In business practice or beyond, in the management of any type of organisation, for many people integrating strategy and innovation is like wanting to mix water with oil. Because for them, the strategy is a pre-determined plan, a set of objectives that we set for ourselves in the future, to then see if we have deviated from that route or managed to reach the pre-determined goal. Those of us who have been working for a few years now remember the four-year strategic plans and the annual management plans that were set which specified the objectives for the next twelve months.
However, innovation is the area in which we explore unknown routes. And therefore our ability to set goals or make plans is much reduced. We can do them, but experience shows that it is much more difficult to get them right. For many companies, innovation has been a fractious chapter in the strategy. They are given the freedom to have a part of the organisation which "leaves no stone unturned" and takes care of "R&D projects", if possible with support from public funds.
This is a weak connection, which falls far short of what we need in these times of change when the COVID-19 crisis is accelerating (and may accelerate even more, if it is prolonged). Innovation has to be much closer to strategy, or vice versa because reality is becoming more and more like a road with obstacles...
Have you ever implemented an 'emerging strategy'?
You need to change the way you plan by combining the elements of 'deliberate strategy' (classic plans) with the elements of 'emerging strategy'. In this second scheme, no target point or planning is assumed. It rather assumes that priorities will emerge and develop as the organization moves forward and better understands the actual context in which it should operate. Thus the strategy "emerges" as we go along.
This does not imply the impossibility of being ambitious and establishing a sense of where you want to be at any given time. However, the process is about learning the way forward, following a trial and error approach. This way of doing strategy requires changes in the culture and in the organization, it requires adapting the processes, the control dynamics... Innovation is no longer in the corner of "those who do projects with grants", but it is put in the centre of the organization, surrounded by layers that go from more flexible to more rigid.
Does an innovation project prove its viability in a pilot phase? It is quickly extended to the rest of the business, always being aware that in this phase of implementation there are also risks.
It is also necessary that this new heart is connected to the innovation ecosystem (open innovation) and develops foresight tools to understand how the change tendencies will affect our business. We can either react with advantage or we decide to assume the role of followers.
It is time to move from concepts to their practical implementation in organizations. The good news is that after a decade of much fuss about nothing, innovation has already begun to choose good practices and relevant experiences that we can apply with some guarantee of success. Some international references are also being consolidated, such as the Oslo Manual (2018) or the ISO 56000 family of international standards for Innovation Management.
It may seem impossible to face all these waves of change that are coming from digital transformation and industry 4.0 to the social impact of the company, through the inevitable impact that the crisis of COVID-19 will leave us. These waves will continue to arrive. So will others that we do not yet know. The way to manage them properly is with an innovation strategy. If you are interested in exploring these ideas further, you can leave us your email because we are going to organize a webinar in the next few days. We will let you know about it.
Author: Guillermo Dorronsoro (Management Board Advisor)
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