1.
Creating An
Innovation Strategy
RDM Management Group
Ron Pickett MBA, CMC

2.
WHO IS THE GREATER INNOVATOR ?
THOMAS EDISON STEVE JOBS
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3.
WHY CREATE AN INNOVATION STRATEGY
 Many executives believe that innovation is critical for
success … many have deep concerns about their firm’s
ability to innovate effectively … they do not have a formal
innovation strategy
• A recent study found that only one in five chief
executives believes his strategic investments in
innovation are paying off… (Bloomberg Business Week,
2013)
• Canada has a poor innovation record, ranking 13 out of
the 16 OECD countries (Conference Board of Canada,
2014)
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4.
WHY CREATE AN INNOVATION STRATEGY
 Innovation does not require a revolution inside
companies
 Innovation is not alchemy, with mystifying
transformations …its more like the basic
tackling of other key business functions
 How you innovate determines what you innovate
 Strategic advantage
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5.
SEVEN INNOVATION OBSTACLES
1. Concentration on daily business / short-term goals
2. Current products and processes are not put into
question
3. Lack of collaboration between departments (silos)
4. Risk aversion
5. Management does not support innovation enough
6. Innovation strategy, process, idea management not
existing, not clear and/or not communicated
7. Budget- and/or resource limitations
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6.
WHAT IS AN INNOVATION STRATEGY?
 An integrated structure, formal processes,
and tools for an innovation growth strategy
 Includes an organizational design,
management systems, performance
evaluation metrics, people, HR policies, and
rewards
 Links to the business strategy
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7.
WHAT IS INNOVATION?
 Innovation occurs when a company makes
changes to the major technologies or business
model for the products and services it markets
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8.
INNOVATION DRIVERS
 Business model change drivers
 Value proposition – what you sell
 Value networks – how you sell it
 Target customer – who you sell to
 Technology change drivers
 Products and service offerings
 Process technologies
 Enabling technologies
 Three types of innovation
 incremental, semi-radical, and radical
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9.
INNOVATION STRATEGY PLANNING MATRIX
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Business model drivers Technology drivers
Value
proposition
Value chain
Value
proposition
Target
customer
Product &
service
Process
technology
Enabling
technology
Incremental Small changes in one or more of the six levers
Semi radical
Business model driven
Radical
Significant change in one or
more of the three levers
Small change in one or
more of the three levers
Semi radical
Technology driven
Small change in one or
more of the three levers
Significant change in one or
more of the three levers
Significant change in one or
more of the three levers
Significant change in one or
more of the three levers
Innovation types

10.
INNOVATION STRATEGIES
 Innovation strategy must align with the business strategy
 Play Not to Lose (PNTL) – Incremental innovation
 Protect and maintain market share
 Combat margin erosion
 Play to Win (PTW) – Semi radical and radical innovation
 Maintain market leadership
 Market makers, new industries
 Drives growth
 Brand building
 Ideal strategy balances PNTL and PTW
 Play to Fail (PTF) is not having an innovation strategy
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11.
INNOVATION STRATEGY PLANNING MATRIX
Business model drivers Technology drivers
Innovation types
Incremental Banks, Utilities,
Government,
TQM, ISO 9000, Oligopolies
Cellular Wireless
Approximately 80% of all
innovation
Semi radical
Business model
driven
Dell, SW Airlines, Walmart,
IBM, Salesforce.com, Virgin
Semi radical
Technology driven
Mobile phones, automobiles,
Radical Amazon, Google, Apple, Facebook, Henry Ford
Walmart, Bit Coin, Apollo Group – Online Education, Virgin,
Cloud Computing
Value
proposition
Value
chain
Target
customer
Product &
service
Process
technology
Enabling
technology
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12.
PLAY TO FAIL
 … RIM/Blackberry, Nokia, Motorola, Kodak,
Sears, Blockbuster Video, Sun
Microsystems, DEC, Eatons, Simpsons …
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13.
INNOVATION MATRIX
Semi Radical
Technology
Automobiles
Mobile telephones
Radical
Apple
Google
Amazon
Virgin
Bit Coin
Cloud Computing
Incremental
Oligopolies
Banks
Utilities
Cellular Wireless Companies
80% of innovation
Semi Radical
Business
Dell
SW Airlines
Walmart
IBM
Salesforce.com
Business Model
T
e
c
h
n
o
l
o
g
y
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14.
INNOVATION STRATEGY
Assess
Drivers
• Business – What, How, Who you Sell to
• Technology – Product, Process, Enabler
Select
Strategy
• Play Not to Lose
• Play to Win
• Combination
Manage
Innovation
Portfolio
• Incremental
• Semi Radical
• Radical
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15.
LEADERSHIP
 Sets the vision
 Leads the innovation strategy
 Align the innovation and business strategy
 Engrain the innovation strategy into the corporate culture
 Create innovation networks of intrapreneurs inside and
outside the company
 Correct metrics and motivators
 Risk tolerance
 Overcome internal organizational resistance
 Freeing up appropriate budget
 Be aware and overcome complacency that innovation
success creates
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16.
Innovation Pyramid
An Innovation
Strategy provides:
 Increased profits
 Branding
 Market Leadership
 High performance
work teams
 Learning innovative
culture
 Real competitive
advantage
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17.
NEXT STEPS
1. Exert strong leadership and determine the innovation
strategy that fits the business strategy, competitive
environment, and innovation competencies
 PNTL, PTW, or a balance
 Assess the innovation climate, run a cultural
diagnosis on creativity and value capture
2. Develop innovation platforms for different innovation
types – six business and technology drivers
 Incremental, semi radical, radical
 Structure company and organizing management
systems to promote innovation
3. Create portfolios for each platform including idea
generation and gating – find the right balance
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18.
NEXT STEPS
5. Define internal and external resource
requirements
6. Ensure internal innovation platforms have
diverse creative and commercialization
resources working in harmony
7. Create balanced scorecard metrics and
rewards supporting the innovation strategy
8. Overcome any internal resistance to change
subverting creativity and commercialization
9. Celebrate successes and embed innovation
throughout the corporate culture
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19.
HOW CAN RDM ?
 An engagement is typically a number of facilitation
workshops and stakeholder interviews, walking a
leadership team through the 8 steps
 Deals with leadership requirements, strategy, structure,
resources, management systems, processes,
performance metrics, project management discipline,
measurement and incentive rewards – organizational
structure and culture
 Document and present workshop/interview results,
clarify, finalize, act, and move to next step
 Similar to the strategic planning process
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20.
THE INNOVATION PROCESS
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21.
THE INNOVATION PROCESS
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22.
Questions?
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