Today’s companies are faced with rapidly changing markets, technologies, and pe9ople. Employees are spread across as many as four generations with different approaches to work and family, and with different frameworks for managing projects to grow the business. Organizations can be successful with innovation projects by focusing on three key elements: strategic orientation, business priorities, and cultural values.
Companies do not exist just to be around. Instead, firms are in business to serve a specific purpose. A part of that purpose is to make a profit and to satisfy stockholders, but a much larger definition of purpose is why the company exists.
Many companies state their purpose within their strategy and mission statements. Google doesn’t want to do evil and Starbucks want to nourish the human spirit. Understanding the business purpose frames the company’s innovation strategy.
A strategic orientation directs and defines the company’s purpose as well as it’s tolerance for risk. A firm that is tolerant of risk and jumps onto each new technology (a prospector) can get new products to market quickly. A company that improves the quality of that product and improves the manufacturing efficiency (an analyzer) will also gain market share. Analyzers are typically less risk tolerant than prospectors yet value the benefits of continuous innovation.
Firms with prospector and analyzer strategies have very different approaches to implementing technology and different perspectives of risk. Yet, the strategic approach to innovation and project management is built into the purpose of the company and how it tackles any new market opportunities.
Once an organization has a clear strategy in place, it can prioritize business goals. With a risk accepting culture and a strategic purpose to be first-to-market, a firm can rank new product development projects and ideas to lead with new technologies. On the other hand, a firm that is less risk tolerant with an existing high market share may instead focus on incremental innovation. New technology may be incorporated at the fringes with minimal impact to the core business. A hobby and craft store may add a smartphone application with a weekly coupon but maintain face-to-face classroom teaching as a way to draw in new customers and increase sales volume.
Lat, but certainly not least, a successful project or innovation organization must be consistent in cultural values. The degree of risk tolerance and business priorities send strong messages to employees, vendors, and other stakeholders. For example, an organization that focuses on growing existing markets with incremental developments will prioritize manufacturing efficiency and cost-control over new technology. In contrast, a firm with a goal of radical inventions to serve niche consumers will employ whatever means it takes to create a new product prototype.
The messages conveyed by the strategy and business priorities set the company culture. In the former case, employees are expected to conform to rules, practices, and procedures. Deviations lead to decreased productivity or inefficiencies. In the latter case, employees are expected to act first and apologize later.
Of course, a free-wheeling culture cannot sustain long-term profitability and a risk-averse culture will design such boring products that it will send itself to an early death. A successful innovation organization lays out a framework for expected behaviors within the strategic orientation and business priorities of the firm. A hotel front desk agent can waive room service charges for a guest with a fussy infant rather than have them dine in the public space, disrupting other patrons. But, the same employee understands that she cannot waive the extra room fee for connecting suites for the family’s other children.
Successful Innovation Organizations
Culture is powerful in a successful customer-centric innovation organization. But, culture is built upon a clear strategic purpose and business priorities. The strategy explains – beyond profit – why a business exists. Whoa re the customers? What is the expected outcome? How will the world be a better place because this company exists?
Business priorities and projects are then selected based upon this ove4rall strategic vision. Companies that are successful with innovation projects build on the purpose by growing core competencies and market share in familiar arenas. They adopt new technologies to support the mission. New products are commercialized that align with these strategic opportunities.
To learn more about new product development management, check out self-study and other NPDP Workshops. Feel free to contact me at email@example.com or 281-280-8717. At Simple-PDH.com where we want to help you gain and maintain your professional certifications. You can study, learn, and earn – it’s simple!
One of my favorite new books on innovation strategy is The Power of Little Ideas by David C. Robertson and Kent Lineback. Of course, anyone interested supporting a repetitive NPD process should read Bob Cooper’s Winning at New Products and New Product Forecasting by Ken Kahn. Stories of entrepreneurial success, like Airbnb, are artfully included in The Creator’s Code and Barking Up the Wrong Tree (affiliate links). I also dedicate an entire chapter to NPD processes in NPDP Certification Prep: A 24-Hour Study Guide, and you can find additional references at https://globalnpsolutions.com/services/npd-resources/.
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