Where Do Innovation Strategies Usually Go Wrong?

Innovation strategy is a common source of anxiety for many innovation managers: they always want one, but few think their organization has a clearly defined one.

However, the good news is that innovation strategy is just a set of decisions on how to best fulfill the company’s overall strategic goals related to creating something new or improved. So, even if your organization doesn’t yet have a clearly defined innovation strategy, it’s often a surprisingly straightforward task to derive it from the overall corporate strategy.

Having said that, there still are a handful of ways in which innovation strategies often go wrong. In this article, we’ll explore some of these more common mistakes, and seek to provide you with some actionable tips for avoiding them.

The Classic Strategy Mistakes

Let’s start by covering the five classic strategy mistakes. These are not specific to innovation strategies but are by far the most common problems in those too.

At first glance, these classic mistakes seem like very basic rookie mistakes that no senior leader worth their salt will make. However, they are actually very difficult to completely avoid in any large organization. Most strategies, even some of the best, usually include at least some of these elements to some extent.

The point is that if you start to see more than one or two of these, or if they’re obvious issues, odds are that your strategy will run into challenges down the road. Let’s next cover each of these mistakes briefly.

1. Daydreaming. This is the classic case of management coming up with a big, bold vision but not having any idea on how to get there, and no concrete plans for figuring that out. For front-line employees and managers, it’s immediately obvious that the strategy just isn’t rooted in reality.
2. Alignment is a related, but more nuanced challenge, and one that almost every large organization struggles with. Bridging the gap between the big picture goals and the day-to-day across the entire organization is just a very difficult task that is nearly impossible to get right from the get-go. The key is getting most of the way there, and then actively working to further improve alignment as you execute on the strategy.
3. Hoping for the best is a classic mistake for the big-picture style of leaders who think that their job is to get the big picture right, and its’ then other people’s job to make things happen. In reality, as Professor Martin well put it, it just doesn’t work like that. If your strategy doesn’t consider the execution, you’re just hoping for the best and usually that won’t happen. There’s a reason for the CEO being the Chief Executive.
4. Not deciding is probably the second most common challenge right after alignment. We’ve all seen strategies that are basically a variation of "we do everything for everyone because that's the biggest market", and that lack of focus can only lead to spectacular failure when it comes time to execute the strategy. Another variation of this is strategies like "we focus on growth", “we will become a market leader”. These aren’t meaningful choices; they are the end results, and very abstract ones at that. Nevertheless, growth can be made into an effective strategy if it’s focused on a very specific area, and the strategy includes the compromises you’re willing to make to achieve that growth, for example profitability. However, that's just not what most companies are doing when they say their strategy is growth.
5. The 5-year plan is our nickname for running an extremely intensive one-off strategy process where a detailed roadmap is created for the next five (or however many) years. The problem is that no matter how well you know the business and do your research, no one gets it right from the get-go, and even if you theoretically would, there are very few markets that are so stagnant that nothing significant will change in the next five years. Good strategies are always a result of an iterative, on-going process.

In a nutshell, innovators plan for the long-term and towards specific goals – but remain flexible on the ways to get there and make strategy an iterative learning process focused on getting things done and continuously moving in the right direction. There are many good frameworks for this. Be it Future-Back, Discovery-Driven Planning, Blue Ocean Strategy, or the Lean Startup, they all essentially talk about variations of the same thing.

The Real Challenge is Implementation

Let’s say you get the big picture right and avoid the classic mistakes we’ve just covered. The good news is that you’re now in the game! The bad news is that you’re still a long way from successfully pulling off your strategy.

The implementation is the hard part, and the part that makes all the difference. In essence, a great strategy, be it an innovation strategy or any other kind of strategy, sets the upper limit for the performance of the organization. A poor strategy, even when executed perfectly, will still lead to poor performance. But so does a perfect strategy when implemented poorly.

Reliable figures for the failure rate of strategy execution are hard to come by, but the consensus seems to be in the range of 60-90%. I haven’t seen research on the same figures for innovation focused strategies but based on the stats that are available, I’m quite confident they won't be meaningfully better.

Anyone can, after all, say that they want to change the world or become a global leader at something, but few can make that happen.So, a great innovation strategy is built on a nuanced understanding of an organization’s operating environment and is built on choices that give the organization the best possible odds of success. And, in that, keeping the implementation and the day-to-day realities top of mind during each phase of the strategy work is key.

The details will naturally vary depending on the business and industry, but before we wrap up, we’ll briefly cover some of the key principles that most organizations pursuing an innovation focused strategy should pay attention to. 

Getting Implementation Right 

1. Tell the What, focus on the Why, and leave room for the How

The first of our principles is to understand that you as a leader don’t have all the answers. Whatever plan you create will need to be adjusted, and it should be done by the people executing the strategy. So, make sure your strategy tells the big picture mission and key choices you’ve made (the What), but focuses especially on the rationale behind them (the Why) while leaving room for people to figure out what the best methods are for achieving those goals (the How).

Statistically speaking, no one will remember your strategic goals, but with a couple of well-chosen examples, you can get your employees to remember the rationale behind key choices, which has far reaching consequences throughout the organization. If you get that right, alignment and execution will become dramatically easier.

2. Speed is key, systematically seek out and remove barriers for it

As we’ve covered, executing an innovative strategy is an iterative learning process. The faster you can move, the faster you will learn and the more you can accomplish. This leads to compounding returns, and that’s why I think pace of innovation is the ultimate competitive advantage.

There are a number of things that can help make an organization more agile, innovative, and faster, but in the end it comes down to systematically seeking out and removing any and all barriers that prevent people from innovating or executing the strategy. Sometimes this is straightforward if you just keep an ear to the ground, but often you may need to resolve more complex structural issues.

3. Decentralize

While it’s been shown that an extraordinary CEO can temporarily get an organization to execute well with sheer will of force, things will unravel the moment they leave if capabilities and responsibilities aren’t spread out across the organization. Thus, smart leaders will focus on controlled decentralization and capability building from the get-go.

The same principle applies for both strategy execution and innovation. Simply put, decentralization will help your organization make more informed decisions and move even faster. 

Conclusion

As we all know, strategy plays a big role in determining the success of any organization. It essentially sets the upper limit for their performance, and a poor one will prevent the organization from ever reaching its full potential.

But, in any industry, there are likely dozens if not hundreds of companies with great, often even nearly identical strategies. Some just seem to pull it off, where others don’t.

Thus, it’s the implementation that makes the difference and really determines the success of an organization, and planning for execution and adapting to a changing reality must be crucial parts of your strategy from the get-go.

This article was originally published in Braden Kelley's blog.

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