How do you spell success when starting or running your own business? I-n-n-o-v-a-t-i-o-n s-t-r-a-t-e-g-y. Innovation strategy is a set of steps that allows you to make informed decisions related to change within your business, whether that be at the product level, the organizational-level, or somewhere in between. What is the importance of innovation strategy? It aids you in:
- Developing new products or services
- Improving either their products or services or their business model
- Increasing revenue while providing value to customers
As a business owner, you have a lot on your plate, though. How, then, do you have time to create and implement an innovation strategy. Through business innovation consulting. Companies like NEXT Studios offer advice on how best to innovate to make and keep your business thriving. More on that later, though. First, we’re going to explain what should be included in an innovation strategy in business as well as different types of innovation strategies with examples. Let’s dive in.
What Should an Innovation Strategy Include?
Because an innovation strategy requires that your business makes changes, it’s no easy feat to create and implement. There are several major pieces that you should include when creating one:
- Research: Before you begin innovating, you must first understand what your business does and doesn’t do well and what your customers want and need. Your research should guide your decisions on what to change and how to change it.
- Collaboration: The best ideas come from working with others. After all, you can gather more ideas and better workshop the ones you do have if there is more brain power working on them. Feed off the ideas of others and find smarter solutions to the issues you need to solve.
- Core Value Proposition: When implementing a change, make sure to keep your business’s value proposition in mind. Doing so will tell you either that you have strayed from and need to realign with it or that you have stuck to and shouldn’t stray from it when innovating. A great way to win customers over is to stick with and keep improving in your areas of expertise. For example, if your business sells software as a service, you probably shouldn’t include selling office supplies in your innovation strategy.
- Investment: Once you have an innovation in mind, you need to make sure that you allocate enough time and resources to it. True change takes effort. As the old adage goes, anything worth doing is worth doing right.
- Clear Understanding of Objectives: Have you ever tried playing a game or working on a project without clear directions? If you have, you probably know that it can be overwhelming and even frustrating. The same is true if making an innovation without clear objectives. When you go about making the change, ensure that you and your team know what the innovation is and what you aim to get from it. Make sure that it is smart and measurable. Having these details up front will guide the work you do.
- Clarity Regarding Trade-offs: Sometimes to achieve a goal, you have to make sacrifices. The same is true with innovation. For example, you might decide to focus most of your research on one area of your business while not paying attention to others. This can lead to stagnation in the other areas while bringing major success to your focus area. Understanding these trade-offs will allow you to innovate while also keeping in mind where you might experience issues later so that you can work to prevent them.
- Ability to Evolve: Any good strategy should constantly evolve. That’s because innovation does not always go according to plan. Research may be skewed. Results might be different than expected. You might work through your strategy quicker or slower than expected. Whatever the case, as you see more results, your strategy should change to reach your business’s goals.
When it comes down to it, innovation means adding or creating value through your products, services, or business as a whole. Keeping all the above mentioned details in mind will allow you to create that value. You just have to come up with a strategy. There are three types of innovation strategies from which you can choose. We cover those and some innovation strategy examples next.
What Are the 3 Innovation Strategies?
There are 3 types of innovation strategies: product, process, and business model.
- The product strategy aims to either develop new or update existing products or services. For example, think of smartphone manufacturers. Every few years, they release a new version of their phone. In doing so, they give customers value by providing better cameras, better durability, etc. This tempts customers to buy the latest version of the phone.
- The process strategy works to innovate the production and delivery of products or services. Ultimately, the goal is to improve return on investment. Ford has a famous example of process innovation. In 1913, it started using the moving assembly line, which shortened the time it took to build a Model T. This allowed employees to work shorter days and made Model Ts more affordable.
- The innovation strategy is the business model strategy. It focuses on how your business exists within your industry or the overall market. Netflix is one company that has used this strategy. In the late 90s, it was an online DVD rental store that would send you DVDs via mail. Then, in the early 2000s, Netflix changed their strategy to allow subscribers to stream movies and shows directly to their TVs. By changing their strategy, they outlasted other DVD rental companies like Blockbuster and Family Video.
No matter the size of your business or institution, you can benefit from these strategies, too. Where do you start? NEXT Studios can guide you.
Build Your Innovation Strategy With NEXT Studios
Whether you have never created an innovation strategy before or you have experience but want some extra guidance, NEXT Studios can help. We are entrepreneurs who guide other entrepreneurs in turning their ideas into real products or services. When you work with us, we will advise you on best practices, models, and ways to decrease risk to make your business succeed.
We believe that “one size fits all” doesn’t apply to innovation. That’s why we work alongside you to create the strategy that works best for you. And we’ll be with you throughout the creation and implementation of your strategy. Ready to start innovating? Contact us to set up a call.