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Where does innovation fit in your growth strategy?

75% of senior executives have innovation as one of their top 3 priorities — BCG, 2021.

So, you would think that the articulation of innovation and strategy must be pretty clear in most organisations, right? Well, it’s not been my experience. First, don’t look for the answer in an innovation strategy because most organisations don’t have one, as my friend and colleague Christian Doll highlighted in this fun moment at our Corporate Innovation in Action conference in Melbourne. And when organisations do have an innovation strategy, it’s often disjointed, with no clear connection to the overall strategy of the organisation. Indeed, it is possible for corporate innovation to exist in isolation in a large organisation, for a while at least. Until an Executive pulls the plug one day out of frustration.

I believe corporate innovation can only be sustainable when it’s no longer an isolated practice, but it has become a critical vehicle to deliver strategic growth objectives.

In this blogpost I want to highlight the key question that will guide you towards having innovation closely connected to the overall strategy of an organisation, and then propose a simple framework to clarify your innovation strategy.

Where is your growth coming from?

The key question to answer in order to understand where innovation fits in the overall growth strategy is: where is your growth coming from?

Our Growth Orienteering approach helps explore this question with more depth. And in a previous article I detailed the key questions and steps I use to help executive teams get to a better answer:

  • What’s the vision for a different future that underpins the overall strategy?

  • What are the key strategic objectives?

  • Is there a growth gap? 

  • Where is growth to fill up the gap coming from?

  • How will you create that growth?

I worked recently with an organisation that identified a $750M growth gap by 2030. Growth Orienteering enabled this organisation to widen the “where” and “how” of strategic growth to go beyond the default comfort zones of executives and consider new potential sources of growth. For them, those comfort zones were clearly organic growth and acquisitions. But the strategy work highlighted that pushing for more organic growth and the realisation of their program of acquisitions would not be enough. As for many large organisations, corporate innovation was not the vehicle they naturally gravitated to. But throughout the strategic process they realised that they would need to create new revenues in adjacent and new territories outside of the core business in order to achieve their growth objectives. 

The growth plan they defined integrates all those vehicles they will use to generate growth. It shows clearly how innovation in adjacent and new territories fits into their overall growth strategy. And it makes explicit the growth target that corporate innovation is in charge of, and how those objectives would be delivered.

Please see below an example of a growth plan created during the Growth Orienteering strategic conversation.

Growth plan one pager

Now in a large organisation the Head of Innovation might often feel like she’s sitting on an ejectable seat. So I find it useful to also document an innovation strategy that can be used to communicate clearly the critical contributions of corporate innovation. 

What’s the innovation strategy?

The good news is that - now that we know how innovation contributes to the overall growth objectives - it becomes much easier to document an innovation strategy. We just need to shift the vantage point from the whole organisation to corporate innovation.

Once again the 3 types of innovation framework comes in handy.

Here’s a short video introducing the three types of innovation.

Why does it matter in the context of innovation strategy? Because the Head of Innovation will likely play a different role to achieve the strategic objectives related to each type of innovation. Understanding these differences is key to creating a clear narrative in the innovation strategy.

For each type of innovation, the innovation strategy should clarify:

  • The growth objective,

  • The person(s) in charge of leading the realisation of those objectives,

  • The role of the “Head of Innovation”,

  • The identified strategic areas to focus on in order to reach those objectives,

  • The volume of projects, vehicles and programs that will enable the exploration of those strategic focus areas

Please see below an example of what the innovation strategy one-pager looked like for the organisation I mentioned earlier with a $750M growth gap by 2030. 

Innovation strategy one pager

It’s not enough for an organisation to want to be “more innovative” or even to have innovation as one of the top 3 priorities. Indeed, many large organisations end up with innovation as an isolated practice that creates little value.

For organisations to thrive in the long-term, corporate innovation needs to be one of the vehicles used to deliver the strategy. This should translate into explicit growth objectives in adjacent and new areas; those highly uncertain areas with a big potential upside that corporate innovation is best placed to explore. Finally, the “Head of Innovation” needs to integrate the growth objectives into an innovation strategy and tell a clear, compelling story of how she will lead the realisation of those objectives across the three types of innovation.


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