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Business innovation strategy: 9 key pillars for success in 2021.

• Published on: January 6, 2021
• Author: masschallenge

More than 80% of leaders at large corporations believe innovation is crucial for business growth. And yet, many companies have no innovation strategy.

Technology and digital disruption continue to advance at breakneck speed, leading all industries into a future where business agility counts just as much as having an experienced C-suite.

It doesn’t matter what industry you operate in now—the choice is the same for all companies:

Innovate or get left behind.

Without a solid plan that maps out how you will achieve your goals and establish a sustainable business built to adapt to a rapidly-changing digital landscape, you’re bound to struggle.

In this article, we’ll find out what an innovation strategy is, why it matters, and then we’ll give you the ideas and inspiration to start innovating at your company.

What is an Innovation Strategy?

An innovation strategy is a clearly-defined plan of structured steps a person or team must perform to achieve the growth and future sustainability goals of an organization.

Innovation  aims to create original value, such as new solutions to adapt in changing industries or solve impeding social, health, or economic challenges. A strategy is a plan that details precisely how you will bring your vision into reality.

Essentially, a strategy acts as a heuristic that we can rely on when facing tough decisions. Ergo, an innovation strategy provides people with a framework for critical decision-making relative to company innovation, such as:

• In what areas will we invest?
• How much will we invest?
• Who will make investment decisions?
• What capabilities will we need to develop to support our investments?
• What capabilities can we not build, which we must then acquire or form a partnership to provide?

All of these questions are long-term decisions. When devising an innovation strategy , we must consider our goals and the potential for change over several years.

Why Are Innovation Strategies Important?

Typically, the most effective business models, markets, and products follow a similar growth cycle, often visualized as an S-curve , where diminishing returns set in sometime after the initial growth trajectory.

This slowdown in growth is inevitable, and yet, many companies are taken off-guard. We can’t simply ignore these decisions. If you decide to wait until there is a lull in growth or sales until you gather more information, it may be too late.

In 2008, Blockbuster CEO Jim Keyes said, “Neither RedBox nor Netflix are even on the radar screen in terms of competition.”

This bold claim came even though Blockbuster had lost 75% of its market value between 2003 and 2005.

By 2010, the DVD rental store declared bankruptcy, succumbing to the indomitable rise of Netflix and the streaming television era.

Kodak fell to a similar demise. As smartphones became ubiquitous, Kodak could no longer compete, and in 2012, the company once synonymous with photography filed for bankruptcy and vanished from the camera industry.

These are, of course, highly visible and consumerist examples, but the same dilemmas befall more naunced areas is every industry, whether it be in healthtech, security, sustainability, or infrastructure.

Nothing grows forever, and you can never really know when the inflection point will hit, which is why it is best to always be ready. In other words, you should make innovation a continuous process. Otherwise, it’s only a matter of time before revenue starts tumbling.

Benefits of an Innovation Strategy

Holding on to traditional practices just because “that’s what we’ve always done” is not a strategy for success. That rigid approach is guaranteed to fail in the face of disruption, as proven by Kodak and Blockbuster.

With that in mind, here are four benefits of an innovation strategy:

Improve existing products

When selling any product or service, you must consider the three levers of the value proposition:

• Benefits and features
• Target customers

A good innovation strategy will experiment with these levers, helping sales and marketing teams to reinvent or revert the value proposition of existing products. In doing so, innovation helps to bring more value to the customer, and ultimately, more revenue for the business.

Develop new products

For many, the most appealing benefit of a business innovation strategy is its capacity to generate entirely new ideas. Innovation can birth new products and services to add to your existing lines, or it may open the doors to target new markets, or solve growing societal problems.

By analyzing the customer journey of different consumer types, you can develop a better understanding of purchasing behaviors. This research helps companies identify the key factors that motivate people to make purchases and discover new opportunities by finding markets or products that need improvement.

Optimize revenues

The three variables of profit are price, demand, and costs. For any business strategy to be deemed successful, it must increase profit by reducing costs or raising prices or demand.

Earnings innovation encourages businesses to seek out ways of maximizing their profit. Quite often, the most effective way to do this is by expanding your customer base.

Whether you’re creating a new product or improving your existing ones, the impact on your earnings should be a top priority of your business innovation strategy.

Optimize costs

Increasing revenue is not the only way to drive profits, as you can also use innovation to reduce costs. When you apply new practices and process throughout the organization, you can optimize internal operations in many ways, such as:

• Switching from legacy offline systems to cloud storage
• Moving to paperless systems for all records and communication
• Using live chatbots instead of human customer support staff

Through constant innovation, it’s possible to streamline workflows and teams so that you spend less on administration and more on activities that generate a higher return on investment (ROI).

9 Key Pillars of a Business Innovation Strategy

Creating an innovation strategy is a vital step that gives your team the understanding and directional insight into how individual, departmental, and organizational goals come together to deliver the business objectives.

Here are 9 pillars of an innovation strategy that enable a company to maximize its potential:

You can execute an innovation strategy using one of two models—business model innovation or leveraging existing business model.

• Business model innovation is the process an organization uses to adapt its business model to deliver more value to its customers. By making changes to its value proposition and the underlying business model, a company can gain a competitive advantage.
• Leveraging Existing Business Model focuses on continuous improvement of core business, rather than seeking to build new business models.

Once you have decided on your preferred model, you can experiment with the concepts below:

2. Intrapreneurship

Intrapreneurship is the practice of enabling employees to act as entrepreneurs while they work within a company.

By empowering individuals to think, act, and create their own ideas, a company benefits from a widespread internal culture of ongoing innovation. An organization can provide resources and support to intrapreneurs, helping them launch startups within the organization.

3. Corporate accelerator

A corporate accelerator is an innovation event or program funded by a large enterprise, which typically offers aspiring entrepreneurs the chance to acquire seed capital, mentorship, and important connections.

These programs usually culminate with a demonstration day, where startups pitch their ideas to the host corporation for the chance to secure investment or a partnership.

By including a corporate accelerator in your innovation strategy, you get the chance to build your network with promising new talent in your industry. Moreover, there is an excellent chance you will discover startups and concepts that align with your own business needs and goals.

4. Innovation labs

An innovation lab is a business department that provides a base and supporting resources for startups or R&D teams to work on new ideas that could disrupt the current market.

While these labs may operate independently from the parent company, it’s also possible to house an innovation lab within the main company building and staff it with existing employees.

5. Open innovation program

The traditional model of research and development relies on internal resources and expertise. Existing employees work together to generate, manage, and sustain new business ideas and retain all information within the company, usually within the R&D department.

Open innovation takes a novel approach by opening the company’s doors to external input, welcoming experts, researchers, and bright minds from outside the company to come and share their ideas.

6. External accelerators

An external accelerator is a little different from an in-house corporate accelerator, as your company will not cover the full costs of running the program. As such, this is a low-risk tactic in an innovation strategy, with the potential to deliver fantastic rewards. Like a corporare accelerator, purview to new startups and concepts that align with business needs and goals are exhibithed, but additionally there’s the benefit of opening your eyes to advantageous approaches that were not intially apart of your goals.

By becoming involved, you can actively participate in advancing startups and focusing on particular solutions that appeal to your business, making this type of accelerator a worthwhile venture.

7. Collaboration

The ideas are just the beginning, but it’s only through interaction and discussion with subject matter experts, researchers, and other innovators that you can successfully bring ideas to life.

Having more conversations around an idea with various outside sources makes it easier to identify potential issues and iterate a basic idea until it is something genuinely worth producing.

You should seek praise and criticism at this stage, as it’s important to challenge the concept and debate the pros and cons in-depth.

8. Ideation

Approximately 4 of every 5 employees has an idea to improve the company. Finding ideas is not a challenge—gathering, analyzing, and implementing the best ideas is the struggle for many companies.

Many companies fail because they lack an effective system to take a simple idea and turn it into a practical process that will deliver results. In other words, they don’t have an innovation strategy.

It’s important to explain your ideation processes to all employees to be aware of how the company captures ideas. When you have this system in place and encourage people to contribute, it’s easier to collect and organize new ideas.

9. Measurement

You can’t manage what you don’t measure. And so, one of the most important pillars of your innovation strategy is a plan for how you will measure success.

Think about your goals and the most relevant metrics to track. For example, if your goal is brand awareness, you could track social shares, website traffic, and email subscribers.

With every new idea, monitor its progress, and gauge performance by taking periodic measurements of your key metrics. It’s not always easy to measure innovation, but doing so from the start allows you to determine whether your efforts are successful.

Innovation Strategy Examples

We can see innovation strategy examples in every industry, as companies strive to get an edge in increasingly competitive marketplaces.

As the rise of café culture birthed hipster pop-ups and independent shops, the dominant chains began to lose ground. Keen to avoid a Kodak moment, Howard Schultz jumped to action . The Starbucks CEO invited store managers from all over the world to come together for a conference to redesign the café experience.

As a leader in technology and sustainability, Bühler invests up to 5% of its turnover every year in research and development. To optimize these efforts, in 2016 Bühler identified five core topics that are decisive for driving change:

• Food and Feed Safety: spend 50% of food relevant R&D projects with focus to improve food and feed safety
• Energy, Waste and Water Reduction: reduction by 50% in the value chains of their customers by 2030
• Mobility: make lighter cars with die-casting solutions and create more efficient batteries for electric vehicles
• Nutrition: spend 20% of food relevant R&D projects with focus to improve nutrition
• Digitalization: improve transparency through digitalization and collaboration

By working with an external accelerator, in the case MassChallenge, Bühler received early access to emerging, high-impact technologies and startups across their five core initiatives.

In 2018, Bühler teamed up with Givaudan to support Legria , a new natural sweetener made from waste streams, supporting their waste reduction initiative. The new business model was made more public-appealing by having two companies in support of it, however maintaining economic independence of each other.

The dating app, Tinder , was the first of its kind to gamify dating. The development team approached potential users at college sororities, recruiting signups from a largely female audience before pitching the app to men in the same colleges’ fraternities.

With a personal touch, the company’s clever innovation strategy quickly grew the app’s user base, as many college students joined because they knew other people on the app.

Sometimes, people can be concerned about offending with their reviews online, and therefore, they may not be totally honest.

Airbnb set 14-day deadlines and implemented a double-blind review process, so neither party can view the other’s review until both have been completed. This change paved the way for more spontaneous reviews and more candid, detailed feedback.

Airbnb turned reviews into a bonafide trust factor on their site with this simple move, which people use to make booking decisions. In the long-term, the strategy has helped grow the authority of the website and company.

The growth of the software-as-a-service (SaaS) industry tempted many customers away from traditional hardware technology companies. In the cloud age, IBM knew change was needed and decided to take a startup-like approach to innovation.

In 2014, IBM launched a growth hacking team to explore new ideas and tap into new markets through data-driven creativity. Now, the legacy tech corporation operates with a collection of lean, startup-sized teams within its workforce, encouraging team members to work in an innovation lab style to test new marketing strategies.

Our vision for a better company, product, or value for the customer may feel clear, but how we get there isn’t always so simple. Faced with market trends, changes in consumer preferences, new technology, and disruptive competitors, companies will need a blueprint to stay on track.

An innovation strategy goes beyond simple tactics like campaign ideas and marketing ploys to develop the company’s mission, vision, and unique value proposition against this ever-evolving landscape.

Nowadays, it’s no longer an option.

“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.”  – Sun Tzu

MassChallenge gives partners the tools to meet this moment head on while realizing results that make the difference for their businesses. See how companies like MassMutual , Barry Callebaut , Columbia Threadneedle , and Elta Systems  have partnered with MassChallenge to drive their innovation.

Join the MassChallenge program today to give your corporation the edge in the startup era.

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5 Effective Steps to Creating a Powerful Innovation Strategy

Updated on: 1 March 2023

Innovation is an organization’s path to survival. In a world of rapid change and increasing competition, innovation has become essential to maintaining business growth, competitiveness, and productivity.  

Innovation is one of the key activities in a company’s operations. Innovation is a long and complex process that takes an abstract idea and converts it into a successful product or service. A proper strategy in place to execute it ensures that you do it well. 

In this post, we are exploring 5 effective steps for developing a powerful innovation strategy.

What is an Innovation Strategy

“Innovation transforms insight and technology into novel products, processes and services that create new value for stakeholders, drive economic growth and improve standards of living.”

In the simplest of terms, innovation is the process of bringing new, unique, and creative ideas into reality. An organization following an innovation strategy uses innovation to execute its business strategy. In other words, an innovation strategy guides the process of resource allocation, enabling the organization to achieve its long-term goals through the use of innovation.  

“An innovation strategy guides decisions on how resources are to be used to meet a firm’s objectives for innovation and thereby deliver value and build competitive advantage.” – Mark Dodgson, David Gann, Ammon Salter (The Management of Technological Innovation: Strategy and Practice)

A company’s innovation strategy should specify how the different types of innovation fit into the business strategy and the resources that should be allocated to implement these innovations.

An innovation strategy paves the way to 

• Improve the ability to retain customers 
• Reduce competitive intensity
• Improve product or service performance  
• Increase the chances of becoming a market leader 
• Preserve bargaining power in an ecosystem and blunt imitators

Types of innovation

• Gradual/ incremental innovation (continuous innovation) is based on abilities that can be easily learned and developed in an organization and has a low-risk low return. 
• Radical innovation (discontinuous innovation) on the other hand may change the structure of an industry dramatically and has a high-risk high return. 

Innovation Matrix

The innovation matrix as introduced by VIIMA helps categorize innovation based on two dimensions; the technology it uses and the market it operates in. It, thus, visualizes the most common types of innovation.

Based on these categories, three major types of innovation an innovation strategy can be based on can be identified, 

• Product innovation; occurs in the development of new products, modifications in established products, or in the usage of new materials or components in the manufacture of established products
• Process innovation; refers to the development of and implementation of significantly improved organizational processes through the integration of new technologies
• Business model innovation; refers to the improvements done to an existing business model or the creation of a new one to better meet the needs of customers

The Innovation Value Chain 

The innovation value chain provides a framework to identify which innovation approach makes the most sense for a company to adopt. It enables managers to find the company’s weaknesses and become more aware of an apt approach to implement for success. 

The framework includes three phases 

• Idea generation ; creating and sourcing new ideas from internal and external environments to achieve a competitive advantage in the marketplace.
• Conversion ; selecting and screening the best idea and implementing them. While this involves transforming knowledge into innovations in the form of new products, processes, or organizational forms, special focus should be placed on the company budget and strict funding criteria to avoid shutting down the development of the idea. 
• Diffusion ; spreading the idea across the organization. Find the relevant communities in the organization to support and spread the new product or service, process, and practices across geographic location, consumer groups, and channels. 

How to Develop an Innovation Strategy 

Determine the innovation strategy objective .

Developing an innovation strategy should start with understanding the reason behind developing one in the first place or the objectives you want to achieve by implementing it. 

To identify your innovation strategy objectives, examine the overall business objectives that help the company achieve sustainable competitive advantage. This will clear the path for your innovation strategy as it should eventually support the overarching goals of the organization.

Get the executive team onboard 

Engage the leadership team in dialogue and ensure that they are aware of the innovation objectives established and what it means for them as well as the future of the organization. During the discussions also identify, 

• External changes that could be occurring at present and in the future as a result of innovation 
• The implication of such changes on the company 
• Scope of innovation; identifying opportunities for innovation, whether to improve existing products or services or introduce brand new products to new markets
• Business outcomes; financial results, social impact, new economic models, market leadership,  etc. 
• The gaps that must be closed to deliver the chosen innovation scope, especially in terms of processes, skills, and resources needed and company culture
• Barriers to and enablers of the innovation strategy.  Barriers can come in the form of embedded beliefs on how the business should operate and enablers can show up as core capabilities or resources.  

Their involvement is necessary to create a shared vision of success with innovation at the core.

Gather customer insight 

Understanding customer needs will inform the direction of the development of the innovation idea. It will also enable you to formulate a strategy that works and create value-creating innovations that will ultimately generate a good return on investment.

In order to create value for potential customers with your innovation strategy, you need a thorough understanding of your market and the customer segment you are catering to. 

(Utilize a customer persona to gather insight on customers’ demographic characteristics, needs, challenges, and ambitions and apply that knowledge to generate a solution.)

Allocate resources 

When allocating resources for new areas for growth and renewal, reserving resources for the core business growth should also be taken into consideration. By conducting a comprehensive audit on the current innovation landscape of the organization you can determine and understand how much time, effort, and money are allocated to different innovation initiatives. 

The Harvard Business Review has introduced the Innovation Ambition Matrix to determine how to allocate resources based on the type of innovation initiative.

The matrix describes 3 types of innovation and how resources should be split among them,  

• Core initiatives – refer to efforts to make incremental changes to existing products and incremental inroads into new markets. For example, through new packaging or added service convenience. Such efforts can draw on resources the company already has. 
• Transformational initiatives – refer to creating new offers to serve new markets and customer needs. This may require assets the company is unfamiliar with. 
• Adjacent innovations – involves leveraging something the company does well into a new space. This type of innovation allows a company to draw on existing capabilities but necessitates putting those capabilities to new uses.

Research conducted by HBR shows that companies that allocated about 70% of resources to core initiatives, 20% to adjacent ones, and 10% to transformational ones outperformed their peers.

However, the right balance will vary from company to company and according to factors such as industry, competitive position, and the company’s stage of development.

To learn more about striking and maintaining the right balance between the allocation of resources and the innovation initiative, refer to this article here.

Develop an innovation system 

Not all organizations are likely to possess the capabilities to execute successfully at all three levels of innovation ambitions identified above.

However, HBR emphasizes that the companies that have got it right, have usually focused on five key areas of management that help them excel at the three levels of innovation ambition, and hence enable them to maintain a sustainable innovation system with the organization. 

• Talent : includes the skills needed to execute core, adjacent, and transformational innovation initiatives. 
• Integration : refers to organizing and managing the skills in the right way, with the right mandate, and under the conditions that will help them succeed.
• Funding: refers to determining how to fund the innovation initiatives. Core and adjacent innovations can be funded by the relevant business unit’s P&L through annual budget cycles. Transformational innovations, on the other hand, require a sustained investment that comes from an entity (i.e. executive suite and the CEO).  
• Pipeline management : mechanisms to track and monitor ongoing initiatives and ensure that they are progressing according to plan.
• Metrics : what measurements should inform management. While traditional financial metrics are appropriate for measuring core and adjacent initiatives, a combination of noneconomic and internal metrics should be used to evaluate transformational efforts.

Developing an Innovation Strategy 

The innovation strategy of a competitor or an industry leader may not work for you. While you can learn from their best practices, an explicit innovation strategy to match your own competitive needs will be effective in the long run. 

Follow the innovation strategy steps explained above to formulate a robust strategy and better coordinate your innovation process. 

Got anything to add to our guide? Let us know in the comments below.

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Five Steps to Implementing Innovation

We’re all familiar with stories about breakthrough products, services, and processes—the disruptors that grab the headlines and garner eye-popping valuations. And then there are the entrepreneurs who end up on the cover of Bloomberg Businessweek and write best-selling books about the keys to their success. The message seems to be that, through good timing or genius, innovation is the purview of a select few.

But at its core, innovation is simply a way to solve problems and create value in new ways. Overhauling an inefficient process, using customer feedback to breathe new life into a stale product—innovations don’t have to be splashy or game-changing to lead to sustained organizational success. These small but mighty initiatives seldom come from top management or an “idea lab,” but rather from individual contributors and frontline leaders who are closest to the customer and best positioned to understand their needs.

When employees from throughout the ranks learn to see themselves as innovators and take steps to make their ideas a reality, the results can be powerful. In addition to furthering a company’s purpose and bolstering its bottom line, employee-driven innovation engages people in ways that carrying out top-down directives never will.

Tips to get you started

Given the growing interest in innovation, it’s no surprise that organizations are looking for clear guidelines on how to implement it. Every innovation is unique. Even so, certain strategies and skills are useful across a range of projects and at all levels of an organization:

• Spot opportunities for innovation. As innovation expert Greg Satell puts it, “No matter what form innovation takes—short, agile sprints or long-term, grand-challenge investments—innovation is fundamentally about solving problems.” As you think about your organization, what problems need solving? Where do opportunities lie? Once you land on some promising ideas, continue to explore them from different angles. By doing so, you may discover even more exciting possibilities.
• Prioritize opportunities. You don’t have infinite time and resources, so prioritize potential innovations depending on where you think you’ll get the most bang for your buck. Narrow in on the two or three ideas you think are most worth digging into, testing, and refining. Then express them as hypotheses you can test through targeted experiments.
• Test your potential innovations. Keep your experiments modest in scope, especially when you’re starting out. You may want to begin with “paper prototypes,” or simple drawings of the new product or process that your end users can interact with to see what works and what doesn’t. They are quick and inexpensive, and they help you figure out where you need to tweak your concept. With each round of testing, move to progressively more complex experiments involving more users.
• Build support for your innovations. Don’t be shy. Make sure the time is right and tell your story to all your stakeholders, including those whose resource backing you need and those who’ll directly benefit from your innovation. You’ll want to tailor your approach based on what’s important to each person and what you need from them.
• Learn from your innovation efforts. You’ve probably heard the mantra “fail fast, learn fast.” After each innovation, list what you would do again and what you wouldn’t. And don’t overthink failure; the key is learn from it and apply those lessons to your next innovation.

We’ve seen these steps work at all levels in an organization. In fact, we even followed them when redesigning our Harvard ManageMentor® innovation-related topics. What process do you follow when implementing innovation in your organization?

Janice Molloy is senior manager, online learning at Harvard Business Publishing. Email her at [email protected] .

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How to Come Up with an Innovative Business Idea

• 21 Jul 2020

Entrepreneurship is the pursuit of opportunity beyond currently controlled resources. By definition, entrepreneurs seek to fill a need in a new way.

For aspiring entrepreneurs, however, generating strong, novel business ideas can be challenging.

If you’re interested in being an entrepreneur , brainstorming ways you can satisfy needs and solve problems is a good place to start.

Remember the golden rule of brainstorming: There are no bad ideas. As your thoughts flow, jot them down so you can later prune the list to focus on your strongest concepts.

Here are some thought-starters for coming up with innovative business ideas and examples of how entrepreneurs have used them to build successful companies.

Access your free e-book today.

How to Come Up with a Business Idea

Is there an easier way.

One place to start brainstorming potential business ideas is by asking yourself, “What task can I make easier?”

A common denominator for successful businesses is their ability to fulfill customer needs . In this case, the need is to create a product or service that makes people’s lives easier.

Related: How to Identify an Underserved Need in the Market

The most innovative businesses have flourished from simple ideas. For example, HelloFresh has taught people how to cook and provided tools to prepare meals more efficiently. It started with a need to make meal planning and grocery shopping easier. By preparing meal kits that directly fulfill busy people’s needs, this idea has seen major growth.

Check out our video on how to come up with innovative business ideas below below, and subscribe to our YouTube channel for more explainer content!

This method of creating a product to fill a need can be viewed through the lens of Harvard Business School Professor Clayton Christensen’s jobs to be done theory , which he presents in the online course Disruptive Strategy .

“A ‘job to be done’ is a problem or opportunity that somebody is trying to solve,” Christensen says. “We call it a ‘job’ because it needs to be done, and we hire people or products to get jobs done.”

Look for these kinds of opportunities in your own life. Every “job” presents an opportunity to create an easier way to get it done.

By centering your business plan on a particular need, you can increase your chances of building a profitable business.

Related: Jobs to Be Done: 4 Real-World Examples

Can I Make This More Accessible?

There are many useful products and services that aren’t readily available to the entire market, creating an opportunity to produce a similar, more accessible product offering.

The founding of Airbnb by Brian Chesky and Joe Gebbia is an example that HBS Professor William Sahlman uses in the online course Entrepreneurship Essentials .

“Chesky and Gebbia observed how hard it was to find housing during big local events,” Sahlman explains. “They decided to list online three air beds in their apartment for people coming to San Francisco for a design conference.”

From there, they added a third member to their founding team, Nathan Blecharczyk, who built the platform for connecting people with spare rooms to travelers needing a place to stay. They called it AirBed and Breakfast, which later became Airbnb .

Chesky and Gebbia noticed hotel rooms weren’t easy to book during large events, recognized a business opportunity, and devised a solution to fulfill a need for accessible, short-term lodging.

There are countless industries and companies whose offerings are inaccessible to certain market segments or during specific periods. Consider how you might fill those needs.

Related: 10 Characteristics of Successful Entrepreneurs

What Can I Improve About This?

For every successful product offering, there's a multitude of ways to make it better. Think of companies you admire and imagine how you could improve their products. As you do so, consider the following four factors.

1. Delivery Process

Your business idea doesn’t have to be entirely new—it just has to fill a need. If you can identify a more convenient way of delivering an existing service, it could be an opportunity for your business.

Uber is used as an example in Entrepreneurship Essentials . Taxis have existed for decades, but Uber delivered its services in a new, innovative way by linking drivers in their own cars to customers via an app.

This example also shows there are no limits to what type of business you can create. Your business’ ability to fulfill a need will matter more than whether it’s a brick-and-mortar or online business.

Related: 3 Effective Methods for Assessing Customer Needs

2. Location

One of the simplest improvements to a product or service is bringing it to a new location.

Returning to the Uber example in Entrepreneurship Essentials , ride-sharing company Didi was founded in China—a location Uber hadn’t yet reached. Didi used a similar platform and model as Uber but filled a location gap Uber had left open.

What products, services, or concepts have you experienced in other places that you’d like to bring to your community?

One improvement that can make a significant impact is cost. Determining how to make a high-quality equivalent to a leading product and offer it for a fraction of the price has great potential.

Home security brand Wyze was founded using this logic. After four ex-Amazon employees discovered they could produce high-quality security cameras and sell them for one-tenth the cost of leading competitors, they sold one million security cameras in their first year as a company.

It takes testing to ensure product quality isn’t sacrificed for a lower price, but finding a way to reduce the cost of an in-demand item could jumpstart your entrepreneurial journey.

4. Customer Experience

Taking an existing offering and improving the customer experience for all or a segment of the market can be a valuable way to fill a need.

One example of an organization that’s done this well is Wanderful , a platform that, similar to Airbnb, connects travelers to locals who can offer lodging and travel advice—with the provision that all users are women.

Beth Santos, founder and CEO of Wanderful, noticed that female solo travelers made up 11 percent of the travel industry , which failed to take into consideration the safety, gender norm, and cultural concerns of women traveling alone.

She improved this experience by creating a network of women that can be tapped into for lodging, travel advice, or just a friendly face in a new location. Wanderful has since expanded its mission to give female and non-binary travelers voices in the travel industry through conferences, communities, and recognition programs.

If there’s an opportunity to improve the experience of a specific group of people, act on it and see where the opportunity leads.

Related: 6 Questions to Ask Before Starting a Business

Is It Time to Pivot?

When starting a business, you may need to pivot from your original idea as new needs arise in the market.

For instance, Jebbit , a tech startup that originally offered a platform to pay students for the advertisements they watched, saw a rising need for privacy and consent in the consumer data space. It pivoted to create a platform for secure, declared customer data.

Another instance in which it makes sense to pivot is during technological evolution.

In Disruptive Strategy , Christensen explains that technological advancements can be either sustaining or disruptive innovations , depending on how they impact your company.

Take Netflix : The service was created to allow people to watch movies without going to the video store and accomplished this by mailing DVDs to customers’ homes with prepaid return envelopes.

When streaming came on the scene in 2007, Netflix implemented the new technology into its business model and has continued to adapt as it’s evolved. Because Netflix was able to adopt new technology to continue serving its customers, streaming was a sustaining innovation.

In the case of video store Blockbuster , streaming was a disruptive innovation that it tried but couldn’t affordably adopt. It ultimately led the business to shut down.

When technological advancements arise, think of how your current business model could shift to use innovation as a sustaining force.

More Examples of Innovative Business Ideas

As you think of ideas for businesses, take inspiration from the world around you. Analyze the foundational needs other businesses have fulfilled for society and how they’ve adapted to what customers want.

Remember: As a future business owner, it’s critical to understand your company’s core mission. Focusing on that can help align your startup ideas and provide a greater chance for success.

To gain even more insight and inspiration, consider the following examples, which show how diverse your business model and mission can be.

Notarize , the first online platform for legally signing and notarizing documents is just one example of an online startup that discovered an overlooked need. For many, it’s a hassle to find a notary public to sign a document in person. This prompted Pat Kinsel, founder and CEO of Notarize, to make this difficult, but necessary, task more convenient.

"It really struck me that notarized documents are often some of the most important things people sign, and yet, we have this system that’s 100 years old," Kinsel said in an interview with Inc .

Kinsel designed the Notarize app to connect people to licensed notary publics via video chat so they can see their documents signed in real time.

This need for notarized documents seemed to be a common, but overlooked, need for many professionals. By thinking outside the box, Notarize seized a business opportunity and brought it to its fullest potential.

The development of Starbucks under former chairman and CEO Howard Schultz is another example that highlights how to efficiently choose locations for your brick-and-mortar.

“Schultz admired the sidewalk coffee shops he’d visited in Italy and decided he would introduce the same basic idea in the United States,” Sahlman says in Entrepreneurship Essentials. “That venture became Starbucks.”

Now, it’s rare to walk a few blocks without seeing a Starbucks on a corner. Strategic locations within high traffic routes created a customer base that’s made Starbucks an essential part of their lives.

Perhaps one of the most well-known companies in the world, Amazon is a prime example of fulfilling people’s need for convenience.

This e-commerce business made it the norm to buy items online—including books, music, movies, housewares, and electronics—and have them quickly and conveniently delivered.

Think Like an Entrepreneur

Coming up with an innovative business idea isn’t difficult if you’re observant. By asking yourself key brainstorming questions, you can generate a list of business ideas that fill market needs, improve existing products, and make daily life easier and more enjoyable.

Do you want to turn an idea into a viable venture? Explore our four-week Entrepreneurship Essentials course, six-week Disruptive Strategy course, and other online entrepreneurship and innovation courses to discover how you can harness the power of innovation. Download our free course flowchart to determine which best aligns with your goals.

This post was updated on September 19, 2022. It was originally published on July 21, 2020.

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The eight essentials of innovation

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January 4, 2024

In the time since this article was first published, McKinsey has continued to explore the topics it covers. Read on for a summary of our latest insights.

Innovation may sound like a creative art: hard to quantify, dependent on lightning-bolt inspiration, subject to the availability of magic dust and luck. It’s true that innovation relies, to an extent, on the vagaries of ingenuity. But according to McKinsey research, innovation—and, crucially, the type of outperformance that innovation can spark in organizations—is much more likely to happen when there is a rigorous process  in place to bring ideas to fruition.

The simple fact is that innovation translates to growth : innovation leaders generate almost twice as much revenue growth from innovation as their competitors. Our research in the years since the COVID-19 pandemic has found that these organizations, which we call “innovative growers,” do this by cultivating four best practices :

• Link innovation to growth aspirations and reinforce its importance in strategic and financial discussions.
• Pursue multiple pathways to growth, both in core businesses and when entering adjacent customer segments, industries, or geographies. Innovative growers also only enter markets where there are clear opportunities to create value.
• Invest productively in all innovation capabilities, including research and development, resourcing, and operational agility.
• Cultivate strong M&A capabilities, particularly programmatic dealmaking.

Innovation can be especially rewarding when deployed as a crisis-management measure . During periods of uncertainty, organizations that invest in innovation—contrary, perhaps, to the impulse to batten down the hatches—are also more likely to emerge ahead of competitors. More specifically, innovative organizations are more likely to find emerging pockets of growth  in times of uncertainty.

Looking ahead, we expect innovative organizations to keep outpacing their peers. Our 2023 McKinsey Global Survey  reveals a striking connection  between organizations’ innovation capabilities and their abilities to increase value through the newest digital technologies, including generative AI. Everyone is talking about gen AI, but organizations with strong innovative cultures are walking the walk, too: thirty percent of top innovators we surveyed said they are already deploying gen AI at scale in their innovation and R&D functions, more than six times the rate of companies that are lagging on innovation. Top innovators are also already reaping significantly better business outcomes from their AI investments than slower-moving competitors.

Articles referenced:

• “ Companies with innovative cultures have a big edge with generative AI ,” August 2023
• “ Innovation: Your solution for weathering uncertainty ,” January 2023
• “ Committed innovators: How masters of essentials outperform ,” June 2022
• “ Innovation in a crisis: Why it is more critical than ever ,” June 2020

It’s no secret: innovation is difficult for well-established companies. By and large, they are better executors than innovators, and most succeed less through game-changing creativity than by optimizing their existing businesses.

Yet hard as it is for such organizations to innovate, large ones as diverse as Alcoa, the Discovery Group, and NASA’s Ames Research Center are actually doing so. What can other companies learn from their approaches and attributes? That question formed the core of a multiyear study comprising in-depth interviews, workshops, and surveys of more than 2,500 executives in over 300 companies, including both performance leaders and laggards, in a broad set of industries and countries (Exhibit 1). What we found were a set of eight essential attributes that are present, either in part or in full, at every big company that’s a high performer in product, process, or business-model innovation.

Since innovation is a complex, company-wide endeavor , it requires a set of crosscutting practices and processes to structure, organize, and encourage it. Taken together, the essentials described in this article constitute just such an operating system, as seen in Exhibit 2. These often overlapping, iterative, and nonsequential practices resist systematic categorization but can nonetheless be thought of in two groups. The first four, which are strategic and creative in nature, help set and prioritize the terms and conditions under which innovation is more likely to thrive. The next four essentials deal with how to deliver and organize for innovation repeatedly over time and with enough value to contribute meaningfully to overall performance.

To be sure, there’s no proven formula for success, particularly when it comes to innovation. While our years of client-service experience provide strong indicators for the existence of a causal relationship between the attributes that survey respondents reported and the innovations of the companies we studied, the statistics described here can only prove correlation. Yet we firmly believe that if companies assimilate and apply these essentials—in their own way, in accordance with their particular context, capabilities, organizational culture, and appetite for risk—they will improve the likelihood that they, too, can rekindle the lost spark of innovation. In the digital age, the pace of change has gone into hyperspeed, so companies must get these strategic, creative, executional, and organizational factors right to innovate successfully.

President John F. Kennedy’s bold aspiration, in 1962, to “go to the moon in this decade” motivated a nation to unprecedented levels of innovation. A far-reaching vision can be a compelling catalyst, provided it’s realistic enough to stimulate action today.

But in a corporate setting, as many CEOs have discovered, even the most inspiring words often are insufficient, no matter how many times they are repeated. It helps to combine high-level aspirations with estimates of the value that innovation should generate to meet financial-growth objectives. Quantifying an “innovation target for growth,” and making it an explicit part of future strategic plans, helps solidify the importance of and accountability for innovation. The target itself must be large enough to force managers to include innovation investments in their business plans. If they can make their numbers using other, less risky tactics, our experience suggests that they (quite rationally) will.

Establishing a quantitative innovation aspiration is not enough, however. The target value needs to be apportioned to relevant business “owners” and cascaded down to their organizations in the form of performance targets and timelines. Anything less risks encouraging inaction or the belief that innovation is someone else’s job.

For example, Lantmännen, a big Nordic agricultural cooperative, was challenged by flat organic growth and directionless innovation. Top executives created an aspirational vision and strategic plan linked to financial targets: 6 percent growth in the core business and 2 percent growth in new organic ventures. To encourage innovation projects, these quantitative targets were cascaded down to business units and, ultimately, to product groups. During the development of each innovation project, it had to show how it was helping to achieve the growth targets for its category and markets. As a result, Lantmännen went from 4 percent to 13 percent annual growth, underpinned by the successful launch of several new brands. Indeed, it became the market leader in premade food only four years after entry and created a new premium segment in this market.

Such performance parameters can seem painful to managers more accustomed to the traditional approach. In our experience, though, CEOs are likely just going through the motions if they don’t use evaluations and remuneration to assess and recognize the contribution that all top managers make to innovation.

Fresh, creative insights are invaluable, but in our experience many companies run into difficulty less from a scarcity of new ideas than from the struggle to determine which ideas to support and scale. At bigger companies, this can be particularly problematic during market discontinuities, when supporting the next wave of growth may seem too risky, at least until competitive dynamics force painful changes.

Innovation is inherently risky, to be sure, and getting the most from a portfolio of innovation initiatives is more about managing risk than eliminating it. Since no one knows exactly where valuable innovations will emerge, and searching everywhere is impractical, executives must create some boundary conditions for the opportunity spaces they want to explore. The process of identifying and bounding these spaces can run the gamut from intuitive visions of the future to carefully scrutinized strategic analyses. Thoughtfully prioritizing these spaces also allows companies to assess whether they have enough investment behind their most valuable opportunities.

During this process, companies should set in motion more projects than they will ultimately be able to finance, which makes it easier to kill those that prove less promising. RELX Group, for example, runs 10 to 15 experiments per major customer segment, each funded with a preliminary budget of around $200,000, through its innovation pipeline every year, choosing subsequently to invest more significant funds in one or two of them, and dropping the rest. “One of the hardest things to figure out is when to kill something,” says Kumsal Bayazit, RELX Group’s chief strategy officer. “It’s a heck of a lot easier if you have a portfolio of ideas.”

Once the opportunities are defined, companies need transparency into what people are working on and a governance process that constantly assesses not only the expected value, timing, and risk of the initiatives in the portfolio but also its overall composition. There’s no single mix that’s universally right. Most established companies err on the side of overloading their innovation pipelines with relatively safe, short-term, and incremental projects that have little chance of realizing their growth targets or staying within their risk parameters. Some spread themselves thinly across too many projects instead of focusing on those with the highest potential for success and resourcing them to win.

These tendencies get reinforced by a sluggish resource-reallocation process. Our research shows that a company typically reallocates only a tiny fraction of its resources from year to year, thereby sentencing innovation to a stagnating march of incrementalism. 1 1. See Stephen Hall, Dan Lovallo, and Reinier Musters, “ How to put your money where your strategy is ,” McKinsey Quarterly , March 2012; and Vanessa Chan, Marc de Jong, and Vidyadhar Ranade, “ Finding the sweet spot for allocating innovation resources ,” McKinsey Quarterly , May 2014.

Innovation also requires actionable and differentiated insights—the kind that excite customers and bring new categories and markets into being. How do companies develop them? Genius is always an appealing approach, if you have or can get it. Fortunately, innovation yields to other approaches besides exceptional creativity.

The rest of us can look for insights by methodically and systematically scrutinizing three areas: a valuable problem to solve, a technology that enables a solution, and a business model that generates money from it. You could argue that nearly every successful innovation occurs at the intersection of these three elements. Companies that effectively collect, synthesize, and “collide” them stand the highest probability of success. “If you get the sweet spot of what the customer is struggling with, and at the same time get a deeper knowledge of the new technologies coming along and find a mechanism for how these two things can come together, then you are going to get good returns,” says Alcoa chairman and chief executive Klaus Kleinfeld.

The insight-discovery process, which extends beyond a company’s boundaries to include insight-generating partnerships, is the lifeblood of innovation. We won’t belabor the matter here, though, because it’s already the subject of countless articles and books. 2 2. See, for example, Marla M. Capozzi, Reneé Dye, and Amy Howe, “ Sparking creativity in teams: An executive’s guide ,” McKinsey Quarterly , April 2011; and Marla M. Capozzi, John Horn, and Ari Kellen, “ Battle-test your innovation strategy ,” McKinsey Quarterly , December 2012. One thing we can add is that discovery is iterative, and the active use of prototypes can help companies continue to learn as they develop, test, validate, and refine their innovations. Moreover, we firmly believe that without a fully developed innovation system encompassing the other elements described in this article, large organizations probably won’t innovate successfully, no matter how effective their insight-generation process is. 

Would you like to learn more about our Strategy & Corporate Finance Practice ?

Business-model innovations—which change the economics of the value chain, diversify profit streams, and/or modify delivery models—have always been a vital part of a strong innovation portfolio. As smartphones and mobile apps threaten to upend oldline industries, business-model innovation has become all the more urgent: established companies must reinvent their businesses before technology-driven upstarts do. Why, then, do most innovation systems so squarely emphasize new products? The reason, of course, is that most big companies are reluctant to risk tampering with their core business model until it’s visibly under threat. At that point, they can only hope it’s not too late.

Leading companies combat this troubling tendency in a number of ways. They up their game in market intelligence, the better to separate signal from noise. They establish funding vehicles for new businesses that don’t fit into the current structure. They constantly reevaluate their position in the value chain, carefully considering business models that might deliver value to priority groups of new customers. They sponsor pilot projects and experiments away from the core business to help combat narrow conceptions of what they are and do. And they stress-test newly emerging value propositions and operating models against countermoves by competitors.

Amazon does a particularly strong job extending itself into new business models by addressing the emerging needs of its customers and suppliers. In fact, it has included many of its suppliers in its customer base by offering them an increasingly wide range of services, from hosted computing to warehouse management. Another strong performer, the Financial Times , was already experimenting with its business model in response to the increasing digitalization of media when, in 2007, it launched an innovative subscription model, upending its relationship with advertisers and readers. “We went against the received wisdom of popular strategies at the time,” says Caspar de Bono, FT board member and managing director of B2B. “We were very deliberate in getting ahead of the emerging structural change, and the decisions turned out to be very successful.” In print’s heyday, 80 percent of the FT ’s revenue came from print advertising. Now, more than half of it comes from content, and two-thirds of circulation comes from digital subscriptions.

Virulent antibodies undermine innovation at many large companies. Cautious governance processes make it easy for stifling bureaucracies in marketing, legal, IT, and other functions to find reasons to halt or slow approvals. Too often, companies simply get in the way of their own attempts to innovate. A surprising number of impressive innovations from companies were actually the fruit of their mavericks, who succeeded in bypassing their early-approval processes. Clearly, there’s a balance to be maintained: bureaucracy must be held in check, yet the rush to market should not undermine the cross-functional collaboration, continuous learning cycles, and clear decision pathways that help enable innovation. Are managers with the right knowledge, skills, and experience making the crucial decisions in a timely manner, so that innovation continually moves through an organization in a way that creates and maintains competitive advantage, without exposing a company to unnecessary risk?

Companies also thrive by testing their promising ideas with customers early in the process, before internal forces impose modifications that blur the original value proposition. To end up with the innovation initially envisioned, it’s necessary to knock down the barriers  that stand between a great idea and the end user. Companies need a well-connected manager to take charge of a project and be responsible for the budget, time to market, and key specifications—a person who can say yes rather than no. In addition, the project team needs to be cross-functional in reality, not just on paper. This means locating its members in a single place and ensuring that they give the project a significant amount of their time (at least half) to support a culture that puts the innovation project’s success above the success of each function.

Cross-functional collaboration can help ensure end-user involvement throughout the development process. At many companies, marketing’s role is to champion the interests of end users as development teams evolve products and to help ensure that the final result is what everyone first envisioned. But this responsibility is honored more often in the breach than in the observance. Other companies, meanwhile, rationalize that consumers don’t necessarily know what they want until it becomes available. This may be true, but customers can certainly say what they don’t like. And the more quickly and frequently a project team gets—and uses—feedback, the more quickly it gets a great end result.

Some ideas, such as luxury goods and many smartphone apps, are destined for niche markets. Others, like social networks, work at global scale. Explicitly considering the appropriate magnitude and reach of a given idea is important to ensuring that the right resources and risks are involved in pursuing it. The seemingly safer option of scaling up over time can be a death sentence. Resources and capabilities must be marshaled to make sure a new product or service can be delivered quickly at the desired volume and quality. Manufacturing facilities, suppliers, distributors, and others must be prepared to execute a rapid and full rollout.

For example, when TomTom launched its first touch-screen navigational device, in 2004, the product flew off the shelves. By 2006, TomTom’s line of portable navigation devices reached sales of about 5 million units a year, and by 2008, yearly volume had jumped to more than 12 million. “That’s faster market penetration than mobile phones” had, says Harold Goddijn, TomTom’s CEO and cofounder. While TomTom’s initial accomplishment lay in combining a well-defined consumer problem with widely available technology components, rapid scaling was vital to the product’s continuing success. “We doubled down on managing our cash, our operations, maintaining quality, all the parts of the iceberg no one sees,” Goddijn adds. “We were hugely well organized.”

In the space of only a few years, companies in nearly every sector have conceded that innovation requires external collaborators. Flows of talent and knowledge increasingly transcend company and geographic boundaries. Successful innovators achieve significant multiples for every dollar invested in innovation by accessing the skills and talents of others. In this way, they speed up innovation and uncover new ways to create value for their customers and ecosystem partners.

Smart collaboration with external partners, though, goes beyond merely sourcing new ideas and insights; it can involve sharing costs and finding faster routes to market. Famously, the components of Apple’s first iPod were developed almost entirely outside the company; by efficiently managing these external partnerships, Apple was able to move from initial concept to marketable product in only nine months. NASA’s Ames Research Center teams up not just with international partners—launching joint satellites with nations as diverse as Lithuania, Saudi Arabia, and Sweden—but also with emerging companies, such as SpaceX.

High-performing innovators work hard to develop the ecosystems that help deliver these benefits. Indeed, they strive to become partners of choice, increasing the likelihood that the best ideas and people will come their way. That requires a systematic approach. First, these companies find out which partners they are already working with; surprisingly few companies know this. Then they decide which networks—say, four or five of them—they ideally need to support their innovation strategies. This step helps them to narrow and focus their collaboration efforts and to manage the flow of possibilities from outside the company. Strong innovators also regularly review their networks, extending and pruning them as appropriate and using sophisticated incentives and contractual structures to motivate high-performing business partners. Becoming a true partner of choice is, among other things, about clarifying what a partnership can offer the junior member: brand, reach, or access, perhaps. It is also about behavior. Partners of choice are fair and transparent in their dealings.

Moreover, companies that make the most of external networks have a good idea of what’s most useful at which stages of the innovation process. In general, they cast a relatively wide net in the early going. But as they come closer to commercializing a new product or service, they become narrower and more specific in their sourcing, since by then the new offering’s design is relatively set.

How do leading companies stimulate, encourage, support, and reward innovative behavior and thinking among the right groups of people? The best companies find ways to embed innovation into the fibers of their culture, from the core to the periphery.

They start back where we began: with aspirations that forge tight connections among innovation, strategy, and performance. When a company sets financial targets for innovation and defines market spaces, minds become far more focused. As those aspirations come to life through individual projects across the company, innovation leaders clarify responsibilities using the appropriate incentives and rewards.

The Discovery Group, for example, is upending the medical and life-insurance industries in its native South Africa and also has operations in the United Kingdom, the United States, and China, among other locations. Innovation is a standard measure in the company’s semiannual divisional scorecards—a process that helps mobilize the organization and affects roughly 1,000 of the company’s business leaders. “They are all required to innovate every year,” Discovery founder and CEO Adrian Gore says of the company’s business leaders. “They have no choice.”

Organizational changes may be necessary, not because structural silver bullets exist—we’ve looked hard for them and don’t think they do—but rather to promote collaboration, learning, and experimentation. Companies must help people to share ideas and knowledge freely, perhaps by locating teams working on different types of innovation in the same place, reviewing the structure of project teams to make sure they always have new blood, ensuring that lessons learned from success and failure are captured and assimilated, and recognizing innovation efforts even when they fall short of success.

Internal collaboration and experimentation can take years to establish, particularly in large, mature companies with strong cultures and ways of working that, in other respects, may have served them well. Some companies set up “innovation garages” where small groups can work on important projects unconstrained by the normal working environment while building new ways of working that can be scaled up and absorbed into the larger organization. NASA, for example, has ten field centers. But the space agency relies on the Ames Research Center, in Silicon Valley, to maintain what its former director, Dr. Pete Worden, calls “the character of rebels” to function as “a laboratory that’s part of a much larger organization.”

Big companies do not easily reinvent themselves as leading innovators. Too many fixed routines and cultural factors can get in the way. For those that do make the attempt, innovation excellence is often built in a multiyear effort that touches most, if not all, parts of the organization. Our experience and research suggest that any company looking to make this journey will maximize its probability of success by closely studying and appropriately assimilating the leading practices of high-performing innovators. Taken together, these form an essential operating system for innovation within a company’s organizational structure and culture.

Marc de Jong is a principal in McKinsey’s Amsterdam office, Nathan Marston is a principal in the London office, and Erik Roth is a principal in the Shanghai office.

The authors wish to thank Jill Hellman and McKinsey’s Peet van Biljon for their contributions to this article.

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What is Innovation Strategy? Stages, Types & Examples

Picture this — you have a new startup or large business operating in a highly competitive market. A constant shift in trends makes it hard to keep up with your competitors and offer products people want. How will your organization keep up with those changes, thrive in the market, and set the pace for the industry with what you offer?

In the business world, the answer usually lies in your innovation strategy . It isn’t only about generating great ideas — it’s also about creating a strategy to put your ideas into place to drive growth and attract customers.

In this guide, we’ll walk through creating an innovation strategy. We’ll go through the process — from idea generation to executing your plan . We’ll also cover the types of innovation you can invest in and a few examples of companies innovating in competitive markets.

What is innovation strategy?

What are the stages of innovation strategy, what are the types of innovation strategy, what are some examples of successful innovation strategies, imd’s driving strategic innovation program — empowering businesses for innovation success.

An innovation strategy is a detailed roadmap with a series of strips that helps your organization reach its future goals. This roadmap isn’t just a guide for business success — it’s a guide that helps you keep up in your industry by thinking of new and innovative ways to tackle problems.

These innovations can be creating new products to solve future problems, optimizing business processes to be more efficient, or thinking of entirely new ways to disrupt your industry.

Ultimately, your innovation strategy will help you align your business with your customer’s needs and create products and services to give your company a competitive advantage.

The innovation process doesn’t happen in a vacuum — it requires a clear process that takes a new idea and brings it to market.

1. Idea generation and ideation

Idea generation is the foundation of an innovation system. It’s the process that helps companies develop ideas to compete in the market and explore new opportunities without taking too much risk.

Many companies innovate by taking advantage of new technologies for insights — learning from data to see what problems customers have that you can solve. Innovators can use this information to explore new ideas and brainstorm ways to bring those ideas to life.

The vital part of this process is customer feedback. A great idea needs a customer base available to see success — and not every idea will have people around willing to pay money to access it. New ideas need customer validation to determine if they are viable.

2. Idea evaluation and selection

Idea evaluation and selection is assessing new ideas to see if they are feasible. During this process, you’ll look at costs, time to market, potential profit, and other business metrics to see if it’s worth pursuing an idea.

If it looks like a product you’re considering has a chance to succeed, then the next step is to compare it with what’s currently on the market. Is your new product something new that doesn’t exist yet, or does it improve on existing products? Will this help your company stand out?Use this information to find the unique value proposition and determine if the idea is worth pursuing.

3. Implementation and execution

The implementation and execution phase is where you take your new idea and turn it into a concrete plan to make it a reality. But this stage is more than building a product — it’s also about creating a successful business strategy and finding help to create your idea.

The first step is product development. Which vendors can supply the materials for your product or help you manufacture it? Which members of your team will be the best fit for development?

Once you find the right people, implementation becomes a matter of executing a plan. It involves project management, resource management, process management, and continuous improvement. 

4. Monitoring and evaluation

You’re breaking new ground when innovating in an industry, so you may not get everything right. Monitoring and evaluation will help you handle those problems and adapt your innovation efforts.

Your goal when monitoring a new project is to assess your performance. Is what you’re doing helping you achieve your goals and keeping you on track for release?

A key part of doing this is metrics. These numbers will tell you how well you are doing. Track your time to release, product progress, defects, and eventual return on investment. Reassess your strategy and make changes if your metrics show you aren’t meeting your goals.

There isn’t one type of innovation in business. Let’s look at four of the main ways you can create new and innovative ideas.

• Product innovation : Product innovation is the process of building new products or upgrading existing ones to meet customer needs in a new way. It helps companies offer better products and stay competitive in evolving markets. This process happens when you pay attention to product markets. You see the problems customers have and their issues with the current offerings. Use that information to develop novel ways to solve those problems and offer a better customer experience.
• Process innovation : Process innovation is changing how you do things inside an organization. You aim to apply new initiatives and technology to optimize efficiency and your ability to compete in the market. Take the inclusion of a new IT system, for instance. New technological innovation can improve your employees’ ability to collaborate and get more done — allowing them to serve customers better in your core business.
• Business model innovation : Business model innovation is about making big changes to how a business runs. It isn’t just a few changes in business processes or a new product. Your goal is to create new business models to capture value in the market. One of the common ways this happens is finding new sources of revenue. An excellent example of this is service businesses adding subscriptions to their revenue. Take an HVAC company. Instead of relying on incoming calls to get business, HVAC companies offer customers a maintenance plan — allowing companies to get a new source of predictable revenue.
• Disruptive innovation : Disruptive innovation is about shaking things up. You aren’t launching products that are a minor upgrade of what exists — you’re making game-changing innovation initiatives that disrupt existing business models. Radical innovation often comes from startups, such as rideshare companies taking on the taxi industry. You’re rewriting some of the rules to take on the established industries to provide a better service and give people more options.

Now that you’ve seen what types of innovations there are, let’s look at a few innovation strategy examples.

Amazon was one of the first companies to use the internet to sell products. It started as an online bookstore, but as time passed, it changed its focus to become a one-stop marketplace for every product you can imagine.

Since then, Amazon has continued to use technology to innovate in the online market. It now offers subscription services to offer more customer value, video streaming, audiobooks, eBooks, and countless other value-added services for its customers.

Apple’s innovation projects are a blend of user-centric design and quality. Apple doesn’t often create brand-new product categories. Instead, it waits to see how technology trends play out and creates innovative approaches to those products.

One of the best examples of this is the iPhone. Apple didn’t create the first smartphone. Blackberry was one of the first to market and was popular for a while.

But smartphones didn’t start making their way into most homes until Apple unveiled the iPhone — their easy-to-use smartphone offering that every consumer can use.

Startups and entrepreneurs

Innovation is at the heart of the startup and entrepreneurship ecosystem. Let’s look at how a few companies changed the game with their new innovations.

• Uber: Took on the taxi industry by allowing regular people to use their cars to offer rideshare services to customers using mobile apps.
• Airbnb: Competed against the established hotel industry to give people more lodging options and allow homeowners to rent parts of their homes.
• Netflix: Used a subscription model and on-demand streaming approach instead of a monthly fee for live TV.
• Stripe: Changed the payment industry by allowing companies to integrate payment processing into their websites easily.

Innovation strategy is an essential part of creating a roadmap for long-term success. It helps you define new product ideas, validate them in the market, and execute the process of bringing them to life. Without the right strategy, you take more risk of building products that don’t work or won’t meet your customers’ needs. IMD offers business school programs for entrepreneurs and professionals who want to learn how to drive innovation in their businesses.

Learn more about what we offer and how our program for driving strategic innovation can help you accomplish more in business and build something great.

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Are you curious how certain new businesses can completely reshape industries and leave established companies struggling to keep up? In the ever-changing business world, staying ahead of the competition requires constant innovation. While there have been many ideas and strategies over time, few have been as impactful and enduring as disruptive innovation. This article will […]

Picture this — you have a new startup or large business operating in a highly competitive market. A constant shift in trends makes it hard to keep up with your competitors and offer products people want. How will your organization keep up with those changes, thrive in the market, and set the pace for the […]

For companies willing to embrace innovation during uncertain times, the rewards can be transformative, both during a crisis and in its aftermath. In this article, we demystify the concept of business innovation, offering actionable steps and tangible examples to help ignite a culture of innovation within your organization. We delve into the many benefits of […]

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Grab is an on-demand ride service that has since expanded to everyday services like deliveries, financial services and more – making it a superapp. It charges a service fee of 20% ~ 30% for every transaction that goes through its platform.

Hubs charges clients for each industrial manufacturing job they begin through the platform. Prices are determined by a machine learning algorithm.

Patients Like Me offers a free health community service to its users. They make money by selling the data, generated by the community, to pharmaceutical companies.

WHOOP offers a wearable fitness gadget that gives personalized recommendations and feedback. WHOOP charges a monthly subscription fee to access the data on the platform, while the first device is free.

Digit is a financial service application that monitors financial behavior and automates its users’ savings. Digit receives a fixed monthly fee of $5 from its users. On top of that, it can leverage the funds it has under management for greater returns

Kiva is the first online non-profit lending platform for underserved populations.As a non-profit, Kiva doesn’t profit from loans received — lenders donate to Kiva to cover operating costs. The remainder of costs are covered through grants, supporters, and field partners.

Appear Here is the Airbnb of retail spaces — an online marketplace to list, find, and book short-term retail spaces. After the landlord sets a daily, weekly and monthly price, Appear Here takes commission between 12% - 15% on a completed transaction, while the space owners pay no listing fee.

Kaggle makes money in two ways: With Kaggle competition, they receive a “listening fee” for each competition posted on the platform. Also, they provide a service for matching companies to the top 0.5% of their community, which they call Kaggle Connect.

23andMe makes money with personal genetic tests, providing reports on lineage discovery & +240 health conditions. It’s believed that their DNA research studies & surveys will soon be an additional way of making money, with a mainly B2B focus instead of B2C.

Friendsurance works as a broker between Policy Holders and existing Insurance Partners. They’re letting customers share risks with friends, allowing them to lower prices due to reduced fraud & process costs, better risk pools, etc.

AliveCor makes money by selling ECG devices ($199) that fit on existing smartphones and via their AliveInsights Service – a professional analysis service that makes it easy to get expert insight on your ECG readings.

Glow sells “data insights” regarding conceiving to Research Institutions & gives exposure to trustworthy Infertility Treatment Clinics. The data is generated by users who use the Glow free fertility-tracking app.

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Innovation Strategy: Developing Innovative Strategies in Business

Published: 27 February, 2024

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Table of Contents

Innovation has become an imperative for organizations worldwide, yet the multitude of methods and frameworks available often lead to confusion rather than clarity. While various approaches focus on specific aspects such as user experience or design thinking , they often fail to provide a cohesive strategy for innovation from start to finish. An innovation strategy is key to capturing and  sustaining innovation , it serves as a detailed roadmap, comprising a series of strategic steps that propel an organization toward its future objectives. Beyond being a mere guide for business success, this roadmap is essential for ensuring a company remains competitive in its industry by continually devising new and innovative approaches to address challenges.

At Digital Leadership, our core belief is that by harnessing emerging technologies and innovative business models , we can revolutionize customer experiences. Crafting an innovation strategy is crucial for a company’s success. It entails fostering collaboration within the organization to stimulate new ideas and establishing a well-thought-out framework for future growth. It’s crucial to understand that no two innovation strategy plans are identical. 

What is Innovation Strategy?

An innovation strategy is a planned and organized way of using new technologies and creative ideas to bring about significant changes in a company. It involves creating a detailed plan that closely matches the company’s main goals, encouraging a culture of constant improvement. Think of an innovation strategy as a commitment to a shared goal of innovation, including a structured set of activities designed to drive the future growth of the organization. 

Each innovation strategy is unique. This innovation strategy plan is more than just a guide for business success; it functions as a compass, steering the organization through new and creative approaches to address challenges. Developing a company innovation strategy includes clearly defining an innovation mission, aligning activities with long-term business goals , and promoting a culture that welcomes change and creativity. Following such a strategy ensures that organizations stay ahead in their industries, always adjusting and evolving to meet emerging needs.

Business Innovation Strategy: What is Innovation Strategy In Business

In the business environment, remaining competitive necessitates ongoing evolution to address evolving customer demands. Establishing an innovation strategy becomes imperative for organizations aiming to excel in this dynamic setting. One prevalent initial step in crafting such a strategy involves gaining a comprehensive grasp of the organization’s innovation initiatives and overarching business goals . This encompasses identifying the market landscape, comprehending customer requirements, and discerning the most effective strategies to optimize customer satisfaction while utilizing resources efficiently.

Once you have a grasp of your organization’s innovation landscape, the next step is to define a common innovation mission. This mission should align with your overall business strategy and focus your innovation efforts on creating value for your customers. An effective innovation strategy must also include setting specific innovation goals and metrics to measure success. By establishing clear objectives, businesses can better track their progress and adapt their innovation programs as needed.

So, Why are Innovation Strategies Important in Business

• Generating and capitalizing on returns from innovations serves as a primary source of competitive advantage.
• Complex and resource-intensive activities like R&D, product design, and collaboration can impact a firm’s competitive standing. Without strategic guidance, these efforts may yield fragmented and short-term outcomes.
• With globalization, firms face a multitude of opportunities and threats across various markets. A strategic approach to innovation helps navigate this landscape effectively.
• Organizational structures and innovation processes must align with the overall corporate strategy. For instance, R&D efforts may differ depending on whether the firm aims to lead or follow in innovation.
• Articulating long-term strategic objectives for innovation is crucial for engaging with public-sector policies, fostering collaborations, and attracting patient investors.
• A firm that prioritizes innovation strategically is more likely to attract talented individuals seeking opportunities for creative engagement.

The “UNITE Innovation Approach” Model acts as a guide for entrepreneurs to build a strong innovation strategy framework. This model smoothly combines market insights, aligns with business goals, and offers a structured way of generating and implementing ideas. By employing the UNITE model, entrepreneurs gain a strategic advantage, ensuring that their innovation efforts are intentional steps toward lasting success, not haphazard. 

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The UNITE Innovation Approach | Overview

Steps of developing innovation strategy framework.

Innovation is crucial not only for large corporations but also for small and medium-sized enterprises (SMEs). It serves as a vital competitive advantage and is often considered a core capability of firms. For SMEs, innovation is particularly important due to resource constraints, making it an effective means to enhance productivity and performance. However, research findings on Heineken Beverage Industry reveal that the organization’s innovative strategies, particularly in process, market, and product innovation, are weak and fail to significantly contribute to its performance and productivity levels. To strengthen their innovation efforts, SMEs can follow several steps in developing an effective innovation strategy.

Step 1: Innovation Strategy Setup

In the crucial first step of Setup within the innovation strategy , organizations lay the groundwork for success. This involves defining the business intentions and direction, outlining high-level Search Fields, and identifying detailed Opportunity Spaces. By articulating the Business Intention, organizations clarify the problem they aim to solve or the legacy they aspire to leave behind, ensuring alignment with organizational goals.

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The UNITE Business Intentions

Utilizing tools like the Search Field Matrix aids in analyzing dimensions like trends and market segments, guiding prioritization of areas for innovation within the overarching innovation strategy. Opportunity Spaces then pinpoint specific intervention sites, outlining Jobs to be Done and target customers in alignment with the innovation strategy’s objectives. Building the core team, led by an experienced entrepreneur, is essential for executing the innovation initiative effectively. Operating in a protected environment, clear goals are set for each stage, with regular updates provided to stakeholders, ensuring smooth organizational setup and progression through subsequent stages.

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THE UNITE Definition Of Search Fields & Opportunity Spaces

Step 2: problem/solution fit.

In step 2 of developing an innovation strategy, the focus is on achieving Problem/Solution Fit , and aligning customer needs with viable solutions. This involves three key streams of work: Stream A delves into understanding Jobs to be Done, Stream B crafts a Value Proposition, and Stream C defines the Business Model. Bringing the team up to speed is essential, involving active briefings with stakeholders and thorough research to refine objectives. Properly framing the broader objective, clarifying the JTBD, and conducting initial market research are vital steps before proceeding further, ensuring a solid foundation for subsequent actions.

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The UNITE Business Model Innovation Patterns

The Jobs-to-be-Done (JTBD) framework is a powerful tool for understanding customer needs and driving innovation. By focusing on tasks rather than demographics, businesses gain deep insights into their target market. Through qualitative interviews and quantitative surveys , companies validate insights and identify growth opportunities. This approach helps in creating solutions that precisely match customer needs, reducing the risk of failure and increasing market success. Continuous iteration based on customer feedback ensures a competitive edge in today’s customer-centric landscape. Embracing JTBD is essential for fostering innovation and delivering value to customers.

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The UNITE Jobs-To-Be-Done Statement & Map

It offers a systematic approach to understanding customer needs and shaping innovative solutions. By focusing on the tasks or objectives customers are trying to accomplish, rather than just their demographic or psychographic profiles, businesses can uncover deep insights into unmet customer needs and opportunities for improvement.

To effectively outline the tasks and activities customers undertake to fulfill their job using the UNITE Jobs-to-be-Done Universal Job Map, convene your team and set up a whiteboard or wall with eight columns representing the eight steps in the Job Map. From defining and planning to concluding, each step provides insight into the customer’s journey. For example, when purchasing a bottle of wine, steps may include defining preferences, locating a store, preparing by comparing options, confirming the choice, executing the purchase, monitoring the taste, modifying preferences based on satisfaction, and concluding the purchase experience. Understanding these steps is vital for developing solutions that precisely meet the customer’s needs.

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At this stage, having gone through the Jobs-to-be-Done process and developed initial Customer Promises, we find ourselves within a relatively narrow solution space ripe for exploration using methodologies like Design Thinking. The next step involves translating these initial promises into robust solutions by treating each promise as a mini-opportunity Space. Ideation is the key here. We encourage exploring a plethora of ideas, ranging from ambitious “moonshots” to targeted solutions addressing specific but unsolved problems. It’s about being smart in approach, knowing when to think big and when to focus narrowly, all while keeping the original customer needs at the forefront.

To navigate this process effectively, we recommend leveraging frameworks such as the Value Proposition Canvas . This tool provides a structured approach to deep dive into the value proposition, ensuring alignment with customer needs and market demands. Crafting a robust value proposition isn’t just about generating ideas; it’s about understanding the core essence of what your offering brings to the table. By embracing ideation, divergence, and strategic frameworks, businesses can unlock innovation potential and create value propositions that resonate deeply with their target audience.

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The UNITE Business Model Canvas

(3) solution/market fit (mvp).

In step 2, we’ve pinpointed our customers’ needs, tested potential solutions, and outlined a solid business model. However, jumping straight into execution is risky. While we may have a good grasp of what our customers want, our concept hasn’t been fully validated yet. Step 3 of developing an innovation strategy, where customers actually buy and use our product, is crucial for true validation. Rushing into scaling before perfecting our concept can lead to wasted resources and the need for costly adjustments later on. It’s essential to ensure our business concept is finely tuned before expanding.

Innovation strategy hinges on the meticulous execution of a Minimum Viable Product (MVP) , a streamlined version of your offering that validates key business assumptions while conserving resources. The MVP approach, epitomized by Zappos’ early success, emphasizes real-world validation over elaborate prototypes, focusing on tangible customer experiences. Yet, challenges like imitation and reputational risk loom large, necessitating strategic differentiation and brand management. Moreover, maintaining quality is paramount, ensuring that the MVP not only functions but delights users, fostering genuine feedback. Executing an MVP entails two phases: development and launch, followed by rigorous testing and iteration. This iterative process drives continuous improvement , steering your innovation strategy towards tangible value creation .

You can now access the complete Unite Solution/Market Fit (MVP) Scorecard, including a full presentation, related models and instructions for use.

The UNITE Problem-Solution Fit & Minimum Viable Product (MVP) Scorecards

In the initial phase of MVP development and launch, four key work streams drive the process: Marketing focuses on brand development and campaign planning, while the Business stream refines models and tests pricing strategies. Product & UX teams develop and test the MVP, while Technology sets up technical infrastructure. Phase B shifts focus to live testing and tweaking, with Marketing launching test campaigns and Business refining operating models.

Step 4: Build & Scale Your Innovation Strategy

After countless tests and a number of pivots and iterations, you have quantitatively proven with real customers that you have achieved a Solution/Market Fit. In other words, your product works and customers have actually bought it! In Stage 4 of developing an innovation strategy, you will be shifting gears and moving from incubation (concerned with finding a working Business Model) to acceleration (building and scaling the identified Business Model). With your business concept now proven and well-defined, the next challenge is getting it to scale. That is the core purpose of this stage: to build and scale the business concept that you have been working on thus far and now get it out into the market to scale as quickly as possible. But moving from your business concept (the strategy) to an actual business (the execution) is inherently difficult. Many organizations fail to bridge the Strategy-Execution Gap , meaning they fail to implement the strategy, or business concept, they originally designed. According to the available statistics, up to 70% of organizations struggle with moving from strategy to execution.

One key ingredient we propose to overcome the Strategy-Execution challenge is to establish how you are going to execute using a well-defined and communicated Operating Model. The Operating Model Canvas emerges as a potent solution, offering a blueprint for execution. Establishing a well-defined and communicated Operating Model is pivotal in overcoming the Strategy-Execution challenge.

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The Growth-Hacking Process

To ensure the effectiveness of the innovation strategy , it is imperative to embed innovation within the organization’s processes and overall strategic framework. This necessitates the allocation of resources, including time, finances, and skilled personnel, to innovation initiatives, while fostering a culture that champions and rewards innovative thinking.

By adhering to these guidelines for formulating an innovation strategy , businesses can position themselves for sustained success and growth amidst a rapidly evolving market landscape. Through a steadfast commitment to customer value creation and adaptability to uncertainty, organizations can pave the path to industry leadership through innovation.

Types of Innovation Strategies

Elaboration on innovation strategy typologies has been provided by various scholars (Freeman and Soete 1997; Goodman and Lawless 1994). These typologies encompass proactive strategies, characterized by technological and market leadership with a strong research focus, often associated with firms embracing first-mover advantages and taking significant risks. Active strategies involve defending existing technologies and markets while remaining agile to respond swiftly to emerging opportunities. Reactive strategies, on the other hand, are adopted by firms with a slower response to innovation, often prioritizing cost-cutting measures over technological advancements. Finally, passive strategies entail engaging in innovation only in response to customer demands, typically involving low-risk initiatives.

Examples of passive strategies can be observed among supplier firms in industries like automotive manufacturing, where lower-tier suppliers often rely on fulfilling specifications rather than driving innovation themselves.

1) Proactive Innovation Strategy

Being ahead in innovation defines successful companies that stand out in the ever-changing business world. These forward-looking organizations don’t just react to changes; they actively search for new opportunities and predict future trends. This proactive approach allows them to take control of the market by introducing fresh and distinctive products or services that capture consumer attention.

Within proactive innovation strategies, several paths contribute to an organization’s overall success:

• Product Innovation: At the core of being proactive in innovation is making new and groundbreaking products. Companies that do well put money into research and development, always trying to do things that haven’t been done before to meet new needs and go beyond what customers expect. Whether it’s using the latest technology or coming up with creative designs, creating innovative products is a big reason why these companies lead the market.
• Process Innovation : To ensure internal efficiency and stay ahead of the competition, organizations with a proactive innovation strategy focus on optimizing their internal operations. Process innovation becomes crucial, streamlining workflows, improving productivity, and fostering a culture of continuous improvement.
• Business Model Innovation : Recognizing that how value is provided and money is made is as crucial as the products themselves, organizations embracing proactive innovation strategies engage in business model innovation. This involves reimagining the fundamental structure of the business, exploring new revenue streams, and adapting to changing market dynamics.
• Open Innovation : Proactive innovators often collaborate with external partners, startups, or research institutions through open innovation practices. By tapping into a broader pool of ideas, expertise, and resources, these organizations enrich their innovation ecosystem and stay at the forefront of industry advancements.
• Sustainability Innovation: Forward-thinking companies, under a proactive innovation strategy, increasingly incorporate sustainability into their product development and business practices. This aligns with societal and environmental expectations, positioning them as responsible and future-ready entities.

Essentially, a proactive innovation strategy goes beyond mere adaptation; it positions organizations as catalysts of change, architects of the future, and leaders in industries where innovation is the key currency.

For instance, proactive innovators like DuPont and Apple exemplify a commitment to technological leadership through continuous innovation. Microsoft, employing an active strategy, strategically leverages existing technologies while adapting swiftly to market shifts. In contrast, firms like Dell may adopt a more reactive approach to technology adoption but remain proactive in their production and distribution models.

2) Active Innovation Strategy

Active innovation represents a dynamic approach for organizations to swiftly respond to market changes and evolving customer preferences. Embracing flexibility and agility, companies adopting this strategy proactively lead rather than merely follow in the ever-changing business landscape. Key aspects of the active innovation framework include:

• Proactivity : Organizations take the lead in meeting the needs of the continually evolving market.
• Incremental Innovation : Constant, small improvements to existing products or processes keep offerings up-to-date and aligned with customer preferences.
• Service Innovation: Beyond product creation, organizations focus on enhancing the overall customer experience by listening to customer feedback and adapting services accordingly.
• Adaptability : Rapid response to new demands, including staying abreast of technological changes.
• Technology Innovation: A pivotal component, organizations prioritize staying updated on technological advancements to provide modern solutions in the digital era.

Active innovation places a premium on a proactive mindset, swift actions, and a deep understanding of the market. This strategy positions organizations not only to navigate changes effectively but also to capitalize on new opportunities, establishing them as leaders in their respective industries.

3) Reactive Innovation Strategy

In the Reactive Innovation Strategy , businesses respond to market changes as needed. While not always the first to introduce groundbreaking products, these companies prioritize adaptability in the competitive environment. Cautious in their responses, organizations employing this strategy carefully evaluate market shifts before making changes. Though the pace of innovation may be slower compared to proactive approaches, this strategy holds advantages, especially in industries where stability and a deep understanding of market dynamics are paramount.

Strengths of Reactive Innovation:

• Adaptive Innovation: Enables precise adjustments in response to changes, maximizing resource utilization.
• Cost Innovation: Focuses on finding cost-effective solutions and operational efficiencies.

For organizations embracing Reactive Innovation , balancing responsiveness with forward-looking anticipation is key. While not always the first movers, strategic and well-timed responses to market shifts make them resilient players in the ever-changing business landscape. This approach proves particularly relevant in industries experiencing gradual changes, where staying attuned to market demands remains the primary focus.

4) Passive Innovation Strategy

In passive innovation , organizations show limited involvement in the innovation process , often missing opportunities and potential advancements. This cautious approach relies on established practices, avoiding proactive exploration. However, this passivity, while providing stability, can be a double-edged sword, risking stagnation in a quickly changing landscape.

• Imitative Innovation: Organizations that embrace passive innovation may tend to copy successful ideas from competitors or industry leaders, finding security in proven models but sacrificing the agility and originality of more proactive strategies.
• Stability vs. Stagnation: While passive innovation gives a sense of stability, organizations must be aware of potential downsides, including the risk of falling behind in industries where rapid advancements are the norm.
• Open Innovation Bursts : To counteract potential stagnation, passive innovation strategies may benefit from occasional bursts of open innovation. Drawing on external ideas and collaborations brings in fresh perspectives and helps maintain relevance in dynamic industries.

Developing an effective innovation strategy requires a comprehensive approach, incorporating key elements and following a systematic framework. By understanding the market, aligning strategies with business goals , and fostering a culture of innovation , organizations can stay ahead in the ever-evolving business landscape. The examples of successful innovation strategies from industry leaders further highlight the importance of innovation in achieving sustained business growth and competitiveness.

This nuanced understanding of innovation strategy underscores the dynamic interplay between technological advancements, market dynamics, and organizational capabilities, shaping firms’ strategic orientations towards innovation.

Innovation strategies vary widely, each tailored to specific organizational contexts and objectives. Also, there are five styles of Innovation Strategies

• Leadership ignites entrepreneurial energy within teams.
• Culture of rapid innovation and creation of new business models.
• Suitable for industries facing rapid changes.
• Management involves sharing the vision, establishing internal markets for ideas, and encouraging intrapreneurship.
• Managers innovate within existing business structures.
• Transformation of business structures over time.
• Ideal for companies seeking significant yet sustainable change.
• Management practices include experimentation, empowering teams, and customer-centricity.
• Exploration of new directions beyond existing strategic assets.
• Pursuit of radical change in response to limited growth opportunities.
• Management involves identifying crucial assets, encouraging cross-pollination of ideas, and seizing opportunities beyond core areas.
• Conducting low-cost experiments to overcome obstacles hindering major innovations.
• Cautious yet progressive approach to innovation.
• Suitable when significant opportunities are sensed, but details remain unclear.
• Management practices include goal-focused research, patience, and continuous exploration.
• Outsourcing creativity and investing in startups.
• Acquisition of promising startups.
• Feasible with available resources to leverage discoveries from smaller players.
• Management involves maintaining internal R&D capacity, scouting for acquisition prospects, and efficient integration processes.

Innovation Strategy of the Four main Types of Innovation

Four primary types of innovation —radical, architectural, disruptive, and incremental—provide a comprehensive innovation strategy framework for organizations to navigate the complexities of innovation and achieve their strategic objectives. Each type offers unique opportunities and challenges, catering to different levels of risk tolerance and resource availability. Understanding these distinct approaches to innovation is essential for organizations seeking to adapt, evolve, and thrive in an ever-changing marketplace. Let’s explore each type of innovation strategy in detail to gain insights into their applications and implications for organizational success.

• Radical Innovation : Radical innovation involves the development of entirely new technologies, products, or services that often disrupt existing markets or create entirely new ones. It represents a significant departure from current offerings and requires a high level of investment and risk.
• Architectural Innovation : Architectural innovation focuses on reconfiguring or redesigning existing systems, processes, or components within an organization to create new value. It involves changing the underlying structure or design of a product or service while keeping its core functionality intact.
• Disruptive Innovation : Disruptive innovation refers to the introduction of a product, service, or business model that fundamentally changes the way an industry operates, typically by targeting underserved or overlooked segments of the market. It often starts at the low end of the market and gradually improves to challenge established competitors.
• Incremental Innovation : Incremental innovation involves making small, gradual improvements to existing products, processes, or services over time. It focuses on optimizing and refining existing offerings rather than introducing radical changes, making it a lower-risk approach to innovation.

Innovation Strategy Examples

(1) apple innovation strategy.

Apple’s innovation strategy revolves around creating groundbreaking products that seamlessly integrate hardware, software, and services. Their focus on user experience and design sets them apart in the technology industry. This dedication matches the core of t he marketing innovation strategy – putting user happiness first by creating new and exciting solutions.

(2) Amazon Innovation Strategy

Amazon’s innovation strategy centres around customer-centric approaches, such as one-click purchasing, Prime membership benefits, and advanced supply chain management. Their focus on enhancing customer experience sets the standard for e-commerce.

(3) Tesla Innovation Strategy

Tesla’s innovation strategy includes advancements in electric vehicles, renewable energy solutions, and autonomous driving technology. Constantly pushing boundaries, Tesla exemplifies the essence of value innovation strategy, delivering cutting-edge solutions that reshape the automotive industry.

(4) Netflix Innovation Strategy

Netflix’s innovation strategy lies in content creation, personalized recommendations, and streaming technology. They continually invest in original content and technological advancements to stay ahead in the entertainment industry.

(5) Microsoft Innovation Strategy

Microsoft’s innovation strategy encompasses a diverse range of products and services, from operating systems to cloud computing. Their commitment to empowering individuals and organizations through technology fuels continuous innovation.

(6) Google Innovation Strategy

Google’s innovation strategy revolves around search algorithms, online advertising, and a wide array of digital services. Their commitment to organizing the world’s information and making it universally accessible drives innovation in various sectors.

(7) Nike Innovation Strategy

Nike’s innovation strategy focuses on product design, materials, and technological advancements in sportswear. They continuously introduce new technologies, such as Nike Adapt, to enhance athletic performance and customer experience.

Types of Innovation Strategies Examples

Innovation strategies can vary significantly depending on the industry, organizational goals, and market dynamics. Here are several types of innovation strategies along with examples:

• Example: Apple’s continuous development of the iPhone, introducing new features and designs with each iteration.
• Example: Toyota’s implementation of lean manufacturing principles, led to streamlined production processes and reduced waste.
• Example: Netflix transitioning from a DVD rental service to a subscription-based streaming platform, revolutionizing the entertainment industry.
• Example: Airbnb’s platform, enables individuals to rent out their properties to travellers, disrupting the traditional hospitality industry.
• Example: Procter & Gamble’s Connect + Develop program, which sources innovation ideas from outside the company to fuel new product development.
• Example: Tesla’s electric vehicles disrupt the automotive industry by challenging traditional gasoline-powered vehicles with innovative technology.
• Example: Coca-Cola introduces new flavours or packaging variations of its beverages to maintain consumer interest and market relevance.
• Example: SpaceX’s development of reusable rocket technology, aims to revolutionize space travel and exploration.

Elements of a Great Innovation Strategy

Crafting an innovation strategy plan entails navigating a dynamic landscape, demanding a flexible and multifaceted approach.

• Nurturing an Innovation culture : Establishing an environment that fosters creativity and embraces change is crucial for fostering innovation.
• Embracing Digital Transformation strategy : Incorporating technology to enhance processes and business models is a key aspect of digital transformation.
• Top-Level Endorsement: Securing commitment and support from senior leaders is essential for successful innovation initiatives.
• Strategic Resource Allocation : Wisely allocating resources to support novel and imaginative ideas is paramount.
• Customer-Centric Focus : Prioritizing and comprehending customer needs throughout the innovation process is indispensable.
• Agile Adaptation : Remaining receptive to agile methodologies facilitates swift adjustments to evolving circumstances.
• Performance Measurement: Implementing metrics to assess the success and impact of innovation efforts is vital.
• Investment in Research and Development: Devoting funds to research and development endeavors represents a valuable investment.
• Learning from Risks and Setbacks: Cultivating a culture that embraces risk-taking and views failures as learning opportunities is critical.
• Innovative Business Models : Continuously reimagining and innovating fundamental aspects of the business model adds a layer of dynamism to the innovation strategy.

In essence, innovation is the cornerstone of organizational longevity and competitive advantage. By embracing diverse innovation strategies such as technological advancements, architectural refinements, disruptive shifts, and incremental enhancements, businesses can unlock fresh opportunities and deliver unique value propositions. Whether through revolutionary changes or gradual refinements to existing offerings, innovation is pivotal for adapting to market fluctuations and seizing value.

Central to these pursuits is the evolution or reinvention of the business model. By aligning with customer preferences, organizations can develop innovative solutions that resonate with consumers, thereby bolstering market presence and fostering growth. Ultimately, a well-crafted innovation strategy empowers organizations to stand out from the competition, achieve objectives, and ensure sustained success in today’s fiercely competitive business arena.

Frequently Asked Questions

(1) what role do senior leaders play in achieving innovation strategy.

Senior executives wield significant influence in propelling innovation strategy forward. Their unwavering commitment, backing, and visionary guidance establish the organizational ethos. They allocate resources judiciously and foster an atmosphere conducive to experimentation and bold risk-taking.

(2) How is product innovation strategy delineated in business?

Product innovation strategy in business encompasses the formulation and introduction of novel or refined products to satisfy consumer demands and attain a competitive edge. It revolves around the conception of pioneering features, designs, or functionalities that distinguish the product within the market milieu.

(3) What delineates the trifecta of Innovation Strategies?

The trinity of innovation strategies comprises proactive, active, and reactive approaches. Proactive strategies entail a proactive quest for novel opportunities, active strategies pivot swiftly in response to market dynamics, while reactive strategies are triggered only by exigencies.

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Start » strategy, how to write a business plan for inventions.

Attract investors and formalize processes by developing a roadmap for commercializing your innovation.

An inventor’s business plan is a framework for bringing a concept to market and achieving profitability. It’s similar to a regular business plan but adds details about intellectual property protection and prototypes. Ideally, a business plan for inventions builds upon a feasibility study. It should highlight your findings from a comprehensive competitive analysis and be tailored to its intended audience, such as investors.

An invention business plan is crucial for getting funding and securing strategic alliances. But you can also use it internally to guide operations, from marketing to hiring. Here’s how to craft an effective report.

Determine your audience and purpose

Although most business plans for a new invention follow a basic outline, you can tailor your approach to appeal to specific readers. Suppose you want to pitch your idea to investors or accelerator programs. In this case, it’s essential to mention funding requirements. But you should also emphasize the skills and experience your team brings to the table. According to Heer Law , “Often, investors and other stakeholders care as much or more about who the people are behind an invention than the potential of the invention on its own.”

However, if you’re looking for co-founders and employees, modify your document to clarify the skills required and long-term benefits for early joiners. Once you understand what drives your intended audience, you can write a business plan that excites them while answering their questions.

[ Read more: How These Innovation-Driven Startups Reached an Elusive Milestone: Profitability ]

Outline your invention business plan sections

The Small Business Association (SBA) said, “There’s no right or wrong way to write a business plan. What’s important is that your plan meets your needs.” You can use a basic template , take a free course , or start from scratch. Begin your process by outlining commonly used sections, then modify your document to include invention-specific content.

Often, investors and other stakeholders care as much or more about who the people are behind an invention than the potential of the invention on its own.

Christopher Heer, Annette Latoszewska, and Daryna Kutsyna, Heer Law

Consider adding the following components:

• Executive summary: Keep it concise but touch on each aspect of your plan. Remember to pique interest and compel your audience to read more.
• Company overview: Discuss your industry and niche, including what makes your invention and business stand out. Explain how you will commercialize your design (selling to consumers, wholesale, or retail).
• Organizational structure: This is where you describe your legal business structure (sole proprietorship, partnership, limited liability company (LLC), or corporation). Provide details about inventors, executive team, and current or prospective employees.
• Market and competitive analysis: Share insights from your feasibility study, including an analysis of your industry, competitors, and market. Add statistics about market size and growth. Plus, offer a customer profile and explain what differentiates your invention from others.
• Invention: Tell readers about your design (features and functions) and how it benefits customers. Mention your product research, prototypes, and intellectual property registrations .
• Marketing and sales: Explain how you will apply competitive and market insights to earn a return. Topics may include sales, pricing, promotional strategies, positioning statements, and marketing campaigns.
• Financial information: Show how your invention will be profitable and use spreadsheets, charts, and graphs. Include projected revenue , profit and loss, cash flow, and a balance sheet. Also, detail any funding needs, how you’ll get the money, and what you’ll do with it.
• Appendix: Add all supporting evidence for your invention business plan. For instance, Chron.com said, “Investors respond well to business plans that include endorsements of the product from potential customers.

Add sections for your new invention

In addition to these regular sections, you can expand your business plan to include research and development, intellectual property protection , and owned or future IP assets. According to Heer Law, the research and development component helps readers understand “future products that can be commercially exploited.” Likewise, details about your intellectual property protection ensure investors that you’ve taken action to defend your innovation from unwanted duplication.

Provide information about any assets going through the application process and how various trademarks, patents , and copyrights will impact profitability. Also, discuss if you plan on developing new inventions or have prototypes available.

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What Your Innovation Process Should Look Like

• Steve Blank
• Pete Newell

Whether you’re a company or a government agency.

For innovation to contribute to a company or government agency, it needs to be designed as a process from start to deployment. When organizations lack a formal innovation pipeline process, project approvals tend to be based on who has the best demo or slides, or who lobbies the hardest. A canonical Lean Innovation process inside a company or government agency would include sourcing, curation, prioritization, hypothesis testing and exploration, incubation, and integration.

Companies and government agencies often make the mistake of viewing innovation as a set of unconstrained activities with no discipline. In reality, for innovation to contribute to a company or government agency, it needs to be designed as a process from start to deployment.

• SB Steve Blank is an adjunct professor at Stanford University, a senior fellow at Columbia University, and a lecturer at the University of California, Berkeley. He has been either a cofounder or an early employee at eight high-tech start-ups, and he helped start the National Science Foundation Innovation Corps and the Hacking for Defense and Hacking for Diplomacy programs. He blogs at www.steveblank.com .
• PN Pete Newell , Colonel (Retired), ran the U.S. Army’s Rapid Equipping Force and now runs BMNT, providing battlefield tested solutions to corporate and government problems.

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7 Different Types of Business Plans Explained

11 min. read

Updated April 10, 2024

Business plans go by many names: Strategic plans, traditional plans , operational plans, feasibility plans, internal plans, growth plans, and more.

Different situations call for different types of plans. 

But what makes each type of plan unique? And why should you consider one type over another?

In this article, we’ll uncover a quick process to find the right type of business plan, along with an overview of each option. 

Let’s help you find the right planning format.

• What type of business plan do you need?

The short answer is… it depends. 

Your current business stage, intended audience, and how you’ll use the plan will all impact what format works best. 

Remember, just the act of planning will improve your chances of success . It’s important to land on an option that will support your needs. Don’t get too hung up on making the right choice and delay writing your plan.

So, how do you choose?

1. Know why you need a business plan

What are you creating a business plan for ? Are you pitching to potential investors? Applying for a loan? Trying to understand if your business idea is feasible?

You may need a business plan for one or multiple reasons. What you intend to do with it will inform what type of plan you need.

For example: A more robust and detailed plan may be necessary if you seek investment . But a shorter format could be more useful and less time-consuming if you’re just testing an idea.

2. Become familiar with your options

You don’t need to become a planning expert and understand every detail about every type of plan. You just need to know the basics:

• What makes this type of plan unique?
• What are its benefits?
• What are its drawbacks?
• Which types of businesses typically use it?

By taking the time to review, you’ll understand what you’re getting into and be more likely to complete your plan. Plus, you’ll come away with a document built with your use case(s) in mind—meaning you won’t have to restart to make it a valuable tool.

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3. Start small and grow

When choosing a business plan format, a good tactic is to opt for a shorter option and build from there. You’ll save time and effort and still come away with a working business plan.

Plus, you’ll better understand what further planning you may need to do. And you won’t be starting from scratch.

Read More: How to identify the right type of plan for your business

Again, the type of business plan you need fully depends on your situation and use case. But running through this quick exercise will help you narrow down your options. 

Now let’s look at the common business plan types you can choose from.

• Traditional business plan

The traditional (or standard) business plan is an in-depth document covering every aspect of your business. It’s the most common plan type you’ll come across. 

A traditional business plan is broken up into 10 sections:

• Executive summary
• Description of products and services
• Market analysis
• Competitive analysis
• Marketing and sales plan
• Business operations
• Key milestones and metrics
• Organization and management team
• Financial plan
• Appendix 

Why use this type of plan?

A traditional business plan is best for anyone approaching specific business planning events—such as presenting a business plan to a bank or investor for funding.

A traditional plan can also be useful if you need to add more details around specific business areas. 

For example: You start as a solopreneur and don’t immediately need to define your team structure. But eventually you hit a threshold where you need more staff in order to keep growing. A great way to explore which roles you need and how they will function is by fleshing out the organization and management section .

That’s the unseen value of a more detailed plan like this. While you can follow the structure outlined above and create an in-depth plan ready for funding, you can also choose which sections to prioritize. 

Read More: How to write a traditional business plan  

• One-page plan

The one-page business plan is a simplified (but just as useful) version of a traditional business plan. It follows the same structure, but is far easier to create. It can even be used as a pitch document.

Here’s how you’ll organize information when using a one-page plan:

• Value proposition
• Market need
• Your solution
• Competition
• Target market
• Sales and marketing
• Budget and sales goals
• Team summary
• Key partners
• Funding needs

A one-page plan is faster and easier to assemble than a traditional plan. You can write a one-page plan in as little as 30 minutes . 

You’ll still cover the crucial details found in a traditional plan, but in a more manageable format.

So, if you’re exploring a business idea for the first time or updating your strategy—a one-page plan is ideal. You can review and update your entire plan in just a few minutes.

Applying for a loan with this type of plan probably wouldn’t make sense. Lenders typically want to see a more detailed plan to accurately assess potential risk. 

However, it is a great option to send to investors. 

“Investors these days are much less likely to look at a detailed plan,” says Palo Alto Software COO Noah Parsons. “An executive summary or one-page plan, pitch presentation, and financials are all a VC is likely to look at.”

Creating a more detailed plan is as much about being prepared as anything else. If you don’t dig into everything a traditional plan covers, you’ll struggle to land your pitch . 

If you don’t intend to seek funding, a one-page plan is often all you need. The key is regularly revisiting it to stay on top of your business. 

Let’s explore two unique processes to help you do that: 

Read More: How to write a one-page business plan

Lean planning process

Lean planning is a process that uses your one-page plan as a testing tool. The goal is to create a plan and immediately put it into action to see if your ideas actually work. You’ll typically be focusing on one (or all) of the following areas: 

• Strategy – What you will do
• Tactics – How you will do it
• Business Model – How you make money
• Schedule – Who is responsible and when will it happen

Why use this process?

Lean planning is best for businesses that need to move fast, test assumptions, revise, and get moving again. It’s short and simple, and meant to get everyone on the same page as quickly as possible. 

That’s why it’s so popular for startups. They don’t necessarily need a detailed plan, since they’re mostly focused on determining whether or not they have a viable business idea .

The only drawback is that this planning process is built primarily around early-stage businesses. It can be a useful tool for established businesses looking to test a strategy, but it may not be as helpful for ongoing management.

Read More: The fundamentals of lean planning

Growth planning

Growth planning is a financials-focused planning process designed to help you make quick and strategic decisions.

Again, it starts with a one-page plan outlining your strategy, tactics, business model, and schedule. The next step is to create a working financial forecast that includes projected sales, expenses, and cash flows.

From there, you run your business. 

As you go, track your actual financial performance and carve out time to compare it to your forecasts . If you spot any differences, these discrepancies may indicate problems or opportunities that call for adjusting your current strategy.

Growth planning combines the simplicity of the one-page plan and the speed of lean planning, with the power of financial forecasting. 

This makes the process useful for every business stage and even allows you to skip to the forecasting step if you already have a plan.

With growth planning, you’ll:

• Regularly revisit your financials
• Better understand how your business operates 
• Make quick and confident decisions

This process focuses on growing your business. If diving into your financials isn’t a priority right now, that’s okay. Start with a one-page plan instead, and revisit growth planning when you’re ready.

Read More: How to write a growth-oriented business plan

• Internal plan

Sometimes you just need a business plan that works as an internal management tool. 

Something to help you: 

• Set business goals
• Provide a high-level overview of operations
• Prepare to create budgets and financial projections

You don’t need an overly long and detailed business plan for this. Just a document that is easy to create, useful for developing or revisiting your strategy, and able to get everyone up to speed.

The internal plan is a great option if you’re not planning to present your plan to anyone outside your business. Especially if you’re an up-and-running business that may have created a plan previously. You might just need something simple for day-to-day use.

Read More: 8 steps to write a useful internal business plan

• 5-year business plan

Some investors or stakeholders may request a long-term plan stretching up to five years. They typically want to understand your vision for the future and see your long-term goals or milestones.  

To be honest, creating a detailed long-term business plan is typically a waste of time. There are a few exceptions:

• A long-term plan is specifically asked for
• You want to outline your long-term vision
• Real estate development
• Medical product manufacturing
• Transportation, automotive, aviation, or aerospace development

The reality is, you can’t predict what will happen in the next month, let alone the next one, three, or five years.

So, when creating a long-term plan, don’t dig too deep into the details. Focus on establishing long-term goals , annual growth targets, and aspirational milestones you’d like to hit.

Then supplement these with a more focused one-page plan that actually describes your current business, which you can use in your business right now.

Read More: How to write a five-year business plan

• Nonprofit business plan

A nonprofit business plan is not too different from a traditional plan. You should still cover all of the sections I listed above to help you build a sustainable business. 

The main differences in a nonprofit plan are tied to funding and awareness. You need to account for:

• Fundraising sources and activities.
• Alliances and partnerships.
• Promotion and outreach strategies.

You also need to set goals, track performance, and demonstrate that you have the right team to run a fiscally healthy organization. You’re just not pursuing profits, you’re trying to fulfill a mission. But you cannot serve your community if your organization isn’t financially stable.

If you can use your business plan to show that you’re a well-organized nonprofit organization, you are more likely to attract donors and convince investors to provide funding.

Read More: How to write a nonprofit business plan

Resources to help write your business plan

Don’t get too hung up on the type of business plan you choose. Remember, you can always start small and expand if you need to.

To help you do that, I recommend downloading our free one-page business plan template . It’s especially useful if you’re exploring an idea and need a quick way to document how your business will operate.

If you know you’ll pursue funding, download our free traditional business plan template . It’s already in an SBA-lender-approved format and provides detailed instructions for each section. And if you want to explore other options, check out our roundup of the 8 best business plan templates you can download for free.

Lastly, check out our library of over 550 sample business plans if you need inspiration. These can provide specific insight into what you should focus on in a given industry.

Remember, just by deciding to write a business plan, you are increasing your likelihood of success. Pick a format and start writing!

Types of business plans FAQ

Which type of planning should be done for a business?

The type of planning fully depends on your business stage and how you intend to use the plan. Generally, whatever format you choose should help you outline your strategy, business model, tactics, and timeline.

How many types of business plans are there?

There are seven common types of business plans, including: traditional, one-page, lean, growth, internal, 5-year, and nonprofit plans.

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

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13 Examples of SMART Goals for Innovation

Innovation is all about bringing something new and creative to a business or organization. Developing SMART goals allows you to focus on creating a clear blueprint for reaching your dreams.

Achieving these goals can help drive innovation and ensure your team remains motivated and productive over time. In this article, we will cover several examples of SMART goals for innovation.

Table of Contents

What is a SMART Goal?

The SMART ( Specific, Measurable, Attainable, Relevant, Time-based ) framework will enable you to establish goals for innovation.

Still confused? Here is a deep dive into each SMART criterion:

The more precise your goals for innovation are, the greater your chances of reaching them. Setting well-defined goals provides a blueprint for innovation efforts that can guide decision making.

Ambiguous goals are challenging because they lack direction. So if you want your business to succeed, specificity is key.

Measurable goals provide a clear target for your team and help them understand what success looks like in concrete terms. Without this criterion, it’s easy for individuals or groups to get sidetracked or lose focus on what they’re trying to accomplish.

When developing goals for innovation, try to be as realistic as possible. Having lofty aspirations can lead to frustration and disappointment, ultimately hindering the organization’s growth. So make sure your resources are allocated efficiently to meet these objectives.

Creating relevant goals aligning with your personal values is a crucial step to greatness. It keeps you working towards something that truly matters to you, inspiring you during tough times. You’ll be able to push forward despite obstacles.

A timeline enables you to prioritize tasks based on their importance level. When you have a deadline looming over your head, it’s much easier to determine which tasks require immediate attention and which can be put off. You’ll stay accountable and make efficient use of your time.

Let’s take a look at 13 SMART goals examples for innovation:

1. Develop New Products

“To stay competitive, I’ll create a new product line with innovative features to meet customer needs within 9 months. I want to ensure our products are competitive and relevant in the ever-changing marketplace.”

Specific: The SMART statement is to create a new product line within 9 months.

Measurable: The progress of the product line can be evaluated in terms of milestones and deadlines.

Attainable: Developing products is feasible if the necessary resources are available.

Relevant: This goal is appropriate because the product line will be competitive and meet customer needs.

Time-based: Completion of this goal is expected after 9 months.

2. Embrace Change Better

“I will strive to create a corporate culture encouraging innovation and change. I want to provide guidance on embracing and incorporating change into our operations by the end of 6 months.”

Specific: Identify how to create a corporate culture that encourages change.

Measurable: Define how you can embrace and incorporate change into corporate operations.

Attainable: Creating a culture takes time and effort, but it is achievable with the right approach.

Relevant: This statement is suitable for the overall mission of your business.

Time-based: Goal achievement is expected within 6 months.

3. Increase Market Share

“I will aim to increase the market share of our products in three existing markets by 5% over the next 10 months. This is important to our company’s growth and profitability, so I will use all available resources to ensure its success.”

Specific: The aim is explicit as it outlines the exact plan and end result to increase market share.

Measurable: You should track the market share for these three markets every month.

Attainable: A 5% market share increase is possible within the given time frame.

Relevant: This SMART goal is pertinent to the company’s growth and profitability.

Time-based: Ten months are required to accomplish success.

4. Create Collaborative Workplace

“I want to create an environment of collaboration by establishing a working group to identify areas in the workplace within four months. That should help promote team building and communication, improve morale, and increase efficiency.”

Specific: The goal is precise because it describes creating a more collaborative workplace.

Measurable: The group can measure the level of collaboration among employees.

Attainable: Encouraging a more collaborative environment is absolutely doable.

Relevant: This statement applies to creating an inclusive workplace.

Time-based: You have a four-month end date to achieve lasting success.

5. Enhance Customer Experiences

“I’ll work to improve customer experiences by providing them with a platform to voice their comments, complaints, and suggestions within two months. I also want to include new features in our services to improve customer satisfaction.”

Specific: The aim is to provide customers with a platform to voice their comments and to include new features to enhance overall customer satisfaction.

Measurable: You can check customer satisfaction through surveys or feedback forms.

Attainable: This statement is doable if given the necessary resources and time.

Relevant: Recognize that improving customer service is vital to business innovation.

Time-based: Goal attainment will be met within two months.

6. Explore Technology Solutions

“I will use the resources available to me to research and explore technology solutions that can help optimize our workflow. I expect to have three solutions implemented, such as live chats or AI tools, over the following 7 months.”

Specific: The goal is well-defined , detailing the objective and how it will be reached.

Measurable: Ensure you count the number of technology solutions that have been implemented.

Attainable: This is feasible if the resources necessary to research and explore technologies are available.

Relevant: The statement is applicable because it will help optimize workflow, which results in improved productivity.

Time-based: You want to achieve success after 7 whole months.

7. Build Employee Skills

“I want to create a culture that values learning, so I’ll implement training programs in areas like problem solving , teamwork, and communication to help our employees improve their jobs within 6 months.”

Specific: This goal identifies the areas that need training and the completion timeline.

Measurable: You can track the number of sessions that have been completed, participants in each program, and other metrics.

Attainable: Creating training programs and implementing them is something that can be done within 6 months.

Relevant: Improving employees’ skills will make them better at their jobs and build a culture that values learning.

Time-based: There is a 6-month deadline for goal completion.

8. Measure Impact of Initiatives

“Within three months, I’ll track the impact of all innovation initiatives taken in our workplace to evaluate success. I look forward to seeing how many of these initiatives have positively impacted employee morale, productivity , and overall performance.”

Specific: The SMART goal describes what is to be done and when.

Measurable: You can measure the impact of initiatives through employee surveys, data collection, and other feedback.

Attainable: It is possible to gauge the impact of initiatives within three months.

Relevant: This is important for understanding an initiative’s success or failure.

Time-based: The goal has a three-month window for achievement.

9. Network With Other Companies

“I’ll nurture relationships with two other organizations in the same industry by setting up meetings and attending events within three months. That will help us learn from these organizations, creating new opportunities for solutions to current challenges.”

Specific: The statement is easy to understand, outlining precisely what needs to be done.

Measurable: The number of meetings and events attended can be tracked to gauge progress.

Attainable: This goal is feasible by building relationships with other companies in the industry.

Relevant: This is relevant to innovation because networking helps the organization stay updated with industry trends and knowledge.

Time-based: Three whole months are needed for goal attainment.

10. Think Beyond Current Markets

“I want to identify and explore 5 new international markets in the next 8 months. I hope to capitalize on global trends that can be leveraged to reach new revenue opportunities.”

Specific: This is specific since the person will look for 5 new international markets.

Measurable: Make sure you jot down the 5 markets you explore and be mindful of global trends.

Attainable: This SMART goal is possible if you take the time to explore and capitalize on global trends.

Relevant: Exploring new markets is essential for any business wanting to expand its reach and stay innovative.

Time-based: Success is anticipated within 8 months.

11. Promote Creativity

“I will create and promote a culture of creativity by incentivizing employees to suggest new ideas. My aim is to have at least 5 creative ideas from each department by the end of 6 months.”

Specific: This goal is specific regarding what needs to be done (create and promote a culture of creativity ) and how many ideas are expected from every department.

Measurable: Count the number of ideas each department suggests within a given timeline.

Attainable: A culture of creativity and incentivizing employees to suggest ideas is possible.

Relevant: Promoting creativity encourages innovation in the workplace and helps keep employees motivated.

Time-based: The deadline for this particular goal is set to 6 months.

12. Encourage Risk-Taking

“I’ll foster an environment of open communication and trust that encourages employees to take risks with new ideas within 5 months. This can be done by actively engaging in conversations with employees and supporting their creative ideas.”

Specific: The aim is to create an environment of trust and communication that enables employees to take risks with new ideas.

Measurable: Ensure you actively engage in conversations with employees and support their creative ideas.

Attainable: This is doable because the individual is taking steps to foster an environment that encourages risk-taking.

Relevant: The statement is appropriate because it promotes creativity and innovation at work.

Time-based: The goal is time-bound because it has an end date of 5 months.

13. Set Rewards for Innovative Ideas

“I want to incentivize innovative ideas from my team in the next 7 months. I’ll develop a rewards program for employees who come up with new ideas. The rewards could range from company swag to salary bonuses, depending on the success of their idea.”

Specific: This certain goal is about setting up rewards for innovative ideas.

Measurable: Determine the number of employees who generate successful ideas and the value of their rewards.

Attainable: Reasonable rewards are within reach, depending on the budget.

Relevant: This is relevant for encouraging creative solutions and ideas from employees.

Time-based: The SMART goal should be achieved over 7 months.

Final Thoughts

SMART goals are a fantastic way to ensure you have the best conditions for innovation. This method helps foster clarity and focus, providing a framework for long-term success.

Striving towards SMART goals can help any business or individual realize their ideas more effectively. They can identify potential challenges and minimize risks associated with innovating.

Taking Action: Your Innovation Master Plan

By: Langdon Morris

The focus of the The Innovation Formula is on the innovation process that makes sense for small businesses, where lean, simple, and fast are essential. You may also be interested in a view of the innovation process that’s suited to larger companies, so this chapter provides an overview of the Innovation Master Plan framework that we use when we’re working with larger organizations on innovation projects and initiatives.

And while many of the issues and concerns of larger firms are similar or identical to smaller companies and start-ups, some are quite different. In particular, the challenges that large companies must deal with precisely as a consequence of their large size relate to innovation funding, the breadth of the innovation portfolios that they are obliged to develop, staffing for innovation as well as decision making about innovation projects, engaging very large numbers of people, and relationships with outside partners are generally different from the way that most small firms must handle these issues. But it is included here as it is often useful to see how others deal with the same issues as you’re dealing with, and similarities and differences can be illuminating.

The framework is documented in the first three books in this series, Permanent Innovation, The Innovation Master Plan, and The Chief Innovation Officer , and they’re widely read and used by leading companies, universities, and governments everywhere to help them organize the pursuit of innovation and its management as a structured, purposeful, and highly successful organizational process for business and government.

Innovation is vitally important, as we all know that all organizations must innovate to survive in these times of rapid change. Nevertheless, it remains very difficult for most organizations to achieve innovation on a consistent basis. We only have to look at the recent history of global businesses to see the impact of innovation – new and innovative companies are achieving great success, while the companies and even nations that do not innovate often fail and fall behind.

Hence, the purpose of this section is to document some key principles of innovation so you can work more effectively and productively as an innovator, and thereby contribute to a successful future for your organization.

In practice, it’s obvious that a significant part of the innovation process depends upon the creative capacity of people to come up with new and compelling ideas, while another aspect of success at innovation has to do with how we organize and conduct the innovation process from a technical and managerial perspective.

The intent of this summary is to address all of these aspects, with particular focus on the principles, tools, and methods necessary to a systematic and rigorous business process that can achieve meaningful and long lasting innovation results.

…systems thinking approach to innovation must address all six of the critical questions: Why, What, How, Who, Where, and When.

We call this an “innovation system,” and we have named it “the innovation master plan.” So to justify calling it a “system” it must be complete and comprehensive, providing valid solutions for senior leaders, middle managers, and front line workers who will work together to evoke, manage, and produce innovative results. Hence, this chapter presents an overview of a complete set of principles, concepts, methods, and tools.

While innovation is a challenge for most organizations to achieve, it’s also fun, fascinating, and very rewarding. There are few accomplishments as satisfying as seeing new ideas and decisions making a positive difference in the organization you work for.

As you learn the details of the Innovation Master Plan framework, we hope that you will develop a love for innovation, and that you will then share this love enthusiastically with others so that they, too, may experience the joys and benefits of success at innovation.

The Innovation Master Plan System is based on the concept that a comprehensive or systems thinking approach to innovation must address all six of the critical questions: Why, What, How, Who, Where, and When.

Why innovate: the link between strategy and innovation

The “why” of innovation is simple: as we examined in Chapter 2 , change is accelerating, and we don’t know what’s coming in the future, which means that we must innovate to both prepare for change, and to make change in order to improve our position in the market.

As we already noted, if things didn’t change then your company could keep on doing what it’s always done, and there would be no need for innovation. If markets were stable, if customers were predictable, if competitors didn’t come up with new products and services, and if technology stayed constant, then we could all just keep going as we did yesterday.

But all the evidence shows that change is racing at you faster and faster, which means many new types of vulnerabilities. Technology advances relentlessly, altering the rules of business in all the markets that it touches, which is of course every market. Markets are not stable, customers are completely fickle, and competitors are aggressively targeting your share of the pie. So please ask yourself, “Are we managing with the realities of change in mind? And are we handing uncertainty?”

The alternatives are either to “make change” or to “be changed.”

Since the alternatives are either to “make change” or to “be changed,” and making change brings considerable advantages while being changed carries a huge load of negative consequences, then the choice isn’t really much of a choice at all. You’ve got to pursue innovation, and you’ve got to do it to obtain long lasting benefits.

The decisions to be made focus on how best to prepare for future markets, and the actions relate to transforming the innovation mindset into meaningful work throughout the organization, work that results in the development of innovations that impact the market, and improve the position of the organization relative to its competitors. This means, finally, an organization-wide commitment to designing and implementing your version of the innovation master plan.

So what we’re talking about here is the practice of innovation as a vital aspect of corporate or organizational strategy; the rest of this chapter explores how strategy and innovation are intimately linked and should be mutually reinforcing.

A tight linkage between innovation and strategy will certainly be part of your master plan, as innovation by your competitors and by your own firm causes existing products, services, and business models, and indeed entire businesses, to become obsolete. Since innovation is the driver of change, and change is the most fundamentally important driver of business strategy, then it’s not an exaggeration to say that innovation is the means of achieving strategy, as we find in the story of Apple’s turnaround from the abyss.

When Steve Jobs was asked to return to Apple as CEO in 1997 after an absence of more than ten years, the company was, to put it bluntly, a mess. If you thought that the PC market was a war between Apple and Microsoft, it was clear that Microsoft had won big.

Apple’s market share was about 5% and shrinking, and to many observers it seemed that the company was fading away. Its product line was an incoherent collection of 11 different computers, and there didn’t seem to be a clear vision guiding the company forward. The board of directors was desperate.

But did Jobs have a vision for the 21st century, as he had had in the 1970s? Did he still have the magic?

We know today that he did, but imagine that it’s 1997 and you’re Steve Jobs, and you have to figure out how to turn Apple Computer around. What do you do?

Today Apple’s share of the US PC market is growing, although it’s still less than 10%. But the iPod is the undisputed MP3 world leader, with 70% of the market, the iPhone became the world standard design for smart phones immediately upon its launch, and the iPad did the same in the tablet market. And now more than fifteen years after Jobs returned, Apple’s total market capitalization recently achieved an insider milestone when the company’s total stock value surpassed arch-rival Microsoft, and then another milestone when it became the world’s most valuable corporation.

We simply can’t imagine “Apple” without thinking about “innovation.”

To summarize, without a focused and successful effort at innovation Apple surely would not have survived; the quality of its innovative efforts led not only to survival, but leadership. Innovation was thus essential to the company’s strategy, and it was in fact how the strategy was executed, so much so that we simply can’t imagine “Apple” without thinking about “innovation.”

Innovation plays the same role for many firms

Do you admire Google? Then ask yourself what role innovation plays in Google’s strategy. It’s obvious that we wouldn’t admire Google, and in fact we wouldn’t even know about Google if it weren’t for innovation. The very existence of the company is based on a single strategic insight and on two critical innovations that made the strategy real. The insight was that as the number of web pages grew, the internet’s potential as an information resource was surpassing all other resources for scale, speed, and convenience, but it was getting progressively more difficult for people to find the information they were looking for.

People therefore came to value better search results, and Google’s first innovation to address that need was its PageRank system, developed in 1995, an algorithm for internet searches that returned better results than any other search engine at the time.

The second innovation was a business model innovation , which turned the company into a financial success along with its technical search success. When Google’s leaders realized in 2000 that they could sell advertising space at auction in conjunction with key words that Google users searched for, they unleashed a multi-billion dollar profit machine. The integration of these two innovations provided a multiplicative advantage, and Google’s competitors are falling by the wayside as the company continues to dominate.

As a result, in November 2010, Ask.com threw in the towel with only 2% of the market for internet search after trying for five years to compete with Google following its $1.85 billion acquisition by Barry Diller’s IAC/InterActiveCorp. Diller wrote, “We’ve realized in the last few years you can’t compete head on with Google.”¹

Yahoo, a much bigger company than Ask, came to the same conclusion earlier in 2010 when it decided to position itself as a media company rather than a technology company, and outsourced its search function to Microsoft’s Bing.

What other companies do you like? Do you also admire Starbucks? Or Disney? Or Toyota? Or BMW? They’re certainly innovators, and many of us appreciate them precisely because of it.

So the relationship between strategy and innovation is vital, and the important role that innovation plays in transforming the concepts of strategy into realities in the marketplace tells us that none of these companies could have succeeded without innovation. This is the “why” of innovation.

What to innovate: creating and managing innovation portfolios

Investors in all types of assets classes create portfolios to help them attain optimal returns while choosing the right level of risk, and innovation managers must do the same for the projects they’re working on.

Innovation is inherently risky. You invest money and time, possibly a lot of both, to create, explore, and develop new ideas into innovations, but regardless of how good you are, many of the resulting outputs will never earn a dime.

Is that failure or success? It could be both. The degree of failure or success will be determined not by the fate of individual ideas and projects, but by the overall success of all projects taken together. Hence, the best way to manage the risk is to create an “innovation portfolio.”

So what do you do? You allocate capital across a range of investments to obtain the best return while reducing risk, and then you manage each project aggressively to make it work.

The underlying principle of portfolio management is that the degree of risk and the potential rewards have to be considered together. In a rapidly changing market, the nature of innovation risk is inherently different than in a slower-changing industry such as, say, road construction, because the faster the rate of change in a company’s markets, the bigger the strategic risks it faces. The faster the change, the more rapidly will existing products and services become obsolete, a factor we refer to as “the burn down rate.” The faster the burn down, the more urgent is the innovation requirement.

This will necessarily affect the composition of an innovation portfolio by inducing a company to take greater risks in innovation its efforts. Hence, the ideal innovation portfolio of each organization will necessarily be different: Alibaba, Apple, NASA, Genentech, Toyota, Union Pacific, GE, and Starbucks are all innovative organizations, but when it comes to their innovation portfolios it’s obvious that they cannot be the same in content or style.

Depending on the questions at hand, senior managers may have tens or dozens of relevant portfolio views to consider.

A further key to the dynamics of a successful portfolio is described in portfolio theory, which tells us that the components of a portfolio must be non-correlated, meaning that various investments need to perform differently under a given set of economic or business conditions. In the case of innovation, “non-correlated” means that every firm needs to be working on potential innovations that address a wide range of future market possibilities in order to assure that the available options – and here is the key point – will be useful under a wide variety of possible future conditions.

The need for broad diversity in the portfolio also reminds us we need to develop all four types of innovation, so what we’re really talking about are five different portfolios. There will be a different portfolio for each type of innovation, breakthroughs, incremental innovations, new business models, and new ventures, and there will be a fifth portfolio that is an aggregate of all four. There may also be portfolios for different business units or products lines, so depending on the questions at hand, senior managers may have tens or dozens of relevant portfolio views to consider.

We should also note that each different type of portfolio will be managed in a different process, by different people, who have different business goals, and who are measured and possibly rewarded differently. Hence metrics and rewards are inherent in the concept of the portfolio, and the master plan also calls for the design of the ideal metrics by which the portfolio should be measured.

And because we’re preparing for a variety of future conditions, its obvious that some of the projects will never actually become relevant to the market, and they will therefore never return value in and of themselves. But this does not mean that they are failures; it means that we prepared for a wide range of eventualities, and some of those futures never appeared, but we were nevertheless wise to prepare in this way. This sort of “failure” is a positive enhancement of our likelihood of our survival and ultimate success, so it’s not failure in a negative sense at all. By analogy, I carry a spare tire in my car, but it’s not a failure if I never have occasion to use it.

Therefore, the process of creating and managing innovation portfolios cannot be overseen by the CFO’s office as a purely financial matter. Instead, the finance office and innovation managers are partners in the process of innovation development. Hence, innovation portfolio management is like venture capital investing, early stage investing where it’s impossible to precisely predict the winners, but nevertheless a few great successes more than make up for the many failures.

The CFO will also have to accept the idea that the mandatory investments in innovation mean investments in learning, and that during the early stages of the development of an idea its future value is almost entirely a matter of speculation.

And the CFO will also have to accept the idea that the mandatory investments in innovation mean investments in learning, and that during the early stages of the development of an idea its future value is almost entirely a matter of speculation. As work is done to refine ideas in pursuit of business value, the key to success is learning, as the learning shapes the myriad design decisions that are inevitably needed. The innovation process as a whole therefore seeks to optimize the learning that is achieved, and to capture what has been learned for the benefit of the overall innovation process as well as the portfolio management process. This costs money, which cannot and should not be avoided.

As the projects that constitute an innovation portfolio mature and develop, they provide senior executives and board level directors with increasingly attractive new investment options.

By managing their portfolios over time, a team of executives can significantly improve the portfolio’s performance; as they engage this type of thinking they get more in sync with the evolving market, and better at identifying and supporting the projects that have greatest potential.

Still, many will fail. In fact, a healthy percentage of projects should fail, because failure is an indication that the organization and particularly the innovation teams are pushing the limits of current understanding hard enough to be sure that they are extracting every last bit of value from every situation, and at the same time preparing for a broad range of unanticipated futures.

Or as TS Eliot said, “Only those who risk going too far can possibly find out how far one can go.”²

How To Innovate: the innovation process

Many people assume that creating new ideas is the beginning of the innovation process, but actually that’s not true. Ideation generally occurs in the middle of the disciplined innovation process, as we will explain here.

While the purpose of innovation is “simply” to create business value (simply is in quotes because it’s obviously not so easy to do), the value itself can take many different forms. As we noted above, it can be incremental improvements to existing products, the creation of breakthroughs such as entirely new products and services, cost reductions, efficiency improvements, new business models, new ventures, and countless other forms as well.

In the quest for innovation it’s obvious that many ideas at the input stage become a few completed, useful innovations at the output stage, so people readily visualize the innovation process as a funnel: lots of ideas come in the wide end on the top, and a few finished innovations come to market from the narrow end below. The trick to making it work is knowing what’s supposed happen inside the funnel.

So naturally you want to start by creating a whole bunch of ideas, right? Actually, no.

Ideas are indeed the seeds of innovation, just as ore taken from the ground is the raw material of steel, or waving fields of wheat provide the raw material for bread. But it takes a lot of work to mine the raw ore and transform it into steel, or to prepare the fields to grow the wheat long before it becomes bread. It’s the same with innovation; we don’t start by collecting raw ideas. Instead, we know that innovation is a core element of our organization’s strategy, so we have to start the innovation process itself with strategic thinking to assure that the outputs of innovation are fully aligned with our strategic intent.

Step 1 is therefore Strategic Thinking. The innovation process begins with the goal to create strategic advantage in the marketplace, so in this stage we think specifically about how innovation is going to add value to your strategic intents, and we target the areas where innovation has the greatest potential to provide strategic advantage. This was the topic of phase 1 described above, the “why” of innovation.

Step 2 is Portfolio Management & Metrics. As we discovered in phase 2 on the “what,” one of the important underlying facts of innovation management is the necessity of failure. We are by definition trying to do something new, and as we proceed on the innovation journey we do not in fact know if we are going to succeed. We have confidence that we’ll succeed eventually, but along the way we know that there will be many wrong turns, and many attempts that will never come to fruition. So we manage innovation portfolios aggressively to balance the inherent risks of the unknown with the targeted rewards of success, and balancing our pursuit of the ideal with the realities of learning, risking, failing in order to ultimately succeed.

Steps 1 and 2 together provide a platform and context for everything that follows, and so they constitute the ‘Input’ stages of the funnel, and so that the activities in the following stages have the best chance to achieve the best results.

Step 3 is Research. An output of Stage 2 is the design of the ideal innovation portfolio, which is what we believe, as of today, is the right mixture of short and long term projects across all four types of innovation. Once we understand the ideal we can compare our current knowledge and discern the gaps. Filling these gaps, then, is the purpose of research. Through research we will master a wide range of unknowns, including emerging technologies, societal change, and customer values, and in the process we will expose significant new opportunities for innovation.

Strategic thinking has clarified for us how the world is changing and what our customers may value, and this stimulates new questions that our research has answered. Research findings provoke a broad range of new ideas across a wide range of internal and external topics. This is the abundant raw material, and it is already and automatically aligned with our strategic intent because it came about as a result of a direct connection between strategy, portfolio design, and research.

Step 4 is Insight. In the course of our explorations, the light bulb occasionally illuminates very brightly, and we grasp the very best ways address a future possibility. Eureka! The innovation and the target and mutually clarified; we understand what the right value proposition is for the right customer.

While many people think of this moment of insight as the beginning of the innovation process, as you can see, in the well managed innovation effort we expect insight to come about as the result of the preceding processes and activities, not at random.

Hence, the innovation process described here is specifically contrasted with random idea generation; insight is the result of a dedicated process of examination and development. It doesn’t occur because someone had a good idea in the shower, but because individuals and teams of people were looking diligently and persistently for it.

Step 5 is Innovation Development , the process of design, engineering, prototyping, and testing that results in finished product, service, and business designs. Manufacturing, distribution, branding, marketing, and sales are also designed in at this step, in an integrated, multi-disciplinary process.

Step 6 is Market Development , the universal business planning process that begins with brand identification and development, continues through the preparation of customers to understand and choose this innovation and leads to rapid sales growth.

Step 7 is Selling , the where the real payoff is achieved. Now we earn the financial return by successfully selling the new products and services. In the case of process improvement innovations directed internally, we now reap the benefit of increased efficiency and productivity.

Managing a process of this scope and complexity is of course a challenge for all organizations, but among the world’s companies we see that there are some that do this extraordinarily well. The knowledge that some do it very well, and that it’s certainly possible to be an exemplary innovative organization that can attain exceptional profits, should be a powerful source of motivation to develop and apply your own master plan.

Who Innovates: creating the innovation culture

Organizations that are successful at innovation naturally develop a strong innovation culture. But supposing an innovation culture doesn’t yet exist in your organization. Then how can you develop it?

Such a culture is much appreciated by customers who say that the company is a genuine innovator, and it’s also known among the people inside the organization as a dynamic and innovation-friendly place to be.

But supposing an innovation culture doesn’t yet exist in your organization. Then how can you nurture it? How do organizations develop an innovation culture? Who should be involved in the innovation process? And what roles should they play?

Every culture is an expression of behaviors and attitudes, and every organization’s culture reflects the beliefs and actions of its people, as well as the history that shaped them. The innovation culture, of course, is likewise an expression of people, their past, and their current beliefs, ideas, behaviors, and actions about innovation.

We have found that the innovation culture comes into being when people throughout the organization actively engage in promoting and supporting innovation, implementing rigorous innovation methods, and filling three essential roles: Creative Geniuses, Innovation Champions, and Innovation Leaders. In this respect, the approaches that are suited for large companies are identical to those of small business: it’s all about defining the right roles, and getting the right people to fill them.

Innovation’s Creative Geniuses

Who comes up with the critical ideas that are the beginnings of innovation, and then turns these ideas into insights, and insights into innovations? They are Creative Geniuses, and they work everywhere, inside and outside.

If it seems like a stretch to label these people as “geniuses,” let me explain the rationale. No one can innovate if they accept things the way they are today, so making innovations requires that we are willing to see things differently. We have to overcome institutional and bureaucratic inertia that may burden our thinking process, and challenge ourselves to see beyond conventional viewpoints. This fits perfectly with the dictionary definition of genius, which is “exceptional natural capacity shown in creative and original work.”

Innovation Managers

Innovation Managers (also referred to as “Innovation Champions”) are those who promote, encourage, prod, support, and drive innovation in their organizations. They do this in spontaneous moments of insight, in ad-hoc initiatives, as well as in highly structured innovation programs.

Innovation manager/champions build the practical means for effective, systematic innovation. They take direct responsibility for finding creative thinkers and encouraging them to see and work in new ways; they help people seek new experiences that may spark new ideas; and they create a regular operations context in which sharing and developing new ideas is the norm.

While they may work anywhere in the organization, including in senior management positions, line management roles, staff, or front line operations roles, the specific nature of the champion’s role is to function in the middle, to provide the bridge between the strategic decisions of senior managers and the day to day focus of front line workers.

Innovation Leaders

An Innovation Leader is someone who shapes or influences the core structures and the basic operations of an organization, all with a clear focus on supporting innovation.

Core structures include the design of the organization itself, as well as its policies and their underlying principles. Metrics and rewards can also be core structures.

None of these factors are absolute givens, and all of them can be changed, and that’s the point: they are all subject to design, to thoughtful choice about what is best. It’s generally within the power of senior managers to change them, and when they impede innovation they should be changed to favor it.

…all of these factors can be done in a way that makes innovation easier or more difficult, because each can be arranged to favor the status quo or to favor useful and effective change.

The actions and attitudes of senior managers are based, ultimately, on their philosophies about management, on their mindset, which we explored earlier in this document. Innovation leaders set expectations, define priorities, celebrate and reward successes, and deal with failures, and all of these factors can be done in a way that makes innovation easier or more difficult, because each can be arranged to favor the status quo or to favor useful and effective change.

Do leaders believe in a win-win model, or win-lose? Win-lose organizations usually are not trusting environments, and because trust is so important to innovation, when it’s missing innovation suffers.

Leaders also set goals, and they don’t need to be modest; in fact they can be outright aggressive. By setting ambitious goals, managers emphasize the linkage between an organization’s strategy and the pursuit of innovation, elevating innovation to a strategic concern where it properly belongs. Conversely, if innovation is not expressed as a specific goal of top management then it probably won’t be a goal of anyone else, either; and if policies are restrictive and make it difficult to test new ideas, then there won’t be many new ideas. We refer to organizations that are focused on the present, rather than the future, as “status quo organizations.”

The firm that’s obsessed with the status quo probably won’t last very long, but some managers still seem to believe in this model, and their domineering attitudes and behaviors reinforce it.

Innovation doesn’t happen without leaders who embrace it, nor can it happen without people who have ideas and are willing to risk failure to experiment with them. Nor does it happen without champions to bridge between the strategic and the operational questions, and the individuals who have ideas and want to explore them.

And of course it happens best, and fastest, when all three roles are consciously implemented and mutually supporting. This does not mean that each individual can play only one of these roles; many people are geniuses, and leaders, and champions, and at various times we play all of these roles.

So what is important is not that we classify people into the various categories; in fact, we should avoid doing that. We just need make sure that all three roles are being played, and played well, so that defining, developing, and implementing ideas that become innovations becomes the norm.

Where We Innovate: the innovation infrastructure

What are the essential elements of infrastructure and tools to support the innovation process? There are four key parts of this infrastructure, the same ones we identified in the previous chapter . How large companies implement these tools will be different than small businesses simply because of the larger scale that they must address, but the core needs and intents are the same.

Organizations that consistently deliver innovation do so because their employees have the skills to effectively explore, understand, diagnose, analyze, model, create, invent, solve, communicate, and implement concepts, ideas, and insights. These are all attributes that we might consider facets of “learning,” and naturally enough any organization that thrives in a rapidly changing environment necessarily has developed the capability to learn and to apply that learning to keep up with external changes.

Certainly the link between learning and innovation is a strong one, and clearly speed matters. The faster people in a company can learn, the faster they can apply that learning to create the next product, service and business model. By creating a positive and self-reinforcing feedback loop of accelerated learning to create innovation, organizations then obtain more learning, leading to more innovation. The results are manifold: shorter product life cycles, which leads to quicker learning, yet shorter product life cycles, better profits, etc., all contributing to competitive advantage.

To support the acceleration of learning and innovation we have found that the proper infrastructure tools make a big difference. The four key infrastructure elements are open innovation, effective collaboration, the virtual workplace, and the design of the physical work place; here is a quick summary paragraph about each.

Open Innovation

While in the past many organizations kept the innovation process closely guarded as an in house secret, these same companies have recently discovered that seeking new product ideas from outside can significantly improve the flow of new opportunities. Applying the principles of open innovation can significantly accelerate the pace of innovation, as well as its effectiveness. Open innovation means expanding the pool of participants in the innovation process to all types of outsiders, including customers, suppliers, partners, and community members, tapping into ideas, critical thinking, and advice.

Collaboration

Everyone who works in the field of innovation agrees that collaboration is vital to success at innovation. Mastering and applying the principles of effective collaboration, not only for pairs and small groups, but also for groups of tens or even hundreds of people requires facilitation skills to help nurture new ideas and turn them into effective innovation, and the benefits can be significant.

The virtual work place

As we spend more and more time working and collaborating on line with our internal colleagues and with outside partners, customers, and vendors, the quality of our tools and our skill in using them can make a significant difference in the productivity of our innovation efforts. Active engagement in the selection and adoption of the right tools is a simple but fundamental rule to follow.

The physical work place

As MIT Professor Tom Allen puts it in the lively book he co- authored with architect Gunter Henn called The Organization and Architecture of Innovation , “Most managers will likely acknowledge the critical role played by organizational structure in the innovation process, but few understand that physical space is equally important. It has tremendous influence on how and where communication takes place, on the quality of that communication, and on the movements – and hence, all interactions – of people within an organization. In fact, some of the most prevalent design elements of buildings nearly shut down the opportunities for the organizations that work within their walls to thrive and innovate. Hence, the implications of physical space for the innovation process are profound.”

The essentials for effective innovation are thinking, creating, problem-solving, and collaborating, and we know that the work place that best supports them is not a traditional conference room, but a mush better work environment that is designed for innovation.

These four elements, open innovation, collaboration, the virtual workplace, and the physical workplace constitute the critical elements of the innovation infrastructure, and it is by providing these tools to the innovative people in your organization that you can help them do their best to develop the innovations that will compose your organization’s future.

Summary of the innovation master plan

Your innovation master plan will cover each five of the major elements in great depth.

To enable the development of your plan, it’s often helpful to conduct a comprehensive review of your organization’s performance as an innovator to clearly identify what’s working well and what’s not working at all, and to design the corrections. (This is one reason why, by the way, we consider “designer” to be one of your essential skills.)

We have found that there are seven technical factors that are critical to innovation performance, as well as seven additional factors that are cultural.

7 technical factors

We refer to these as technical because they can be assessed in a relatively objective fashion, and according to specific technical criteria.

• Alignment of Strategy and Innovation You’ll describe how you intend to align the innovation process with the strategy process.
• Innovation Portfolio Management You’ll assess the contents of the existing innovation portfolios to see if they have the right balance of incremental and breakthrough projects, and to asses the projects that are underway to determine if they really are the right future products and services for the organization to make and sell.
• Research The purpose of assessing the research process is to determine how well it’s capturing the critical tacit knowledge that will feed the search for unknown and unmet needs.
• Innovation Development You’ll evaluate the development process as well, to make sure that innovation development and market development are proceeding effectively and in parallel, and providing the right guidance for the organization.
• Alignment with Sales You’ll make sure that the new products and services that are being introduced are effectively aligned with the sales organization so that the organization can in fact bring these products and services to market effectively.
• Innovation Metrics and Rewards You’ll determine which innovation metrics should be used throughout each stage of the innovation process, and make sure that those innovation metrics are aligned with the rewards that are offered to individuals, teams, departments, and business units.
• Infrastructure And you’ll examine the infrastructure to determine whether the people who are working in the innovation process have sufficient information and support to complete their work as efficiently as possible.

Wherever a stage of the process or a critical skill is not at the level it ought to be, or if it’s missing entirely, you’ll design an improvement plan or a process to implement it from scratch.

7 cultural factors

Assessing these factors will perhaps lead you into a more subjective dialog than the assessment of the technical factors, but they are nevertheless critical to effective innovation performance as well, and you should conduct a robust study of them.

• Innovation Culture A critical issue, of course, is the character of the organization’s culture. Does it favor innovation, or shun it? Do people feel safe in taking risks, or is this a career-threatening move, and something which is consistently avoided? Do people embrace the characteristics and qualities of the innovation culture, or is it an organization that seeks the status quo culture?
• Creativity You’ll assess the creativity of people throughout the organization to see if the new ideas that are under development are sufficiently creative.
• Trust You’ll examine the level of trust in the organization to see if people are comfortable in their working relationships to allow the ambiguities and uncertainties of the innovation process to follow a natural developmental flow, or if the lack of trust forces people to make innovation decisions too quickly because it’s not safe to allow ambiguity to resolve itself over time.
• Leadership You’ll assess the performance of leadership across the four delivery factors, including goal setting, expectation setting, and tone setting.
• Mindset You’ll assess the mindset of the leadership team to see how well they understand the acceleration of change, and how much they’re prepared to support the innovation process as the development of the future products and services for the company.
• Attitude You’ll review the overall attitude that people have towards innovation to find out if innovation is sufficiently support, and if people are engaged in the innovation process.
• Tone And of course, you’ll look at the tone as defined as said by senior leadership to see that innovation is getting the proper support in both words and actions.

A thorough assessment involves talking with a lot of people, and not just people in top management, but people throughout the organization. You may also interview people who are outside, including customers, suppliers, and partners, to learn their views on the company’s innovation performance, strengths, and weaknesses. Interviews often last 30 to 60 minutes, although they could also be longer.

Researching the external environment measures the rate of change in the market, and assesses the innovation capabilities and performance of major competitors.

To learn the views and experiences of a larger group of people it’s helpful to do an online survey to reach hundreds more people. Ten to twenty minutes of questions and answers, answered anonymously and therefore candidly, provide tremendous depth of information about people’s attitudes, feelings and experiences of the innovation process.

By comparing findings across all three of these information sources we expect to gain a detailed understanding of current innovation performance, assess where performance is outstanding, where it’s good, and where it needs to be improved, and where it should be targeted.

Your innovation master plan

You may choose to write up your findings in a plan, and it will certainly also be the subject of a briefing with your executive team to help them understand the organization’s current capabilities, prescriptions, and the role that each member of the executive team needs to play in developing and promoting the dramatically enhanced innovation capability that you envision, the transformation of your organization into a genuine innovator.

As you prepare the innovation master plan you should expect to identify ten to twenty major improvement areas to focus on, and these may become the primary drivers of your innovation action plan for the first six months to one year. You can also expect that during the course of that work you’ll be interacting with a great many people, and both coaching and encouraging them to participate in the innovation process, as well as for many insisting that they follow the rigorous innovation structure.

As you will certainly have noticed, a lot of this overlaps with your needs as a small business leader, but the scale of the ideation effort that a large firm has to engage in, and the scale of the infrastructure to support the financial, managerial, and coordination of all that is probably far more than you need.

And in fact, the very idea of a Master Plan may be beyond the scale or scope of your requirements. But at the same time it’s necessary to plan thoughtfully and engage people effectively as you pursue innovations to support your own business’ future growth and development.

And of course the advantage that you’re likely to have over a larger firm is the capacity to act quickly. As the leader of a small company, when you want to move forward you can make a lot of great stuff happen very fast, while bigger firms may spend weeks, or months, or even years debating; that can yield you a significant head start.

This means taking action, and in the next chapter we’ll look specifically at your own action plan.

By Langdon Morris

Article series

The Innovation Formula: the guidebook to innovation for small business leaders and entrepreneurs

About the author:

References:

• San Francisco Chronicle, “Ask.com layoffs spell surrender.” November 10, 2010
• ST.S. Eliot, Preface to Harry Crosby, Transit of Venus (1931), p. ix.

Images: Ideas in funnel and  Businessman looking at Innovation plan from Shutterstock.com

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Thinking of starting a business?

Starting a business offers many benefits including being your own boss, offering a flexible work schedule, and boosting your income. In addition to these rewards, owning a business offers many personal benefits, like the opportunity to innovate or be creative, have a positive impact on your community, or make money doing something you love. It’s an exciting challenge!

How to get started

Step 1: Get your paperwork in order – Before opening for business, make sure you file the required legal, tax, and business licensing documents for your local area.

• Choose a business structure : It’s important to select the proper legal structure for your business (sole proprietorship, LLC, LLP, GP, corporation) in the beginning because it’s not easy to change it later. Each type of legal entity comes with specific requirements and restrictions.
• File your tax and employer identification documents : City, county, or state governments may require business tax filings.
• Get appropriate licensing : A city, county, or state license or professional certification may be required to operate.

Step 2: Create a business plan – Your plan creates the foundation for your business on how to structure, run, and grow it. Business plans can also help you get funding or bring on new business partners.

Step 3: Business funding – One of the greatest challenges small businesses and entrepreneurs face is accessing capital. Many small businesses are funded by loans from friends, partners, or family members. However, according to the 2020 Census, more than 68 percent of small businesses rely on banks for credit. Accessing traditional sources of capital often relies on connections or a track record of sustainable business growth. Below are some funding alternatives for small businesses:

• Government-backed loans: Microloans are good options for when a lender is not able to make a direct loan. They may also offer better lending terms and payment flexibility. The California Office of the Small Business Advocate also offers grants and financing.
• Investors and private equity: Consider capital raising through equity financing when a bank may not be an option.
• Business incubators and accelerators: Access seed grants and other resources like networking, mentorship, fundraising, and legal assistance. Be careful about signing shared equity agreements, mandatory participation contracts, or sharing proprietary information about your business, products, or services. APEX accelerators benefit underserved communities with regional offices across the state.
• Franchise opportunities : A franchise agreement grants the right to offer, sell, or distribute goods or services under a prescribed marketing plan or system. Franchising can be a relatively affordable way to start a business that provides educational resources, marketing support, and access to learn from an already established company. Most (but not all) franchises doing business in California are required to be registered with the DFPI.

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Payments Innovation Alliance Releases Business Email Compromise Response Action Plan

Nacha's Payments Innovation Alliance, a membership program bringing together diverse global stakeholders seeking to transform the payments industry, has published its Business Email Compromise Response Action Plan . This free publication not only offers guidance to companies that are victims of business email compromise (BEC) but also provides steps organizations can take to actively mitigate the potential for being a victim. 

BEC scams occur when criminals send a fraudulent email message that appears to come from a known source making a legitimate request, such as a known company vendor appearing to send an invoice with an updated payment address or payment account information. These scams have resulted in substantial financial and reputational harm to corporate victims, with billions of dollars in losses.

“Business email compromise is on the rise, and information that is shared publicly about contracts and business relationships makes organizations vulnerable,” said Matt Luzadder, Managing Partner, Chicago Office, Kelley Drye & Warren LLP, and co-leader of the Alliance’s Cybersecurity & Payments AI Project Team. “The Response Action Plan details what to do if your company is impacted and practical steps to take to prevent business email compromise from occurring.”

The Payments Innovation Alliance’s Cybersecurity & Payments AI Project Team develops tools and resources to help organizations understand evolving threats related to potential cyberattacks and learn about the potential impact of artificial intelligence on the world of payments. To download the Plan, learn more about initiatives or join the Payments Innovation Alliance, visit https://www.nacha.org/cybersecurity-response-project-team . Organizations interested in joining the Alliance should visit http://www.nacha.org/content/alliance-membership-features .   

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Planview Accelerates Innovation Velocity as More Enterprises Adopt the Future of Connected Work

Organizations’ imperative to combat waste in digital transformation initiatives drives Planview momentum

Planview, the leading end-to-end platform for Strategic Portfolio Management (SPM) and Digital Product Development (DPD), today reports on the adoption of recent product innovations that drive the future of connected work. These innovations connect project and product initiatives across the enterprise to accelerate the speed and impact of transformation. Organizations require bi-directional visibility and governance to create tighter alignment between strategies and teams, actionable artificial intelligence (AI) to enhance predictability and informed decision-making, and personalized user experiences to up-level productivity.

“Business leaders are under tremendous pressure to cut costs while delivering business outcomes and innovation. Disconnected tools and dated operating models block their progress,” said Dr. Mik Kersten, Chief Technology Officer, Planview and author of the bestselling book Project to Product: How to Survive and Thrive in the Age of Digital Disruption with the Flow Framework .

“Rapid adoption of our cross-platform, cross-tool approach demonstrates organizations’ urgent need to connect all strategic initiatives to deliver teams’ capacity and workflow. Now, it is easier than ever to close the feedback loop between prioritization and planning, development and delivery, back to investment and strategy.”

Industry Leadership & Product Innovation Highlights

To bring the company’s vision for connected work to fruition, Planview has:

• Announced Planview.Me™, an easy-to-use, personalized user experience designed to bring data, insights and work together into a single view. Since launching, 32% of Planview Portfolio customers are already actively using Planview.Me.
• Introduced Planview® Copilot, to accelerate speed and impact of transformation by providing actionable insights on project and product initiatives across the enterprise. Since introduction, more than 25 customers are in production, with another 50+ customers involved in Planview’s co-development program known as Inner Circles.
• Elevated visibility of all work at the portfolio level to ensure alignment and governance while empowering teams to plan and deliver projects in collaborative workspaces. Since debuting these capabilities, 14% of Planview Portfolios customers now each have hundreds of actively syncing projects between Planview ProjectPlace and Planview Portfolios, with one customer already syncing as many as 9,400 projects.
• Announced the winners of its 13 th annual Vision Awards, honoring Planview customers who have achieved their strategic objectives and key results by partnering with Planview. Honorees included: Blue Shield of California, Commonwealth Bank of Australia, Corning, and FedEx.
• Honored the following partners for their excellence in collaboration and driving impact for our customers: Infosys, AWS, and PwC.
• Recognized as a leader in the 2024 Gartner® Magic Quadrant™ for Strategic Portfolio Management. The company was positioned furthest for Completeness of Vision.
• Named a Leader in The Forrester Wave™: Strategic Portfolio Management Tools, Q2 2024. According to the report, “Planview’s end-to-end planning and delivery capabilities provide optimal visibility.”

Partner and Customer Achievements

To deliver on the company’s vision for connected work, Planview continues to expand and invest in its partner ecosystem and celebrate its customers’ successes. Highlights from the first half of this year include:

• Hosted more than 50 partners across two ‘Partnerview’ events in London and in Singapore
• Partnered with Accenture to deliver an enterprise-wide transformation project for a $90 billion logistics company
• Added 102 net new customers
• Increased the number of customers actively co-developing through Inner Circles by 15%, approaching nearly 2,500 individual participants across the program

“We are thrilled to see increasing engagement from our customers. Our co-development program puts us on the frontlines with customers seeing directly where innovation is needed and impactful,” said Louise K. Allen, Chief Product Officer at Planview. “We are uniquely positioned to give organizations a connected view of all their work and initiatives, in the context of their demand and capacity, to make timely prioritization and planning decisions.”

Notable customers who significantly expanded or started their connected work journey with Planview in the last six months include: Apple, Bank of England, Bank of Montreal, British Telecommunications, Charles Darwin University, Daiichi Sankyo, Dell, Dyson Technology, FedEx, Ford Motor Company, Health New Zealand: Te Whatu Ora, Olam International, Qualcomm, Raytheon, Siemens Energy, Sherwin Williams, Shutterstock, Swarovski, Texas Department of Transportation, University of Southern California, and Vanderbilt University Medical Center.

Planview continues to invest in product innovation, customer success, and go-to-market. In October, Planview will host a two-day virtual industry conference, Project to Product Summit. This inaugural event aims to advance the practices and methods that enable organizations to thrive in the age of digital product delivery and focuses on key dimensions of a project-to-product shift. To learn more or to register for the event, visit https://projecttoproductsummit.com/ .

About Planview

Planview has one mission: to build the future of connected work, from ideas to impact. Planview helps organizations accelerate the achievement of what matters most, supporting our customers from need to speed, from passion to progress, and from overhead to optimization. Our connected platform of solutions underpins the business and digital transformations of more than 4,500 customers globally, including 59 of the Fortune 100. Planview empowers enterprises to improve time-to-market and predictability, increase efficiency to unlock capacity, and ensure their most strategic initiatives deliver the desired business outcomes. Learn more about our portfolio at planview.com, and connect with us on LinkedIn and Twitter.

Rachel Austin Director of Corporate Communication [email protected]

View source version on businesswire.com: https://www.businesswire.com/news/home/20240731602550/en/

Market Updates

Markets brief: back on recession watch, what’s happening in the markets this week, 10 top-performing dividend stocks of july 2024, best- and worst-performing stocks of july 2024, july jobs report forecasts show moderating hiring gains, elections and markets are a mixed bag, 5 stocks to buy now and hold for the long term, markets brief: fed interest-rate decision looms, stock picks, 3 dividend stocks for august 2024, exxon earnings: strong quarter demonstrates progress on long-term objectives, august 2024 stock market outlook: small-cap and value stocks shine, after earnings, is coca-cola stock a buy, a sell, or fairly valued, coinbase earnings: net income declines as lower volatility drives down trading volume, snap earnings: attracting users and advertisers remains a constant struggle against giants, albemarle earnings: plummeting prices pause expansion plans, intel earnings: ugly news and many concerns, sponsor center.

Rethink Ireland: Five-year plan for a €200m social innovation fund

Deirdre Mortell, CEO of Rethink Ireland, whose aim is to develop a social innovation fund of up to €200m within the next five years.

Rethink Ireland is aiming to build its social innovation fund up to €200m within the next five years — music to the ears of those working to enhance people’s lives in communities all over Ireland.

This marks a significant acceleration for Rethink Ireland, having recently marked the milestone of transforming one million people’s lives, with a philanthropic funding total of €109m built up over the previous nine years.

“This funding is critically important to the groups we support,” said Deirdre Mortell, CEO of Rethink Ireland. “Everybody within Rethink Ireland realise what it means to have reached this milestone.

“Everybody knows very well what they contributed to make that happen. They know that it’s really a gift to work to help others. We also make sure that our donors get a chance to participate in the joy.

“Whether they’re donating €50 or several millions of euro, they can clearly see the impact their donations are having in communities across every county in Ireland.” 

 To date, the €109m raised by Rethink Ireland has helped over one million people in charities, educational and health groups for disadvantaged communities and others.

In the past nine years, Rethink has launched 58 funds, backed 448 innovative projects and supported 137,134 learners. Its funds have supported over 1,000 jobs created in the non-profit sector, with over 3,300 people supported into employment.

Big donors have included: IPB Insurance, donating €4.4m for social inclusion projects; Z Zurich Foundation investing €1.5m in youth mental health; Mason Hayes and Curran donating €900,000 towards educational projects in disadvantaged communities; and the Parkes family in Limerick making significant donations to a range of projects in Munster.

Rethink Ireland and its partners recently launched the Resilient Cork Fund 2024-25. This eight-month €570,000+ fund will support up to six projects, with a particular focus on enhancing the lives of migrants, refugees, asylum seekers, other ethnic minorities and other groups facing discrimination and social exclusion.

“There are so many inspirational organisations that we have invested in,” said Deirdre Mortell. “For example, we have invested €1.5m since 2017 in iScoil, which has allowed them to work with over 1,000 people aged 13 to 15 to provide them with an online education.

“Their online model is built around the student, giving them an individualised education and getting them a qualification they wouldn’t otherwise have attained. iScoil helped 315 young people in 2022 alone, scaling that up to 1,000 in the past year.

“Of course, we never just give out grants. Our work is also about the business supports to scale up their services. To scale up, you need access to data. You need a strategic plan and you need to be able to communicate your vision.” 

 Deirdre also cited mattress recycler Bounce Back Recycling as a project which is continuing to scale up. Backed by €827,000 of Rethink Ireland funding, the group began life in Galway, quickly grew to cover Connacht and is now nationwide.

“They are currently recycling 20,000 mattresses per year. They plan to recycle 800,000 mattresses per year by the end of 2025. The local council authorities are delighted with all the waste they are keeping out of landfill.” 

More than 80% of those working for Bounce Back Recycling are members of the Galway traveller community. These were primarily men who were unemployed.

“They decided to create their own jobs. “The project now employs around 20 men,” said Deirdre Mortell. “Meanwhile, Bounce Back Upcycle is a group created by traveller women to upcycle furniture.” 

 For this group to continue to expand to 80,000 mattresses per annum, it has had to develop new machinery to take the mattresses apart. For this level of forward thinking, of course, the group needs to know that it can rely on multi-annual funding. Again, Rethink Ireland’s strategic role in this is critical.

Deirdre said that Rethink Ireland, with its own ambitions to expand, fully comprehends the vital role that reliable access to funding plays in being able to plan ahead.

“Without a three-year commitment from us, Bounce Back Recycling can’t invest in the machinery they need to expand,” she explained. “The same is true for Rethink Ireland. Without our donors, we cannot develop a strategic plan.” 

 Earlier this year, when the team at Rethink Ireland paused to measure what they had achieved to date, the data gave them all a huge lift. The numbers were an affirmation of all they had done to improve the lives of their fellow citizens.

Since 2016, Rethink Ireland has partnered with companies like Google.org, Bank of America, and IPB Insurance, as well as families, individuals and foundations to build a €109m social innovation fund.

While announcing the statistics on achievements, Rethink Ireland again turned the spotlight onto the people within the projects its funding was supporting.

They cited Sensational Kids, a group which has grown its presence from a base in Kildare to operate in every province, changing the lives of more than 10,000 children and saving their families over €2.5m in therapy fees.

Another organisation, Trinity Centre for People with Intellectual Disabilities (TCPID) demonstrates the importance of equality and systems change. The centre promotes the inclusion of people with intellectual disabilities in education and society, providing the opportunity to participate in a higher education programme designed to enhance their capacity to fully participate in society as independent adults.

The proven success of the TCPID model, as an exemplar of best practice, has persuaded the government to introduce a pathfinding pilot programme providing funding supports to ten higher education institutions in Ireland for expanded access to education for people with intellectual disabilities.

“Helium Arts in Mullingar, Co Westmeath, are doing great work with children in hospitals and clinics, many of whom have chronic illnesses,” said Deirdre. “These children are in and out of operations and they don’t have any children around them to play with.

“Helium Arts allows these children to take part in creative arts, often sending art therapists into the waiting room. They help calm the children, and they’re a very welcome support to a parent whose day may have started at 6am to get the child to the hospital for an appointment. The doctors are also delighted to see the children so calm before they arrive in for an operation.

“It is another powerful example of how the money from our donors is used to transform people’s lives. It is also a great example of a project scaling up to help more and more people.” 

 To date, Rethink Ireland has invested €2m in Helium Arts. In 2018, the group helped 300 children. It now stands at 1,500 children, with a goal to bring its services to up to 6,000 children by the end of 2025.

As Rethink Ireland develops its strategic plan to expand its supports for life-enhancing projects for communities all over Ireland, it is also looking into evolving areas within social innovation, including digital marketing and environmental innovations.

As this plan evolves, we can expect further expansions to its own team as it brings in new people with a range of new skills to its core team as well as at board level. Watch this space. 

rethinkireland.ie/current_fund/resilient-cork-fund

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