Aligning innovation with strategy

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This presentation describes five tools to help align any innovation effort with strategic goals. Too often innovation isn't aligned with strategic goals and is often viewed as a failure as a result.

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Aligning innovation with strategy

  1. 1. Five Strategic Tools for Innovation
  2. 2. Innovation and Strategy <ul><li>Perhaps the most difficult aspect of innovation for many firms is the lack of clear strategic direction </li></ul><ul><li>Without clear strategies and direction </li></ul><ul><ul><li>Every opportunity or threat seems equally valid </li></ul></ul><ul><ul><li>Every idea has equal weight and value </li></ul></ul>
  3. 3. 5W1H <ul><li>To adequately frame innovation within corporate strategy, we need the 5W1H model </li></ul><ul><li>Five “W’s” </li></ul><ul><ul><li>Why (innovate) </li></ul></ul><ul><ul><li>What (to create) </li></ul></ul><ul><ul><li>Where (which markets) </li></ul></ul><ul><ul><li>Who (is our customer or target) </li></ul></ul><ul><ul><li>When (the right timeframe) </li></ul></ul><ul><li>Once these are answered, then the last issue is: </li></ul><ul><ul><li>How (what tools and techniques) </li></ul></ul>
  4. 4. Tools <ul><li>We’ll examine a series of tools to help frame your innovation effort. </li></ul><ul><li>These tools were developed by a range of noted management thinkers and innovators </li></ul>
  5. 5. Why Innovate <ul><li>First, understand the opportunity or challenge </li></ul><ul><ul><li>Innovation can create new growth </li></ul></ul><ul><ul><li>Innovation can help differentiate </li></ul></ul><ul><ul><li>Innovation can disrupt another industry </li></ul></ul><ul><ul><li>Innovation can help cut costs or improve efficiency </li></ul></ul><ul><li>What intent or strategy is improved through the use of innovation?? </li></ul>
  6. 6. Why? Which leadership position?
  7. 7. Why - Intent <ul><li>As your team responds to this point, you gain insight into the important strategic goals </li></ul><ul><ul><li>Growth </li></ul></ul><ul><ul><li>Differentiation </li></ul></ul><ul><ul><li>Disruption </li></ul></ul><ul><li>Does the firm want to be the innovator or a fast follower? </li></ul><ul><li>Does it have a specific competitive place or position to “own” – product leadership, operational excellence, customer intimacy? </li></ul>
  8. 8. Where? <ul><li>Where do we have gaps? Where are the gaps in the market offerings, today and in the near future? </li></ul><ul><li>To examine the gaps, examine the competitive portfolio of offerings </li></ul><ul><li>Define your portfolio of ideas </li></ul>
  9. 9. Portfolios Size of Market Idea’s Impact to Market Incremental Disruptive Small Large GAP GAP Shapes represent Ideas under investigation in different product groups
  10. 10. Portfolios <ul><li>Gaps in product and idea portfolios represent opportunities </li></ul><ul><li>Are the gaps intentional? Do opportunities exist in these gaps? </li></ul><ul><li>What opportunities exist in markets or customer segments outside of your defined portfolios? </li></ul>
  11. 11. When? <ul><li>What’s the time horizon? </li></ul><ul><li>Many firms use the concept of horizons: </li></ul><ul><ul><li>Horizon One – near term </li></ul></ul><ul><ul><li>Horizon Two – next generation </li></ul></ul><ul><ul><li>Horizon Three – Exploration </li></ul></ul><ul><li>Spreading investments in all three horizons on a 70% - 20% - 10% basis </li></ul>
  12. 12. Horizons From Innovation Tournaments by Christian Terwiesch and Karl Ulrich
  13. 13. Timeframes <ul><li>It’s important to spread your innovation investments over several time and risk horizons </li></ul><ul><li>Create clarity about the longer term goals and metrics and reinforce the need for short term and longer term ideas </li></ul>
  14. 14. What? <ul><li>What should we create? </li></ul><ul><ul><li>New products </li></ul></ul><ul><ul><li>New services </li></ul></ul><ul><ul><li>New business models </li></ul></ul><ul><li>The chart on the following page helps define the different “kinds” or types of outcomes </li></ul>
  15. 15. Ten Types of Innovation From Ten Types of Innovation by Larry Keeley of the Doblin Group
  16. 16. Types <ul><li>Detail the kinds of innovations and the types of innovation that the executive team expects </li></ul><ul><li>Types </li></ul><ul><ul><li>Product, Service, Business model </li></ul></ul><ul><li>Kinds </li></ul><ul><ul><li>Incremental, Breakthrough, Disruptive </li></ul></ul>
  17. 17. How? <ul><li>What tools and methods should we follow to implement the innovation strategy? </li></ul><ul><li>How do we accomplish innovation in our business? </li></ul>
  18. 18. A defined innovation process Innovation Process Map from OVO Innovation
  19. 19. Innovation Processes <ul><li>Once you understand the strategic frameworks, you need a consistent, repeatable innovation process </li></ul><ul><li>In that way all ideas are managed, evaluated and developed in the same way </li></ul><ul><li>Individuals and teams can learn their roles and exercise them with greater comfort and insight </li></ul>
  20. 20. Strategic Clarity <ul><li>Innovation is far more successful when the strategic goals and expectations are clear </li></ul><ul><li>Using these frameworks, you can help your executive team define the outcomes they expect from innovation </li></ul><ul><li>With that outcome in mind, you can construct the best teams and correct scope for your innovation effort. </li></ul>

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