We’ve established that we are currently experiencing the most rapid increase in technology. Once the internet entered virtually every home, and then every hand via the mobile phone, things started changing at an exponential rate.
New apps, start-ups, artificial intelligence, online businesses and robotics pop up overnight, each one bringing new changes, challenges and possibly disruption to the environment. As a result, we can feel like we’re furiously treading water just to keep our nostrils above the surface.
Innovation has become a major factor in determining organisations’ longevity and success. That’s where an innovation strategy comes into play. It’s the where, what, how and who of innovation.
Communicating your strategy effectively to your team helps them to understand the objectives and their individual roles within them. It helps develop commitment to a set of coherent, mutually reinforcing policies or behaviours aimed at achieving a specific competitive goal. Good strategy will ensure alignment among diverse teams and personalities within the organisation.
Your Innovation Portfolio, forms the foundation of your innovation strategy. At G2, we agree with the Harvard Business Review line of thinking, your Innovation Portfolio helps you determine how much time and resources your organisation should spend on a range of projects at any one time.
This involves dividing your Innovation activities into three distinct categories and applying the 70-20-10 rule. According to data cited by the Harvard Business Review, when it comes to return on investment (ROI), the inverse was true.
An existing market you currently serve and/or and existing technology you currently use. Incremental innovation is a series of small improvements or upgrades to existing products, services, processes or methods that improve efficiency, productivity or competitive differentiation. This is the realms of continuous improvement.
This type of innovation should take up 70% of your time and resources and by reversing the 70-20-10 rule, it delivers 10% of your return on investment.
Mobile phone – New screen sizes, fresh colours, additional security, upgraded camera, louder speakers, wireless charging and biometric security are examples of how mobile phone brands ensure their products remain desirable.
Soft drink – Sugar free, diet, lemon infused, no caffeine, vintage bottles, larger bottles, smaller cans to bring something new to customers.
An existing market that you don’t serve and/or an existing technology that you don’t use. Such innovation shares characteristics of incremental and radical innovation but involves leveraging something your organisation already does well into a new space.
Adjacent innovation should be afforded 20% of your time and resources and deliver 20% of your return on investment.
Virgin – Richard Branson is a master of innovation, what started as a chain of Virgin music stores became boundless adaptations of the brand - Virgin Airlines, Virgin Hotels, Virgin Cola, Virgin Mobile and Virgin Money, to name just a few.
Uber – after disrupting the private transport landscape, Uber demonstrates adjacent innovation with Uber Eats. Next level adjacent is their experimentation with autonomous vehicles for food and human delivery.
Also known as transformational innovation, this involves a whole new market and/or new technology. Few organisations commit resources or are prepared to take risks that allow for radical innovation to flourish and succeed, but those that do reap the rewards.
10% of your time should be spent on radical innovation but, when successful, will deliver 70% of your return on investment.
The Internet - ARPANET, the Advanced Research Projects Agency Network was developed from its initial purpose of a communication system for the US Department of Defence, to include features and technology that we now know as the internet.
The light bulb – vacuum technology, carbon filament and contact wires together created the first electric light, one of the most significant innovations in history.
If you don’t have a current Innovation Strategy, it’s not a disaster and there’s no need to feel lost at sea, we’re here to help. But, just like any other challenge, it’s time to consider how to get yourself out of the ocean and onboard the boat so you can lift the anchor and set sail.