Enterprises today face intense competition in the marketplace from both industry incumbents and early stage companies who’re focused on both ‘changing the business’ and ‘running the business’ more effectively. In this Digital Age, organizations are looking for innovations that can help win customers and transform their business. To stay ahead, your business needs a constant stream of new and novel ideas that can be conceptualized and monetized, quickly and efficiently.
As discussed in my previous post, you need to adopt an enterprise-wide ‘team sport’ approach and behave more like a startup to succeed at driving meaningful business performance through innovation. Use a variety of ‘inside out’ and ‘outside in’ ideation methods. A rapid, iterative experimentation process (RIEP) will help you test hypotheses and prototype ideas to reduce the uncertainty surrounding ‘pivot, persevere, or halt’ decisions along the lifecycle of each innovative concept. Put together a dynamic core team to manage the innovation program and evolve its capabilities through a ‘build, test, and learn’ approach.
Setting Your Innovation Strategy
For your organization to be able to continuously generate and convert new and novel ideas to value, you need to create an innovation engine that is fine-tuned to your organization’s circumstances and practices.
Whether your organization is more interested in focusing on optimizing existing products and services, exploring new business capabilities, transforming its products to suit other markets, and/or creating new markets will determine the company’s innovation strategy. Your strategy will influence how you source and experiment with ideas, and ultimately, how you select and monetize the most promising innovations. This will be the crux of your innovation engine.
Your innovation strategy should also guide how far you’re willing to depart from leveraging existing technologies, customers and markets, and allies and partners and inform the ‘who and how’ of managing a risk-balanced innovation portfolio and each innovation within it. Though the effort to create and establish the enterprise’s innovation strategy and innovation management capability is not trivial, once you understand what you seek to achieve, you’ll be able to effectively manage the innovation lifecycle for maximal impact.
Managing the Innovation Lifecycle
Survivors in the Digital Age will be those companies that have mastered the art of innovation. What you hope to achieve through innovation and how you will go about achieving those outcomes will determine your ‘art form’ – will you be an Optimizer, Explorer, Transformer, or Revolutionary?
As illustration, Hershey’s might be considered an Optimizer. Its innovation portfolio, due to its risk averse nature, is focused on creating hybrids of existing products that leverage the organization’s knowledge, brand, and core capabilities. In contrast, Alphabet, the new holding company established by Google, might be considered a Revolutionary. Alphabet recognizes that innovations of varying degrees of radicalness require different practices. For example, Google X is focused on creating new markets with breakthrough technologies, while Google sets its sights on enhancing current web offerings for current customers with incrementally improved technologies.
The path you choose to follow will determine the right governance structure, operating model, talent, culture, allies, and enablers you need to continuously strategize, ideate, experiment, implement, scale, and monetize, as well as measure performance across the innovation lifecycle and maximize overall innovation portfolio returns.
To better understand how you can give your organization the innovative edge in an increasingly competitive global environment, take a look at our white paper, ‘Digital Age Transformation: Building a High-Performing Innovation Engine.’