Every organization needs to innovate to keep pace with a changing world. But unless you know where what and why you want to change, your blueprint for innovation will come to nothing. Careful planning is essential for successful innovation.
Developing a road map for change, or an innovation strategy, can help your organization stay ahead of the competition over the long term. Any innovation project involves resources – money, time, and employees’ skills – and you need to spend these wisely if an innovation is to be worthwhile.
Developing a Strategy
An innovation strategy requires three key elements:
- Strategic analysis: What do you do, and why would that make a difference?
- Decision-making: What are you going to do, and why are you choosing that option over others?
- Action: How can you make sure the project happens, and support and review it as the innovation takes shape?
Some of the most important innovation decisions are not about starting projects but scrapping those which looked good at the outset but which then failed to develop as expected.
An overall innovation strategy matters if you are competing with other organization in the marketplace. But it is just as important to have a strategy inside the organization, to help prioritize changes you make to the ways you do things – or process innovation. This will help you avoid a situation where you spend your energy improving irrelevant details while leaving the really important changes undone – a bit like rearranging the deckchairs on the Titanic.
Quick Tips: Build A Vision
Make sure people understand the “big picture” – what you are trying to achieve with innovation. Once it’s clear what the challenge is, they can contribute their creativity and energy to help make it happen.
Innovating Across the Board
It is not just a commercial organization that needs an innovation strategy. The public services desperately need creative ideas for change to deal with problems like education, healthcare, and transportation – but simple spending scarce taxpayers’ money on any project that looks interesting is not a good recipe for long-term improvement in those services. We need focused change, targeted at what will make a real difference. And they need the discipline to manage what can be huge projects: to complete them on time and within budget, and, if necessary, to kill them off before they become potential high-profile disasters.
Case Study: Innovation With Impact
India’s Aravind Eye Clinics revolutionized the treatment of eye problems like cataracts, which caused preventable blindness for around 45 million people. The operation to treat it is relatively simple, but costs around $100 – well out of the reach of the rural poor. But through a systematic series of process innovations targeted at reducing costs without compromising quality, the average cost came down to $25. This sustained pattern of innovation continues, and with around 250,000 operations performed every year, these clinics have become “best practice” centres for such surgery, with doctors coming from around the world to learn from them. Read
Aravind Eye-Care System – McDonaldization of Eye-Care from Harvard Business School for further info.
To plan for innovation, you need some way to map for different possible directions. In order to apply resources and energy appropriate. Additionally, one useful model for this is the innovation compass. Which plots innovation along two axes: doing things better and doing things differently.
Using the Innovation Compass
As we have seen, innovation can be radical or incremental and can proceed in one of four directions: product or service, process, market, or business model. The innovation compass maps all these variable against each other. Allowing you to work out where innovation effort in your organization are concentrated. And where they are neglected. Each of the four points of the compass represents one of the innovation directions. Incremental innovations are sitting closer to the centre, while radical innovation is placed farther away. Plotting all of your innovation projects on a graph helps you direct innovation in the areas of your organization.
Defining Your Innovation
The compass defines the “innovation space” your organization needs to explore to help move it forward. A number of journeys can be taken, not just along the four main directions, but in combination. For example, you could introduce a new product that opens up a new market. As Nintendo did with the Woo and the DS, targeting people who had never played computer games before. Or you could apply a radical procedure as McDonald’s did. Opening up the fast-food market by applying lessons from Henry Ford’s mass production process innovation in car making.