Strategic Innovation is the creation of growth strategies, new product categories, services or business models that change the game and generate significant new value for consumers, customers and the corporation
4. 4
Management Innovation
Strategic Innovation
Business Model InnovationValue Innovation
Product Innovation
Service Innovation
Market Innovation
Process Innovation
Technological Innovation
Disruptive Innovation
Application Innovation
Experiential Innovation
Marketing Innovation
Structural Innovation
Brand Innovation
User Lead Innovation
Supply Chain Innovation
Evolutionary Innovation
Revolutionary Innovation
Innovation Comes in Many Flavors;
5. 0 Many companies fail to extract the most from their
investments in innovation, this can be attributed to
many pitfalls, to name a few:
0 Not having a complete understanding of innovation,
all the different options to achieve a sustaining
innovative organization
0 Insufficient insight into what customers really want
0 Failure to make innovation connected and explicit in
vision, objectives and part of the strategy and fabric of
the organization
0 Lack of balance between the ‘dynamic’ parts required
to be successful
5
Why does structuring innovation really matter?
6. 0 Weak links between business strategy and product
portfolio
0 Insufficient engagement of the whole organization to
pursuit innovation
0 A lack of resources or not placed in the appropriate
part that brings value in your high priority areas.
0 A weak innovation process that places its focus on
one part, not appreciating the whole process needs
equal emphasis
0 A missing set of enabling structures within the
organization
0 Knowing that different types of innovation require
‘distinctive’ recognition
6
Why does structuring innovation really matter?
10. 0 New business models (including a new value chain
architecture), or
0 New markets (either by creating new ones or
reshaping existing ones), or
0 Increased value for both the customer and the
company
or a combination of these three, and as such it‘s nature
is radical. It‘s a departure from a company‘s
traditional definition of “how we do business around
here”.
10
What Is Strategic Innovation?
14. 0 “No problem can be solved from the same level of
consciousness that created it.”
-Albert Einstein
14
15. 0 Traditional Approach
0 Serendipitous Approach
0 Strategic Innovation
15
3 Different Approaches
16. 16
Traditional Approach Vs. Strategic Innovation
Traditional Approaches Strategic Innovation Approaches
0 Adopt a “present to future” orientation-takes
today as the starting point
0 “Starts with the end in mind”-identifies long-term
opportunities and then “bridges back to the
present”
0 Assume a rule-maker/taker(defensive/follower)
posture
0 Assume a rule-breaker (revolutionary) posture
0 Accept established business boundaries/product
categories
0 Seeks to create new competitive space/playing
fields
0 Focus on incremental innovation 0 Seeks breakthrough, disruptive innovation-while
continuing to build the core
0 Follow traditional, linear business planning
models
0 Marries process discipline with creative
inspiration
0 Seek input from obvious, traditional sources 0 Seeks inspiration from unconventional sources
0 Seek articulated consumer needs 0 Seeks unarticulated consumer needs
0 Are technology-driven(seek consumer
satisfaction)
0 Is consumer inspired (seek consumer delight)
0 May have a “one-size-fits-all” organizational
model
0 May experiment with entrepreneurial “new
venture” or other organizational structures
18. 0 It’s part luck, part skill
0 Incorporates a process to create and takes advantage
of serendipitous moments
0 Sounds like planning for accidents, right?
0 While this concept may seem counter intuitive, but it
actually makes a lot of sense
0 Integrate the best strategy and chance into your plans
0 Cannot plan for all of the unexpected opportunities
that may come your way, but what you can do is
analyze the unplanned opportunities
18
Serendipitous Strategy
21. 0 Focus on a common theme of making large
expansive changes in products and operation
vs
0 The traditional TQM approach of incremental
monitoring, assessing, and modifying.
21
Strategic Innovation Models
22. As seen in this figure many innovation strategies refer to these
explosive growth and breakthroughs created by Strategic
Innovation as discontinuous change or disruptive change and
innovation.
22
Level of Change
23. 23
to produce outcomes that drive organizational
growth
1: Managed Innovation Process Dimension
2: Strategic Alignment Dimension
3: Industry Foresight Dimension
4: Consumer/Customer Insight Dimension
5: Core Technologies and Competencies Dimension
6: Organizational Readiness Dimension
7: Disciplined Implementation
(Keathley, Merrill, Owens, Meggarrey, & Posey, 2014)
7 Dimensions
24. Managed innovation processes are at the core
of any strategic approach. An organization’s goal is to find
the equilibrium between external perspectives and an
organization's internal capabilities. It must look beyond the
obvious in order to create a culture that explores new
possibilities.
24
1 – Managed Innovation Processes
25. Strategic alignment involves internal support and
commitment among key stakeholders. This commitment is
necessary for strategic innovation. It engages the
organization around a unifying vision and goals which align
its strategies and business models.
25
2 – Strategic Alignment
26. Industry Foresight is a top-down perspective used
to understand the complex forces that drive change, it
includes emerging and converging trends, the latest
technology, competitive dynamics, and alternative
scenarios.
26
3- Industry Foresight
27. Core Technologies and Competencies are a set of
internal capabilities, competencies needed deliver
value to the organization’s customers. Understanding
these capabilities and competencies, as well as the
organization’s gaps in technologies, intellectual
property, brand equity and strategic relationships are
critical for creating strategic innovation.
27
4- Core Technologies and Competencies
29. Consumer/Customer Insight is mirroring, bottom-
up perspective, a deep understanding of both
articulated (explicitly stated) and latent, or
unrecognized, needs of current and potential customers
and business segments.
29
5- Consumer/Customer Insight
30. Organizational Readiness is the determination
and ability for an organization to implement new ideas
and strategies, as well as, to successfully manage and
sustain those ideas and strategies once initiated. It is
typically made up of three areas of readiness; cultural,
process, and structural.
30
6- Organizational Readiness
31. Disciplined Implementation is the organization’s
capability to effectively sustain the life cycle of
innovation. The sustainment of which is dependent on
the organization's repeat each step of the innovation
life cycle over and over again.
31
7- Disciplined Implementation
33. 0 Five Phases of Innovation
0 Generate
0 Conceptualize
0 Optimize
0 Implement
0 Capture
0 Repeat as needed
33
5 Phase Strategic Innovation Life Cycle Model
34. A specific type of strategic innovation
0 Leads to a new way of doing the business
0 Conflicts with the traditional way of doing business
Examples:
0 Internet
0 Low-cost airlines
0 Direct insurance
0 Online brokerage trading
0 Distribution of news
0 Home delivery of grocery stores
34
Disruptive Strategic Innovation
35. 0 Emphasis on different product or service attributes
0 Traditional brokers sell services on the basis of research
and advice
0 Online brokers sell on price and speed of execution
0 Innovators become attractive to new segments
35
Characteristics of Disruptive Strategic Innovation
36. 0 Start out as small and low-margin businesses
0 Rarely gain support or long-term commitment from
established competitors
0 The innovations are small and not attractive until they
grow
0 Grow to capture a large share of the established market
0 Improvements are made over time
0 They are able to deliver comparable performance
0 Established competitors model the new attributes
36
Characteristics of Disruptive Strategic Innovation
39. 0 Developed new engines and a new launch vehicle
0 Resulting in NASA and commercial customers signing on to
40+ manifests
0 Focused on Disruptive Strategic Innovation
0 Developing the Grasshopper vertical takeoff and landing
(VTVL) vehicle
39
Space-X
40. 0 Dell Inc. redesigned the company’s direct-sales model
0 IBM changed its practice of independently selling
hardware and software to selling complete solutions
0 Canon Inc. developed photocopiers for small offices instead
of large corporations
0 Eastman Kodak pioneered IT operations outsourcing
40
Technological Industry Examples
42. 0 Delve into product innovation until ready to kick-off
0 Use time effectively
0 Portfolio Mapping
0 Innovation Roadmaps
0 Innovation Funnel
0 Stage Gate Innovation
0 Open innovation has emerged as viable mitigation strategy
(More Recently)
42
Risk Management Applied to Product Innovation
43. 0 Innovate while providing service Invest in new service
infrastructure Customers finance the development cost
Risks
0 Higher service costs/reduced profit margins
0 Contract penalties
0 Uncertainty of outcomes/customer satisfaction
0 Soiled reputation
43
Risk Management Applied to Service Innovation
44. 0 Phased/Pilot implementation may yield desired outcome
Avoid singular mindset Open to suggestions Critical
elements:
0 Entrepreneurial culture
0 Incentives
0 Knowledge management
0 Risk Management in Service Innovation
0 Prepare for Service Innovation
0 Examine alignment of business model, infrastructure,
operations
0 Identify gaps
0 Take actions (hire experts, separate business models)
44
Risk in Strategic innovation
45. 0 Master the learning challenge
0 Collaborate with frontline stakeholders
0 Knowledge dissipation/training
0 Knowledge capture/feedback
0 Customer collaboration
0 Setup the stage/expectations
0 Positive customer engagement
0 Knowledge capture
0 Learn from the knowledge
0 Look at past and current initiatives and Key
Performance Indicators (KPIs)
0 Adjust as needed
45
Risk in Strategic innovation
46. 0 Facts:
0 Service Innovation happens in “real-world”
0 Initial service delivery does not yield returns right away
0 Benefits come from “hits-and-misses” analysis and
corrective measures Service B overlap Service A Time
Time
0 Better results can be achieved by:
0 Cross-functional decision making
0 Organizational alignment
0 Knowledge management
0 Incentives and rewards
46
Risk in Strategic innovation
49. 49
• How innovative is your company already?
• Do people feel like they can innovate in your
organization?
• Are building blocks for innovation in place?
• Is the organization aligned to support
innovation?
- Culture
- Rewards
- Human Resource policies
- Top-down support
• Is funding for idea development set aside?
What We Do?
0 Conduct Innovation Audits
0 Build Innovation Strategies
0 Create Continuous Innovation
0 Optimize Marketing Strategies
0 Improve Customer Relationships
0 Find Revenue Innovations
0 Uncover Cost Innovations
50. 50
• Align with Corporate Strategy or not?
• Define Innovation Goals
• Define Innovation Policies
• Innovation Management System Selection
• Build Processes for Idea Selection
• Establish an Innovation Funding Plan
• Identify Relevant Innovation Metrics
• Create an Innovation Training Plan
0 Conduct Innovation Audits
0 Build Innovation Strategies
0 Create Continuous Innovation
0 Optimize Marketing Strategies
0 Improve Customer Relationships
0 Find Revenue Innovations
0 Uncover Cost Innovations
What We Do?
51. 51
• Identify Organization Cultural Changes to be
Made
• Build Visual Models to Drive Quality
Contributions
• Train All Employees to be Business Innovators
• Modify HR Policies as Needed
• Define Innovation Communications Plan
• Refine Processes for Idea Generation as Needed
• Innovation Management System
Implementation
• Refine Innovation Funding Plan as Needed
• Refine Innovation Metrics as Needed
0 Conduct Innovation Audits
0 Build Innovation Strategies
0 Create Continuous Innovation
0 Optimize Marketing Strategies
0 Improve Customer Relationships
0 Find Revenue Innovations
0 Uncover Cost Innovations
What We Do?
52. 52
•Are you building your marketing and product
development around the right customer
insights?
•Are you marketing to your customers where
they are, or are you shouting into the darkness?
•Are you reaching the right customers?
•Are you building a relationship of increasing
mutual value with your customers?
•We’ll improve your marketing outcomes or
build you a marketing strategy from scratch
0 Conduct Innovation Audits
0 Build Innovation Strategies
0 Create Continuous Innovation
0 Optimize Marketing Strategies
0 Improve Customer Relationships
0 Find Revenue Innovations
0 Uncover Cost Innovations
What We Do?
53. 53
• Together we will create meaningful and
productive conversations your customers
• Enabling a seamless transition of the
conversation from pre-sale to post-sale
• Creating loyalty not just a loyalty program
• Delivering value to customers, not e-mails
• We can help you implement a true
conversational marketing strategy
• We will find the right role for social media in
your conversational marketing strategy
0 Conduct Innovation Audits
0 Build Innovation Strategies
0 Create Continuous Innovation
0 Optimize Marketing Strategies
0 Improve Customer Relationships
0 Find Revenue Innovations
0 Uncover Cost Innovations
What We Do?
54. 54
• Understand your customers better
• Identify new markets or customers for existing
products or services
• Deliver new products or services that will
expand your customer base or increase your
customer penetration
• Deliver new products or services that will
increase lifetime value of your customers
through higher customer loyalty
• Extract the right customer insights, those that
will result in competitive separation
0 Conduct Innovation Audits
0 Build Innovation Strategies
0 Create Continuous Innovation
0 Optimize Marketing Strategies
0 Improve Customer Relationships
0 Find Revenue Innovations
0 Uncover Cost Innovations
What We Do?
55. 55
• Optimize your business processes with us
• We will help you identify what customers
really want
• We will help you identify what the business
really needs
• As a result their may be things you
currently do that you can stop doing
• Identify opportunities for savings from
outsourcing
• Identify opportunities for insourcing (does it
make sense to perform a process for others in
the industry to leverage our investments)
0 Conduct Innovation Audits
0 Build Innovation Strategies
0 Create Continuous Innovation
0 Optimize Marketing Strategies
0 Improve Customer Relationships
0 Find Revenue Innovations
0 Uncover Cost Innovations
What We Do?
56. 0 Palmer, D., & Kaplan, S. (n.d.). Resources: Strategic Innovation
Resources – Articles, White Papers & Books. Retrieved
November 14, 2013, from InnovationPoint:
http://www.innovationpoint.com/resources.htm
0 Abraham, J., & Knight, D. (2001). Strategy & Leadership:
leveraging creative action for more profitable growth. Strategy &
Leadership, 29(1), 21-26. Retrieved from Emerald:
https://www.emeraldlibrary.com
0 Govindarajan, V. (2004, January 15). Strategic Innovation and
the Science of Learning. Retrieved November 21, 2013, from MIT
Sloan Management Review:
http://sloanreview.mit.edu/article/strategic-innovation-and-the-science-
56
Refrences
57. 0 Markides, C. (1997, April 15). Strategic Innovation. Retrieved
November 18, 2013, from MIT Sloan Management Review:
http://sloanreview.mit.edu/article/strategic-innovation/
0 Porter, M. E. (1996, November 1). What is Strategy? Harvard
Business Review(74), pp. 61-78. Retrieved November 18, 2013
57
Creativity is thinking up new things innovation is doing new things
در مورد آپریشنال اینوویشن اینا رو بگیم
Process innovation: making processes for established offers in established markets more effective or efficient
technological innovation in manufacturing
Of course concepts like the moving assembly line, TQM, SCM, Six Sigma or Lean Manufacturing were radical innovations at the time they were being invented. If your company implements such concepts today, they might represent a radical innovation for your organization, but the concept as such is not revolutionary. It would rather be the application of best practices.
در مورد پروداکت اند سرویسز اینوویشن اینا رو بگیم
taking established offers in established markets to the next level
making surface modifications that improve customers' experience of established products
Product & Service innovations can of course also be radical and disruptive...but than it‘s rather strategic innovation, the difference being that radical product innovations provide an completely new level of value to both the customer and the company producing them.
در مورد منجمنت اینوویشن اینا رو بگیم
Management Innovation changes the way managers do what they do, and does so in a way that enhances organizational performance.
„Management innovation is anything that substantially alters the way in which the work of management is carried out, or significantly modifies customary organizational forms, and, by doing so, advances organizational goals.“ Gary Hamel
The target of innovation efforts are the business processes and not the manufacturing processes. It‘s about „fundamental breakthroughs in how companies organize, coordinate, plan, motivate and allocate resources...“ Gary Hamel
Concept of Strategic Innovation What is strategic innovation and why is embracing it so critical to organizational success in today’s global market? According to authors, Derrick Palmer and Soren Kaplan, strategic innovation is the, “…creation of growth strategies, new product categories, services or business models that change the game and generate significant new value for consumers, customers and
کلن نیو بیزنس مدل از تایپ های استرتژیک اینوویشنه.
Albert Einstein is quoted as saying, “No problem can be solved from the same level of consciousness that created it.” This statement is no truer than in relation to the way many organizations approach strategic innovation. Porter’s Five forces model, SWOT, PEST (Political, Economic, Social and Technological analysis), PESTLE (Political, Economic, Social, Technological, Legal and Environmental) analysis models have been traditionally been used successfully by business to stayahead of the curve.But in today’s globally connected economy, the way corporate cultures view the nature of innovation has had to change.Traditionally, innovation was associated with products, many times viewed as the result of leveraged technology and customer needs. However, researchers and practitioners have broadened the traditional approach to include types of innovation, management of innovation and business models designed to enhance innovation (Visnjic, Turunen, & Neely, 2012). The reason these cultures fail strategically is often because they do not differentiate between the organization’s purpose (what the organization exists to do) and the organization’s constraints (what the organization must do to survive). Corporate objectives become intertwined with strategy and implementation. This makes it difficult to know where to begin. Compounding the problem in these situations is the presumption that planning processes lead to new and improved strategies. The fact is, the insight needed to create value seldom comes from planning meetings. Instead, it is usually derived from many different sources. All of this ultimately leads to directionless strategies, confusing processes and “flat-footed” plans. This
What is strategic innovation and why is embracing it so critical to organizational success in today’s global market? According to authors, Derrick Palmer and Soren Kaplan, strategic innovation is the, “…creation of growth strategies, new product categories, services or business models that change the game and generate significant new value for consumers, customers and the corporation”(Palmer & Kaplan, n.d.).Traditional strategic approaches focus on best practices, operational effectiveness and incremental improvements in cost and equity. Leadership tends to focus on imitating competitor’s actions and hyper-focus on strategic positioning. The organizational culture often mistakes operational effectiveness with strategy. (Sniukas, 2009) Further, organizations tend to approach strategy using today as the starting point, accept established industry and product positioning and categories. Leadership may also try to use a “one-size-fits-all” organizational model. Unlike companies that embrace traditional strategy, companies that commit to strategic innovation do not rely on serendipitous creative acts, ad hoc, unstructured approaches to foster innovation. Instead they look for holistic, systematic approaches; ones that generate breakthrough or discontinuous innovations. The culture “starts with the end in mind” by identifying long-term opportunities, assume a rulebreaker mentality and seeks breakthrough, disruptive innovation. Leadership looks to create new competitive space and may experiment with entrepreneurial or different structures to accomplish innovation and growth. A culture that internalizes strategic innovation tends to seek inspiration from unconventional sources. (Palmer & Kaplan, n.d.) In this new, and ever-changing, global market, organizations that fail to heed Einstein’s warning, will continue to institutionalize traditional strategy and fail to differentiate between purpose and constraint. They will invest in directionless strategies and focus on short-sighted, strategic initiatives that will make them less effective (Campbell & Alexander, 1997) than their competition. Those companies that do heed, and utilize the seven dimensions, will realize new sources of innovation. As they embrace and internalize strategic innovation frameworks they
Traditional strategy development results from the continuous application and interaction of three fundamental thinking skills: identification of elements and scope, analysis, and synthesis. The basic elements of a strategy for an enterprise are: the market (comprised of customers, competitors and technology embedded in a milieu of social, political, economic, demographic and scientific driving forces for change), stakeholders, enterprise capability and enterprise capacity. The enterprise capability and capacity are defined by it projects, resources and culture. Traditional strategy takes into account today as a starting point. It has present to future orientation. Second, using traditional strategy requires a rule-maker posture. This inhibits outof-the-box thinking. The traditional strategy accepts established boundaries and product categories. This strategy does incorporate some level of innovation incrementally. The traditional strategy primarily follows linear business planning models. It is aimed directly at gaining strength through input from traditional sources and articulated consumer needs. Traditional strategy is driven by technology and may have a one-size-fits-all organizational model approach. (Palmer & Kaplan, n.d.)
traditional strategic approaches focus on best practices, operational effectiveness and incremental improvements in cost and equity. Leadership tends to focus on imitating competitor’s actions and hyper-focus on strategic positioning. The organizational culture often mistakes operational effectiveness with strategy. (Sniukas, 2009) Further, organizations tend to approach strategy using today as the starting point, accept established industry and product positioning and categories. Leadership may also try to use a “one-size-fits-all” organizational model. Unlike companies that embrace traditional strategy, companies that commit to strategic innovation do not rely on serendipitous creative acts, ad hoc, unstructured approaches to foster innovation. Instead they look for holistic, systematic approaches; ones that generate breakthrough or discontinuous innovations. The culture “starts with the end in mind” by identifying long-term opportunities, assume a rulebreaker mentality and seeks breakthrough, disruptive innovation. Leadership looks to create new competitive space and may experiment with entrepreneurial or different structures to accomplish innovation and growth. A culture that internalizes strategic innovation tends to seek inspiration from unconventional sources. (Palmer & Kaplan, n.d.) In this new, and ever-changing, global market, organizations that fail to heed Einstein’s warning, will continue to institutionalize traditional strategy and fail to differentiate between purpose and constraint. They will invest in directionless strategies and focus on short-sighted, strategic initiatives that will make them less effective (Campbell & Alexander, 1997) than their competition. Those companies that do heed, and utilize the seven dimensions, will realize new sources of innovation. As they embrace and internalize strategic innovation frameworks they
Serendipity is having an aptitude for making desirable discoveries by accident.Many organizations rely on serendipitous acts of creativity to foster innovation. Others take an unplanned, often unstructured approach, which results in only incremental improvements with poor implementation that can lack sponsorship. A classic example of serendipitous strategy is the story of 3M Post-it notes. In 1974, Stephen Silver at 3M research laboratories was trying to develop a strong adhesive and instead created a new adhesive that was not too strong, could stick on all surfaces and be removed easily without causing damage or leaving residue. Not knowing what to make of this, it was four years later that his colleague Art Fry came up with the idea to use this low tack adhesive to attach a bookmark to his hymnal. He further developed the concept and 3M launched what became known as Post-it notes nationwide (Bands, 2012). A recent critique of business strategy argues that the role of serendipity has been largely excluded from formal strategy theory. Further, it showed that there is an element of serendipity in the fabric of all organizations and that the neo-classical model of corporate strategy cannot accommodate this reality. In today’s increasingly complex, dynamic and interconnected business world, business strategy cannot be perfectly planned in advance as traditional theories of strategy would suggest, but has to evolve in response to continually changing circumstances. This alternative and contemporary approach to business strategy argues that the challenge for executives is to build an organization which is capable of executing strategy in a fast changing environment by balancing both high alignment and high autonomy (Loosemore, September).
It is important to note the difference between serendipitous strategy and synchronized strategy. The distinction between serendipity and synchronicity is a matter of time. With synchronicity there is an immediate recognition of the meaningful coincidence of two events happening close in time. Serendipity, however, cannot be assessed until later when the consequences of events are evaluated (Lawley & Tompkins, 2008). Synchronicity can become serendipity if the effects of the coincidental events have large positive significance over time. However serendipity can also arise out of events that are not synchronous. Serendipitous learning will always be there and provide great anecdotal evidence for informal learning, but serendipity is not a strategy for building a high impact, learning performing organization. Strategic innovation is a holistic, systematic approach focused on generating beyond, incremental, or discontinuous innovations. Strategic innovation focuses on obtaining meaningful breakthroughs. 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. A strategic innovation initiative generates a portfolio of breakthrough business growth opportunities using a disciplined yet creative process (Palmer & Kaplan, n.d.).
Strategic Innovation does include concepts like Value Innovation, Blue Ocean Strategy and Disruptive Innovation and Business Model Innovation.