When choosing the right innovation strategy, each company must be able to visualize three essential elements. Here we tell you what they are.
According to Clayton Christensen, former Harvard Business School professor and the first to coin the theory of "disruptive innovation," 95% of new products and services that reach the market fail.
Despite these results, global conditions are putting a lot of pressure on large companies forcing them to innovate,by launching new initiatives that rarely result in a real return on investment.
At the same time, these same external conditions are perceived as an ocean of opportunities for thousands of entrepreneurs around the world who undertake to create new products and services, even though they know that the chances of sustaining these new businesses for more than a year are only 1%.
While the pace of innovation continues to accelerate, the failure rate remains very high. What can we do differently? Could it be that we need a different strategy for developing and implementing innovation in order to improve the success rate?
“Strategy is about making choices, trade-offs; it's about deliberately choosing to be different.” - Michael Porter
When entering into the innovation process, companies should be able to understand the "what" and "why" behind it. At DMO, we find that for many companies this is not clear at the beginning. When they tell us "We want to innovate," we respond with a question of our own: "and then what do you want?"
Innovation is a very broad concept and must be implemented using a "tailor-made" approach. When choosing the right strategy, each company must be able to easily visualize its purpose, adopt a cultural transformation mindset, allocate the necessary resources to achieve it, and finally, travel and co-create this path alongside the end users of the products or services. Otherwise, innovation is often unviable to put into practice.
Other important aspects to take into account when choosing an innovation strategy are:
- Focus:define the concrete problem that innovation efforts are going to focus on.
- Resources:design a medium-term action plan in terms of time, teams, and money to sustain innovation processes over time so that they do not end up as isolated initiatives, lost in corporate silos.
- Communication:it is vital that all the people and areas involved are kept in the loop throughout the innovation process. Share milestones, learnings and things that are being implemented, validated and co-created so that all stakeholders can actively participate in the process from end to end.
CO-CREATING INNOVATION STRATEGIES
Do we want to implement disruptive, incremental or radical innovation? Are we looking to meet strategic, financial or growth objectives? What capabilities and processes do we need?
To find answers to these and other questions, it is best to focus on the smallest possible aspect, on the specific ideas and hypotheses that allow us to design minimum viable products (MVPs).The aim is to implement and fail fast at a low cost, to gradually iterate and validate the innovation process. A methodology is required to align internal teams,reach an agreement contemplating the different needs and perspectives and transform the diverse opinions into valuable inputs.
The key is to CO-CREATE TO INNOVATE.
An effective innovation strategy is one that is designed through co-creation and is made visible in a holistic way,keeping it alive throughout an organization.
If we carry out this process in a systemic way, people manage to learn and develop the necessary competencies for innovation in all its forms, having the necessary flexibility to adapt to changing market conditions.
It is people who generate the ideas and knowledge that drive innovation.
To innovate is to transform, understand, devise, validate and implement. It is to improve people's lives in some way that improves the current state of affairs. There is no magic recipe; the path is to co-create with users at the center to focus on understanding their needs,pain points, interactions, and opportunities to bring value to their experience. Every innovation process is a tailor-made suit that varies depending on who wears it and what "event" they attend.
And beyond digital and data, innovation is about building life stories from better experiences with the products and services that surround us every day.
Can we help you define your team's innovation strategy using co-creation?