4 characteristics of strategy driven innovation


Sometime ago, I dedicated a whole article to organizational innovation & strategy and different types of innovation happening in an organization. I categorized innovation types into A) Incremental and B) Disruptive and we learned that they are both useful and important.

The next question could be clearing the direction of innovation: 

Not every innovation may change the game of our business, right?

Then what type of innovation should be considered as a helpful one to boost the input? I believe that by now you replied to it. You are right. It is strategy driven innovation. An innovation which helps us to reach organizational goals faster, cheaper, more optimized and probably easier. Just let's not forget that any type of innovation should be embraced but here, I would like to mainly discuss a roadmap for selecting those that are more important. 

Imagine that you are CEO of a 200 employees company and you have monthly or quarterly competition programs to recognize innovative proposals. Eventually, you should rank them and select the first two or three to be invested and implemented. Then how should we select the best ones? I believe that we should pick those ones aligned with our organizational strategy. This is what I would like to clarify.

The characteristics of strategy driven innovations can be summarized as below:

1. Future Trends:

Strategy is not anymore about measuring the past and getting stock in some KPIs as tools for performance appraisal and letting people down. It is about making the business relevant as much as we can. I spoke about it before.

To know the future trends, we do need smart research to understand the needs and to get some direction for our R&D plans. Basically, our research should not be focused on finding the needs only, but we must focus on the upcoming next level too which we can call "future trends".

Let's keep in mind that the smarter we find the clue of the trend, the more confident we can promote it.

Here's how Steve Jobs reacted when a journalist criticized the keyboard on the first iPhone. The journalist claimed that the buttons were too small for her/his thumbs but Jobs confidently replied: " Your thumbs will learn."

I like this true story very much. From my point of view, the innovation was very well aligned with future trends and we can say that even if it didn't exist Apple innovated it with smart research to make them confident.

2. Focused on mission and vision:

In 2020, when the pandemic started, Tesla and GM offered to produce ventilators due to lack of them in hospitals. They helped a lot and from government to citizens everyone praised the two companies for such a help but when the needs were over, these two companies got back to their own business routines. They didn't think for a second to produce other medical devices regardless of their capacities.

Sometimes, board members and employees are not focused on their visions and missions. They just think of making money on a daily basis, no matter how!

These short-term solutions make the entire company confused and tired. 

Let's not jump from one branch to another only because we find some short-term opportunities.

3. Unique Value Proposition:

If in 2021 I inform you that I know a mobile company producing phones with no physical keyboard, would you be surprised? I don't think so!

Any innovation ideally should bring a unique value to processes, projects, products or services. Something which we call "the reply to a million dollar question".

Of course we cannot let down basic innovations helping us to be more efficient but as I mentioned earlier, if you are responsible for recognizing the best then you should keep the roadmap in your mind to select the best which may happen only once a year or after many years!

4. Improve financial situation:

Either we like it or not "cash" in business is very important. Strategy driven innovations should make the company stronger either in mid-term or long-term.

Peter Drucker in his Innovation and Entrepreneurship book says: "Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth."

We can complete the list with many more items but I believe that the other ones may not fit all companies and it might be confusing for some businesses. Since this is a weblog for all businesses let me keep it relevant and clear.

Good luck with your innovations!