Innovate – Ideas or Strategy?

Innovate – Ideas or Strategy?
Innovate : Ideas or Strategy? Arkaro

Original article by Francesc Guell, Associate Contributor adapted by Mark Blackwell

 

The traditional belief that innovation must start with ideas like “the lightbulb moment”, likely comes from the thought that scientific research is based on discoveries, possibly by chance, and likely also on individual genius. Perhaps we are confusing innovation with creativity?

 

Practical experiences in innovation processes show us that we could spend years and years producing ideas, selecting among them, turning some into projects and develop these projects without securing commercial success. What a precious consumption of time and resources! With this we would realize that perhaps ideation alone is not the way in which innovation occurs in reality, nor that it is an effective guide to how it should be managed.

 

 

Experience shows that the most successful and innovative companies tend to be those that start from a strategic perspective. That is, identifying first and in accordance with their own vision and goals, the intersection of

  • what the market needs now and in the future

  • what the organisation is capable of

to define their future opportunities. Initially focus areas, and then early-stage ideas are not selected by precise, but this stage inaccurate financial measures such as NPV, but selected value drivers, in line with the strategy, to optimise risk & return in the portfolio. By creating focus derived from the strategy, ideation becomes more productive.

 

 

The author is reminded of an organisation wanting a major improvement in its innovation capability. Believing it had a strategy in place and to secure motivational quick wins, initially much effort was given to ideation activity. However, the results were disappointing. Many ideas were created, but of poor quality, not much better, if at all, than the organisation already had. The strategy made it clear that more innovation was required, but provided no guidance on “where to play” or “how to win”.  Ideation participants were drawn mainly from the business teams, but because of their position in the value chain, knowledge of customer needs and market trends was very limited. The R&D function was generally not involved in ideation, and being located 3 hours away, had very limited communication with the business anyway! After a few months, the reality of the situation became clear. The business strategies needed to be enhanced and fed by teams trained on techniques to understand the market needs and trends – and all with much greater cross-functional collaboration. From this base, effective innovation could begin.

Sporadic vs Permanent Innovation

At this point, I would like to distinguish between sporadic innovation and permanent innovation.

 

In the first case, it may be closer to a process that comes from an initial idea and is used to start a new business model. Normally we would talk about a start-up or a small company. The generation of ideas and their selection and filtering would in these cases be the appropriate model.

 

On the other hand, in larger companies, permanent innovation is more necessary, in order to maintain its leadership, continuously innovating and what is more difficult, with success.

 

Permanent innovation is a continuous process of innovation flowing from the strategy. It is an organisational habit. Organisations that adopt innovation as a core value, practice innovation with a proven methodology, produce innovations with consistent results. Permanent innovation is, therefore, a human process derived from the business strategy, beyond the purely technological activity, and excellence is achieved through the proper repetition of the correct methods. The concept of permanent innovation can be surprising at the beginning or even seem a contradiction. Doing something continuously and with method implies stability and a certain absence of change, while the concept of innovation is associated with change and novelty. The combination of the two, however, produces an important synthesis. Permanent Innovation is the practice of innovation not as an occasional event, but as a repetition, a process of value creation and organizational adaptation.

 

… and even in start-ups, it should be remembered that the value of an idea is not so much the scientific brilliance of the technology but the ability to solve problems for a growing number of customers. By setting the correct strategic direction early, multiple generations of products may be launched successfully to build a successful company.

Francesc Guell - Arkaro Innovation and Strategy
Francesc Guell

Francesc Guell was CEO and director of international companies in specialty chemicals and pharmaceuticals. The last 12 years was associated with international consulting groups, providing advice and support to businesses on topics such as innovation and agile innovation processes, operational excellence, knowledge management, change management, strategy and integrated business management. Currently creates and presents courses and workshops on these topics. He graduated as a chemical engineer, postgraduate from ESADE Business School in Business Administration and Master in Knowledge Management. He participated in numerous programs, seminars and ESADE, IESE, EADA, APD and MCE (Management Centre Europe). He is author of articles, presentations and courses on innovation in strategic management, integrated business models, knowledge management, performance measurement, change management and excellence in business processes.

www.fguell.com

Mark Blackwell - independent consultant Arkaro
Mark Blackwell


Mark Blackwell
founded Arkaro in 2016 following a career in organisations both large and small, covering a wide range of industries including animal health, speciality chemicals, advanced materials, food, and feed ingredients.  13 years at DuPont included 8 years in internal consulting roles across multiple businesses. 
Focus areas included Innovation, Top Line Growth, Product Line Management, Business Productivity, and Integrated Business Planning.

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