What An Innovation Strategy Is (and Why You Need to Have One)

Definition

Innovation: the development of a new product, design or ideal strategy: a long-range plan for achieving something or reaching a goal, or the skill of making such plans the development of a new product, design or the skill of making such plans.

How to innovate and create your innovation strategy

Humans are creatures of habits but also love whatever can may their lives easier. Companies need to be ready to satisfy this need and they have to do it in a way that can benefit not only the clients but also the organisation itself.

Types of digital innovation

As briefly mentioned in the previous paragraph — point no. 3 — there are a plethora of options you can choose from when you start creating your innovation strategy.

  • Architectural innovation: processes or technologies that a company has already developed and implemented are applied to a different market. It typically results in an increase in the number of clients and it’s typically low risk.
  • Incremental innovation: consists of continuous adjustments and improvements to already existing products or services.
  • Radical innovation: a completely new product, service or business model enters the market and changes the environment forever. A great example of this type of innovation is Amazon.
  • Disruptive innovation: technology or a process whose application significantly affects the way a market or industry functions.

Plan Execution

1. Idea generation

  • Units sold/revenues generated by new products
  • Number of units produced in X amount of time thanks to the new process
  • ROI of innovation
  • Number of positive feedbacks about the new product or service

Tools

Creating an innovation strategy and then practically implement it can be challenging, especially if this is the first time you do it.

  • IDEA GENERATION: Brainstorm cards will help you come up with a huge number of ideas. Start from the problem you want to solve/the need you want to fulfil with your innovation, then gather a client, some employees or friends and ask them to come up with ideas that can make you achieve your goal and ask them to write them on the cards. Many of the ideas won’t probably be feasible or maybe they won’t make sense, but this process will help you consider options you might haven’t thought of.
  • IDEA GENERATION / IDEA VALIDATIONBusiness Model Canvas is “a business tool used to visualise all the building blocks when you want to start a business, including customers, route to market, value proposition and finance”. It will help you test your assumptions and identify the metrics you need to check to make sure that your strategy is working.
  • IDEA VALIDATION — Validation board can be used to keep track of the assumptions you’ve made, and the results of the test done to validate those assumptions. Most digital technology ideas fail due to assumptions so this stage is critical.
  • TESTING — Low-fidelity prototypes on tools like Figma or Invision will help you understand the viability of the innovation you’re working on, and get valuable feedback from customers early. Product innovation is about iterations and learning using data and what your customers say, so get feedback early.
  • TESTING — Marketing websites can give you important information regarding the individuals that are willing to buy your idea and being your early adopters.

Conclusions

Being able to change and adapt is and will be a critical factor for success in digital technology. Companies that are not prepared to adopt new innovation and product innovation models, the risk to lose market share in favour of their more innovative competitors. Innovation needs to be considered as an opportunity that can enable companies small and large to improve their clients’ lives while earning and maintaining a leading position in the market. Addressing this opportunity requires clear and smart choices: where to invest, how much to invest, who is going to be responsible for the innovation process and how the value will be delivered to the company’s stakeholders.

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