Why Business Strategy Requires Disciplined Innovation Process
No matter how sophisticated the field of corporate strategy has become, companies find it extremely challenging to ‘do’ their new strategies. That is because companies, and even whole industries, are legacies-in-action of earlier strategies, which have been encoded into existing business models, product categories, and market segments. New strategies—the pursuit of new categories, segments and business models—therefore confront layers of assumptions, operating procedures, and non-negotiables that work as an immune system against strategic innovation. The Next Practice innovation process was designed to address this challenge in five ways:
- Governance is key. The process establishes clear and adequate C-suite mandate to shield innovation efforts from standard metrics, operating procedures, and management culture that might constrain ambitious experimentation. The governance of the process by executives creates managerial license and space for aggressive undertakings.
- De-risking change. By isolating experimentation from existing business operations and by staging innovation, the process manages risks associated with testing and launching a new product category, business model, and/or partnership in sometimes unfamiliar segments. The ‘stretch’ parameters for innovation at each stage are also clearly defined so that exploration is disciplined.
- Bespoke analytics. The process uses a variety of customized analytics methods to produce granular definitions of new opportunity spaces for which data is not readily available. These analytics further focus and discipline the innovation. They also create an early advantage relative to competitors who approach the market with readily available data and conventional off-the-shelf consultant analytics.
- Co-creation management. Truly strategic innovation involves the creation of a new category or new market ecosystem to deliver value to a new segment. This often requires collaboration, if not also partnership, with non-conventional counterparts like government institutes, social sector organizations, producer cooperatives, cultural institutions, and informal enterprise networks. The Next Practice process uses tested staging protocols for selecting, testing, and evolving these collaborations.
- A new ventures approach. Even the best innovations often fail to survive a market launch that is brought back under the management and metrics of the existing organization. In parallel with market piloting and entry planning for the innovation, The Next Practice approach works with the project governance committee to develop an organizational home, management team, investment plan, and metrics tailored to the requirements of the new business and its successful market entry.
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© Jeb Brugmann, 2009. All rights reserved. May be reproduced and circulated with authorship and copyright attribution. Source: www. jebbrugmann.com