Deciding Innovation Strategy

On average, an innovation programme will last 18 months before it gets cancelled. Most of the time, this happens because the people involved haven’t gotten results quickly enough.

Why do innovation teams fail so often? The main reason is that they’ve neglected to define their overall vision of what innovation should mean in their organisations.

It is remarkable how many times I’ve come across innovators who aren’t able to tell me what their organisation’s innovation strategy is. Inevitably, you can tell this is the case when the answer to the question “why do you have an innovation programme?” is long winded, taking more than a sentence or two to answer.

Deciding the overall objective of an innovation programme is the most fundamental, and most important, decision innovators will ever be asked to make.

It is a decision, though, that isn’t especially complex, as there are only three options from which to choose.

The first is obvious: don’t do innovation at all. Rely on what worked in the past. Accept that a “back to basics” approach is possible, and that continuing practices appropriate two decades ago will, at least, let the business continue.

Actively choosing not to innovate is a reasonable strategic choice, assuming everyone agrees at the start.

At the other end of the scale is Play-2-Win innovation. This is the innovation strategy you adopt when you can say, with no disagreement, that “innovation is going to be the source of all competitive advantage in the future”.

Play-2-Win will usually require a relatively large investment at the start, but can deliver handsome rewards over time.

The third kind of innovation strategy is Play-Not-2-Lose. Play-Not-2-Lose accepts that doing new things to maintain parity with competitors is the primary reason to have an innovation function. You may not get the market windfalls that accompany a big breakthrough, but you do get relatively good returns in the short term.

Deciding which of these three strategies to adopt is really a matter of deciding the risk appetite of the organisation wanting an innovation programme.

Deciding which strategy to adopt up front is a critical thing to do, because everything that follows will be different depending on which choice you make.