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Strategic Innovation is a solid framework that identifies growth strategies, new product categories, services or business models that change the game and generate significant new value for consumers, customers and the corporation.
Strategic Innovation calls for a holistic approach that operates on multiple levels. You may need to turn to the basics to make sure you understand the customer value proposition, drill down into the competition, or assess your go to market strategy for example.: In order to develop your strategy successfully, you need to be able to answer three key questions:
- WHO is my customer?
- WHAT the product does to satisfy the customer need and determine best fit?
- HOW will it reach the customer?
- WHY does the customer need it?
By understanding this business model, you can more easily pinpoint the value within your own product or service and identify new opportunities.
The 4 core steps to consider when developing an innovative strategy
- Design a suitable value proposition for your target customer segments
- Understand the industry you are serving and your position within it (your USP)
- Develop a winning product combination based on company capabilities and consumer expectations
- Build a strategy and business model that benefits the customer and your organisation that delivers targeted and tangible value to consumers
Why do businesses need strategic innovation?
Developing a strategic innovation process forces you to think about areas of the business that you might not normally consider.
Take the marketing and sales process, for example. A lot of effort goes into developing and launching a new product which may only have a short life span before it is obsolete due to an upgrade or new version being released. If the launch and price isn’t aimed at the right market, it is likely that sales will not go as planned. To prevent this from happening, the team should focus on taking a longer and wider view rather than going for a short-term win. Many of us fall into this near-sighted focus known as ‘marketing myopia’, a concept described by a marketing professor from Harvard Business School named Theodore Levitt.
Time needs to be invested to determine what the customer wants or needs, rather than simply producing a product or service that we think they want.
As Levitt says; “People don’t want a quarter inch drill. They want a quarter inch hole!”. There are 2 fundamental parts to a business: innovation and marketing.
The role of a marketer is to have a deep understanding of the market, upcoming trends and the state of the industry, and a very clear sense of what the consumer needs. Once you know the customer need, the market and segment you are focusing on, you need to provide an innovative solution that is unique or novel and adds tangible value. This solution also needs to be tested and refined based on research and feedback.
The customer value proposition can then be quantified by asking:
- What is the value we provide?
- Who are we aiming to reach?
- How will we reach them?
This value proposition is the most important aspect for your customer. They care about what they will get out of the deal and how their life will improve if they buy your product or service. Your role is to define the most important thing the customer cares about or their pain. Think about what keeps them up at night. Determine how they achieve it now. Finally, describe how their life can be improved by your product or service. If you do all this and can communicate it succinctly to the consumer in their language, you will go a long way to avoiding a failed product launch and becoming one of those 80% of business that fold.
Want to know more?
Join other like-minded people for the upcoming ‘Innovative strategies for business growth’, a five-week programme that will cover tools and techniques to consider and help you evaluate and develop your core offering in order to achieve sustainable innovative results.