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Why Innovation Strategies Are Needed

While successful companies are often innovative, the ranks of innovators have seen their share of failures. Polaroid, Nokia, Sun Microsystems, and Yahoo were all once industry leaders due to their innovations, yet each foundered when attempting to consistently maintain its innovation success. Indeed, innovation failure runs high in American business, despite notable innovative successes.

A successful innovation requires a clear innovation strategy.

Innovation can be of products – the digital devices that have become ubiquitous, for example – or of processes. Toyota, for instance, is an innovator not because of the innovation of its vehicles, but because of its innovations in producing them with streamlined processes.

Develop an Innovation Strategy

How should business leaders best ensure that their organizations’ innovations are successful?

The Harvard Business Review points out that successful innovations require not just a business strategy, but a specific innovation strategy that ties the innovation to how it supports the overall strategy of the business in a way that can be explicitly stated.

The innovation strategy makes clear to an organization’s multiple departments and employees why an innovation is being pursued. It clarifies how the innovation is expected to create value for the company’s customers. It does not rely on knowledge of a business strategy alone. Nor does it rely on vague commitments to innovations or a culture of innovation. It is quite specific.

An innovation’s benefit to customers needs to be disseminated through the organization.

Several decades ago, for example, pharmaceutical company Bristol-Myers Squibb make a decision to shift its focus to cancer research, focusing on biotechnology and monoclonal antibodies, and away from organic chemistry. The innovation was clear: monoclonal antibodies were at the time new therapeutics that targeted cancer cells in a different way than previous treatments had. Multiple forms of cancer can be targeted and researched via biotechnology. The value added was better treatment of cancer, and more available treatments for patients with cancer. And that value added drove multiple innovations throughout the organization.

Another consistent U.S. business innovator has been Corning Glass. Corning focuses on “keystone components” that support the performance of its customers’ products. It has focused in recent years on exceptionally thin glass for consumer electronics. A clear innovation strategy guides the contribution of departments throughout the company. According to The Final Step, the best way to get a head start in developing a strategy is to use an IT strategy template to get your brain thinking about what it will need to do when you create a real plan.

Without an innovation strategy, departments may pursue innovations in ways that, in the views of department heads, support the innovation, but which do not necessarily work together to support the overall business strategy. Too many innovations often fail when there are inconsistencies; for example, IT may focus on technological support that impedes sales leads, or marketing may develop and promote innovation messages that sales believes will not resonate with clients.

The value of an innovation strategy is that it provides an easily articulated link between innovation and company goals that is the ultimate driver of the benefit of innovation.

To be effective, innovation strategy must come from the C-suite. Leadership must be clear and integrated throughout the company. Innovations commercialize creativity; each team needs to know that their contributions to innovation will be rewarded throughout the company.