Your Innovation Strategy Should Be a Mindset

In order to arrive at a proper innovation strategy, you have to meet a couple of requirements, but the most important thing is to have the right mindset.

I have said it before: innovation is more than the next beautiful, new product. Innovation can also be a new way of distribution, a new business model, innovative partnerships, or a different brand positioning. Innovation is all about the question: How do we stay relevant as a company for our customers?

As a consequence, a strong innovation strategy aims to include the complete business model. It goes way beyond developing the next, slightly improved version of an existing product. It includes new service propositions, new revenue streams, new processes, alternative distribution channels, and partnerships. This requires a long-term perspective, a healthy ambition, and a profound understanding of your market.

Let’s take a look at some data that indicate that things are about to change:

• According to McKinsey, 80% of the CEOs of Dutch companies indicate that innovation is increasingly crucial for growth and that the current earnings model is under pressure.
• Only 6% of the CEOs state that they are satisfied with the current innovative strength of their company.
• In 10 years, 50% of the S&P 500 companies will be removed from the list.
• According to a survey from PricewaterhouseCoopers, insufficient innovation is one of the main reasons for low growth, and companies that do innovate successfully grow 3 times faster than the market.

(Thank you, Matthijs Rosman, for the figures.)

So, are you convinced that innovation is crucial for your future too? If so, you are not alone. Our research at RevelX indicates that a growing number of Dutch entrepreneurs and executives understand the importance of innovation. A huge number of them lag behind in putting this insight into action, though. There is a lot of work to do to develop a proper innovation strategy.

To accomplish this, I recommend you to check which of the following statements apply to your organization:

1. Our innovation strategy and roadmap is clearly defined and documented.
2. We have well-defined and ambitious innovation targets.
3. We have a clear understanding of future innovations that can disrupt our industry.
4. Innovation is not only focused on new products but on our entire business model.
5. Our organization invests sufficiently in projects with a long-term horizon.

In a perfect world, all of these statements would apply to your organization. You certainly should keep all these aspects in mind.

Your goal should not be to write the best innovation plan there ever was, though. No, you should see innovation as a process. In another article, I will tell you how to set up this process. So watch this space!