Laying the foundation is the most important part of building a house and it is also the most important part of building a world class innovation organization. This foundation is laid down during the strategic planning process. It is important that the corporate strategic plan ensures that innovation is considered during the strategic planning process.
The foundation of our house of innovation is dependent on 6 basic premises:
- Strategic Alignment and Communication
- The Voice of your Customer
- Your Company’s Build/Buy/Partner/Acquire sourcing strategy
- White Space Road mapping
It is important to realize that building a foundation is not a one step process. So as a company you must look at these topics and prioritize what you will work on based on how good you are at each and how critical you feel each step is for your success. I will not get into the specifics of how you should rank and score each of these, but I will define what each is and why you should consider all 6 of them when determining how you want to build your foundation.
- Strategic Alignment and Communication
Far be it from me to lecture you on how to create your company’s strategy. Never lecture the artist on how to make art. However, the most important part of a strategy is making sure that it cascades down throughout the organization and that each team has a specific understanding of what their team strategy is and how it relates to the corporate strategy.
Think I am full of crap? Here is a challenge, find your lowest level team leader and ask them 3 question:
- Have you seen and do you understand the corporate strategy?
- Can I see your team strategy document?
- How does what you do impact the overall strategy of the company?
The answers to those 3 simple questions will not really surprise you if you are looking in the mirror every day, but they will tell you what you need to focus on when it comes to Alignment and communication.
- The Voice of your Customer
There is only one question you must ask yourself or your team on this one to know where you stand.
- Can you show me the Customer Discovery Documentation?
Enough said. Oh, and do not accept the, “we really don’t have any customers” answer. We all have customers.
- Your Company’s Build/Buy/Partner/Acquire Sourcing Strategy
One of the major flaws when communicating a strategy is not communicating the guardrails that drive many decisions, especially in technology and innovation.
It is imperative that your team understand when it is considered smart to build, buy, partner and what the M&A strategy is.
As and example, if your company builds widgets and the innovation, you are looking at is about that primary business of building widgets, then what cost breakdown of build versus M&A decisions. Or if the innovation is around support what or the constraints on buying versus partnering.
- White Space Road mapping
What the heck does that mean. Well, every good strategy discussion/document has areas that need to be addressed but we have absolutely no idea what technology or innovation we need to accomplish the task. White Space refers to the fact that under the task there is nothing of substance on that page of the strategic plan, a blank spot, or White Space.
No innovation team can be truly effective if they do not have access and understanding of where the “White Space” exists within the strategic plan. Without that knowledge what does the innovation team do besides make stuff up.
- SWOT Analysis with a focus on opportunity
When looking at innovation you need to also understand what the disruptions to society, business and technology are anticipated to be in the coming years. These disruptions do cause a multitude of challenges that the company will need to address while at the same time providing an equal number of opportunities for new revenue or greater revenue if the disruptions are leveraged properly. Those opportunities are what can differentiate your business from all others.
- How we identify high growth opportunities
This is another one of those keys that is defined buy your corporate personality. The team must have a process that vets the list of innovations you have found. This process must filter things down based on the risk bias of the company you are acting as the innovation scouts for. If your leadership is risk adverse you may prioritize your innovations differently than if your leadership has a high tolerance for risk.
There is also how you represent the variety of innovations you find. I have also found that using a Radar like graphic that show the Horizons of when the opportunities will be available to the public is helpful. It allows decision makers to understand when the competitive advantage of the decision they are about to make vaporizes. That talks to all executives regardless of their tolerance of risk.
Whew! Now that we have laid out the details of what the foundation of our house of innovation looks like, I fell so much better. Wait…now we must put the frame together? Ok, well let me take a little break and figure out how that needs to go up. Talk to you all when I have that put together.
In the meantime, …
Stay Safe, Stay Smart and Stay Healthy!