What Is an Innovation Strategy?

An innovation strategy is a plan that guides decisions, actions, and investments to achieve an organization's objectives. The innovative approach can include plans for your organization's future and how you will do things differently from other companies.

An innovation strategy provides a lens for decision-making by setting clear goals and expectations about how to grow your business, what success looks like, how you will measure it and where the most value will come from.

An effective innovation strategy asks questions such as:

What needs are we trying to solve?
How do we know if we've succeeded in solving them?
Where will we find opportunities for growth or improvement?

Benefits of a Good Strategy

A good strategy provides a clear direction for the organization and enables you to align your innovation activities with your overall business goals.

A Clear Vision

Your innovation strategy should define what is essential for your organization and how you see it developing in the future. It can be used as a benchmark when evaluating new opportunities or technology developments, helping to prioritize investments that will significantly impact your business over time. The benefits of an innovative strategy include the following:

A Framework for Decision-Making

An effective innovation strategy will clearly articulate which technologies and processes are considered strategic priorities and why they're essential to achieving the desired outcomes outlined in your vision statement.

It helps ensure that all decisions related to these areas are made rationally rather than on a whim or due to political pressure from influential organizational stakeholders (such as senior managers).

Flexibility Around Strategic Objectives

Only some projects have equal priority within a year. Hence, flexibility in how much time/resources are allocated towards different areas during different periods enables organizations like yours greater freedom when planning.

Building the Plan

The strategy should outline how you will grow your business and what resources you need to achieve that growth. It needs to be flexible enough for you to adapt as the external environment changes, and it also needs to be realistic.

The strategy should identify the risks of not achieving these goals and how you will manage them if they occur.

You can use tools analysis tools to help with this, such as:

SWOT analysis which analysis the strengths, weaknesses, opportunities, and threats
PESTLE that includes political, economic, social, technological, and legal)

You'll also want a plan that outlines how your organization will deliver on its innovation objectives. It may include establishing an innovation team or employing experts who can assist with new product development and business model design processes.

A Strategy for Innovation Directs Choices, Actions, and Long-Term Plans

An innovation strategy guides decisions, activities, and plans around innovation. It is a plan to use innovation to achieve your business goals.

A high-quality innovation strategy can help you:

Make better decisions about what kinds of ideas to develop, how much funding you should invest in them and where they are being developed
Identify external challenges that may affect your ability to implement an idea successfully
Identify future opportunities for growth and possible threats from competitors or other stakeholders.

Take Action

With this guide to innovation strategies, you should have a good idea of what makes a practical approach. Take the time to consider your own business and find out what works best for you - then put it into action!