Is Strategy and Innovation Intertwined?
The innovation strategy defines the role of innovation and sets the direction for innovation execution. However, the role of innovation in helping organizations achieve growth targets is often unclear and the revenue growth from innovation is insufficient, unless managed with great rigor. Despite this, however, many companies fail to develop and execute an innovation strategy.
Nonetheless, companies cannot afford to ignore the benefits of leveraging innovation through strategy. PwC’s 2016 Industrial Manufacturing Trends report finds that investments in technology are “essential” for the growth of the U.S. manufacturing sector. Many of the technological innovations used in manufacturing today will be commonplace within the next 5 to 10 years, meaning that manufacturing executives “must lead with an eye toward that reality, and not merely the current bottom line.” Fundamentally, innovation capability can be leveraged if corporate culture and strategy fit with each other.
Ultimately, successful innovation should be an inbuilt part of your business strategy. Good strategies promote alignment among diverse groups within an organization, clarify objectives, and help focus efforts around them. Companies regularly define their overall business strategy (their scope and positioning) and specify how various functions—such as marketing, operations, finance, and research and development (R&D) —will support it. Without an innovation strategy, innovation improvement efforts can easily become a miscellaneous concoction of much-touted best practices: dividing R&D into decentralized autonomous teams, spawning internal entrepreneurial ventures, or setting up corporate venture-capital arms, to name just a few. Overall, innovation calls for a holistic approach that operates on multiple levels – innovation becomes “strategic” when it is an intentional, repeatable process that creates a significant difference in the value delivered to consumers, customers, partners and the corporation.
What do you think, are strategy and innovation intertwined?