For Eraneos I’ve written this article about choosing the right innovation strategy. The article can be found on the Eraneos website. Below is my maintained article.
Most of the communication and skills in the field of innovation are aimed at ‘discovery’. Discovery is about how to free yourself from your biases, daily grind and set ways to see the world with a new perspective. The goal: find, research and try meaningful and interesting innovations and fields that might become relevant for your business. And, what if you find not one, but over a hundred topics and relevant technologies?
It might sound silly but when you are an innovator inspiration is abundant and opportunities seem limitless. For most this wealth of innovation can be suffocating and create dissonance. Where to begin? And, how do you separate hype from helpful?
It is time to find a way to focus your mind, budget and resources. With our innovation strategy matrix you can start learning fast and building the skills and team to not only discover, but also practice innovation. That is where the rubber meets the road: practice! Let’s make some choices.
A strategy to focus your energy, learn and create impact
The innovation strategy matrix is as easy and as powerful as they come. It revolves around the one premise that innovation strategy for a topic is not a “yes or no” choice. Your strategy for a particular innovation topic is not whether you want to do something, but what you do with the topic. We identified eight possible actions.
Before we get into the eight actions, it’s important to know that an ‘innovation strategy’ is the answer to the question: “What should we do with this innovation topic in the upcoming period of time?” Our innovation strategy matrix is a grid where you answer this question for every innovation topic you’re interested in, or where you like to know more, or like to participate.
In the matrix: Eight strategies for every innovation topic
We could of course say for each topic we’ll invest 100% into this, and 0% into that, but most innovation practice is about connection. Innovation is about finding valuable overlap between various innovative technologies, innovative applications of old tech, or for example affordable technology through economies of scale.
So, a “yes” or “no” answer does not suffice. Your goal is to determine your effort and the shape of your effort for each topic, keeping in mind that some topics are interesting because they might connect with others, or might become relevant whether you like it or not.
Introducing our eight strategies you can apply for each topic, in no particular order:
Choosing not to spend energy on an innovation topic could be the best road to take for many topics and takes the least amount of resources.
Choosing (for now) to ignore a trend, technology, or innovative product helps you focus on more important topics.
Although, ignoring takes almost no effort, or resources, we advise to make sure a topic stays on the list until it has run its course according to the market.
Make sure the topic is on your list when you re-evaluate your matrix.
You are curious how this innovation topic might become more relevant for you, but you are not an early adopter for this topic.
You choose to observe at a safe distance. Once the innovation becomes a commodity, you might step in and incorporate.
In practice, it means to have one or two experts follow the news feeds and attend a conference once a year. Just to check.
We use follow as a low effort strategy to act quickly when a topic becomes relevant. If you think a topic might be interesting to others, or is at the point of breakthrough – follow.
You see relevant innovation topics. Once it reaches the maturity you are looking for, you build out your capabilities and start joining existing groups to boost the learning speed.
Joining your peers helps you to quickly catch up and it ensures that you are not missing out from that point on.
This strategy takes effort from some experts, and probably is also a strategic decision, so other parts of the company can follow along. This topic is important and relevant now.
Innovation can change your industry or market fast. All of a sudden the competition just grabs the topic and starts publishing and using the innovation in their communication and perhaps even their business.
To act fast on those developments, you need to be ready. You need capabilities and knowledge ready to adapt, improve and overcome threats and opportunities. This strategy needs both intimacy in your industry: track what the competition does and also a firm grasp of the innovation topic.
The strategy can be implemented by combining external expertise and internal alignment, so you can act fast, without wasting time and resources.
Growing slow and learning iteratively helps the quality and ability to discover and incorporate innovation by your organization. To be frank, this is the most preferable and sustainable way to invest into innovation.
It allows you to not only track and discover a topic, but it also trains the muscles and gets you familiar with the activity of innovation. You’ll notice that the reasons to grow a topic are rather intrinsic. People can’t help but to tinker and do research. Encourage this behavior, but don’t get stuck.
You should grow at your own pace, learn and not only cope, but embrace innovation as an activity. It also inspires autonomous progression from within. Effort and needed resources are relatively high and the yield is potentially transformational.
Have at the least one or two of these topics in your innovation strategy matrix.
Leading innovation creates energy, lowers risk and ensures success of a growing innovative topic. You’re basically creating a self-fulfilling prophecy by creating an ecosystem, means and connections to have others adopt the innovation topic.
This takes more than just innovation know-how of both the activity and the topic at hand. Added to those, you’ll also do external marketing, social engineering and orchestration of your vendors and partners.
When you are ahead of the curve, it is good to also focus on building community, collaboration to maximize success and speed.
At this level, the innovation topic is already at the core of your business and you are already invested into the topic. This will grow. Aim to also pivot from research to operation.
Participation is not the only way to add value in the innovation space. Supporting multiple innovation initiatives through funding and facilitation can be greatly beneficial in the long run.
This strategy is meant for organizations with both an abundance of resources, and also a potential stake into the success of the topic at hand.
A boost can be monetary, resources, space, connection and perhaps context. It puts you in the seat of the beneficiary and if you play your cards right, also on the steering comity.
It might be even considered a risk-averse strategy to grow. Follow-up strategies might be an investment into the vendor company, a take over, or majority stake into the adaptation phase.
The one ‘strategy’ most of us cannot afford is not choosing at all. Prevent distraction for yourself, your leadership and ensure a long life for your innovation program.
Of course, not choosing is basically not now, but not filling your matrix just causes panic when you need to act.
Take control of your organization’s destiny and business at large and invest into making clear choices and calibrating those choices regularly. Be inspired, rather than confused.
Set an innovation compass now and choose a fitting strategy.
Innovation Budget Bell Curve
In order to maintain focus and accelerate progress, we use the Innovation Matrix Bell Curve. It’s a short calculation on what you spend most time on, ideally creating a perfect bell curve. The goal is to heavily invest in one, or two topics, rather than twelve. If all topics are important, no topics are important.
With the right balance of time spend, you will see a nice bell curve with a nice curvy top and a broader base. If your time spend is too spread out: you’ll get a flat curve, showing a lack of focus. And if your bell curve is very spiky and narrow with no base you might be suffering from a lack of adventure or inspiration.
With the help of our Data and AI team we created an easy, ready-to-go innovation strategy model to both calculate and optimize your choices. The model is aimed for you to discover whether your innovation portfolio is well balanced and if it will yield the right results.
Remember – your choices can be changed at any time, but your Innovation Budget Bell Curve should remain healthy. That is why you need to re-evaluate the strategy on some other topics, or themes as well.
Safe innovation? Innovation by proxy
When working on the matrix, you’ll notice that your Budget Bell Curve is quite flat. The reason might be that your organization is a bit stand-off-ish towards innovation. You might say: I don’t want to follow every fad there is, or invest in something that’s not a sure thing. And that is perfectly fine.
At this point in time the majority of commercial companies use the innovation-by-proxy model. Basically, have other companies take the risk, invest, do the research and start to follow their activities once there is a usable product on the market.
That is of course for most parts of your business canvas a very sane approach. As a boat company you don’t want to develop the latest AI-driven financial software, but you might be the first with the need for AI-driven 3D scanning software to break through in the cabin restoration market.
Often, our advise is get familiar with the activity and dynamics of innovation. Start with topics and technologies that are relevant for your core business and build your Innovation Strategy Matrix soon, so you can focus your efforts.
How to decide
How to start with filling in your Innovation Strategy Matrix? We make it easy and start by getting to know each other. We have a quick onboarding experience that will help you start quickly.
I can guide you into clear and concise rules to make the right choice for the upcoming 6 months. Why six months? It’s the time most organizations need to learn at scale and integrate innovation on a new level in their organization.
For interactive workshops, a maintainable innovation strategy matrix and of course our budget bell curve model, we have ready-to-go projects. No matter your scale, this will help you as a decisive leader, a growing company and participant of a healthy industry.