innovation strategy - few approaches to innovation

9
Innovation Strategy [email protected] 7/27/2012 Sundeep Mohanty This is a very brief research paper on innovation and different strategies for innovation. Here the focus of the research is to show correlation between Time, Market and opportunities.

Upload: sundeep-mohanty

Post on 29-Nov-2014

359 views

Category:

Business


2 download

DESCRIPTION

Innivation, Innovation Strategy, market, oppertunity search

TRANSCRIPT

Page 1: Innovation Strategy - Few approaches to innovation

Innovation Strategy

S u n d e e p _ m o h a n t y @ y a h o o . c o m

7 / 2 7 / 2 0 1 2

Sundeep Mohanty

This is a very brief research paper on innovation and

different strategies for innovation. Here the focus of the

research is to show correlation between Time, Market and

opportunities.

Page 2: Innovation Strategy - Few approaches to innovation

Page 1 of 8

Page 1

Contents

Time, Opportunity and Market Correlation Diagram: .................................................................................. 2

Abbreviations: ............................................................................................................................................... 3

Summary: ...................................................................................................................................................... 3

Three steps to convert idea to opportunity and opportunity to innovative product/service:................. 4

1. Visualize, Realize and Prioritize [VRP] Analysis: ............................................................................ 4

2. Look for opportunities – Open, Focused or Hybrid [OFH] Model: ................................................ 5

3. Explore, Establish and Expand Model: .......................................................................................... 8

Page 3: Innovation Strategy - Few approaches to innovation

Page 2 of 8

Page 2

Time, Opportunity and Market Correlation Diagram:

Above diagram indicates how market moves with time and how past untapped opportunities are now

parts of today’s competitive market. Most of the leading innovative Organizations falls under the green

zone (zone-3 in below diagram) and keep trying to stay ahead in the market by investing and exploring

the untapped market and trying to explore new opportunities and zone-4 of below diagram is the zone

to find opportunity. While majority of other Organizations are competing with each other in the extreme

red zone (Zone-2 in below diagram) and because of high competition and high supply, the profit margin

in red zone is less. The Organizations which falls in zone-1 are in high risk, without any product/service

gradually falling behind in competition and have very less to compete and survive unless until they don’t

Page 4: Innovation Strategy - Few approaches to innovation

Page 3 of 8

Page 3

have any new innovation to bring them back to competition. Organizations which are in zone-5 also are

very risky in their business model (example: www.planetaryresources.com), because the product and

service they were planning to sell don’t have demand as well as market aware about that and sometime

the business model for this type of business not get evolved fully to realize its effectiveness.

Abbreviations:

VRP Analysis: Visualize, Realize and Prioritize Analysis

OFH Model: Open, Focused and Hybrid models

EEE Model: Explore, Establish and Expand model

IC: Idea Contributor

IGT: Innovation Governance Team

BPDT: Business Plan Development Team

BP: Business Plan

OSC: Organizational Steering Committee

FG: Focus Group

CFC: Core Focus Committee

IM: Innovation Moderator

Summary:

Above “Time, Opportunity and Market correlation” diagram explains how the market moves

with time and why it is important to look for new opportunities or create new opportunity.

With time, need changes and things of future look current. For example, six to seven years back

smartphone technology was far from reality however, in today’s market it is a reality, as demand for

smart phone increasing many companies are now in smartphone business with Apple and Samsung

leading the smartphone market. In another 4 to 5 years, smartphone phones going to be very common

and slowly will get saturated with high supply (though demand may increase) until unless some new

technology revolution brings some face-lift to the smartphone devices.

Page 5: Innovation Strategy - Few approaches to innovation

Page 4 of 8

Page 4

In current market condition, most of the Organizations understand the importance of research

and innovation. However, looking beyond the current market and foreseeing future is not an easy task,

it needs proper planning to control future catastrophe.

Therefore, when Organizations are realizing the importance of innovation, it is necessary to

understand how to drive innovation initiatives. Here I am trying to explore few innovation strategies,

like “open innovation”, “focused innovation” and “hybrid innovation”. Though it is difficult to decide one

best approach, I feel for mid-sized to small-size established Organization should go for “focused

innovation”, whereas big Organizations can go in either way as they have enough budget to conduct

more research activities, while entrepreneurial Organizations can target any one of the above

innovation tactic depending on entrepreneurial resources.

Below providing three steps which I feel will help deciding how to create strategy for innovation

and create opportunity in the market.

Three steps to convert idea to opportunity and opportunity to innovative

product/service:

1. VRP Analysis

2. Look for opportunities- OFH Model.

3. Stay focused on core Strategy- EEE Model

1. Visualize, Realize and Prioritize [VRP] Analysis:

Visualize- Try to place your Organization in the above diagram depending on current product, service,

market demand, etc. Before taking any step I feel it is important for Organizations to find where it stand

in current market. Try 360-degree visualization by considering different viewpoints and then find a

commonly agreed view for current Organizations position.

Realize- Once Organization creates visualization, then focus on realization. Evaluate Organizations

vision and mission, create strategy where and how you want to take the Organization, try to foresee

where you think competitors are heading, how competitive you think future going to be, try identifying

issues, gap in business model, etc.

Page 6: Innovation Strategy - Few approaches to innovation

Page 5 of 8

Page 5

Prioritize- In this step, work on all the issue you identified and all the market analysis you did in

previous two phases. Create short term and long term goals, create action plans to meet the goals. Once

you create the action plan, it is important to prioritize the action plans and start working as per priority

of the action plan.

2. Look for opportunities – Open, Focused or Hybrid [OFH] Model:

The approach for innovation and looking for new opportunities is not simple, Organizations really need

to understand their capability, liquidity, current consumer base and target market.

N.B.: Below I am not going to discuss implementation approach and who will own the innovation effort.

Depending on what type of effort needed, what type of technology and human resource needed, the

implementation responsibility and ownership may vary. For example- if the innovation opportunity is

related to mobile technology, then it may come to IT innovation team and then to IT development team,

but if the idea is to improve HR related process, then it should be managed by HR department with

support from innovation team.

Page 7: Innovation Strategy - Few approaches to innovation

Page 6 of 8

Page 6

Open Innovation:

i. The free flow approach

ii. Free and open for any new opportunity, then try

to correlate with current business.

iii. Expect innovation ideas from individuals, which

may or may not follow Organization’s vision and

mission.

iv. There is no hard rule to focus on any particular

area.

v. Idea Contributor (IC) may be internal or external

to the Organization.

vi. Need more time for evaluation, may incur loss of time if the plan not fits with Organizations mission, obstacles in

its implementation feasibility, etc.

vii. The Innovation Governance Team (IGT) can then communicate with the Idea Contributor (IC) to understand the

idea.

viii. Innovation Governance Team (IGT) needs to ensure the feasibility of converting the idea to an opportunity for the

Organization.

ix. Innovation Governance Team (IGT) needs to work with Organizations Business Plan Development Team (BPDT) to

prepare a business plan (BP).

x. Innovation Governance Team then forwards the plan to Organizational Steering committee (OSC) for approval.

xi. Once approved, forward the plan to appropriate department/team for implementation.

xii. This approach brings freedom to think new ideas, but some time it is difficult to manage and sometimes plans are

very scattered and overlapping.

xiii. More work for innovation governance team (IGT) and less time to work or think about other innovation initiatives.

this strategy is OK for Organizations where research and innovation budget are flexible and always available, lead-time to

bring something to market is not very tight and demanding, Organization is should feel OK to spend time and other

resources without expecting success for all or most of the ideas. For mid-size to small size companies this approach is not

very suitable, because sometimes you spend more time without correlating the opportunity with current position of the

organization and its vision.

Page 8: Innovation Strategy - Few approaches to innovation

Page 7 of 8

Page 7

Focused Innovation:

1. Focus on Organizations vision and mission.

2. First, create roadmap for Organization.

3. Evaluate strength, weakness, Opportunity and threat

(iterative SWAT in every three month is a most activity).

4. Create Focus Groups (FG) by bringing different internal

employees of same interest. Allow external partners to

participate and join focus group on which they were

interested.

5. Assign them few topics to research and find some new

solution and idea, which will bring new market

opportunity and bring profit to the Organization.

6. This approach increases interest level for employees

and build strong synergy.

7. Gives learning experience to some those who are not

familiar with the business to understand business and Organization.

8. Focus group should work with Organization’s Business Planning Team (BPT) to create business plan.

9. Once the focus group ready, they need to present it in front of innovation governance team (IGT) and later to

Organizational Steering Committee (OSC).

10. It reduces work for IGT, helps them to oversee more than one innovation initiation simultaneously.

Hybrid Innovation:

To make innovation more effective and flexible, the best option is to adopt hybrid approach by combining both open and

focused innovation approaches.

1. Allow individuals to bring new ideas.

2. Create different focus group by taking employees from multi discipline Organizations structure those shares subject of

interest.

3. Form a Core Focus Committee (CFC) by taking few individuals from each focus team.

4. Let the CFC along with idea contributor (IC) and innovation moderator (IM) from IGT decides to which focus group the

idea should go.

5. Once directed the idea to focus group, the focus group will analyze and evaluate the idea in more detail manner from

Page 9: Innovation Strategy - Few approaches to innovation

Page 8 of 8

Page 8

different prospective and provide the recommendation to IGT, which will again evaluate the plan and send its

recommendation to OSC.

6. This is very systematic and incremental approach, with each move from one group to other, it can produce various

analysis and matrix, reduces work for IGT, with move from one phase to other it bring more detail about the idea and

its benefits and help in filtering out or help realizing importance of the opportunity.

3. Explore, Establish and Expand Model:

This is very simple approach which uses all the above explained analysis and models.

Explore: To explore own organization, market and competitor. “Visualize” and “Realize”

analysis explained above falls under it. More the Organization knows about itself, its

vision/mission, consumers and market evolution better it will be equipped with its plan and

preparation.

Establish: Once you pin-pointed Organizations current and future path, let’s focus on its

implementation and presentation. “Prioritize” mechanism mentioned above is part of establish

phase. How much customer acceptability your product/service is getting depends on how you

delivering and presenting to the customer. This is the phase where I believe Organizations most

of the departments and groups involved, so better coordination is the key.

Expand: Once you established your business and Organization in delivering products and

service effectively don’t sit back and relax, in market if something gets “established” that also

brings competition and more attack from competing business establishments. So once the

Organization reaches in its peak of sale or sees more competitions then you need to realize to

work on new opportunities, it can be bringing new products, remolding old products, reaching

out to new regions or segments.