The new is not always better than the old, but a continuous flow of fresh ideas at least prevents the death of the mind and institutions, which is so often the price of victory and the cause of future defeat. Today’s victory can turn to be the worst enemy of future victory or can be the source of future losses. Playing by yesterday’s rules is no longer the game of the future. That which you have been doing successfully can be done by someone else differently, and you lose the game. Therefore, every organisation’s strategic objectives should incorporate innovation as an integral part. In the words of Matthew Wall, “Companies that fail to innovate risk extinction. That’s the stark truth in the era of digital disruption.”
Innovation means different things to different people. Several people stop to think of innovation as technology driven only, but in speaking of business, experts categorise innovation into two. The first being a breakthrough innovation, which refers to completely new products or services or business models that call for a disruption in customer buying patterns, competition and the operating environment. Internet is one of the biggest breakthrough innovaIncorporating innovation in strategy Batanai Kamunyaru tion! The second category of innovation is the sustaining innovation, which refers to incremental improvements or changes to products and services that result in the extension of the product or service life and it may be a build on products or services that were once breakthroughs. In other words, innovation concentrates on finding ideas of doing things differently, and it is centxred on having a different perspective to how things are done or should be done. Strategic plans or objectives that do not incorporate innovation have little impact to the future existence of the business. Strikingly, instead of supporting innovation, several organisations try to fight innovation and knowingly or unknowingly set up structures that do not support change and new ways of doing things. Notably, it is a waste of time and resources to fight innovation for it has a higher chance of defeating its enemies.
The disruption of innovation can be noticed in several industries. A story is told of the recording industry and the birth of MP3 players. The MP3 revolution hit the earbuds of people in the late 1990s, and ever since the recording industry has been in trouble, resulting in its ‘death’ and the birth of the new. When executives of the recording industries saw the coming of the MP3 wave, they decided to fight with copyright laws and they spent millions in legal fees. Even though they fought with litigation, to their own customers, the digital downloads of music kept growing whilst the sales of CDs continued to plummet. The MP3 digital music eventually won the game in 2007 when the music industry threw in the towel to the fights – for innovation cannot be fought for long – and they were forced to do that which they had strongly resisted, thus selling digital downloads!
Innovation should be an integral part of your strategic plan and objectives since markets are not stable, competition is on the rise and coming up with new products, technology is advancing relentlessly, and customers are very fickle. Competition is targeting the same market that you are serving, so to maintain or improve market share, you must be continuously innovating to keep ahead of the game. To make your own changes to business is advantageous than to be forced to change, just like the recording industry. The more you take before changing, the more you will lose in profits and revenue. Being innovate is no longer a choice in these times, but a must if you are to obtain long lasting benefits, so business executives must build innovation in their strategic development processes.
Strategic plans must have clearly detailed action steps of transforming innovative mindsets into meaningful results that will have impact on markets, customers and competition. Since innovation is the driver of change, an organisation that is change ready embraces and supports innovative ideas that transforms the business for better placement against competitors. Great companies in the world allows innovation to play a major role in their strategy, and all the great companies are innovators! From a strategic point of view, innovation can be imbedded in the four perspectives of the Balanced Scorecard. The balanced scorecard must be the instrumental tool that almost every organisation should use in crafting strategic plans. Any strategy with no roots in the balanced scorecard has limited chances of giving the organisation a competitive advantage.
On the financial perspective, innovation might mean that the organisation will continue to create shareholders value, expressed in financial language or terms. Value may also be created for the tax authorities, however value expressed in financial terms will depend with the nature of the organisation – thus what the organisation does and what it seeks to achieve. As a way of being innovative, the organisation might even choose to measure the percentage of dividends per every dollar of revenue, which gives the shareholder some level of comfort that a dividend might be on its way as detected by the revenue levels.
From the customers and stakeholder perspective, innovation has to do with the creation and deployment of new products, services or business models that result in increased value for customers and consumers. Also, in this category, the products, services or business models will address the concerns of the stakeholders to their satisfaction. It is of importance to always remember that the needs of the customer keep on changing, so the strategic planning process must aim to address the changes to maintain customer loyalty.
Several organisations have gone out of businesses because they underestimated the change in the needs of the customer. Look at how Nokia lost the market to Samsung and Apple. In a press conference to announce the acquisition of Nokia by Microsoft, the Nokia CEO concluded his speech by saying, “…we didn’t do anything wrong, but somehow, we lost”. Upon saying such, his management team and himself teared. In his eyes, they didn’t do anything wrong, but in the eyes of the customers and the stakeholders, they failed to pace up with their changed needs. If you do not change your products and services or business models in line with the needs of the customers, your organisation will be completely removed from the competition equation shortly. It is sad when customers are still stuck with you because there is no better competitor or innovation, so be on the lookout!
The advantages you had previously might be your biggest enemy in the future if you do not endeavour to change. You might not be doing anything wrong, but when customers’ needs change, no-matter how you understand the product and how much you love it, you also must change as they are the ones who keep you in or out of business.
From a process viewpoint, innovation might mean creating, managing and controlling processes for the deployment of promised ideas. Processes are of great importance in the delivery of promises to stakeholders, so the strategic plans should aim to address this on a continuous basis. The way you delivered a product or service in the1990s might not be the best way of delivering products or services in 2019. Do not get stuck to the notion that “it’s how we have been doing it here”. Yes, how you have been doing it in the 1990s might have been the best way then, but not now! Relook at the processes and make them very efficient, to deliver a high-quality product or service, at a competitive price. Daily, big businesses are becoming small businesses because of new processes that are being introduced. In the yesteryears, the Zimbabwean telecommunications industry was dominated by then PTC – they didn’t move with the times and decided to stick to their old processes, hence they are now small under a different name. Innovation can never be successfully fought, you either join the bandwagon or you will be left behind. In your strategic plans, never try to fight innovation, embrace it – and you will be in business for so many years.
On the organisation capacity perspective, innovation requires that the business have a good cocktail of leadership and skills, as well as a structure that incubates new ideas. New ideas develop the organisation to be better. Your strategic plans should emphasize the blending of new blood and minds into the corporate structures to ensure continuity of the organisation. When an organisation does not have young brains in its executive, it is only a matter of time before the organisation goes to the dogs.
To conclude, in the words of William Pollard, “Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” Therefore, make innovation a priority in your strategic plans! Batanai Kamunyaru is a business writer, speaker and coach. He can be contacted on bat.
email@example.com or +263 718 852 489.