Innovation Follows Strategy

Innovation that is done in the context of business strategy tends to be more focused, efficient, and business-model relevant.  Innovation should not be viewed as a way to take the organization off its strategic track and in new directions.  Rather, innovation should be applied in a way that makes the current strategic track more successful and profitable…true growth.

Yet the tendency is to view this approach as incrementalism and not disruptive enough in the Christensen sense.  Some would say that starting with your current situation is not bold and is risk adverse.  “We’re not thinking outside the box” is the usual incantation at this point.  Instead, there is a preference to chasing “white space” and “open source” innovation as a source of growth.  Some executives prefer the lure of white space and opportunity spotting, and they readily acknowledge that it is “low yield by design.”  The Scarcity Principle tends to make these opportunities seem more valuable than they really are.  White space chasers position themselves as fighting the heroic fight.  Resources come pouring in.

The best Fortune 100 companies pursue high yield, organic innovation efforts… not “low-yield-by-design” efforts.  High yield innovation comes from tying innovation directly to the strategic marketing context of the firm.  Ideas generated this way help the organization stretch its model in a way that is achievable and internally-sellable.

How do you tie innovation to strategy?  Professor Christie Nordhielm from the University of Michigan has developed what I consider the best single contribution to marketing thought since the 4P’s.  Her Big Picture framework of the marketing management process provides the context for innovating across the entire business model.  Applying systematic innovation tools to each aspect of her Big Picture model can yield amazing insights at both the strategic and tactical levels of the business.  It is the intersection of these two ideas…Big Picture Strategy and Systematic Inventive Thinking…that will yield consistent, profitable results.  Innovation follows strategy…not the other way around.