Alignment of Business & Innovation Strategy is critical

Nolan Bushnell, creator of the modern video game industry and the co-founder of

Atari inc., once stated on 'Innovation'

“Everyone who has taken a shower has had an idea. It’s the person who gets

out of the shower, dries off, and does something about it that makes a

difference.”

Since long, business research and publications had identified ‘innovation’ as the

most critical attribute for an organisation/ business to be differentiated and

flourishing. Despite being so well-recognised and acknowledged as a key growth

lever, ‘innovation’ is seldom focused as a strategic priority in general by industry

leaders! The usual argument is that, ‘innovation’ per se is quite ‘cost - time – skill’

intensive, and therefore is not prioritised by most mid / small businesses! In several

instances, semi-organised processes were initiated to build-in innovation, however,

they got dropped out in due course of time. Therefore, the reasons for not pursuing

an innovation project by organisations is multifactorial, and not so simple.

Cluster of assembled experiences were analysed and classified under 4

categories:-

1. Resource Plan

● "Many idea-workshops are conducted, but the required resources are never /

inadequately budgeted; so, ideas remain as ‘ideas’ and never get

implemented.”

● "It is frequently advised to sponsor innovation by saving resources from the

current business spending; but no one is willing to compromise on current

achievements.”

● "When current business suffers crisis, the first in the list that "gets the cut" is

the project for the future.”

● "Corporate finance should have a separate cost-head for such exploratory

spends; project ideas should not be shot down due to accounting dilemmas."

2. Focused Effort

● "Everyone in business is busy trying to achieve their sales quota. No one

really can devote additional time to work on innovation projects; therefore,

projects naturally get delayed and subsequently aborted."

● "It is extremely important to engage a dedicated ‘project team’ that is

responsible to drive innovation projects, irrespective of current business.”

3. Right Mindset

● "Most often, there is no proper communication to people regarding the

significance of an innovation project & its criticality. As a consequence, people

don’t put adequate seriousness since they feel that such projects are just

"feel-good corporate fashion" rather than a necessity.”

● "Sometimes, management itself is not sure of an meaningful outcome of such

innovation project! Hence, a risk-averse behaviour takes a safer route of

continuing with what is already tried and tested.”

4. Competent Project Drivers

● "Often, inadequately competent or untrained junior employees like trainees

are given the responsibility to drive such innovation projects."

How an Innovation project can be introduced

1. Project Ideation

A set of first-hand ideas are generated based on

(i) Customer feedback

(ii) Competition activities

(iii) Gap / Data analytics

(iv) New breakthrough thinking.

2. Screening and Selection of the Projects

Selection of the projects and prioritisation is done considering projected gain vs cost,

time requirement vis a vis risk of failure. This is a key success factor for innovation.

3. Project scoping and Resource Planning

Selected projects are detailed out in terms of scoping, resource planning and

costing; this entails a project design to be drawn with adequate nitty-gritties.

Most often, innovation projects are typically either ‘New-Product Development’

or ‘New Feature Development through Technological advancement’ and these

are largely incremental in nature. It is also important to note that, New-Product

and Tech Innovations go hand in hand are interdependent.

Innovations of higher value of differential are missed out on many occasions.

For example, Business Process Innovation or Innovation on New Informatics /

application can make companies substantially unique and can be truly

sustained. A new functional skill, either developed in-house (though a lengthy

process) or acquired in an inorganic way, can boost the business operating

model substantially.

Aligning Innovation to Business Strategy

Finally, during selection of the type of innovation a business should adopt to, one

must consider the following aspects:-

● What type of business model is deployed?

● What kind of business issues are intended to be addressed by innovation?

● What kind of opportunities are targeted for focus?

● What are the core strengths of the business?

Most popular Ansoff's Matrix can help establish clarity on the choice of innovation

aligned to the business challenges.

The Q1 quadrant is all about growing business of the existing products from existing

customers. Such growth will depend largely on continuous augmentation of customer

experience viz. through improved products applying new technologies, or bringing in

new insights / knowledge / Informatics to improve product functionalities or outcome.

Even, a new business process can enhance customer reach/attraction or better

interface between customer and product.

The Q2 quadrant is supposed to steer growth from new customers offering existing

products, i.e. business from so far un-approached market/sectors. Here innovation

(like technology or new business process) plays the key role in acquisition of new

customer and facilitating their faster adoption up the ladder. Therefore, a faster and

better market uptake is the critical success factor in this quadrant.

The Q3 for existing customers with new products, innovation through new

technologies for developing new products with advanced features will be important.

Once again, creating deeper insights for newer segments to approach the business

differently or through advanced informatics will be game changing innovation. Finally,

like Quadrant 1, a new business process towards enhanced customer reach / attraction

and better interface between customer & product will hasten achievement

of the strategic goal.

The Q4, is a growth quadrant primarily with new / diversified business opportunities.

It demands diverse kinds of Innovations, be it new process, new product, newer

ways to reach customers or to address an unmet need etc. This requires re-skilling

for the organisation which is most often acquired through acquisition than building it

in-house (sometimes a costly and time-consuming affair)!

Summary

● Innovation has always been and will remain a key driver for business growth.

But identifying the right Innovation aligning to the business strategy is key.

● It’s a myth that innovation is principally pertained to Manufacturing

(Technology) & Marketing! This needs to be challenged and a new mind-set to

be developed.

● Innovation can definitely be a New Business Process, New Ways for

Customer-Reach, Newer Ways to Serve an Unmet-Need, Building a New

Capability as well !

● Innovation, most often, is easier to kick-off than sustain it till the desired point

of success. Creating a dedicated resource, structure and an independent

project head is the only way to achieve the purpose!