Idea in Brief
The Problem
Innovation remains a frustrating pursuit. Failure rates are high, and even successful companies can’t sustain their performance. The root cause is that companies fall into the trap of adopting whatever best practices are in vogue or aping the exemplar innovator of the moment.
The Solution
Managers should articulate an innovation strategy that stipulates how their firm’s innovation efforts will support the overall business strategy. This will help them make trade-off decisions so that they can choose the most appropriate practices and set overarching innovation priorities that align all functions.
The Steps
Creating an innovation strategy involves determining how innovation will create value for potential customers, how the company will capture that value, and which types of innovation to pursue. Just as product designs must evolve to stay competitive, so must innovation strategies as the environment changes.
Despite massive investments of management time and money, innovation remains a frustrating pursuit in many companies. Innovation initiatives frequently fail, and successful innovators have a hard time sustaining their performance—as Polaroid, Nokia, Sun Microsystems, Yahoo, Hewlett-Packard, and countless others have found. Why is it so hard to build and maintain the capacity to innovate? The reasons go much deeper than the commonly cited cause: a failure to execute. The problem with innovation improvement efforts is rooted in the lack of an innovation strategy.
