8 essential characteristics of an innovation strategy

innovation strategy
Business Strategies
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Strategic and organizational characteristics determine the success or failure of a business innovation plan. In today’s world, maintaining leadership and continuous innovation is by no means easy. The fact is that currently, many successful companies are looking for many successful entrepreneurs not because of their specific innovations, but for process optimization and maximum use of their few innovations. These companies know best that innovation and changing style and strategy are very complex and costly for developed and mature companies. In general, in order to create a proper innovation strategy, it is necessary to identify the priorities correctly and choose the right solution to implement these priorities.

However, there are companies and organizations that, despite their development, have found the right ways to maintain constant innovation. An example of this is the Ames Research Center, run by NASA located in Silicon Valley.

Innovation : How many types of innovation are there?

What characteristics make an innovation strategy and its resulting innovations effective?

In general, in order to create a proper innovation strategy, it is necessary to identify the priorities correctly and choose the right solution to implement these priorities. Of course, it should not be forgotten that there is no specific formula for success in innovation. In fact, these characteristics are obtained only on the basis of many years of companies’ experience that have chosen the innovation path.

Aspiration

Aspiration One of the best examples of innovation that was possible with aspiration and passion was space travel and landing on the moon. In 1962, John F. Kennedy, the USA President, encouraged his nation to do their utmost to achieve the long-held and impossible human dream in the midst of intense competition and tension with the Soviet Union, and this wish was finally fulfilled. Many organizations, however, have found that aspiration, passion, and words, as the underlying layers of these movements, are not enough to achieve innovation and success. First of all, this innovation must be economically profitable or have other positive functions. Second, the goal must be so ambitious and attractive that investors are willing to take risks and invest in innovative ideas.

Choice of ideas

Choice of ideas : Ideation and innovation are inherently valuable, but a company cannot implement all the ideas that it come up with. One of the major challenges for any company that is on the innovation path is choosing ideas. In fact, the main problem is not the scarcity of innovative ideas, but the recognition of the probability of success of each idea and the feasibility to support and scale it. This can be a real challenge, especially in large, developed companies where it becomes extremely difficult to support the next wave of growth in the ever-fluctuating market conditions.

Innovation is inherently risky. What successful companies do is risk management through methods such as diversifying their selection of innovation methods. However, it is necessary to specify a boundary and framework for tolerable risk limits in order to determine the boundaries of the space to be explored. Of course, defining this framework requires a legal process. During the process of setting boundaries, the company usually focuses on coming up with new ideas to make it easier to work on the next step when eliminating options not fitting the framework. The process of removing options may be done as a small-scale pilot implementation of ideas. For example, a company selects 10 of the most appropriate ideas and implements them in its target market. There are specific budgets for each project, and based on the effectiveness of each of these ideas, after a few months or years, the best options are selected and accepted as the company’s new innovation.

Most developed companies choose a combination of short-term and long-term low-risk ideas. An important principle in choosing innovation management is the number of projects under operation. Sometimes, a company may become so involved in new ideas and projects that it refuses to spend time and money on its most important and cost-effective projects.

Discover

Discover : Innovation usually requires discovering unknown territories, unexplained markets, and ignored customers. Aside from highly creative and out-of-the-box ideas that turn into novel innovations, every new idea has to go through three stages to be finalized: find a solution to a problem or need, create new technology to implement the idea, and create a business model to make money.

 In this innovation strategy, all successful innovative ideas have these three characteristics. They are aware of the problems and needs of their customers, have a deep and extended knowledge of existing and emerging technologies that somehow help to solve that need or problem, and most importantly, have sufficient experience and expertise to manage long-term sustainable operations in order to implement the necessary processes to provide services and products.

The process of discovering customers, new fields, new markets and testing them is normally done simultaneously with the design of new ideas; thus, a comprehensive and efficient system takes on the task of innovation in the company.

Growth

Growth : Innovative ideas need continuous growth and promotion. Smartphone companies, for example, have to produce the technology they need and push the boundaries of science and technology one step further. In fact, leading companies cannot wait for other sectors of industry and technology to produce the technology they need. In addition, a company established on innovation and creativity requires constant growth and transformation. This is why most technology companies are constantly developing new products because they know that maintaining a level may lead to the risk of freezing their business model will naturally assumed as a weakness.

These companies spend a lot of money testing and exploring new markets and technologies, sometimes far from their core business, to ensure their continuous growth and outperforming their competitors.

Accelerator

Accelerator : In many cases, it is the internal structure of companies that prevents innovation and the creation of new ways and means. Careful management and lack of clear principles and framework for innovation easily lead to bureaucracy and hierarchy in the innovation path. In such an environment, legal, marketing, technology, etc. problems become potential obstacles to stop the implementation of ideas. It is noteworthy that many significant innovations have originated from disregard for the project approval stages and processes, which were later accepted because of their success. Of course, this does not mean that processes are bad or they are preferred to be eliminated. In such companies, it is very difficult to maintain a balance between the idea and discipline and going through the planned processes.

Therefore, the main challenge for businesses that have taken the innovation path is to be present in the market, to maintain competition and superiority, to be profitable, and to accept risk and implement new projects and ideas simultaneously. This problem can be solved by assigning someone to control innovative projects through budget and cost management. Additionally, the implementation and development of such ideas require a significant amount of time and energy of employees from different departments.

Project’s scale

Project’s scale : Some ideas, such as producing expensive products or developing specific applications, require small group targeting in the market. However, some other activities, such as creating a social network or producing food, usually involve large communities, including cities, countries, or even the world. When deciding on a project, it is necessary to consider the potential of its implementation at different scales and to manage risk and resources accordingly.

Expand the scope of activities and collaboration

Expand the scope of activities and collaboration : Over the past few decades, leading companies in various industries with many innovations have realized that continuing to develop the company and maintaining innovation requires increased cooperation between companies. Successful innovators are companies that can maximize access to the skills, talents, and abilities of others in return for their investment. That’s why collaboration between companies is a new way to accelerate innovation and remove barriers to pave the way for value creation.

Of course, working with other companies is not just about finding new ideas and innovations, but it can also make it possible to share common costs and find shortcuts to achieve a goal. For example, parts of Apple’s first iPods were developed almost entirely outside the company by proper management of the company’s external partners. In this way, Apple was able to turn an original idea into a commercial product in just 9 months.

The same is true of NASA’s Ames Research Center. One of the important outputs of this research center is the launch of joint international satellites with countries such as Latvia, Saudi Arabia, Sweden, etc. However, the research center also benefits from joint ventures with successful companies such as SpaceX.

Successful companies spend a lot of time and energy building an efficient ecosystem to facilitate collaboration with other companies and take advantage of it. When companies work together, ideas and designs come to implementation more easily, and innovations have a better chance of survival.

To do this, each company must first select the appropriate potential partners. Usually these companies are current partners that have better conditions for collaboration. In the stage, the innovation strategy is tailored in accordance with an interconnected network of companies. Empowered and innovative companies usually regularly inspect their processes and networks and eliminate non-urgent and unimportant parts. In general, joint collaboration of companies is based on their capabilities such as brand use, higher market share, better access to technology, higher knowledge, etc. These indicators can be the criteria for removing branches and collaborations from the ecosystem.

Mobilization

Mobilization : How do successful companies direct and support creative decisions and strategies? Such an atmosphere is the result of creating enthusiasm and aspiration in the company, which is then linked to the right strategy and processes. When the economic goal and the target market are determined, the efforts of the company’s people are directed accordingly. The initial motivation is to create movement and activity, and this activity finds a definite direction in the implementation stage of ideas and plans after defining the duties and responsibilities, and finally is accompanied by incentives.

But to maintain this space, every company needs to create a mechanism to maintain mobilization and creativity among its employees. Some companies allocate a center for innovation and new ideas where a number of employees in small groups test ideas outside the framework for the company’s activities. This is exactly what NASA did, resulting in the Ames Research Center in Silicon Valley.

Innovation strategy in large companies

Large companies hardly tend to innovate and change, and it is rarely seen that a developed company would present itself as a pioneer in technology and innovation. In these companies, many rules, regulations, frameworks, principles and processes have been defined aiming at efficiency maintenance, stability and minimizing problems and shortcomings in large-scale work. These issues make the company highly resistant to innovation and implementation of new ideas. Such companies can maintain their continuous innovation only if they study the methods of maintaining efficiency carefully and in detail along with examining innovation maintenance, strategies for its implementation and seeking help from experienced individuals or companies in the field.

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