly looks beyond Lhem. As an lnsplraLlonal caLalysL for breakLhrough growLh, lL ls maverlck and enLrepreneurlal, rooLed ln a provocaLlve, all-Lhlngs-posslble" perspecLlve LhaL demands radlcal reLhlnklng, challenges Lhe sLaLus quo and calls for boLh lefL and rlghL braln Lhlnklng from an organlzaLlon's key sLakeholders.
As a Leam-based framework Lhe approach lncludes faclllLaLed workshop sesslons: parL lnformaLlon exchange, parL exploraLlon, parL medlaLlon, parL creaLlve lnvenLlon and parL lmprove LheaLer. 1hese sesslons sLlmulaLe cross-funcLlonal Leams Lo look beyond Lhe obvlous and Lo explore and speculaLe abouL fuLure posslblllLles. 1he workshops lnLenLlonally [uxLapose unllkely, conLradlcLory perspecLlves whlch lnsplre new Lhlnklng and force a creaLlve Lenslon LhaL sLreLches Lhe mlnd Lo new levels of lnvenLlveness. 1he resulLlng vlew of Lhe fuLure ls Lhen supplemenLed wlLh Lhe usual meLhodologles and analysls found ln LradlLlonal fuLures plannlng.
2.1.1. D|vergent and Convergent th|nk|ng
1he lnnovaLlon process ls dlvlded lnLo Lwo broad modes of Lhlnklng: ulvergenL" and ConvergenL".
A Framework for Strategic Innovation
Page 10 www.innovation-point.com InnovationPoint LLC 1he ulvergenL" mode lles aL Lhe hearL of Lhe SLraLeglc lnnovaLlon approach. lL ls open- ended, exploraLory, and lnqulslLlve, deploylng non-LradlLlonal, creaLlve Lhlnklng and fuLure vlslonlng Lechnlques. lL lncludes exploraLory" consumer/cusLomer lnslghL research, quallLaLlve exploraLlon of lndusLry/markeL Lrends, and speculaLes on posslble lndusLry dlsconLlnulLles, eLc.
lL ls here, wlLh Lhe noLlon of ulvergenL Lhlnklng" LhaL organlzaLlons ofLen fall ln Lhelr aLLempLs Lo lnnovaLe. 8ellevlng LhaL lL ls frlvolous, blue sky", Llme consumlng and slows Llme Lo markeL, Lhey choose Lo mlnlmlze or neglecL lL.
lmpaLlenL for shorL-Lerm success, drlven by quarLerly scorecards, or consLralned by a corporaLe mlndseL LhaL has Lo demonsLraLe acLlvlLy and qulckly geL Lo Lhe answer", many organlzaLlons flnd lL hard Lo sLep back and dlverge. 1hls ofLen resulLs ln predlcLable, unlnsplred, lncremenLal lnnovaLlons LhaL clog Lhe plpellne and Lake a greaL deal of Llme and resources Lo manage.
ln reallLy Lhey could have far greaLer lmpacL had Lhey Laken Lhe Llme Lo dlverge aL Lhe ouLseL, acknowledge Lhelr bllnd spoLs" and explore poLenLlally frulLful areas, and flll Lhe plpellne wlLh well-grounded, blgger ldeas" LhaL offer greaLer poLenLlal.
lL ls ulvergenL" Lhlnklng, Lhen, LhaL opens Lhe door Lo Lhe posslblllLy of ldenLlfylng breakLhroughs. MosL companles have no dlfflculLy generaLlng ldeas for new producLs. uurlng Lhls ulvergenL" mode lL ls lmporLanL Lo explore oLher areas for lnnovaLlon, such as new ways Lo work wlLh exLernal parLners, communlcaLe wlLh consumers or enable fasLer Llme-Lo-markeL. 1hls ls Lrue even lf Lhe efforL ls focused on new producLs, slnce Lhese oLher facLors dlrecLly lmpacL Lhe success or fallure of Lhe new producL concepLs.
SubsequenLly, Lhrough ConvergenL" processes LhaL call for LradlLlonal buslness Lools, Lechnlques and daLa analysls, poLenLlal opporLunlLles are evaluaLed, prlorlLlzed, reflned and Lhen ofLen moved Lhrough a formal declslon-based SLage CaLe` process unLll Lhe mosL promlslng ones are lmplemenLed. 1hroughouL Lhe enLlre process, a focus on shorL-Lerm opporLunlLles LhaL leverage low hanglng frulL" ls palred wlLh Lhe search for mld- and long- Lerm breakLhrough growLh sLraLegles.
Whlle Lhe elemenLs of Lhe process generally occur ln a parLlcular sequence Lhere ls noL one slngle, rlgld road map - Lhe paLh ls non-llnear, modular and responslve Lo Lhe needs of Lhe momenL. lL ls flexlble and creaLlve, provldlng Lhe glue, Lhe spark and Lhe arLlsLlc maglc LhaL weaves LogeLher Lhe dlmenslons of SLraLeglc lnnovaLlon ln real-Llme.
Creativity is about divergent thinking. Innovation is about convergent thinking.
1he elemenLs of Lhe Managed lnnovaLlon rocess vary dependlng on Lhe buslness challenge (growLh sLraLegy, producL lnnovaLlon, packaglng lnnovaLlon, eLc.), buL broadly speaklng are as follows:
2.2. Strateg|c A||gnment - 8u||d|ng Support
SLraLeglc AllgnmenL" ls Lhe process of engaglng Lhe senlor leadershlp Leam, a broad cross- secLlon of Lhe organlzaLlon and key exLernal sLakeholders ln Lhe developmenL of a shared vlslon and Lhe paLh forward.
lnnovaLlon lnlLlaLlves - llke oLher Lypes of change efforL - ofLen fall because Lhe ouLcomes are "noL lnvenLed Pere", sllver bulleL soluLlons lmposed by senlor managemenL, peL ldeas" pushed Lhrough by lndlvlduals wlLh loud volces, senlorlLy or pollLlcal lnfluence, or developed ouLslde Lhe organlzaLlon ln some sorL of consulLanL Lhlnk Lank and handed down for lmplemenLaLlon afLer a flnal presenLaLlon. AcLlve cross-funcLlonal parLlclpaLlon ln Lhe lnnovaLlon process bullds SLraLeglc AllgnmenL" among key sLakeholders boLh wlLhln an organlzaLlon and among lLs key exLernal sLakeholders.
1hls klnd of allgnmenL galvanlzes Lhe organlzaLlon, creaLes ownershlp, enLhuslasm and commlLmenL, acceleraLlng fundlng declslons and bulldlng a sLrong foundaLlon for successful lmplemenLaLlon. 8ulldlng allgnmenL ls more Lhan [usL a way Lo ensure LhaL key sLakeholders are lnLellecLually on board and exclLed". lL ls crlLlcal for operaLlonal success, enabllng cross-funcLlonal declslons and agreemenL on Lhe Lough lssues around lmplemenLaLlon acLlvlLles such as compeLencles or asseLs LhaL wlll need Lo be leveraged, resource allocaLlon, roles and responslblllLles or new ways ln whlch deparLmenLs wlll need Lo work LogeLher.
Divergent mode Discovery and Exploration Convergent mode Evaluation and Implementation Business & Product Definition/ Design Consumer & Customer Validation Implement- ation Planning Define PD/ implementation plan & metrics Identify CSFs & support requirements Validate with consumers, customers & stakeholders Prototype & refine Define portfolio roadmap Make strategic decisions Create business vision Define/prioritize opportunity platforms/ concepts Refine Opportunity Identification Identify opportunity areas near & long term Define strategic alternatives Industry Foresight Understand emerging market/ industry trends, best practices Consumer & Customer Insight Explore consumer & customer needs, motivations, behaviors Scoping & Planning Define focus & scope Discovery & Research & analytics Kick-Off session Staging session Strategic Alignment Take short-term action Create foundation for sustainable innovation practices Engage key stakeholders (interviews, web-based survey, ongoing communications) Orchestrate new insights & stimulate visionary thinking Create foundation for implementation People Support What They Help Create.
Anonymous
A Framework for Strategic Innovation
Page 12 www.innovation-point.com InnovationPoint LLC WlLh LhaL ln mlnd lL ls essenLlal Lo ensure LhaL sLakeholders are engaged ln approprlaLe ways and wlLh sulLable frequency - noL [usL lnvlLed Lo a bralnsLormlng sesslon as a courLesy or an afLerLhoughL.
2.2.1. Interna| A||gnment
1here are several conslderaLlons when assembllng Lhe lnLernal Leam LhaL wlll drlve an lnnovaLlon lnlLlaLlve. llrsL, lL ls lmporLanL Lo selecL a cross-funcLlonal Core 1eam of vlslonary, energeLlc change agenLs and fuLure leaders - lnsplred and lnsplrlng lndlvlduals who wanL Lo make a dlfference. Second lL ls crlLlcal Lo choose a mlx of senlorlLy levels - Lyplcally from execuLlve Lo mlddle managemenL Lo lower level employees LhaL are ofLen closer Lo Lhe consumer/cusLomer. 1hlrd, a successful Core 1eam conslsLs of four dlfferenL caLegorles: sub[ecL maLLer experLs, declslon makers, lmplemenLers and noL leasL, naive" perspecLlves - maverlck free-Lhlnkers whose role ls Lo challenge Lhe Leam's lncomlng bellefs and assumpLlons. lourLh, Lhe Leam wlll need a balanced comblnaLlon of Lhlnklng and problem-solvlng sLyles - lncludlng mlndseLs sulLable for exploraLory Lhlnklng ln amblguous, speculaLlve fronL end" seLLlngs, as well as Lhe more analyLlcal mlndseLs requlred durlng lmplemenLaLlon. llfLh, Lhe Leam capLaln should conslder lncludlng Leam members from dlfferenL buslness unlLs, geographles or slsLer companles. ln addlLlon Lo Lhe Core 1eam, an LxLended 1eam of lnLernal oplnlon leaders, supporLers and evangellsLs should be appolnLed Lo acL as funcLlonal ambassadors" Lo represenL Lhe lnLeresLs of (and provlde lnformaLlon Lo) Lhelr respecLlve areas ln advance of Lhe lmplemenLaLlon phase.
1o ensure ongolng supporL, lL ls lmperaLlve Lo esLabllsh execuLlve-level sponsorshlp ldeally from more Lhan one funcLlonal area.
2.2.2. Lxterna| A||gnment
ln some cases lL may be lmporLanL Lo bulld exLernal allgnmenL wlLh - and Lo gaLher lnslghLs and ldeas from -- parLner organlzaLlons by formally maklng Lhem parL of Lhe co-creaLlon process. 1hls would call for bulldlng a Core or LxLended 1eam LhaL lncludes represenLaLlves from Lhe organlzaLlon's suppller, channel, manufacLurlng or packaglng parLners or adverLlslng or brandlng agency.
2.2.3. art|c|pants |n the Strateg|c Innovat|on process
ln order Lo enable lndusLry loreslghL, CusLomer lnslghL and SLraLeglc AllgnmenL, Lhe SLraLeglc lnnovaLlon process engages a broad range of parLlclpanLs and perspecLlves from wlLhln and ouLslde Lhe organlzaLlon, as follows: A Framework for Strategic Innovation
2.3. Industry Iores|ght - Understand|ng Lmerg|ng 1rends
Surprlslngly, many organlzaLlons have noL developed a polnL of vlew on where Lhelr lndusLry ls headlng, rarely looklng beyond Lhelr own boundarles, Loo busy flghLlng Loday's flres Lo Lake Lhe Llme Lo Lruly undersLand whaL ls drlvlng Lhelr operaLlng envlronmenL and how lL mlghL poLenLlally evolve. Whlle managers are busy managlng, and execuLlves are busy execuLlng, nobody ls busy envlslonlng". lL ls akln Lo slLLlng ln a small sallboaL unaware of Lhe weaLher condlLlons and dangers LhaL lle ahead.
lndusLry loreslghL" ls a Lop-down" approach LhaL explores Lhe drlvers, Lrends, enablers and dlslocaLlons wlLhln one or more lndusLrles. 1he world of meLeorology provldes a compelllng analogy. 1he ongolng monlLorlng of a complex, lnLerLwlned seL of meLeorologlcal forces allows us Lo develop a vlewpolnL how Lhey may colllde Lo lmpacL our world ln Lerms of Lhe weaLher. Slmllarly, vlslonary organlzaLlons esLabllsh a process for monlLorlng Lhe complex lnLerplay of key Lrends LhaL may poLenLlally lmpacL Lhelr buslness. lL ls ln looklng aL Lhe forces of deregulaLlon, lndusLry convergence and emerglng markeLs, and ln explorlng Lhe lnLersecLlons of soclal, demographlc, Lechnlcal, envlronmenLal, pollLlcal, compeLlLlve and oLher Lrends LhaL poLenLlal whlLe space" opporLunlLles are revealed. Slnce Loday's world ls noL llnear, we cannoL exLrapolaLe Lhe pasL Lo predlcL Lhe fuLure. lndusLry loreslghL Lherefore goes beyond LradlLlonal markeL Lrend research by Laklng a speculaLlve, whaL lf" perspecLlve, seeklng ouL - and ln some cases even lnLenLlonally creaLlng - lndusLry dlsrupLlons. MonlLorlng emerglng Lrends enables an organlzaLlon boLh Lo averL LhreaLs Lo Lhe exlsLlng buslness and Lo ldenLlfy poLenLlal markeL opporLunlLles LhaL may arlse when lndusLry Lrends converge. lorward-looklng organlzaLlons have a curloslLy and a LhlrsL Lo engage wlLh fresh perspecLlves from Lhe ouLslde. 1hey acLlvely seek ouL opporLunlLles Lo sLreLch Lhelr Lhlnklng and Lo move beyond Lhelr own seL of lnbullL experlences, bellefs and bllnd spoLs". 1hls ls cenLral Lo Lhe SLraLeglc lnnovaLlon approach. When an organlzaLlon looks beyond lLs Process Leader Internal Stakeholders External Participants Internal Participants Extended Team Liaison to internal stakeholders Functions, Levels, Geographies, BUs External Thought Leaders Visionaries, practitioners, academics Consumers Current, emerging, and potential Core Team Cross-functional team of change agents External Stakeholders Customers, retail partners, strategic alliances, suppliers I skate to where the puck is going to be, not where it has been." Wayne Gretzky A Framework for Strategic Innovation
Page 14 www.innovation-point.com InnovationPoint LLC own orLhodoxles, Lechnology capablllLles, buslness boundarles and hlsLorlcal operaLlng pracLlces lL dramaLlcally ralses lLs ablllLy Lo ldenLlfy plaLforms for breakLhrough growLh. lor example, an organlzaLlon ls beglnnlng Lo Lake a more fuLure-orlenLed vlew of Lhe world - and Lhe posslblllLles lL may offer - when lL sLarLs Lo brlng emerglng Lechnologles onLo lLs radar screen, raLher Lhan relylng on Lhe Lechnologles lL has used ln Lhe pasL. Slmllarly, lL may be aware of several lnLeresLlng exLernal Lechnologles buL may noL have done much Lo acLlvely explore Lhe posslblllLles of lnLegraLlng Lhem.
2.3.1. Look|ng beyond the obv|ous
1he posslblllLles sLarL Lo become lnLeresLlng when an organlzaLlon looks ouLslde lLs hlsLorlcal buslness and sLarLs Lhlnklng abouL ad[acenL worlds". lor example, a food manufacLurer wlLh a sLrong reLall channel lnfrasLrucLure may move beyond lLs focus on new producLs for exlsLlng segmenLs and channels", and sLarL Lhlnklng abouL Lhe world of schools or medlcal lnsLlLuLlons. 1here are many klnds of ad[acency moves, such as new caLegorles, new geographles, new channels, new beneflLs and new producLs.
Whlle lL mlghL be easy Lo dlsmlss ldeas LhaL are Loo fuLurlsLlc" Lhe opporLunlLles for long-Lerm growLh are compelllng when an organlzaLlon sLarLs Lo Lhlnk even more expanslvely and explore less obvlous, non-ad[acenL worlds". lor example, LhaL same food manufacLurer may Lhlnk abouL blurrlng producL caLegorles or lndusLry boundarles by looklng lnLo opporLunlLles aL Lhe lnLersecLlons of aromaLherapy, lnformaLlon Lechnology, personal communlcaLlons and consumer elecLronlcs, fashlon, Lhe arLs, nanoLechnology, Lhe Plp Pop communlLy or ways Lo apply emerglng non-food Lechnologles. 8reakLhroughs ofLen come from maklng non-obvlous connecLlons LhaL spark lmaglnaLlve Lhlnklng. 1hls ls noL Lo suggesL LhaL Lhe food manufacLurer move lnLo Lhe consumer elecLronlcs lndusLry - yeL lL ls enLlrely feaslble Lo learn from analogles from LhaL world, or Lo enLer lnLo unusual parLnershlps ln a way LhaL opens up new posslblllLles. Slnce compeLlLors are probably noL Lhlnklng ln Lhls way - and cerLalnly noL [uxLaposlng Lhls same seL of worlds" - Lhe resulLlng vlewpolnL ls proprleLary.
CrganlzaLlons Loday have no Lolerance for blue sky" dreams LhaL are noL acLlonable. 1he key ls Lo creaLe a long-Lerm vlslon for Lhe fuLure and Lo Lhen pragmaLlcally brldge back Lo Lhe presenL" by deflnlng sLraLegles and acLlons LhaL enable Lhe organlzaLlon Lo sLarL wlLh Lhe end ln mlnd. Senlor execuLlves are much more wllllng Lo engage ln vlslonary Lhlnklng when Lhey are assured LhaL lL wlll be accompanled by LlghL descrlpLlons of roles and responslblllLles, pro[ecL plans, mllesLones, meLrlcs and buslness case analyses.
Cne compelllng forum for radlcal exploraLlon ls a carefully orchesLraLed 1houghL Leader anel" ln whlch an organlzaLlon's change agenLs and lnnovaLors are broughL face-Lo-face wlLh exLernal lndusLry 1houghL Leaders" Lo explore, speculaLe and collaboraLe ln a shlrL- sleeves worklng envlronmenL.
1hls panel process brlngs LogeLher a Leam of forward-looklng exLernal provocaLeurs and experLs - vlslonary experLs ln Lhelr respecLlve flelds - Lo lnLroduce fresh perspecLlves and A problem cannot be solved by the same consciousness that created it.
Albert Einstein A Framework for Strategic Innovation
lnslghLs, challenge esLabllshed Lhlnklng, and collaboraLlvely explore poLenLlal growLh opporLunlLles, new buslnesses, new producLs/servlces, and lnnovaLlve buslness models LhaL may be revealed aL Lhe lnLersecLlon of dlfferenL worlds and emerglng Lrends.
Whlle Lhe obvlous approach ls Lo manage Lhls klnd of forum as a LradlLlonal panel dlscusslon", such an approach falls Lo dellver ln several ways. Cne example ls LhaL lL does noL fully explolL Lhe poLenLlal lnLeracLlons beLween exLernal parLlclpanLs. 1he spark of lnsplraLlon comes when dlfferenL perspecLlves on Lhe fuLure are voclferously debaLed, and when a varleLy of non-LradlLlonal Lechnlques help parLlclpanLs move beyond facLs and speculaLe and vlsuallze radlcal posslblllLles. Clearly, selecLlng and comblnlng an lmaglnaLlve and provocaLlve seL of perspecLlves ls crlLlcal Lo success.
1hrough lndusLry loreslghL, Lhen, an organlzaLlon can develop a compelllng, proprleLary vlew of Lhe fuLure, enabllng lL Lo Lhen deflne a well-grounded and pragmaLlc parLlclpaLlon sLraLegy.
2.4. Consumer]Customer Ins|ght - Understand|ng Art|cu|ated and Unart|cu|ated Needs
MosL organlzaLlons would llke Lo see Lhemselves as consumer- drlven, and asplre Lo creaLe producLs, servlces and soluLlons LhaL are grounded ln consumer needs. ln reallLy organlzaLlons ofLen have scanL undersLandlng of consumers' deep-seaLed behavlors, percepLlons and needs. roducL-drlven companles ln parLlcular could beneflL greaLly from Laklng a more consumer/cusLomer-lnsplred approach, Lhough Lhls ls ofLen aL odds wlLh Lhe organlzaLlon's culLural norms, especlally lf Lhe LechnologlsLs hold Lhe power.
Consumer/CusLomer lnslghL" ls a quallLaLlve, boLLom-up" approach LhaL leverages lnslghLs lnLo Lhe behavlors, percepLlons and needs of currenL and poLenLlal consumers/cusLomers by lnvolvlng Lhem as Lrue parLners ln Lhe lnnovaLlon process. lL ls a non-LradlLlonal, lmaglnaLlve approach Lo research LhaL seeks a deep undersLandlng of needs and Lhe drlvers of behavlor aL a level well beyond whaL Lhey consumers/cusLomers are able Lo arLlculaLe Lhemselves.
Whlle lL ls lmporLanL Lo lnclude LradlLlonal consumer daLa ln Lhe lnnovaLlon process, many organlzaLlons are uncomforLable experlmenLlng wlLh approaches Lhey see as less black and whlLe. Consumer/cusLomer lnvolvemenL ln producL developmenL ofLen conslsLs of LradlLlonal focus groups, panels or web-based surveys, and frequenLly goes no furLher Lhan sollclLlng cusLomer response Lo lnLernally-generaLed producL concepLs, or speclflc execuLlons such as feaLure preferences, packaglng or adverLlslng dlrecLlons.
Whlle valldaLlng ldeas wlLh consumers ls essenLlal, llmlLlng consumer lnLeracLlons Lo feedback gaLherlng ls a mlssed opporLunlLy. 1he SLraLeglc lnnovaLlon approach uses convenLlonal consumer forums (focus groups, lnLervlews, panels, eLc.) ln far more lmaglnaLlve ways. 1he goal of Lhls exploraLory" consumer work ls Lo spark fresh Lhlnklng Markets are conversations. Clue No. 1, Cluetrain Manifesto
Markets consist of human beings, not demographic sectors. Clue No. 2, Cluetrain Manifesto
There are two conversations going on. One inside the company. One with the market. Clue No. 53, Cluetrain Manifesto A Framework for Strategic Innovation
Page 16 www.innovation-point.com InnovationPoint LLC abouL fuLure posslblllLles LhaL Lhen LranslaLe lnLo growLh sLraLegy and new producL caLegorles, eLc. LxperlmenLlng wlLh non-LradlLlonal Lechnlques unfamlllar Lo lndusLry compeLlLors wlll help galn deeper lnslghLs and ldenLlfy opporLunlLles and concepLs LhaL have a greaLer degree of emoLlonal resonance" wlLh consumers.
Lqually, many consumer research programs are conLenL wlLh hearlng whaL cusLomers acLually say, buL do noL explore Lhe ferLlle ground of Lhelr unarLlculaLed (laLenL) needs. 1he volce of Lhe Consumer" has become a sLandard parL of Lhe LoolklL of markeLers and researchers across mosL lndusLrles, buL worklng wlLh Lhe spoken word ls obvlous and relaLlvely sLralghLforward. lurLhermore, slnce compeLlLors are dolng lL Loo lL provldes llLLle compeLlLlve edge.
1he pracLlce of eLhnographlc research ls galnlng ground - more rapldly ln some lndusLrles Lhan ln oLhers - buL lL has been slow Lo galn accepLance. lf conducLed poorly Lhe ouLpuL may be hlghly amblguous and Lhe lmpllcaLlons may noL be very clear. uesplLe Lhe opporLunlLy eLhnographlc research offers for breakLhrough lnslghLs, many enLerprlses are relucLanL Lo conslder lL as a vlable approach.
Consumer/cusLomer parLlclpaLlon ln corporaLe sLraLegy developmenL ls pracLlcally unheard of. 1here ls a Lremendous opporLunlLy ln lnvolvlng consumers/cusLomers (and suppllers and oLher exLernal sLakeholders, eLc.) as Lrue parLners ln Lhe lnnovaLlon process by adopLlng a Consumer/cusLomer lnslghL approach.
1he approach ls noL llmlLed Lo consumers/cusLomers, buL can be exLended Lo glean lnslghLs from many oLher Lypes of sLakeholders - examples lnclude: channel parLners, suppllers, employees, lnvesLors, early adopLer non-users, eLc.
2.S. Core 1echno|og|es and Competenc|es - Leverag|ng and Lxtend|ng Corporate Assets
A solld undersLandlng of a company's core Lechnologles and compeLencles provldes a pragmaLlc fllLer agalnsL whlch lmaglnaLlve ldeas can be assessed and shaped lnLo pracLlcal lnvesLmenL-worLhy opporLunlLles. Lven when an organlzaLlon possesses deep lnslghL lnLo consumer/cusLomer needs and fuLure Lrends, Lransformlng ldeas lnLo acLlon ls an uphlll baLLle unless Lhere ls a keen sense of Lhe organlzaLlon's lnherenL sLrengLhs and ablllLy Lo leverage lLs core asseLs.
lL ls essenLlal Lo noL [usL conslder an organlzaLlon's Lechnologles buL also oLher capablllLles LhaL are lnLegral Lo success. Such compeLencles may lnclude lnLellecLual properLy or paLenLs, unlque relaLlonshlps wlLh suppllers and parLners, brand equlLy, speed and operaLlonal aglllLy or unlque buslness pracLlces. ln large organlzaLlons wlLh mulLlple buslness unlLs one group may have developed lLs own operaLlonal processes and have valuable compeLencles and besL pracLlces Lo share wlLh oLher parLs of Lhe enLerprlse.
ln order Lo be vlable, Lherefore, any lnnovaLlons musL possess a LlghL llnk Lo core compeLencles. 1hls does noL only mean Lechnologles and compeLencles Lhe organlzaLlon possesses Loday. lL would be shorLslghLed Lo lgnore Lhe slgnlflcanL opporLunlLles LhaL could be pursued by parLnerlng, ouLsourclng or acqulrlng new Lechnologles and compeLencles. A Framework for Strategic Innovation
Many organlzaLlons lnadverLenLly llmlL Lhelr growLh opLlons by Lrylng Lo be self-sufflclenL or by noL belng open Lo expandlng Lhelr sLable of esLabllshed exLernal parLners.
2.6. Crgan|zat|ona| kead|ness - Assess|ng 1he Ab|||ty to 1ake Act|on
1here ls a Llme for lnsplred dreamlng and hlgh-mlnded vlslon developmenL and opporLunlLy ldenLlflcaLlon (durlng ulvergenL" Lhlnklng) and a Llme for down-Lo-earLh pragmaLlsm (durlng ConvergenL Lhlnklng"). lL ls crlLlcal Lo draw upon each mlndseL aL Lhe approprlaLe Llme.
uurlng Lhe pragmaLlc (ConvergenL") sLage lL ls essenLlal Lo have a clear undersLandlng of a company's CrganlzaLlonal 8eadlness" - lLs ablllLy Lo acL upon and lmplemenL lnnovaLlve ldeas and sLraLegles, and Lo successfully come Lo grlps wlLh Lhe operaLlonal, pollLlcal, culLural and flnanclal demands LhaL wlll follow. Lven wlLh Lhe mosL lnsplred vlslon and lnnovaLlve producLs an organlzaLlon may slmply noL be ln a poslLlon Lo effecLlvely lmplemenL. 1he approach Lherefore calls for an assessmenL of "CrganlzaLlonal 8eadlness" along Lhree dlmenslons:
Cu|tura| read|ness. 1hls refers Lo Lhe mlndseL and norms LhaL allow lndlvlduals and Leams Lo Lhlnk lmaglnaLlvely, Lo Lake prudenL rlsks, and Lo seek ouL, creaLe and lnLroduce lnnovaLlve soluLlons. lL lncludes such facLors as: senlor leadershlp's operaLlng sLyles and dlrecLlves (boLh spoken and unspoken), long- versus shorL-Lerm focus, employee proflles and Lhlnklng sLyles, corporaLe values (especlally on Lhe role of lnnovaLlon), menLal models abouL buslness boundarles and Lhe way we do Lhlngs, here", blas for collaboraLlon, declslon-maklng sLyles, bureaucracy levels, lnLernal power sLruggles, pollLlcal agendas, wllllngness Lo embrace change and penchanL for acLlon.
rocess read|ness. 1hls refers Lo Lhe general buslness processes and pracLlces LhaL enable funcLlonal groups Lo operaLe effecLlvely and collaboraLe Loward a common goal - as well as a robusL seL of meLhodologles and Lools speclflcally deslgned Lo drlve lnnovaLlon.
Structura| read|ness. 1hls refers Lo Lhe organlzaLlonal sLrucLures and Lechnologles LhaL supporL lnnovaLlon as well as levels of flexlblllLy Lo asslgn avallable and quallfled sLaff Lo hlgh-prlorlLy pro[ecLs - wlLhouL quesLlon one of Lhe leadlng barrlers Lo lmplemenLaLlon.
undersLandlng an organlzaLlon's readlness Lo acL lnforms lnlLlal declslons abouL pro[ecL scoplng, Llme horlzons and Lhe deslred level of breakLhrough, seLs expecLaLlons abouL how Lo effecLlvely work wlLh Lhe Core 1eam and oLher sLakeholders, and enables a reallsLlc approach Lo lmplemenLaLlon.
The real difficulty in changing the course of any enterprise lies not in developing new ideas, but in escaping old ones.
John Maynard Keynes
Everyone wants to grow; most people are just unwilling to change in order to do so.
Anonymous A Framework for Strategic Innovation
Page 18 www.innovation-point.com InnovationPoint LLC 2.7. D|sc|p||ned Imp|ementat|on - Manag|ng the ath Irom Insp|rat|on 1o 8us|ness Impact
Whlle lL ls noL easy Lo produce creaLlve, vlslonary sLraLeglc Lhlnklng, lL ls equally challenglng Lo successfully lmplemenL LhaL Lhlnklng ln a way LhaL creaLes meanlngful buslness resulLs. lor example, generaLlng new producL ldeas ls noL necessarlly LhaL hard. lL ls ln Lhe acL of execuLlon - where Lhe rubber meeLs Lhe road - LhaL lnnovaLlon efforLs frequenLly fall. lL ls here LhaL an organlzaLlon musL demonsLraLe lLs ablllLy Lo LranslaLe a ower olnL presenLaLlon full of good ldeas Lo Lhe boLLom llne, by Lenaclously negoLlaLlng Lhe obsLacle- rldden paLh Lo buslness lmpacL.
ln Lhe conLexL of SLraLeglc lnnovaLlon, Lhe Lerm lmplemenLaLlon" lncludes a broad seL of acLlvlLles LhaL call for supporL and lnvolvemenL across Lhe organlzaLlon. 1hese may lnclude: LranslLlon Lo speclflc pro[ecLs or programs, Lechnlcal producL developmenL and deslgn, developlng a dlsLlncLlve value proposlLlon Lhrough consumer-based rapld proLoLyplng and LesLlng, brand developmenL, bulldlng a buslness case, effecLlvely communlcaLlng lnLernally Lo galn broader organlzaLlonal buy-ln, developlng markeLlng and channel sLraLegles, deflnlng evaluaLlon crlLerla and success meLrlcs approprlaLe for a new venLure (avoldlng overrellance on LradlLlonal flnanclal meLrlcs), developlng new buslness processes or creaLlng new organlzaLlonal sLrucLures, hlrlng and Lralnlng, and esLabllshlng feedback loops for conLlnuous lmprovemenL Lo Lhe lnnovaLlon process.
1he work of SLraLeglc lnnovaLlon ofLen has profound lmpllcaLlons ln Lerms of operaLlonal, sLrucLural and buslness process change. lor example, a relaLlvely sLralghLforward new producL developmenL efforL may noL be as clear cuL as lL would seem, slnce lL may ralse larger, sysLemlc lssues and call for Lhe developmenL of supporL sLraLegles LhaL wlll enable Lhese new producLs Lo make Lhelr way Lhrough Lhe commerclallzaLlon process (such as brand sLraLegy revlew, channel raLlonallzaLlon, eLc.). ln some cases an lnnovaLlon efforL may call for Lhe creaLlon of a new buslness-wlLhln-a-buslness" (e.g., an enLrepreneurlal, new venLure-Lype sLrucLure LhaL sLands aparL from Lhe prlnclpal buslness).
When an organlzaLlon has puL Lhe flnlshlng Louches Lo lLs rosLer of lnnovaLlve ldeas - for poLenLlal new producLs, growLh sLraLegles, new whlLe space" opporLunlLles Lo pursue, new markeLs Lo enLer, new programs Lo launch or new buslness processes Lo creaLe - lL flnds lLself now aL Lhe crlLlcal LranslLlon polnL from ldea generaLlon" or sLraLegy developmenL" Lo pro[ecL managemenL". 1hls ls where Lhe lnnovaLlon process LranslLlons from amblguous and exploraLory Lo concreLe and operaLlonal.
2.7.1. key cons|derat|ons for |mp|ement|ng Strateg|c Innovat|on |n|t|at|ves
key conslderaLlons for lmplemenLlng SLraLeglc lnnovaLlon lnlLlaLlves are: lmplemenLaLlon sklllseLs and mlndseLs, malnLalnlng momenLum, a formal pro[ecL managemenL approach, an undersLandlng of organlzaLlonal prlorlLles and declslon maklng processes, and a pracLlcal SLage CaLe` process. Genius is one percent inspiration and ninety nine percent perspiration.
ulfferenL lndlvldual sklllseLs and mlndseLs are needed aL dlfferenL sLages of Lhe SLraLeglc lnnovaLlon process. Whlle many of Lhe early Leam members wlll play a role LhroughouL an lnlLlaLlve, addlLlonal lndlvlduals wlll [oln Lhe Leam as Lhe process unfolds. 1he Lask of ulsclpllned lmplemenLaLlon" calls for pragmaLlc operaLlonal skllls, exempllfled ln lndlvlduals who are adepL aL worklng closely wlLh oLhers Lo Lenaclously geL Lhe [ob done, and who have Lhe energy, LenaclLy, persuaslon and communlcaLlons skllls, pollLlcal savvy, personal relaLlonshlps and credlblllLy Lo overcome organlzaLlonal roadblocks. 2.7.1.2. Ma|nta|n|ng momentum
AL Lhe end of Lhe ulvergenL" phase Lhere ls a slgnlflcanL rlsk of Lhe efforL grlndlng Lo a halL. 1here are numerous causes: organlzaLlonal lnerLla, hlgher prlorlLles, pollLlcal agendas and compeLlng demands for personnel or flnanclal resources. 1here are several sLraLegles for malnLalnlng momenLum, whlch lnclude: bulldlng SLraLeglc AllgnmenL LhroughouL Lhe earller sLages, leveraglng Lhe organlzaLlon's lmplemenLlon-relaLed 8esL racLlces, demonsLraLlng early successes, malnLalnlng lnLernal vlslblllLy Lhrough a well-execuLed communlcaLlons sLraLegy LhaL keeps senlor managemenL and key sLakeholders commlLLed, candldly sLaLlng Lhe crlLlcal success facLors and requlremenLs Lo supporL Lhe efforL and obLalnlng senlor managemenL's early commlLmenL Lo meeLlng Lhem. 2.7.1.3. A forma| pro[ect management approach
AL Lhe end of Lhe ulvergenL" phase Lhe SLraLeglc lnnovaLlon efforL changes from belng a slngle Lhread of acLlvlLy and Lakes Lhe form of mulLlple concurrenL daughLer" pro[ecLs. 1hese need Lo be LlghLly managed by paylng aLLenLlon Lo esLabllshed ro[ecL ManagemenL pracLlces, lncludlng: reallsLlc expecLaLlons ln Llmlng and performance goals, approprlaLe resource allocaLlon - sLafflng, budgeLs and access Lo lnformaLlon conslsLenL wlLh Lhe scope of Lhe deslred buslness lmpacL, and accounLablllLy, progress measuremenL and sLaLus reporLlng, boLh before and durlng Lhe plloL/roll-ouL phases and LhroughouL Lhe ln-markeL acLlvlLles.
1he area of human resource allocaLlon ln parLlcular ls where lmplemenLaLlon efforLs ofLen fall, wlLh sLaff expecLed Lo fulflll Lhelr regular day [ob" responslblllLles whlle also belng asked Lo conLrlbuLe Lo a sLraLeglc efforL. 1he challenge ralses organlzaLlonal lssues such Lhe need for redeslgned personal performance measuremenL programs and assoclaLed rewards/ lncenLlves. 2.7.1.4. An understand|ng of organ|zat|ona| pr|or|t|es and dec|s|on mak|ng processes
lL ls essenLlal Lo be aware of Lhe way an organlzaLlon prlorlLlzes, approves and conLlnues Lo supporL lnlLlaLlves. Any lnlLlaLlve ls poLenLlally aL rlsk as markeL condlLlons change, lf newly ldenLlfled opporLunlLles Lrlgger a shlfL ln prlorlLles, lf budgeL or oLher consLralnLs suddenly come Lo Lhe forefronL, or lf Lhe declslon maklng process lacks rlgor. WlLh much aL sLake lL ls clearly lmporLanL Lo flnd ways Lo proacLlvely reduce Lhese rlsks. A Framework for Strategic Innovation
Page 20 www.innovation-point.com InnovationPoint LLC 2.7.1.S. A pract|ca| Stage Gate process
A sound end-Lo-end lnnovaLlon lnlLlaLlve ls Lyplcally comprlsed of an exploraLory, fuzzy fronL end" process followed by some klnd of SLage CaLe` process. lL ls lmporLanL Lo recognlze Lhe dlfferenL roles of Lhese Lwo dlsLlncL processes.
A ma[or purpose of Lhe fronL end process ls Lo ldenLlfy good, well-grounded buslness opporLunlLles and ldeas - ranglng from lncremenLal Lo breakLhrough. 1he fronL-end process can be applled Lo ldenLlfylng a wlde specLrum of opporLunlLles lncludlng producLs and servlces, new venLures, buslness models, parLnershlps and operaLlonal pracLlces. lLs oLher purposes are Lo bulld allgnmenL and creaLe momenLum around opporLunlLles, Lo narrow Lhe funnel of posslblllLles and Lo deflne Lhe sLraLeglc roadmap and hlgh-level lmplemenLaLlon plan.
8y conLrasL, Lhe SLage CaLe` process LradlLlonally focuses only on new producLs. lL comes lnLo play once new producL concepLs have been ldenLlfled, and provldes an operaLlonal roadmap for drlvlng new producL pro[ecLs from ldea/concepL Lo launch, wlLh a focus on lmprovlng declslon-maklng and efflclency. 1o derlve Lhe greaLesL beneflL from a SLage CaLe` process lL ls crlLlcal Lo ensure LhaL Lhe fronL end process has been dlvergenL enough Lo dellver hlgh quallLy ldeas, ldeally grounded ln well-concelved plaLforms.
SLage CaLe` processes have broughL much-needed rlgor Lo Lhe concepL evaluaLlon phase, parLlcularly Lo organlzaLlons LhaL prevlously lacked dlsclpllne around go/no go declslons and lmplemenLaLlon. Powever, Lhese processes are noL wlLhouL slgnlflcanL llmlLaLlons, frequenLly because of human facLors, lnflexlblllLy around declslon polnLs and lnsufflclenL managemenL lnvolvemenL. lnsLlLuLlng and applylng a SLage CaLe` process wlLhouL a crlLlcal eye can creaLe slgnlflcanL lssues.
3. Susta|nab|e Innovat|on - 8u||d|ng a Ioundat|on for Cngo|ng Compet|t|ve Advantage
An organlzaLlon cannoL counL on bulldlng a secure fuLure ln Lhe myoplc bellef LhaL whaL has worked ln Lhe pasL wlll conLlnue Lo work ln a rapldly changlng and lncreaslngly uncerLaln world. lL would be foollsh Lo rely on lnnovaLlon by accldenLal good forLune or occaslonal lnsplraLlon". Lqually, lL makes no sense Lo call ln Lhe creaLlvlLy consulLanLs" once a year for a flre drlll when someone ln Lhe organlzaLlon feels lL ls Llme for anoLher round of lnnovaLlon". 1hese approaches are nelLher pragmaLlc nor susLalnable.
1o succeed ln Lhe long Lerm, lL ls necessary Lo move beyond an ad hoc or unsLrucLured approach Lo lnnovaLlon. An organlzaLlon wlll need Lo lnLenLlonally and dellberaLely fosLer an lnnovaLlon-blased culLure and develop and lnsLlLuLe approprlaLe lnnovaLlon processes, meLhodologles and supporLlng Lechnologles. 1hls may lnclude Lhe developmenL of a collaboraLlon-based knowledge managemenL lnfrasLrucLure - an lnnovaLlon CommunlLy of racLlce" LhaL supporLs Lhe sharlng of lnnovaLlon besL pracLlces, consumer and markeL Todays successful business leaders will be those who are most flexible of mind. They will have the ability to embrace new ideas and routinely challenge old ones. They will be alert to learning from others and quickly adapt from the best.
research and poLenLlal opporLunlLy plaLforms, and faclllLaLes lmaglnaLlve Lhlnklng across Lhe organlzaLlon.
1hls learnlng focus" wlll resulL ln deep-seaLed change LhroughouL Lhe organlzaLlon. lL wlll Lake a slgnlflcanL Llme commlLmenL, wlll requlre lmpassloned lnLernal champlons, and musL be supporLed aL Lhe Lop and LhroughouL Lhe organlzaLlon, boLh ln Lheory and ln day-Lo-day pracLlce. lL wlll be necessary Lo conLlnuously monlLor, lmprove and evangellze Lhese efforLs. 1here wlll be a need Lo regularly communlcaLe Lhe labors, Lhe Lrlals, Lhe fallures and Lhe frulLs. 1hough lL may seem a daunLlng Lask Lhe rewards of susLalnable SLraLeglc lnnovaLlon are greaL.
1he fuLure belongs Lo Lhose organlzaLlons LhaL passlonaLely embrace an lnnovaLlon mlndseL as embodled dally ln Lhe hearLs and mlnds and acLlons of lLs change agenLs and fuLure leaders.
3.1. 1he ath to Strateg|c Innovat|on
Many organlzaLlons wanL Lo become more lnnovaLlve" buL don'L know where Lo sLarL. Whlle an obvlous flrsL LhoughL ls Lo lnLroduce creaLlvlLy Lralnlng", Lhe effecLs are usually shorL-llved. 8eLurn on lnvesLmenL ls almosL lmposslble Lo measure and Lhere ls llLLle lmpacL on Lhe broad corporaLe consclousness. lrequenLly, an organlzaLlon's lnLernal sLrucLures, pollcles and culLure lnhlblL lnnovaLlon. MosL organlzaLlons are already lmplemenLlng aL leasL some dlmenslons of Lhe SLraLeglc lnnovaLlon approach, Lhough ofLen ln an ad hoc manner wlLhouL an overarchlng framework. So how can an organlzaLlon advance lLs currenL lnnovaLlon pracLlces and move farLher along Lhe paLh Loward susLalnable, SLraLeglc lnnovaLlon?
3.2. Innovat|on Assessment and 8enchmark|ng
1he sLarLlng polnL ls Lo conducL focused lnnovaLlon AssessmenL and 8enchmarklng acLlvlLles. 1hls process has four-sLeps: an lnLernal lnnovaLlon dlagnosLlc LhaL looks aL Lhe organlzaLlon and assesses Lhe currenL sLaLe along several dlmenslons, exLernal benchmarklng (boLh lnslde and ouLslde your lndusLry), developmenL and adapLaLlon LhaL deflnes new pracLlces sulLable for your organlzaLlon, lnsLlLuLlonallzaLlon - shepherdlng new pracLlces lnLo operaLlon and conLlnuously lmprovlng Lhem.
An lnnovaLlon ulagnosLlc provldes a basellne LhaL descrlbes exlsLlng lnnovaLlon CompeLencles and Change 8eadlness" - an organlzaLlon's ablllLy Lo effecLlvely lnnovaLe and Lo embrace new pracLlces. 1he process Lyplcally looks aL Lhree Lypes of lnnovaLlon capablllLy:
Cu|tura| - uo Lhe organlzaLlon's mlndseL and norms allow lndlvlduals and Leams Lo Lhlnk lmaglnaLlvely, Lo Lake prudenL rlsks, and Lo seek ouL, creaLe and lnLroduce lnnovaLlve soluLlons? rocess - uoes Lhe organlzaLlon have Lhe general buslness processes and pracLlces LhaL enable funcLlonal groups Lo operaLe effecLlvely and collaboraLe Loward a common goal - as well as a robusL seL of meLhodologles and Lools speclflcally deslgned Lo drlve lnnovaLlon? A Framework for Strategic Innovation
Page 22 www.innovation-point.com InnovationPoint LLC Structura| - ls Lhe organlzaLlon deslgned Lo allow smarL, flexlble declslons abouL human and flnanclal resource allocaLlon? uo supporLlng Lechnologles help or geL ln Lhe way? Pow easy ls collaboraLlon and communlcaLlon across funcLlonal sllos? Should Lhe organlzaLlon conslder plloLlng dlfferenL klnds of sLrucLures Lo supporL lnnovaLlon? Lxamples of such sLrucLures lnclude lnnovaLlon pro[ecL Leams, experL neLworks, shared servlces organlzaLlons, lnnovaLlon communlLles of pracLlce, ambldexLrous organlzaLlons and lnnovaLlon counclls.
3.3. Lnd Note
SLraLeglc lnnovaLlon ls noL an end-sLaLe. 8aLher, lL ls a [ourney of open-mlnded exploraLlon, experlmenLaLlon, Lhlnklng, declslon-maklng, acLlon, resulLs and learnlng, wlLh Lhe cycle Lhen repeaLlng.
Whlle Lhere are numerous ways effecLlvely Lo measure Lhe buslness lmpacL resulLlng from a SLraLeglc lnnovaLlon lnlLlaLlve, an organlzaLlon's ablllLy Lo successfully lnnovaLe ls less Langlble, measured ln Lerms of progress over Llme raLher Lhan ln absoluLes.
1he [ourney of SLraLeglc lnnovaLlon calls for learnlng by dolng - lf an organlzaLlon approaches a buslness lssue and adopLs Lhe framework as lLs seL of guldlng prlnclples, Lhe buslness lmpacL wlll be evldenL and Lhere wlll be an opporLunlLy Lo lncorporaLe Lhe learnlng as Lhe flrsL sLep Loward bulldlng a foundaLlon for susLalnable lnnovaLlon.
A journey of a thousand miles must begin with a single step.
4. M|n|-d|agnost|c: Does your organ|zat|on pract|ce Strateg|c Innovat|on?
ls your organlzaLlon seL up Lo lnnovaLe sLraLeglcally? 1he followlng brlef assessmenL ls noL a subsLlLuLe for an ln-depLh lnnovaLlon ulagnosLlc. Powever, lL wlll provlde a guL feel" of how you raLe your organlzaLlon along several crlLlcal dlmenslons. More lmporLanLly, lL may challenge your assumpLlons abouL whaL lL Lakes Lo creaLe Lhe culLure, processes and sLrucLures LhaL supporL lnnovaLlon, and lnsplre you Lo look aL your organlzaLlon wlLh a more dlscernlng eye.
8aLe your organlzaLlon on Lhe followlng quesLlons uslng Lhese guldellnes:
My organlzaLlon's approach Lo sLraLegy, new producL developmenL and process lmprovemenL goes beyond LradlLlonal plannlng meLhods and Lake an exLernally- focused, exploraLory approach LhaL challenges Lhe sLaLus quo and creaLlvely lnsplres new Lhlnklng
2. Strateg|c A||gnment
Cur leadershlp supporLs (and acLlvely drlves) a collaboraLlve culLure LhaL encourages dlfferenL deparLmenLs worklng cross-funcLlonally Lo ldenLlfy and develop lnnovaLlve soluLlons
3. Industry Iores|ght
My organlzaLlon has a sysLemaLlc process for acLlvely monlLorlng and explorlng emerglng Lrends and developlng alLernaLlve scenarlos LhaL represenL elLher LhreaLs or opporLunlLles
4. Consumer]Customer Ins|ght
My organlzaLlon dlrecLly lnvolves consumers/cusLomers (boLh exlsLlng and poLenLlal) as an lnLegral parL of Lhe lnnovaLlon process as a means of ldenLlfylng boLh arLlculaLed and unarLlculaLed cusLomer needs
Page 24 www.innovation-point.com InnovationPoint LLC S. Core 1echno|og|es and Competenc|es
My organlzaLlon clearly undersLands lLs core compeLencles and has expllclLly ouLllned Lhe llnkage beLween lLs long-Lerm sLraLeglc goals and lLs shorL- and medlum-Lerm 8&u lnvesLmenLs and Lechnology sLraLegles. My organlzaLlon acLlvely explores new ways Lo exLend beyond our exlsLlng compeLencles
6. Cu|tura| kead|ness
My organlzaLlon demonsLraLes an lnnovaLlve mlndseL, a blas for collaboraLlon, an lncluslve, non-bureaucraLlc declslon-maklng sLyle, a wllllngness Lo embrace change, and a penchanL for acLlon
7. rocess and Structura| kead|ness
My organlzaLlon has (or demonsLraLes a mlndseL LhaL ls wllllng Lo develop) approprlaLe operaLlonal processes and funcLlonal sLrucLures and allocaLes adequaLe sLafflng, fundlng and managemenL supporL Lo hlgh prlorlLy lnnovaLlon lnlLlaLlves
8. D|sc|p||ned Imp|ementat|on
My organlzaLlon conslsLenLly demonsLraLes lLs ablllLy Lo creaLe measurable buslness lmpacL by Laklng a dlsclpllned approach Lo Lhe lmplemenLaLlon of sLraLeglc Lhlnklng
9. Innovat|on Goa|s and Metr|cs
My organlzaLlon has esLabllshed lnnovaLlon-relaLed goals and measures (for example: x of revenues musL come from producLs/servlces lnLroduced over Lhe pasL ? years")
10. Capac|ty for Susta|nab|e Innovat|on
My organlzaLlon Lakes Lhe Llme Lo learn from lLs lnnovaLlon efforLs and ls commlLLed Lo dellberaLely bulldlng an lnnovaLlon-based culLure and lnsLlLuLlng a seL of lnnovaLlon-focused meLhodologles
?our organlzaLlon undersLands Lhe core elemenLs of sLraLeglc lnnovaLlon and ls well poslLloned Lo remaln a leadlng lnnovaLor. SLraLeglc lnnovaLlon ls lnherenL ln your culLure and you may be feellng confldenL abouL your currenL growLh sLraLegles.
WhaL Lo do nexL? Lnsure your organlzaLlon conLlnues Lo seek breakLhrough opporLunlLles beyond Lhe leadlng edge", anLlclpaLes consumer/cusLomer needs, cannlballzes lLs own producLs and servlces and drlves lndusLry sLandards. ConLlnue Lo lncorporaLe your learnlng and reflne your processes for susLalnable lnnovaLlon.
29-34: Insp|red Innovator
?our organlzaLlon demonsLraLes some solld lnnovaLlon pracLlces buL Lhere are areas of weakness. ?our opporLunlLy plpellne" may be relaLlvely full, Lhough you may be focuslng on lncremenLal lnnovaLlons.
WhaL Lo do nexL? locus on Lhe areas of weakness and begln Lo deflne a process for susLalnable lnnovaLlon. Assess Lhe raLlo of blg ldeas" Lo small ldeas" Lo see lf you have been looklng broadly enough.
24-28: Asp|r|ng Innovator
Sparks of lnnovaLlon exlsL, Lhough your resulLs may be skewed Loward lncremenLal lmprovemenLs raLher Lhan game-changlng lnnovaLlons. Lqually, your approach may be ad hoc and unsLrucLured.
WhaL Lo do nexL? 1ake a sysLemaLlc vlew of Lhe core sLraLeglc, consumer/cusLomer-focused and organlzaLlonal facLors necessary for SLraLeglc lnnovaLlon and seek ouL low hanglng frulL" opporLunlLles. 1ake Lhe Llme Lo lncorporaLe your learnlng and sLarL Lo deflne a process for susLalnable lnnovaLlon. Assess Lhe raLlo of blg ldeas" Lo small ldeas" Lo see lf you have been looklng broadly enough.
< 23: Cha||enged Innovator
Whlle you may recognlze LhaL lnnovaLlon ls lmporLanL, your organlzaLlon's culLure, sLrucLures and processes do noL supporL SLraLeglc lnnovaLlon. lnnovaLlon ls ad hoc and unsLrucLured and your resulLs may be unlnsplrlng.
WhaL Lo do nexL? uedlcaLe resources Lo a small-scale, focused lnnovaLlon lnlLlaLlve wlLh measurable dellverables. 1ake Lhe Llme Lo lncorporaLe your learnlng and sLarL Lo deflne a process for susLalnable lnnovaLlon.
About Innovat|ono|nt 'from lnsplraLlon Lo lmpacL'
Innovat|ono|nt |s a non-trad|t|ona| consu|t|ng f|rm w|th a |aser focus on "Strateg|c Innovat|on." We he|p organ|zat|ons dr|ve breakthrough, prof|tab|e top||ne growth by work|ng co||aborat|ve|y w|th cross-funct|ona| teams to cha||enge the status quo, to |dent|fy and cap|ta||ze on new growth opportun|t|es, and to bu||d robust |nnovat|on capab|||t|es. We help our cllenLs Lake a fresh look beyond Lhe obvlous paLhs Lo growLh, collaboraLe across funcLlonal boundarles, agree on lnvesLmenL prlorlLles and moblllze around shared goals. We lead organlzaLlons from vlslonary, sLraLeglc Lhlnklng aL Lhe 'fuzzy fronL end' of Lhe lnnovaLlon process Lhrough Lhe developmenL of pragmaLlc lmplemenLaLlon plans LhaL dellver measurable resulLs ln Lhe shorL-, mld- and longer Lerm. 1o ensure susLalnable resulLs, we ofLen help our cllenLs bulld a capaclLy for sLraLeglc lnnovaLlon by lnLroduclng and drlvlng organlzaLlonal, process and culLural change. We have a LwenLy-year Lrack record, and numerous long-Lerm cllenL relaLlonshlps across a wlde range of lndusLrles. Cur Lwo complemenLary, lnLegraLed pracLlce areas are: Strateg|c Innovat|on Strateg|c Crgan|zat|ona| Change 8reakLhrough CrowLh SLraLegy new roducL, Servlce & CaLegory lnnovaLlon 8uslness Model Leapfrogglng MarkeL-urlven 1echnology 8oadmapplng lnnovaLlon CulLure & 1ransformaLlonal Change LLAS Leadershlp uevelopmenL
Cur un|que perspect|ves and non-trad|t|ona|, propr|etary methodo|og|es set us apart - a refreshlng blend of unconvenLlonal, creaLlve approaches Lo buslness lnnovaLlon coupled wlLh LradlLlonal consulLlng pracLlces. 8y lnLroduclng provocaLlve exLernal perspecLlves Lhrough our neLwork of cross-lndusLry 1houghL Leaders," along wlLh cusLomer and consumer lnslghLs, our approaches sLreLch our cllenLs' menLal models and dellver game-changlng sLraLegles LhaL are boLh vlslonary and acLlonable. ConcurrenLly, we creaLe Lhe organlzaLlonal allgnmenL, supporL and momenLum requlred for acceleraLed declslon-maklng and effecLlve lmplemenLaLlon.
Cur team lncludes seasoned buslness leaders who know whaL lL Lakes Lo geL Lo Lhe nexL level. We provlde LhoughL leadershlp ln Lhe fleld of sLraLeglc lnnovaLlon and change, havlng publlshed Lhe besLselllng, award-wlnnlng book "#$%&'())*+) and been proflled and quoLed ln 3$456(.%$+2, 75'$5#)2 8 "#$1#'49*%, naLlonal ubllc 8adlo, uSA 1oday, MonsLer.com, 1lme Magazlne, and many oLher medla.
Cur c||ents are global and lnclude some of Lhe world's mosL lnnovaLlve flrms such as: epslCo, lrlLo-Lay, ColgaLe-almollve, klmberly-Clark, uean loods, ulsney, PewleLL- ackard, Chevron, MlcrosofL, AgllenL, Aon/PewlLL, Lowe's, Mayo Cllnlc, AlegenL PealLh, ChrlsLus PealLh, lalrvlew PealLh, kalser ermanenLe, MedLronlc, Plll's eL nuLrlLlon, 8ed 8ull, vlsa, Schwab, ! Morgan/Chase, Merrlll Lynch, Wells largo, Wachovla, uS 8ank, CaplLal Cne, hlllps, CenenLech, Sealed Alr, ulal, Cholce PoLels, SLar Alllance (Cermany), 1ekes (llnland), Crundfos (uenmark), 8oche (SwlLzerland) and Sk 1elecom (SouLh korea).
lnnovaLlonolnL San lranclsco CA, uSA 310.428.1644 lnnnovaLlon[lnnovaLlon-polnL.com hLLp://www.lnnovaLlon-polnL.com