Mastering the Strategy of Innovation

Mastering the Strategy of Innovation

“The entrepreneur always searches for change, responds to it, and exploits it as an opportunity. The non-innovator will ignore it, or be paralyzed by it.”

Peter Drucker, Innovation and Entrepreneurship: Practice and Principle

Introduction to Innovation: why do businesses seek innovation?

An Innovation strategy is essential for companies to drive growth and stay competitive in changing markets.

Businesses often have a thirst for greater innovation but the underlying drivers of that desire can vary greatly. Some examples include:

A lack of visible idea generation

Strategic innovation generates and implements novel ideas beyond the core business to support long-term growth and achieve strategic objectives.

Is the business short of ideas or do ideas just lack a way to surface? Many businesses have creative employees that live and breath their markets, developing new ideas to solve either customer or internal problems all the time. But it’s also common for those same employees to lack a route to communicate and develop those ideas any further.

A lack of change agility

Innovation efforts require a framework aligned with strategic goals amid rapidly evolving business dynamics to create products and services that meet evolving customer needs.

If an organisation struggles to implement change at pace, then this can have a direct impact on the level of innovation that a company can achieve.  Idea generation counts for little if those ideas can’t be tested and then either dropped or progressed at speed.

Growth stagnation

Driving innovation demands an objective review of the company’s direction and business model to identify areas for improvement and opportunities for growth.

Companies can have a history of effective innovation leading to a period of strong growth, but that period could be coming to an end.  What disrupted the market yesterday is commonplace today.  Continuing to polish previous products might not be enough to return to growth – more of a step-change is required to enter new markets.

Missing the unseen opportunities that are around the corner

New technologies, new products that satisfy previously unmet customer needs or new methods of distribution are just some examples of market disruptions that companies can struggle to compete against. Guarding against these sorts of market threat requires action on multiple fronts: awareness of macro-trends, insight into competitor and customer behaviours and an ability to either lead the change or follow rapidly.

Fear of missing out

If competitors are innovating (which many inevitably will be), then you always run the risk of being left behind.  Either you’re leading the change, following fast or you’re failing to keep up. A strong innovation capability gives you a much stronger platform to respond.

A culture of innovation led by executives encourages cross-functional collaboration and experimentation to support innovation initiatives.

What are your innovation objectives

Innovation Strategy Examples

The temptation is to “just do something”, but this normally leads to confusion and mixed outcomes. By starting with a strategic approach, in our experience, being clear on where the organisation is heading and what it should be focused on gives a much more solid foundation for building innovation.

The first step in building an effective innovation capability and culture is based on having clear objectives for that capability. Where do you want to be by the end of your strategic planning period (and beyond)? Are you preparing for disruption or driving it? What market pressures are going to cause you to act?

Ultimately, the objective of effective innovation is to make your strategic plans more achievable and robust. Whether it’s new sources of growth or defending a leading position from competitors, the ability to innovate quickly and effectively makes the future outlook more secure.

Understanding why innovation is needed, what it means, what must be achieved and what it will take (funding and prioritisation), provides a recipe for success.

The need for innovation to be executed within an organisation

This is where the innovation strategy hits reality and activity begins. Your strategy needs to be translated for each business area so they understand their role in innovation. A clear roadmap and approach to the innovation lifecycle should be determined. There can be many streams of activity, but all must align to the overriding innovation strategy.

Innovation can take many forms, and is often a mix of constant incremental innovation and step-change innovation; as an organisation you need to determine the mix needed. 

Delivering that innovation will depend on your ambitions. If you build it into BAU, you will drive continual innovation, but may miss out on larger ideas.

Focusing on more disruptive innovation often takse separated, even external, resources as the ability to think differently can be hard to achieve when faced with daily work pressures.

The best strategies must be cognisant of culture

Although we recommend starting with strategy, culture must not be an afterthought. “Culture eats strategy for breakfast.” Peter Drucker is still right. No matter how good the strategy, you ignore culture at your peril. Innovation, at the end of the day, is people-centric. 

Even with a clear strategic focus, extensive future roadmap and a well-designed process, innovation success is still not guaranteed. Organisations must remember that they are powered by people not machines. You need people who are passionately dissatisfied, who care enough to change their world, providing the chance of having better innovation. 

Leaders must create an environment for innovation to thrive, not just survive. You need to create innovation approaches that align with your culture, but also will change your culture into what it needs to be. This starts with leaders, who must exemplify the attitudes and behaviours needed. 

Action Plan for Innovation

We can help you to refine your strategic objectives and build a compelling innovation capability

Camelot’s Strategy & Innovation experts can help you to identify strategic innovation goals, determine the nature of innovation needs in your business and select the best route to delivering greater innovation capability. 

Our experts can work with you to deliver interventions and change to bring innovation to life. Our experienced experts use cross-sector insurance knowledge to offer a range of impactful services such as:

• Assess the current strategy and state of innovation against competitors to determine and clearly define your innovation objectives

• Partner to develop innovation strategies and roadmaps to achieve your objectives 

• Develop innovation process blueprints to upgrade your current delivery mechanisms

• Facilitate focussed workshops to engage key people in innovation activities that identify new solutions and build their capabilities

  
  

If you would like to understand the current state of your innovation approach, take this 5-minute assessment to give you a readout in six key areas.

Please get in touch to discuss how we can work with you and take the next steps.  We pride ourselves on the flexibility of our model – we always look for a solution and a way of working that’s tailored to each client’s needs.

About the authors

Chris Hazell has spent 20 years in the insurance industry advising business leaders, executives and Boards at major insurers.  Chris has led internal Strategy and Corporate development teams in the Insurance industry and worked as an external consult.

Harvey Wade is an experienced innovation leader who drives business impact from transformation and change programs. He knows what it takes to create, drive and sustain improvement in organisations, changing cultures to increase engagement and buy-in at all levels, enabling better performance and results.