Strategy can be simply thought of as how the game is played. When playing a game like chess, you start with a plan – as series of moves – that lead to winning the game. In this case, winning is the objective. As the game progresses, your opponent’s actions may require you to modify the moves you planned. To win, you need a better plan than your opponent.
In this game, as well as in business, strategy is the integration of plans and objectives. Companies are accustomed to dealing with strategy. As an example, it is common to see tools like SWOT (analysis of strengths, weaknesses, opportunities, threats) used periodically to evaluate and update the organizational strategy – defining business objectives and making plans to achieve them. Generic strategy approaches, such as Michael Porter’s framework of cost leadership, differentiation, or focus, are well known.
What receives less attention is the innovation strategy an organization uses. The approach to innovation should align with the business strategy and be supported by the organizational culture. Like generic business strategies, categories for innovation strategy have also been defined. One useful approach is the Need Seeker, Market Reader, and Technology Driver framework. These are defined in an annual Global Innovation 1000 report as (Booz & Co, 2012, p. 20)…
- Need Seekers: “actively and directly engage both current and potential customers to help shape new products and services based on superior end-user understanding. These companies often address unarticulated needs and then work to be first to market with the resulting new products and services.”
- Market Readers: “closely monitor both their customers and competitors, but they maintain a more cautious approach. They focus largely on creating value through incremental innovations to their products and being ‘fast followers’ in the marketplace.”
- Technology Drivers: “follow the direction suggested by their technological capabilities, leveraging their sustained investments in R&D to drive both breakthrough innovation and incremental change. They often seek to solve the unarticulated needs of their customers through leading-edge new technology.”
Use this Tool – Identify Your Innovation Strategy
To identify the innovation strategy used in your organization and analyze it further, start with this helpful assessment: www.surveys.strategyand.pwc.com/InnovationStrategyProfiler.
Booz & Co. (2012). Making ideas work: The 2012 global innovation 1000. Available from http://strategyand.pwc.com/global/home/what-we-think/global-innovation-1000/past-year-studies/display/2012-making-ideas-work