A new approach to strategic innovation was published by Harvard Business Review on September 2023. This our summary with key take away. This article present an efficient visualization tool to monitor and present innovation portfolio.
Companies must continually innovate with projects that align with their strategic goals. Traditional approaches to managing innovation often fall short in achieving this critical alignment. This blog summarizes a recent article on strategic innovation, by Haijian Si, Christoph Loch, and Stelios Kavadias from the University of Cambridge’s Judge Business School.
The article, available at HBR.org, introduces a revolutionary Strategic Innovation Tool K. It has the potential to transform how businesses approach innovation.
Understanding the Authors
Before we delve into this innovative approach, let’s familiarize ourselves with the authors. Haijian Si, a former CEO of prominent Chinese new energy companies, brings a wealth of real-world business experience to the table. Additionally, his role as a doctoral candidate at the University of Cambridge’s Judge Business School underscores his commitment to cutting-edge research and innovation.
Christoph Loch, a professor and the dean of the University of Cambridge’s Judge Business School, is no stranger to the world of business education. His extensive background in academia equips him with the insights needed to drive change within organizations.
Stelios Kavadias, the Margaret Thatcher Professor of Enterprise Studies in Innovation and Growth, is also at the helm of the Entrepreneurship Centre at the University of Cambridge’s Judge Business School. His expertise in enterprise studies and innovation further enhances the credibility of the presented approach.
Unveiling the Strategic Innovation Tool Kit
At the heart of this new approach lies the Strategic Innovation Tool Kit. A comprehensive framework designed to bridge the gap between innovation projects and strategic objectives, this tool empowers companies to forge a direct link between their innovative endeavors and their competitive strategies. Let’s explore the key components of this tool kit:
Creating Strategic Alignment
The authors emphasize the importance of grounding innovation in a company’s strategic foundation. The strategy summary framework serves as a guide to help companies articulate their strategic positions. By addressing critical questions such as “what, who, why, and how,” businesses gain insight into their competitive strengths and vulnerabilities. This process not only illuminates weaknesses but also unveils innovation opportunities that can drive the company’s strategic goals.
Designing the Innovation Basket
The tool kit introduces a paradigm shift from the traditional portfolio approach to a more tailored innovation strategy. The authors propose an “innovation basket” concept, where projects are categorized based on their alignment with specific innovation goals. By mapping projects to areas of the business model where they add the most value, companies ensure that innovation efforts are in harmony with their unique competitive strategies.
Filling the Basket and Iteration
The journey continues with the evaluation and refinement of existing innovation projects. Projects that do not align with strategic goals are removed, making room for new ones that better support the strategy. This iterative process ensures that the innovation basket evolves in response to changing strategic dynamics, creating a continuous cycle of alignment and improvement.
Numbers and Metrics
After multiple iterations, the tool kit introduces quantifiable targets for each innovation goal. This step ensures that the selected projects contribute meaningfully to achieving the company’s strategic objectives.
Case Studies: Realizing the Power of Strategic Innovation
Two compelling case studies bring the tool kit’s transformative potential to life:
Glass, Inc.: Achieving Focus and Realignment
The optical devices division of Glass, Inc. utilized the tool kit to address growth challenges. By identifying weaknesses and mapping change needs, the company repositioned itself for success. The process led to a more targeted and impactful innovation portfolio.
BAT: Strategic Reinvention through Innovation
Battery company BAT underwent a strategic shift, leveraging the tool kit to identify a growth opportunity in a different technology segment. The process not only guided project alignment but also played a pivotal role in shaping BAT’s strategic direction.
Fostering a Culture of Strategic Innovation
Implementing the Strategic Innovation Tool Kit requires a cultural shift within organizations. Open communication, collaboration across functions, and emotional engagement are essential components of this approach. By fostering motivation and readiness to act, businesses can ensure that their innovation efforts remain closely tied to their unique competitive strategies.
Conclusion: Transforming Innovation and Strategy
The traditional approach to managing innovation projects may lead to missed opportunities and misalignment with strategic goals. The Strategic Innovation Tool Kit, as presented by Haijian Si, Christoph Loch, and Stelios Kavadias in “A New Approach to Strategic Innovation”, offers a groundbreaking alternative. By adopting this tool kit, businesses can achieve true strategic alignment, unlock new growth opportunities, and drive transformative change.
References
- HBR.org.
- Unleashing Creativity: why is Innovation Management important?
- What is innovation? 11 Definitions and perspectives.
- What are the different approaches to innovation strategy?
