Innovation Strategy: How to Develop an Innovation Strategy

In business, an innovation strategy is a strategic plan for ensuring the future growth of a company. No two businesses are the same, and neither are innovation strategies. Regardless of methodology, every innovative strategy outlines the goals of innovative projects and presents a clear roadmap to all stakeholders for how the company will achieve the goals of its innovation efforts. The innovation process is most successful when you have a concrete plan of action.

Innovation is an important business strategy because it gives companies a competitive advantage, potentially increasing their value proposition and market share. Introducing new innovations satisfies your existing customers’ needs and can help you expand your customer base by attracting new business.

Innovation strategy examples fall within five broad categories:

1. 1. Incremental innovation: An incremental innovation strategy is built around an innovation culture wherein changes to product lines are rolled out gradually. Innovative ideas lead to continuous improvements of existing products.
2. 2. Product innovation: A product innovation strategy focuses on product development. Businesses using this strategy will create products for the express purpose of entering profitable new markets, targeting proven customer segments, and meeting customers’ needs better than their competitors.
3. 3. Radical innovation: A radical innovation strategy is built around technological innovation. It requires the ability to create and implement new technologies.
4. 4. Disruptive innovation: A disruptive innovation strategy seeks to make changes to its existing business model in order to disrupt the market. It can be implemented with existing products. An example of a disruptive innovation strategy would be to offer free shipping on all your existing products. This innovation would cause a disruption in the market and potentially force your competitors to make changes to their business model in order to compete.
5. 5. Architectural innovation. An architectural innovation strategy is an ambitious effort to overhaul your company’s existing products and business model.

Consider these tips for formulating your own innovation strategy:

1. 1. Assess your business model. When creating an innovation strategy, start by assessing your existing business model. It may be possible to continue your core business without implementing a new business model. However, business model innovation may be necessary in order to increase your value proposition.
2. 2. Set innovation goals. A successful innovation strategy sets high but achievable goals. It’s important to strike a balance between ambitious and attainable. Take stock of your current competencies and how you can leverage them to reach your goals.
3. 3. Create an action plan. In order to drive innovation, you need a clear action plan. When forming an action plan, be specific about what actions are needed and who will carry them out. A strong plan of action will detail who on your team is responsible for what, as well as how and when they will carry out their responsibilities.
4. 4. Measure your success. Keep yourself and your team on track by recording useful metrics for measuring the success of your strategy. This can help you identify strengths and weaknesses and make necessary adjustments.

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