Why an Innovation Strategy?
An innovation strategy answers the three W’s of a company’s innovation activities:
- Why: Why is innovation important for the company?
- What: Which goals should be achieved through innovation and in which areas?
- How: With what resources and in which time frame should the innovation goals be achieved?
Building Blocks of an Innovation Strategy
A fully developed innovation strategy should contain the following chapters:
Analysis: Analyses from market monitoring (changes in customer needs, demographics, trends, competitors, new business models, marketing methods etc.), technology scouting (new technologies, start-up ecosystem etc.) and capabilities of one’s company (processes, know-how, technologies, assets).
Importance of Innovations: Defining the company’s main strategic goals and explains the importance of innovations for achieving these goals.
Innovation gaps: Listing of the identified innovation gaps.
Innovation areas: Listing the selected innovation areas and their prioritization.
Resources: High-level outline of the resources and budgets that the company intends to invest in innovation.
Roadmaps: Summary time schedule of activities and responsible departments, so that each department knows what contribution is expected of it.
Two of the most important components of an innovation strategy are innovation gaps and innovation areas. Both are explained in-depth in the following sections.
Identifying Innovation Gaps
Definition: An innovation gap is a perceived need for action in order to fulfill the strategic goals, i.e. a recognized difference between an actual and a desired target state (= corporate goal).
Beispiel: In the future, data-based products and services will be very important.
Innovationslücken identifizieren: Innovation gaps are discovered through a careful analysis of the environment. This includes the following activities:
- Market monitoring: Changes in customer needs, demographics, trends, competitors, new business models and marketing methods, etc.
- Technology scouting: new technologies
- Life-cycle status of own products & services: To what extent do our current products and services meet the requirements of the future.
- Capabilities of one’s company: Technologies, processes, tangible & intangible assets
The innovation gaps of one’s company are revealed, by comparing the corporate strategy with the results of the above analyses.
Prioritizing Innovation Areas
Definition: An innovation area is a sub-area within an innovation gap. An innovation gap can contain several innovation areas.
Beispiel: Develop solutions for storing and processing large amounts of product and transactional data.
Suchfelder priorisieren: A simple prioritization method is portfolio analysis, which can be used to rank innovation areas in terms of relevance and urgency.
Adoption of the Innovation Strategy
Once innovation areas have been identified and prioritized, the innovation strategy must be formulated. This step requires the involvement of all stakeholders in order to use their know-how but also to gain their commitment and thus ensuring successful subsequent strategy adoption.
- Finalizing the prioritization of innovation areas
- Defining the required resources and budgets. This represent management’s commitment to the innovation strategy!
- Tap their know-how about the innovation areas
- Discuss and agree on contributions from each department for suitable innovation areas
- Achieve commitment from the department heads to the contributions agreed they have agreed to by making these contributions part of their target agreements
- In return, department heads receive budgets and resources for innovation
From Theory to Practice: Putting Innovation Strategy to Action
What happens after the innovation strategy has been finalized and the commitment of all stakeholders has been obtained?
The next step is the institutionalization of the innovation strategy in the form of an innovation management practice.
CrowdWorx supports innovation managers by managing and accelerating all innovation management activities.
- The CrowdWorx technology is designed from the ground-up to support agile innovation processes and can be adapted in a few hours to changes in strategy and processes.
- With CrowdWorx you can integrate employees, suppliers and customers into the innovation management activities.
- CrowdWorx’ built-in intelligent tools and smart assistants support everyone involved in the innovation process – making innovation easier and more exciting every day.