If you think that you have an innovation strategy, think again:

When I ask corporate leaders if they have an innovation strategy I either get blank stares or “yes” as an answer.

Leaving the blank stares aside for the moment, when I ask those who said “yes” to briefly explain their innovation strategy, I get non-answers such as:

“At our company, it’s everyone’s job to innovate.“

“Well, we’re right now looking at implementing an ideation platform.”

“We have our innovation lab where a lot of our innovation work is being done.”

Some people confuse strategy with goals, while others think it's a detailed plan. A strategy is much more than simple goal setting and quite different from a detailed plan.

The strategy shows the areas that the company must focus on to win in the market but it doesn’t tell you step-by-step how to do it (like a plan). When strategizing, a lot of thought goes into how the different areas interconnect and help to strengthen one another.

As an example we can use Jim Collins Flywheel to visualize Amazon’s strategy:

Your innovation strategy goes one step further and informs how you intend to build on and adapt your key strengths so that your company will keep winning in the future as envisioned by your innovation thesis. 

Aspects to look at when crafting your innovation strategy:

In the case of Amazon, one search area is to continuously deepen their understanding of how they can leverage Ai and robotics.

The innovation thesis is a written document that describes a thesis of the future that is thought to have a significant impact on your business, while the innovation strategy sets out what your company must explore and dive deep into to prepare for that future.

The distribution of funds shows the ambition level of the company leadership. Are they primarily using their cash flow to pay dividends, buy back shares, or invest in innovation?

The innovation ecosystem consists of all the components (internally and externally) that you need to coordinate to be effective at executing your innovation strategy. The best ecosystems keep a win-win mentality in mind, where each part of the ecosystem understands their role and is happy with the risk/reward relationship that they have been given.

All of this means making tough choices on scope, resource allocation, structure, process, and culture.

An innovation strategy is more than running a hackathon or setting up an innovation lab.

TIP: If innovation strategy is a topic that really interests you, I also suggest that you read Tristan Kromer's excellent article “Strategy of Innovation vs. Innovation Strategy”