By: Chuck Frey
Describes a method for tying innovation efforts to the strategic framework of the firm
How do you tie innovation to strategy? In other words, how do you create the linkage between the two so that they are in sync with one another? There is tremendous value in getting this right. It makes the innovations you create more realistic and supportable if they are couched in the context of the strategy of the firm. And it makes innovating more efficient – you avoid wasting time on creating ideas that are out of scope (i.e., off strategy).
I like to think of it as a two-directional concept (not to be confused with the two directions of innovating). The two directions are Strategy-Informs-Innovation and (just the reverse) Innovation-Informs-Strategy. Here is how I do it.
For Strategy-Informs-Innovation, I begin with a strategy model that depicts what the firm is trying to do at a strategic or market level. There are a variety of strategic/marketing models in use today, and any of them will do. The key is to make sure the model clearly specifies the intent of what the firm is trying to make happen in the competitive landscape.
My favorite model is The Big Picture framework developed by Professor Christie Nordhielm at the University of Michagan. It describes four strategic quadrants that a firm can pursue. The choice of strategy is deciding which quadrant offers the biggest. Once a firm has selected a quadrant, it guides the use of a systematic innovation tool or process.
The trick is to use the process to generate create concepts that are forced to give the firm the marketing impact of the selected strategic quadrant. So, for example, if I had selected Quadrant 2 as my lead strategy (retaining my existing 100 percent of loyal customers), I would use my innovation method in a way that forced the ideas out that emphasized current loyalty, that recognized and rewarded the fact that customers already understand the technology, that made them more efficient and effective at what they already do, and that made them feel very satisfied that they had chosen the right brand to begin with.
For the other direction (Innovation-Informs-Strategy), we begin with an innovation initiative to generate a large stock of ideas within a business category. We then map those ideas back into the strategic model to see where they best fit (while remaining agnostic about which strategic quadrant to choose).
When done correctly, we see a scatter of ideas around the strategic framework, in total free-form fashion. Then we put our strategy hat on and carefully reflect on the choice of quadrant based on the qualtiy and quantity of ideas within each quadrant. For example, if I believe that Quadrant 2 (multi-brand users) of the Big Picture model had the most variety of useful and novel ideas, I would begin to prefer this quadrant as a way to make the biggest, disruptive impact on the market. In effect, I am letting the innovation choose my strategy.
I have seen teams uses both of these directions successfuly, and I am careful not to recommend one method over the other. Either approach is viable. That said, it may make sense to start with the Stratey-Informs-Innovation approach if the firm knows for sure that it must stick with a specific strategic approach because of previous commitments, infrastructre, or other competitive realitites where it won’t make sense to change regardless of the cool ideas generated for other strategic quadrants. In that case, go with the flow. Narrow your innovation process so that it pours out ideas for the strategic quadrant at hand.