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How To Integrate Innovation Into Strategic Planning

We ask the experts

31May

Innovation does not, for the most part, just happen. In order for companies to stay ahead of the curve and keep developing fresh ideas, innovation must be nurtured. The most important thing for it to work is how closely it is integrated into the business’s core strategy. If it is not, an organisation’s innovation efforts risk descending into an incoherent set of autonomous processes and structures that are working at odds with one another, wasting time and money, and ultimately stifling new ideas.

We asked nine leading business figures for their thoughts on successfully developing a strategy to promote and act on innovation.

James Millar, Director of Partnerships at MassChallenge UK

The easiest and the best way to build a successful innovation strategy is to interact with startups - which are the most innovative and entrepreneurial organizations out there. But it’s not just about acquisitions. The best strategies include reshaping the current organizational culture to be more innovative across teams and the organization as a whole and working towards long-term value add back into the company. Here are some key considerations take from our recent study with Imaginatik, The State of Startup/Corporate Collaboration Study 2016:

- Collaboration is a competitive advantage: With the distributed nature of knowledge, especially in high-tech & digital sectors, successful innovation strategies are increasingly determined by the ability to establish and maintain successful collaboration, rather than pursuing innovation activities in isolation.

- Win-Win partnerships: It is no longer 'us' vs. 'them' between startups and corporates. Mutually beneficial partnerships between startups and corporates to solve business specific problems quicker, or at a lower risk, or rejuvenating corporate culture by creating awareness of entrepreneurial mindset.

- Be clear what you want and how you measure success: This includes level setting about the likely speed at which you can move and how much legal documentation you will need in place. Clear strategic intent will determine not only which startups a corporation chooses to interact with, but also how they build the relationships and which vehicles, processes, and people are involved.

- The leadership of a dedicated innovation department: Corporates who had a dedicated innovation department and startup leads reported 96% success rates versus 55% of the industry as a whole. These functions provide two benefits over established roles: 1) sourcing and incubating new innovation opportunities and 2) they have the resources and latitude to fund and launch innovation, allowing them the freedom to act at speed.

Chris Bosch, Director of Strategy and Operations at World Vision International

Innovation has been integrated into the normal operations of our organization for about four years now. We have a dedicated team with an annual dedicated budget to ensure that ideas generated by staff have a forum for discovery, development, deployment, and financial support. The ethos of innovation at World Vision is that it is everyone’s responsibility and not a specific department’s responsibility. However, we do have two dedicated teams investigating innovations in products and channels to ensure we have a consistent pipeline of new offerings going to our audiences in new ways.

We have recently deployed a hot group in the organization to look for $14 million in operational savings over the next five years. This team is prompting the organization to think about how it can change operations to meet the savings goal. This is an example of internal innovation, which is directly connected to the mission of our organization. The savings will increase the amount of funds we can send to our partner offices around the globe for poverty alleviation work.

Julian Harris, Head of Innovation, Department for Work & Pensions (UK Government)

Great pipes at both end: both a focal point that aligns with big questions the organisation has, along with a really clear integration mechanism for taking the results of the innovation function and transferring them effectively to the stakeholders that would most benefit.

Stephan Altman, Head Of Innovation Excellence At BASF

Successful innovation strategies must, first of all, be based on the business strategy of the organization. It’s ‘where to play’ is defined. The innovation strategy then contains roadmaps, describing contributions and required resources, to ensure that the ‘how to win’ contribution, in these focus areas, is well defined with respect to market trends, customer needs, product opportunities, and technology options. Such a concisely derived strategy is the core pre-requisite for precise and easy to follow communication of the summary of innovation targets to the whole organization. This is a key enabler to over time create a strong innovation culture, based on a sound understanding of the organization's needs to succeed in blue, as well as red oceans.

Vanessa Balouzet-Uchansky, Head of Innovation Acceleration Team at Nestle

It needs to be aligned with the business strategy, focused (with clear target and explicit priorities), balanced (long-term and short-term, high-risk bets and low-risk bets, outside of the Business and solidifying our position), and in full alignment with ways to implement it (resources, launch dates)

Benjamin Kumpf, Innovation Lead at the UNDP

The United Nations Development Programme (UNDP) is preparing in close consultation with its Executive Board its new Strategic Plan for 2018 – 2021. Innovation is heavily featured in the early drafts as a key strategy on how to achieve the ambitious goals of this plan and globally, the Sustainable Development Goals. Based on more than 150 experiments in over 75 countries conducted between 2014 and 2016, the UNDP Innovation Facility is making a business case for evidence-base experimentation that informs the programmatic approach of the organization and introduces iterative behavioral design principles to the toolbox of UNDP.

Christoph Huels, Chief Innovation Officer at Merck

Innovation is about creating the right environment for the right people to drive projects forward, according to customer needs, and engage in innovative solutions, creating a clear benefit. It is also important to understand how to capture the value of that innovation. In a larger company, an innovation strategy should also elaborate on how to decide how many resources should be spent on routine innovation versus more risky and long-term innovation in new technologies, and/or business models (radical, disruptive or even architectural innovation).

Annalisa Gigante, Board member at ZIS, former SVP Innovation and R&D at LafargeHolcim

A number of elements are critical for a high performing innovation team: culture and open mindedness are the most pervasive. The best teams are also able to balance creativity to define the right things to work on, and efficiency to deliver the projects...which is a very difficult thing to do!

Emil J. Dzuray Jr., Director of Strategic Planning at the US Postal Service HQ

Internal innovation impacts our strategic planning in two ways. First, it is a core element of the Postal Service’s strategic objectives to increase our internal capability to innovate faster to deliver value to our customers. Secondly, we have this focus because we see that when we clearly communicate our strategic objectives to our employees and give them the resources and space to innovate, they develop innovative and impactful solutions to help us better serve our customers.

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