How To Better Match Your Innovation Strategy to Your Innovation Ecosystem

By Mostafa Sayyadi and Michael J. Provitera

In this article, we place a new emphasis on innovation strategy. Innovation strategy is a critical factor in enabling organizations to build knowledge-based organizations that can create and implement innovations timely as they operate and compete in global markets. For companies to achieve sustained change and eventually a higher degree of efficiency and effectiveness, fostering a great innovation strategy is the key to success.

Introduction 

Innovation and creativity have similarities but the best approach to achieve higher profitability is to consider them separately. [1] [2] [3] [4] The novelty, however, is common to both. The point of difference between these two concepts is their operational capability. Although creativity and innovation both originate from the creation of new knowledge, innovation is the product of new knowledge that can be operationalized to change, improve, and optimize existing systems. [5] [6] [7] [8] This change, improvement, and optimization does not always mean extensive changes in technology, but even a small change to improve service delivery is considered an innovation. We must view innovation in two forms: continuous innovation and disruptive innovation. Organizations include these two forms of innovation in their innovation development strategy so that they can maintain their superiority in the market (continuous innovation) and predict future changes and effectively respond to them (disruptive innovation). Through understanding the hidden and unmet needs of customers, disruptive innovation acts as an accelerator and encourages employees to challenge the existing norm and build a new order to optimize products and services. This form of innovation helps organizations emerge as leaders in their industry.

An effective innovation strategy, which includes continuous innovation and disruptive innovation, helps the most innovative organizations predict changes better than their competitors. [9] [10] [11] [12] The lesson that Covid-19 has taught many organizations in the world is that change is always possible. Hence, many routine operations that have now become an integral part of many business processes can quickly become obsolete and be replaced by new operations. Adapting to and anticipating new changes in the business environment sooner than the competitors is tantamount to success. In this article, we present the characteristics of an effective innovation strategy and provide a blueprint for organizations that want to be more effective at managing their organizational knowledge. 

Long-Term Approach

Executives feel the same pressure to achieve short-term returns as many other organizations but as a conceptual leader, the focus is usually on the long-term approach. This works, but while it is in the process, many competitors and rivals bid on taking over the organization. In particular, R&D managers, who represented the top organizations in innovation in Australia, mentioned that their organizations scored high on a scale that was related to their long-term vision. In fact, leaders showed that adopting a more long-term approach takes the pressure off and they felt more patient in getting results than their competitors that focus on quarterly results. 

Design Thinking

Design thinking is a mindset built upon a framework of innovation and creation. [13] [14] [15] Human-centered thinking is based on the argument that instead of identifying the cause of problems, the problem can be solved in a completely creative way by working backward. The great Wall Street divide was based upon those who can create the most esoteric mortgage-backed securities but when things began to unwind, the design thinkers had to unwind the bonds back to mortgages. We follow the Harvard Business School formula from the article titled “Design thinking.” Brown based his article on four steps, clarification, idea generation, development, and finally, implementation. In the first step, research should be conducted in the organizations to discover the problems. In this step, experts should clearly identify the areas that suffer from the problem and inefficiency. This step is considered to be a goal-setting point to solve the problem. The problem should be also presented in such a way that it can be solved. Next, organizations should look for new ideas and create new knowledge. In this step, human capital should be encouraged to produce ideas to solve this problem and put the organization on the right path to solving the problem. Next, the most practical ideas are screened from non-practical ideas, and then the best idea is selected. This selection is the distinguishing point between innovation and creativity. In this step, the best idea is converted into action (i.e., innovation). Finally, the best idea is selected and presented to the relevant departments to solve the problem and generate value. Brown put it mildly in his article:

Thomas Edison created the electric lightbulb and then wrapped an entire industry around it. The lightbulb is most often thought of as his signature invention, but Edison understood that the bulb was little more than a parlor trick without a system of electric power generation and transmission to make it truly useful. So, he created that, too. (Tim Brown, HBR, June, 2008)

Disruptive Innovation 

The next important characteristic is the simultaneous focus on continuous and disruptive innovation. By simultaneously focusing on these two tenets there is a clarity of roles in the distributive innovative prowess in organizations. By collaborating among the various departments, the innovative process is reinforced, thus leading to continuous and disruptive innovation. Employees and managers in these organizations perform their duties through extensive collaboration among departments. The kernel here is that incentives must be provided. Many silos exist because the culture does not promote collaboration. James Clawson, senior management consultant and author of Level Three Leadership, suggests that innovative quality development teams must really understand the concept of innovation and they must have highly interactive meetings. Program managers and the strength of individual leadership coupled with a successful hiring process will seek out talent, effectively onboard them, and draw upon their skills when necessary. Networking and diagraming what personal networks look like is important but the actual incentive to build an innovative process that is not only disruptive but also continuous is the way to build competitive advantage. Rewards must be based on both individual achievements and innovative team accomplishments, and this is a creative incentive system. 

Incentive Systems

To be innovative, organizations must design incentive systems that work. Building a network of professionals is not enough. Employees need to be nurtured and motivated and the best way to do this is to provide incentives and remove silos and fiefdoms. Incentive systems are used to acquire new ideas so that employees can more effectively participate in innovative activities. Human capital, organizational capital, and social capital can be built with a strong foundation based on incentives and a culture that strives for innovation and creativity. By adopting a long-term approach and being patient with results in the short term but also rewarding people accordingly, leaders anchor an organization in a solid foundation for success. 

In Conclusion 

Given the nature of incentives, it is easy for organizations to get off track and find their company piled deep in inertia. The most innovative organizations have gone beyond many apparent contradictions, such as warding off a continuous and disruptive innovation focus. Today, organizations must reach a complete alignment from problem recognition to solution implementation. New ideas are tantamount to an organization’s success. Fostering an effective innovation strategy to surpass competitors requires including these characteristics mentioned in this article in your strategy.


About the Authors

 

Mostafa SayydiMostafa Sayyadi works with senior business leaders to effectively develop innovation in companies and helps companies—from start-ups to the Fortune 100—succeed by improving the effectiveness of their leaders. 

Michael ProviteraMichael J. Provitera is a senior faculty professor of Management and Leadership, in the Andreas School of Business at Barry University, Miami, Florida, USA . He is an author of Level Up Leadership: Engaging Leaders for Success, published by Business Expert Press.

References 

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