Innovations linkages to Strategy is vitally important

I have just finished the second of a planned series with one of my favourite long-term collaborators Jeffrey Phillips.

The link to this conversation is here, it is just over 15 minutes long. as a conversation between us, where we emphasise the important linkage between innovation and strategy. You might believe this is a no-brainer but you would be really surprised that this ‘tight’ linkage is often lacking.

Our first conversation called the Fundamental building blocks for innovation success (13 minutes), links here, introduces the series and the areas of our focus. I wrote a post supporting this “Getting back to the future about innovation”

All of these short conversations are drawing out the value of having an integrated approach through the Executive Innovation Work Mat, our central theme of the series and solution to integrating innovation.

In this latest conversation, Jeffrey and I argue most problems or disappointment with many innovation efforts within a business can be attributed to a lack of alignment to the organization’s strategy, resulting in poor growth and impact from innovations contribution.

We need to resolve that issue within any innovation activity, it needs a “tight” linkage to strategy.

Achieving innovation alignment always needs clear framing.

You do need a clear framework for innovation and Jeffrey and I believe this can be achieved through the work mat approach. This series is all about the different components of this work mat approach.

Alignment of an organizations strategy and innovation approach is essential and this needs to flow and connect from the top, but I have often felt there has not been a suitable engagement platform to gather around and work through to build a robust, well-connected innovation capability.

It is through this work mat we regard as our solution aimed at filling that gap.

In the video conversation with the link to this conversation here, Jeffrey and I discuss a number of helpful points of strategy and innovation linkage.

We argue many organizations seem to have alignment problems

A majority of people within the organization seem to struggle to connect innovation with their own place and contribution and this often both ‘contains and constrains’ innovation, they lack a mindset for it.

Having a distinct framework mechanism linking strategy and innovation becomes the innovation strategic foundation document that articulates innovation and provides the guiding aspects of innovation for others to work through.

Making that real alignment of strategy and innovation provides a good base

• Greater cohesion and consistency of purpose in your innovation activities
• A framework that raises the visibility of innovation as well as reduces risk and misalignment.
• Provide the mechanism for improving the workflow making innovation more dynamic and interconnected throughout the organization
• Deliver a greater connection & confidence that builds for lasting identification
• The use of frames becomes the organizing point for alignment of activities, measurement, compensation and recognition
• From this, you can derive inspiration, clarity and connecting and becomes a real sustaining source of impact and motivation.

The establishing of innovation within any Strategic thinking is becoming even more important today than ever.

Innovation drives the momentum towards 1) goals and visions, 2) it is the major catalyst in providing the growth and impact needed and 3) it builds the creation and potential towards new business models that can sustain and build your business.

To achieve the right innovation it does need framing and we speak of two framing activities specifically we see value to recognize.

Any construct of a Strategically designed innovation plan needs to work through different concepts and tools.

Two we mention in this conversation are the Three Horizon Model and the investment Portfolio structure over different times.

We use a specific image of the three horizons within the conversation but by simply typing “three horizons” into the search bar on this site you do get to an extended resource around the 3H.

The importance of the three horizon methodology has for me been a central aspect of how I focus on innovation building for years and you will find plenty of resources and references on this posting site. This includes White Papers and Series papers in the “Insights and Thinking” resource on this site as well

The other one we cover is establishing a Portfolio need across the three-time horizon points of your business; today, tomorrow (midterm) and the future (the 3H thinking framework)

Possible Three Horizon Investment Portfolio Allocation.

This is one  example of allocating appropriate resources

In this example above, as the knowledge of the market grows and the emerging understanding of the technology you have different horizons to invest in, to allocate your funds and resources but I feel this is a very “slow burn” allocation and the market might be changing faster than your response.

In many cases today the active portfolio is more pointed towards the future so allocation of funds, resources and time could be 20:40:40.

If you are in a highly dynamic, changing market it might look like 10:30:60

Keeping a very active portfolio in where to place funds and measure their impact is critical. Portfolio management should never stay still or static, it needs to adjust to the latest understanding and outcomes to reallocate funds and resources it is a fluid undertaking. 

Taking action in designing your innovation alignment

“Strategy informs”- it has to be explicit in its goals and intent. Knowing where to place your innovation thinking becomes critical; it is knowing where the leadership places its importance, its turning bets into likely wins’.

We have to keep asking those essential questions that link strategy and innovation in understanding.

• It becomes important to know if the growth is going to come through the acquisition of capabilities and competencies that fill critical gaps.
• What are those ‘perceived’ gaps? Can they be filled by shifting the innovation competencies, capabilities or capacities?
• If you are not ‘informed’ by strategy, you are simply ‘second guessing’ and here is where alignment breaks down by not having this understanding.
• Often the designers of strategy omit the essential details of “how we believe we will get there” and what are the primary resource levers to commit to this.
• This might be in having the need for a richer user engagement experience, a more robust futurist product portfolio to test, learn and explore potential options.
• It can be where it plans to invest its technology options to leverage knowledge.
• The strategy/ innovation dialogue is a constant probe; to clarify and adjust, to reshape and refocus.
• Strategy, like innovation, is dynamic, it is influenced by market conditions, internal needs and ambition.

Today we have even bigger, pressing issues that require this tight linkage between innovation and strategy. 1) We are faced with some very uncertain times, 2) there is a greater push in shaping new disruptive solutions, 3) we are facing increased time pressures to scale, speed and solve challenges and finally, 4) technology is becoming a dominating part of any solutions and innovation needs to link into this.

Today, we also need to consider a more sustainable future and preserve critical resources and this requires this tight linkage within organizations that innovation and strategy are working towards these goals.

Achieving innovation alignment always needs clear framing and the tighter the linkages to strategy gives a greater potential that innovation in outcomes is related to business, and more importantly, to market needs from the evaluations that have been undertaken.

Our next discussions will cover Governance, then Common Language and Communication and then one covering Structure, Function and Design, all drawing out the value of having an integrated approach through the Executive Innovation Work Mat, our central theme of the series.