A Framework for Strategic Innovation

A Framework for Strategic Innovation free pdf ebook was written by Soren on December 04, 2002 consist of 20 page(s). The pdf file is provided by www.raumer.com and available on pdfpedia since March 29, 2012.

a framework for strategic innovation from breakthrough inspiration to business impact a framework..is a future-focused business development framework that identifies breakthrough growth opportunities,..the “me-too” business models of industry followers, or band-aids for inefficient...

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A Framework for Strategic Innovation pdf




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A Framework for Strategic Innovation - page 1
A Framework for Strategic Innovation From Breakthrough Inspiration to Business Impact
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A Framework for Strategic Innovation - page 2
A Framework for Strategic Innovation Table of Contents 1. THE ART AND DISCIPLINE OF STRATEGIC INNOVATION ...3 1.1. 2. S ERENDIPITOUS VERSUS S TRATEGIC I NNOVATION ..................... 4 DIMENSIONS OF STRATEGIC INNOVATION ...........................5 2.1. A M ANAGED I NNOVATION P ROCESS – C OMBINING N ON - T RADITIONAL AND T RADITIONAL A PPROACHES TO B USINESS S TRATEGY .. 6 2.2. 2.3. 2.4. S TRATEGIC A LIGNMENT – G ARNERING I NTERNAL S UPPORT ....... 8 I NDUSTRY F ORESIGHT – U NDERSTANDING E MERGING T RENDS .. 8 C USTOMER I NSIGHT – U NDERSTANDING A RTICULATED AND U NARTICULATED C USTOMER N EEDS ....................................................... 9 2.5. C ORE T ECHNOLOGIES AND C OMPETENCIES – L EVERAGING C ORPORATE A SSETS ............................................................................. 10 2.6. 2.7. O RGANIZATIONAL R EADINESS – T HE A BILITY TO T AKE A CTION 10 D ISCIPLINED I MPLEMENTATION – F ROM I NSPIRATION T O B USINESS I MPACT ................................................................................ 11 2.8. S USTAINABLE I NNOVATION – A P LATFORM F OR O NGOING C OMPETITIVE A DVANTAGE .................................................................. 14 3. THE PATH TO STRATEGIC INNOVATION..............................14 3.1. 3.2. 4. I NNOVATION A SSESSMENT AND B ENCHMARKING .................... 14 E ND N OTE ............................................................................. 15 ADDENDUM: HOW INNOVATIVE IS YOUR ORGANIZATION?................................................................................16 © 2002 Strategic Innovation Group Page 2
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A Framework for Strategic Innovation 1. The Art and Discipline of Strategic Innovation Strategic Innovation is a future-focused business development framework that identifies breakthrough growth opportunities, accelerates business decisions and creates near-term, measurable impact within the context of a longer-term vision for sustainable competitive advantage. Combining non-traditional, creative approaches to business innovation with traditional consulting models, the Strategic Innovation framework inspires cross-functional teams composed of an organization’s leading change agents, guiding them to identify new revenue streams, to create breakthrough growth strategies, to define innovative new products, services and business models, to stimulate new business relationships and to rethink current business practices. Strategic Innovation takes the road less traveled – it challenges an organization to look beyond its established business boundaries and to participate in an open-minded, creative exploration of the realm of possibilities. It is not characterized by mundane, incremental product extensions, the “me-too” business models of industry followers, or band-aids for inefficient processes. It does not consist of simple “facilitated creativity sessions and brainstorming new ideas”. It is not based on the linear principles of traditional strategic planning which extrapolate the past in an attempt to predict the future. The power of Strategic Innovation has two dimensions. First, it blends non- traditional and traditional approaches to business strategy, deploying the practices of “Industry Foresight”, “Customer Insight” and “Strategic Alignment” as a foundation, and supplementing them with traditional consulting models where appropriate. Second, it combines expansive, visionary thinking with pragmatic action, imaginatively exploring long-term possibilities while taking a down-to-earth approach to implementation that leads to short-term, measurable business impact. © 2002 Strategic Innovation Group Page 3 “All great truths begin as blasphemies.” – George Bernard Shaw
A Framework for Strategic Innovation - page 4
A Framework for Strategic Innovation 1.1. Serendipitous versus Strategic Innovation Many organizations rely on serendipitous acts of creativity to foster innovation. Others take an ad hoc, unstructured approach. In doing so they achieve only incremental improvements or diminish their ability to successfully implement. The net result is a lack of meaningful business impact. Strategic Innovation is a systematic approach focused on generating beyond- incremental, breakthrough or discontinuous innovations. Innovation becomes “strategic” when it is an intentional, repeatable process that creates a significant difference in the value delivered to customers. Strategic Innovation generates a portfolio of breakthrough new business growth opportunities through a structured yet creative process. Breakthrough Serendipitous Breakthroughs Strategic Innovation Quantum Change Med/High Revenue Potential Accidental/Uncontrolled Quantum Change Med/High Revenue Potential Initiated by Organization Serendipitous Intentional Unplanned Improvements Incremental Innovation Incremental Change Low/Med Revenue Potential Accidental/Uncontrolled Incremental Change Low/Med Revenue Potential Initiated by Organization Incremental © 2002 Strategic Innovation Group Page 4
A Framework for Strategic Innovation - page 5
A Framework for Strategic Innovation 2. Dimensions of Strategic Innovation The several dimensions of Strategic Innovation are woven together to produce a range of innovative, growth-oriented deliverables. At the creative center of the framework is a Managed Innovation Process that orchestrates and facilitates the interplay between a company’s External Value Drivers and its Internal Organizational Drivers . External Value Drivers include Industry Foresight and Customer Insight, while Internal Organizational Drivers include Core Technologies and Competencies. Industry Foresight provides a “top-down” perspective, a solid understanding of the complex forces driving change in a given industry, including emerging and converging trends, competitive strategies, potential dislocations and alternative scenarios. Customer Insight provides a “bottom-up” perspective, a deep understanding of both the articulated (explicitly stated) and unarticulated (latent or unrecognized) needs of existing and potential customers. Core Technologies and Competencies assesses “internal capabilities”, taking a hard look at organizational competencies and assets that can be leveraged to deliver value to customers, including technologies, intellectual property and strategic relationships. The Strategic Innovation process creatively weaves together these three core dimensions and incorporates other dimensions of an organization’s fabric: its Organizational Readiness to act, and its capacity for effective, Disciplined Implementation. The process is designed and managed to facilitate Strategic Alignment – galvanizing an organization around shared goals and building enthusiastic internal support among its key stakeholders. An organization moves beyond a purely ad hoc (serendipitous) approach to innovation when it begins to develop and institutionalize a cultural mindset and a portfolio of processes for repeatable, Sustainable Innovation. This then becomes the organization’s platform for ongoing competitive advantage. “All men can see the tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.” – Sun Tzu © 2002 Strategic Innovation Group Page 5
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A Framework for Strategic Innovation Framework for Strategic Innovation Value Drivers (external perspectives) Industry Foresight Customer Insight Articulated & Unarticulated Needs New Strategies New Products Products Managed Innovation Process New Insights & Understanding Opportunity Identification/ Prioritization/Development New Revenue Streams through… New Services New Business New Business Models New Markets Organizational Drivers (internal capabilities & limitations) Core Technologies & Competencies Organizational Readiness Disciplined Implementation Implementation Planning Strategic Alignment New Relationships New Business Processes Processes Sustainable Innovation Innovation The eight dimensions of Strategic Innovation are therefore: A Managed Innovation Process – Combining Non-Traditional and Traditional Approaches to Business Strategy Strategic Alignment – Garnering Internal Support Industry Foresight – Understanding Emerging Trends Customer Insight – Understanding Articulated and Unarticulated Customer Needs Core Technologies and Competencies – Leveraging Corporate Assets Organizational Readiness – The Ability to Take Action Disciplined Implementation – From Inspiration To Business Impact Sustainable Innovation – A Platform For Ongoing Competitive Advantage 2.1. A Managed Innovation Process – Combining Non- Traditional and Traditional Approaches to Business Strategy The Strategic Innovation approach combines unconventional and traditional elements. It is rooted in a provocative, “all-things-possible” perspective that challenges the status quo and calls for both left and right brain thinking among an organization’s key stakeholders. As a team-based framework the approach includes facilitated workshop sessions: part information exchange, part exploration, part mediation, part creative invention, and part improv theater. Bringing together a cross-functional team with external industry “Thought Leaders”, these sessions intentionally juxtapose contradictory perspectives, values and interpretations, to force a creative tension that frees the mind to © 2002 Strategic Innovation Group Page 6
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A Framework for Strategic Innovation examine a wealth of possibilities. This foundation is selectively supplemented with the typical business frameworks and methodologies used in traditional future planning. The overall approach is divided into two phases: “Divergence” and “Convergence”. The “Divergent” phase lies at the heart of the Strategic Innovation approach. It is characterized as open-ended, exploratory, and inquisitive, deploying non- traditional, creative thinking and future visioning techniques. It includes “generative” customer insight research, the qualitative exploration of industry/market trends, and speculates on possible industry discontinuities, etc. It is with this backdrop that breakthrough innovation opportunities can be identified. Subsequently, through “Convergent” processes that resemble more traditional business planning and development, potential opportunities are evaluated, refined, selected and subsequently executed. Throughout the entire process, a focus on short-term opportunities that leverage “low hanging fruit” is paired with a perspective focused on mid- and long-term breakthrough growth strategies. Though the elements of the process generally occur in a specific sequence, at there is not one single, rigid road map – the process is non-linear, modular and responsive to the needs of the moment. It is flexible and creative, providing the glue, the spark, the artistic magic that weaves together the dimensions of Strategic Innovation in real-time. “Creativity is about divergent thinking. Innovation is about convergent thinking.” – Ikujiro Nonaka Strategic Innovation Process Map Divergence – Discovery and Exploration Convergence – Evaluation and Implementation Define the Opportunity Focus Industry Foresight - Understand Emerging Trends Customer Insight - Explore Customer & Market Needs Identify Opportunities (near and longer-term) Prioritize & Develop the Opportunity Portfolio Build Business Case & Define Implement -ation Path Commercialize, Measure, Learn, Refine > > > Strategic Alignment - Engaging the Organization > > > © 2002 Strategic Innovation Group Page 7
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A Framework for Strategic Innovation 2.2. Strategic Alignment – Garnering Internal Support Choosing to engage key stakeholders in a collaborative process galvanizes the organization around a set of jointly developed goals. This is referred to as “Strategic Alignment”. Innovation efforts – like other types of change effort – often fail because the outcomes are "Not Invented Here" – silver bullet solutions imposed by senior management, or developed outside the organization in some sort of consultant think tank and handed down for implementation after a final presentation. Active cross-functional participation in the innovation process builds “Strategic Alignment” among key stakeholders throughout an organization. “Strategic Alignment” is, then, an approach for engaging both the leadership team and the broader organization in the development of a shared vision. This creates ownership, enthusiasm and commitment, accelerating investment decisions and building a strong foundation for successful implementation. Looking throughout all levels within an organization, it is important to select a cross-functional Core Team of visionary, energetic change agents and future leaders, inspired and inspiring individuals who want to make a difference. A Core Team typically consists of four different perspectives: subject matter experts, decision makers, implementers and not least, “naïve” perspectives – free-thinkers whose role is to challenge the team’s incoming beliefs and assumptions. In addition to the Core Team, an Extended Team of internal opinion leaders, supporters and evangelists should be appointed to act as “functional ambassadors” to represent the interests of (and provide information to) their respective areas in advance of the implementation phase. To ensure ongoing support, it is imperative to establish cross-functional executive sponsorship – not just sponsorship from a single functional area. “People Support What They Help Create.” – Anonymous 2.3. Industry Foresight – Understanding Emerging Trends Many companies have surprisingly little notion of where their industry is heading, rarely looking beyond their own boundaries, too busy fighting today’s fires to take the time to truly understand what is driving their operating environment and how it may evolve. While Managers are busy managing, and Executives are busy executing, nobody is busy “Envisioning”. It is rather like sitting in a small sailboat not knowing the weather conditions that lie ahead – out of control, entirely at the whim of the fates. “Industry Foresight” is a “top-down” approach that explores the drivers, trends, enablers, and dislocations within one or more industries. It is in looking at the forces of deregulation, industry convergence and emerging markets, and in exploring the intersections of social, demographic, technical, environmental, political, competitive and other trends that potential “white space” opportunities are revealed. Since today’s world is not linear we cannot extrapolate the past to see into the future. Industry Foresight therefore goes © 2002 Strategic Innovation Group Page 8
A Framework for Strategic Innovation - page 9
A Framework for Strategic Innovation beyond traditional market trend research by taking a speculative, “what if” perspective, seeking out – and in some cases even seeking to create – industry dislocations. When an organization looks beyond its own boundaries and limitations it dramatically raises its ability to create breakthrough business strategy. This is often best accomplished in a managed forum – a “Thought Leader Panel” – in which an organization’s change agents and innovators are brought face-to- face with external industry “Thought Leaders” to explore, speculate and collaborate in a shirt-sleeves working environment. This process, then, brings together a team of external provocateurs, visionaries and industry experts to introduce new perspectives and insights, challenge established thinking, and collaboratively explore potential growth opportunities, new businesses, new products/services, and innovative business models that arise at the intersection of emerging trends. While some organizations might manage this as a traditional “panel discussion”, such an approach does not fully exploit the potential interactions between external experts. The spark of inspiration comes when different perspectives on the future are encouraged and vociferously debated. Through Industry Foresight an organization can develop a proprietary view of the future enabling it to define a visionary participation and leadership strategy. “Markets are conversations.” – Clue No. 1, The Cluetrain Manifesto “Markets consist of human beings, not demographic sectors.” – Clue No. 2, The Cluetrain Manifesto “There are two conversations going on. One inside the company. One with the market.” – Clue No. 53, The Cluetrain Manifesto “A problem cannot be solved by the same consciousness that created it.” – Einstein 2.4. Customer Insight – Understanding Articulated and Unarticulated Customer Needs Most organizations would like to see themselves as customer-driven, but often have little understanding of the behaviors, perceptions and needs of their customers. Product-driven companies in particular would benefit from taking a more customer-inspired approach, though this is often at odds with the organization’s cultural norms. Customer involvement in product development often consists of traditional focus groups or web-based surveys, and typically goes no further than merely soliciting customer response to internally-generated product concepts, or specific executions such as packaging or advertising directions. This is a missed opportunity. Instead, these same forums could be used to spark whole new product categories and other value-driven solutions – using a “generative” rather than a “reactive” approach. Equally, many customer research programs are content to hear what customers actually say, but do not explore the fertile ground of their unarticulated (latent) needs. Further, customer participation in corporate strategy development is practically unheard of. There is a tremendous opportunity in involving customers (and suppliers and other external stakeholders, etc.) as true partners in the innovation process by adopting a Customer Insight approach. “Customer Insight” is a qualitative, “bottom-up” approach that leverages insights into the behaviors, perceptions and needs of current and potential © 2002 Strategic Innovation Group Page 9
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A Framework for Strategic Innovation customers by involving them as true partners in the innovation process. It is a non-traditional, qualitative approach to customer research that seeks a deep understanding of customer needs and the drivers of customer behavior at a level well beyond what customers themselves are able to articulate. The approach is not limited to customers, but can be extended to glean insights from many other types of stakeholders – examples include: channel partners, suppliers, employees, investors, early adopter non-users, etc. 2.5. Core Technologies and Competencies – Leveraging Corporate Assets A solid understanding of a company’s core technologies and competencies provides a pragmatic backdrop against which imaginative ideas can be assessed and shaped into practical investment-worthy opportunities. Even when an organization possesses deep insight into customer needs and future trends, transforming ideas into action is an uphill battle unless there is a keen sense of the organization’s inherent strengths and ability to leverage and build upon its core technologies. To truly leverage core competencies for strategic innovation, consideration of both technical and operating capabilities is essential – capabilities that are integral to an organization's success, that yield significant customer benefits, and that provide competitive differentiation. Such competencies may include unique relationships with suppliers and partners, brand equity, organizational speed and agility, innovative business practices and proprietary technology. In large organizations with multiple business units one group may have developed its own operational processes and have valuable competencies and best practices to share. In order to be viable, short- and long-term innovations must possess a tight link to core competencies. That said, outsourcing and partnering are strategies that permit an organization to pursue an opportunity, if it does not currently possess some of the required capabilities. 2.6. Organizational Readiness – The Ability to Take Action There is a time for inspired dreaming and high-minded vision development (“Divergence”) and a time for down-to-earth pragmatism (“Convergence”). During the strategy innovation process it is critical to draw upon each mindset at the appropriate time. During the pragmatic (“Convergence”) stage it is essential to have a clear understanding of a company’s “Organizational Readiness” – its ability to act upon and implement innovative ideas and strategies, and to successfully come to grips with the operational, political, cultural and financial demands that will follow. Even with the most inspired vision, innovative products and adequate funding, an organization may simply not be able to effectively implement. Before actually investing time and money in newly identified growth opportunities, it is necessary to assess "Organizational Readiness" along two dimensions: © 2002 Strategic Innovation Group Page 10 “Everyone wants to grow; most people are just unwilling to change in order to do so.” – Anonymous
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