ISME Magazine -Issue 39 webview (1)

Aligning Innovation
Strategy with a
Business Strategy
A company struggling to bridge the gap between innovation strategy
and business strategy must look at what kind of need drives their business.
They can then develop an innovation strategy based on this need.
Innovation is indispensable
to business growth.
With the business world
evolving every moment
entrepreneurs need to innovate
extensively to keep up with the
changes. The traditional way
of including innovation strategy
in a company was all about
training employees on how to
use design thinking methods,
processes etc., but this is not
enough. In the present market
for a company’s innovation
strategy to work it is important
to align its business processes
with the innovator’s way of
working.
Here’s Why?
With the growing need to
implement innovation strategy
better many companies are
researching ways of reaping
maximum benefits from it.
Price Waterhouse Cooper
very recently published
an ‘innovation benchmark
report. This report was made
based on a survey with 1220
executives who were based
in 44 different countries. The
research aimed at finding out
what executives understand
about innovation globally and
the measures that they are
taking to reap the maximum
benefits out of it. This report
clearly captures the changing
view of innovation in business.
Some of the key highlights
found from this research are:
1. Embracing
Collaborative Models:
Collaborative models like
Design thinking and open
innovation are increasingly
becoming popular with
companies today. The research
found that companies that
used collaborative approaches
to innovation increased their
growth rate to %15 or more
when compared with their
counterparts.
2. Partners for Innovation:
It is interesting to note that
%60 of the studied companies
think that their employees make
for a great partnership when it
comes to innovation. The rest
%16 or so think that start-ups
make for better partners.
3. Technology the
Key Driver of Future
Innovation:
The way people view technology
in business has changed
dramatically with the intense
digitalisation of the world.
Entrepreneurs no longer view
technology as something that
needs to be updated to keep
up with competitors. It is instead
viewed as the main factor that
drives innovation. Business
executives has also realised that
it is not enough to simply develop
technology only; developing
innovative business models is
equally imperative for sustained
growth.
So what is the ‘take away’
from the PWC report?
The report clearly highlighted
that businessmen are investing in
innovation to be able to sustain
their companies over a long term.
Investing in innovation is not just
something that businesses do
for the fun of it. It has become
a cardinal part that defines a
company’s growth.
The success of innovation is measured by the sales growth.
Therefore, companies should not simply invest in random innovation
of unrelated projects but on something that boosts sales. This is why
every company should align innovation strategies with the overall
business strategy.
Bridging the Gap
Although the reasons are pretty clear as to why an
investment in innovation should align with a company’s
business strategy many entrepreneurs struggle to
bridge the gap between innovation strategy and
business strategy. This is not because of incompetence
but because of a lot of unclear answers to cardinal
questions.
Questions that involves a vision of the company’s future,
key trends impacting the industry, using innovation to
respond, needs to be answered precisely to the point. In
many companies there is a lack of research, understanding
and evaluation of these questions. Unless the management
focuses on the answers it is impossible to develop an innovation
strategy that would suit a company. However, if one looks at these
questions as a whole it is impossible to get real answers. So it is
important that these questions are broken down to parts and then
assessed. Breaking down these question while keeping in mind a
particular business strategy brings us to three main conclusions.
1. Find What Seekers Need:
Every company that does business caters to a particular need
of the client base. A company struggling to bridge the gap between
innovation strategy and business strategy must look at what kind
of need drives their business. They can then develop an innovation
strategy based on this need.
If one looks at Apple products one can see that it develops new
product ideas based on its insight of its clients’ changing needs. To
give a more elaborate example, it is common knowledge that music
lovers struggle a lot with headphone cables that take a long time to
untangle. We now have headphones that are tangle free.
How did this come to be?
There is a company that looked at the need (tangle free cables)
that drives their business (selling everything music lovers want) and
came up with an innovation strategy that would boost their business.
This is a classic example of how innovation strategy that is based on
client’s needs naturally aligns it with business strategy.
2. Breaking Benchmark:
Innovation strategy can also be based on incrementally
improvising products that has
already proved itself to be the
benchmark of convenience,
performance etc.
A good example of a company
that innovates using this second
tactic is Samsung. Its products
always come up as a better version
of products that has already been
established. The cheaper rates of
their products work as a perk for
clients.
3. Technology:
Lastly an innovation strategy
that is based on evolving new
technology can help align it with
a company’s business strategy.
An example of a company who
bases its innovation strategy on
technology is Google.
An Innovation strategy which
is unaligned with a company’s
business strategy neither bring
long term benefits nor profits.
The way the business world now
views innovation has changed. In
order to be at par with this change
it is important that businesses
implement innovation strategies
that equally embrace this changing
view. The three strategies
discussed above has proved to
have work wonders - what with
companies like Apple, Samsung,
and Google whose names are
synonymous with ‘sustained
growth and success’ embracing
it. Innovation strategies are no
longer just theoretical aphorisms.
It is increasingly becoming an
indispensable part for a company’s
growth. The future belongs to those
who think in terms of developing
innovative strategies that is long
term.
Where is your innovative strategy
headed?
20 Intelligent SME December 2017
Innovation
21