Innovation can be defined as the process of devising solutions that address unmet customer needs. An innovation strategy is the systematic identification of unmet customer needs in a given market—and selection of which unmet needs to target for growth. Identifying and prioritizing unmet customer needs allows the business to grow market share or profits through reliably successful product and service innovation. Jobs-to-be-Done offers the perfect lens to view innovation strategy because it allows you to uncover all of your customers’ unmet needs.
An effective innovation strategy can:
Some innovations are based on technology development, while others are based on innovative business processes. Both types are valuable and important. An innovation strategy should include the types of innovation that are priorities for the business. Researchers say there are four main types of innovation:
Align innovation with business strategy: Successful innovation efforts must be in step with your overall business strategy. To set the stage for effective innovation, individuals across the organization must understand the corporate goals. That includes understanding the market in which the business plans to work, as the best innovations respond to the needs of customers or potential customers. Your innovation strategy must also be informed by an understanding of your competitors. Also, keep in mind that all the best products and business models travel through a predictable, S-curve cycle of growth. A successful innovation won’t experience growth forever. When the new begins to wear off and diminishing returns set in, that’s the time to introduce the next innovation–and your strategy should plan for that.
Determine your value proposition: Your innovation strategy should answer the questions of what unique value you will bring to your market and what types of innovations will allow you to capture that value and build a competitive advantage. Can you create value by saving customers money and time? By making them willing to pay more for your product or service? By providing a greater benefit to society? By making your product better performing, more convenient, more durable or less expensive than the current options?
Learn the unmet needs of your customers: The most successful innovations will meet needs of the customers you want to serve–and to develop those innovations, your business must understand the needs, sometimes even before the customers realize they have those needs. Consider crowdsourcing input from employees to help uncover their knowledge of customer needs. This can be a valuable approach to gathering information about where to focus your innovation efforts.
Assess and adjust: The best strategy plans are always flexible. Take time to assess the effectiveness of your innovation strategy by crowdsourcing among employees. This step can provide you with a sustainable feedback loop to gauge the validity of your plan and adapt it as necessary. As customer needs and market needs change, be willing to adapt your innovation strategy to better fit reality. Continue crowdsourcing for employee input and adjust your strategy to meet current needs.
Apple: Apple builds innovations by acquiring startups and partnering with other companies to develop new products, such as a partnership with Volkswagen to produce driverless shuttle vans for employees. The company also has an internal accelerator that leverages Apple employees to push forward new research projects, such as Titan, an electric car project.
Corning: For almost 200 years, Corning has repeatedly introduced new innovations and transformed its business model. It continues to succeed by investing in ongoing research at its R&D laboratory, where researchers from diverse disciplinary backgrounds can collaborate, applying science to industrial problems.
Polaris: Polaris implemented an automated system for crowdsourcing new ideas from employees, making the process of ideation to execution 80 percent faster. The crowdsourcing innovation initiative has resulted in four cutting-edge vehicles, such as the Polaris Slingshot, that are all bestsellers and award winners in the ATV market.
Brand-name companies aren’t the only ones who can benefit from an effective innovation strategy. Businesses at every stage can more effectively accomplish future growth by developing an innovation strategy that fits their unique goals and competencies. Learn more about how an effective strategy can help a business realize the ongoing rewards of innovation.
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