How to Make Innovation Strategy Work

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Remember the time — like, a year or two ago — when moving to the cloud, developing a mobile strategy, and analyzing big data represented the cutting edge of business technology?

Well, even as many companies are still waiting to see the results of these transformations, a new wave of technologies — artificial intelligence, the Internet of Things, and augmented reality, to name a few — is already shaping the present and future of business.

Given the pace of technological change, trying to keep up by simply reacting is futile. Yet most companies don’t approach innovation strategically and fail to think about how technology will affect their long-term future. In fact, it is clear the processes and departments that focus on innovating may need to be revamped. The key to successful innovation is to enlist the right mix of employees, customers, and technology partners from the start. Then, leaders must be sure that their company owns the innovation process, develops technology strategies that sync up with its overall business strategy, and consider how new developments will affect users’ experiences.

Of course, having open innovation models and obtaining more external input are valuable. But innovation needs to be a core competency, and core competencies shouldn’t be outsourced.

Why? Companies that outsource innovation today risk becoming dependent on external sources at a time when technology can be the biggest differentiator for success. They typically place a higher priority on revenue growth and increased profitability than on creating better customer and employee experiences. They consider investments on the latter a tax to stay in business and maintain relevance rather than developing innovation as a way of working and a cultural norm. It’s a defensive rather than an offensive posture.

By contrast, for those companies that prioritize fostering creativity in-house, the money always follows. Indeed, the top financial performers in our Digital IQ survey rated higher than their peers on most measures of innovation, and 75 percent of those top performers said their innovation processes include identifying and commercializing digital products.

But simply throwing money at innovation is not, in and of itself, a winning strategy. Too many companies make blind bets on technology without thinking of the business implications. It’s a waste of both time and budget if a company develops a new cloud-based customer relations management system that fails to contribute to its vital business goals. The Digital IQ survey found that only 40 percent of companies proactively explore new innovations with specific business needs in mind.


Read more: https://www.strategy-business.com/blog/How-to-Make-Innovation-Strategy-Work

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