How innovation strategy contributes to business success

Daniel Saunders

Chief Executive Officer

Do you remember the iconic BlackBerry with its QWERTY keyboard, perfect for typing an email on the go? ​​BlackBerry was the phone of choice for busy professionals. Even Obama refused to give up his when entering the White House. At one point, BlackBerry held 43% of the US smartphone market. Fast forward to today, and the operating system has been decommissioned, making any surviving devices obsolete. 

Photo by Randy Lu on Unsplash

What happened? There’s often a nuanced myriad of reasons behind such stories, but one thing is clear: BlackBerry lacked a well-informed innovation strategy. Blindsighted by what had worked well for them in the past, they focused their efforts on enterprise customers and failed to anticipate the rise in personal consumer devices, which Apple and Samsung did. In short, it wasn’t so much a failure to innovate but a lack of strategy behind their innovation efforts. 

Why is innovation strategy important? 

Let’s consider the infamous Segway—a truly disruptive innovation with a vision of transforming personal transport. Nonetheless, from 2002 to 2008, the company only sold 30,000 units, not the 10,000 units a week they originally envisioned. 

Segway is an innovative and novel innovation. The issue wasn’t with the product itself per se but the lack of strategy behind it. Rather than insight-led innovation, this innovation was created because they had already developed the technology for wheelchairs and wondered what else it could be applied to. The adage, just because you can doesn’t mean you should, comes to mind. The lack of strategy meant Segway failed to consider how customers could use their innovation in an everyday context; where would they ride or park it? Who was the target market, and what problems did it solve? How did it compare with market alternatives considering its high price point and brand image?  

This story provides a teachable moment as to why setting an innovation strategy is imperative if you want your work to contribute to the success of your business rather than just innovate for the sake of it.  

If the Segway story is yet to convince you, here are some compelling reasons why innovation strategy is so important; 

Innovation strategy = alignment  

Innovation can deliver massive advantages, but only if aligned with the overall business goals. Getting approval for the strategy allows business leaders to question or confirm that alignment. While innovation-specific metrics, goals and objectives ensure you stay on track and aligned throughout its implementation.  

The innovation strategy and its alignment with border business goals mean that individuals can make tradeoff decisions without seeking approval, speeding up the decision-making process. If your business operates a decentralised innovation model, a cohesive overarching strategy is imperative to ensure all endeavours are aligned, and there’s no overlap or wasted effort. 

An innovation strategy helps improve your success rate. 

Innovation without a strategy is like shooting in the dark and hoping to hit something; your chances of success are slim, but turn the light on, and you greatly improve the odds. An innovation strategy requires you to consider your approach before launching into activity. It means you need to evaluate different options and use research and data to make decisions—it’s the equivalent of turning the light on. 

Preliminary work is done to understand the current market, business challenges, opportunities, consumer trends etc. Such insights should be used to set the scope and ensure any innovations are relevant to your business. This is preferential to starting with a completely blank canvas. 

Innovation strategy defines the approach. 

There are two main methods for innovation; strategic (or disruptive) and sustaining. Each type requires a different process, structure, skills and metrics to thrive. You can also use various tactics to develop innovations, from innovation labs to venture-building programmes. An innovation strategy allows you to devise your approach and consider factors such as focusing on short-term vs long-term results, the internal business culture and risk appetite. 

An innovation strategy helps you gain resources and funding

Innovation requires dedicated individuals to work on the programme (whether in-house or externally). Resources are needed, and thus funding is required. An innovation strategy helps set out the business case for such resources, illustrates how the financing will be used and the potential results of such investments. 

Innovation strategy helps ensure it’s not a one-and-done endeavour

Innovation needs to be rooted in the DNA of your organisation with a seat at the executive table and a line in the P&L. Without a strategy, it’s hard to be taken seriously or deliver consistent results. 

An innovation strategy also provides you with a record of the approach you took. With data and feedback on how well it performed, you can improve and adapt your strategy going forward. 

What are the four key benefits of having an innovation strategy? 

When a strategy is in place driving innovation, it provides a whole host of benefits and advantages. Here are four reasons why innovation strategy is important in business; 

1. Innovation strategy can provide a competitive advantage.

The only constant in life is change.

• Your competitors are changing; from scrappy new startup entrants to established players switching direction.
• Your customers are changing; their wants and needs fluctuate, their behaviour changes, and they develop new expectations. 
• Your environment is changing; different market forces come into play, and new laws are enacted. Advancements in technology occur. 

A well-informed strategy is really the only way to ensure you stay relevant and keep up with change. A great innovation strategy can even result in you leading the change by creating an entirely new category or market-defining product or service. These innovations can create a competitive moat your rivals struggle to break through. 

2. Innovation strategy can improve performance.

Innovation can be used to find new approaches, processes or techniques that drive performance and efficiencies. But to drive efficiencies, you need to use a sustaining innovation approach. The extent to which you focus on disruptive vs sustaining innovation approaches will depend on your specific goals and market. For some businesses reducing costs and improving performance is vital to their success. For others, incremental improvements pale compared to their competitor’s disruptive innovations. This is why innovation strategy is important to set out the right approach for your business. 

3. Innovation strategy can improve employee engagement. 

Engaged employees feel happy and valued, have a stronger affinity with your business, and tend to perform better at work. Working closely with employees can also improve your innovation efforts. After all, who knows more about your customers than the staff who speak to your customers every day?

You can increase employee engagement by including activities and opportunities for involvement within your innovation strategy. For example, consider running a Hackathon or developing an intrapreneurship programme to increase employee engagement. 

4. Innovation strategy can solve complex problems. 

The innovation process follows a tried and tested method for problem-solving, but which problems should you solve? This is where your strategy comes into play. Without a scope or remit, your team might go in a hundred different directions and potentially solve many problems, but are they the highest priority problems for your business? Will they drive business growth? A well-informed innovation strategy should consider problems within your space and purposely select those which offer the biggest potential when solved. 

Summary 

Innovation without a strategy is like throwing a bunch of spaghetti at the wall and seeing if anything sticks. It’s rare that this scattergun approach yields tangible results or does so effectively and consistently. This is why the strategy behind innovation is so critical. 

Innovation can drive revenue growth by addressing unmet needs or creating new categories and can drive profit through efficiencies or new business models. But without a strategy, even the most innovative ideas can fail. 

Innovation requires a strategy to ensure your resources are focused on the biggest opportunities, aligned with the overall business strategy and address real wants, needs or problems. Creating a strategy and defining the innovation approach from the start ensures your work is focused on driving overall business success.