Gary P. Pisano

<article-ideainbrief class="article-ideainbrief">
 <h4 class="ideainbrief-title">Idea in Brief</h4>
 <div class="ideainbrief-contents">
  <h5>The Problem</h5>
  <p>Innovation remains a frustrating pursuit. Failure rates are high, and even successful companies can’t sustain their performance. The root cause is that companies fall into the trap of adopting whatever best practices are in vogue or aping the exemplar innovator of the moment.</p>
  <h5>The Solution</h5>
  <p>Managers should articulate an innovation strategy that stipulates how their firm’s innovation efforts will support the overall business strategy. This will help them make trade-off decisions so that they can choose the most appropriate practices and set overarching innovation priorities that align all functions.</p>
  <h5>The Steps</h5>
  <p>Creating an innovation strategy involves determining how innovation will create value for potential customers, how the company will capture that value, and which types of innovation to pursue. Just as product designs must evolve to stay competitive, so must innovation strategies as the environment changes.</p>
 </div>
</article-ideainbrief><p>Despite massive investments of management time and money, innovation remains a frustrating pursuit in many companies. Innovation initiatives frequently fail, and successful innovators have a hard time sustaining their performance—as Polaroid, Nokia, Sun Microsystems, Yahoo, Hewlett-Packard, and countless others have found. Why is it so hard to build and maintain the capacity to innovate? The reasons go much deeper than the commonly cited cause: a failure to execute. The problem with innovation improvement efforts is rooted in the lack of an <em>innovation strategy.</em></p>

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<p>Why is it so hard to build and maintain the capacity to innovate? The reason is not simply a failure to execute but a failure to articulate an innovation strategy that aligns innovation efforts with the overall business strategy.</p>
<p>Without such a strategy, companies will have a hard time weighing the trade-offs of various practices&#8212;such as crowdsourcing and customer co-creation&#8212;and so may end up with a grab bag of approaches. They will have trouble designing a coherent innovation system that fits their competitive needs over time and may be tempted to ape someone else&#8217;s system. And they will find it difficult to align different parts of the organization with shared priorities.</p>
<p>As Corning, a leader in glass and materials science, has found, an innovation strategy must address how innovation will create value for potential customers, how the company will capture a share of that value, and what types of innovation to pursue. Critics tend to discount &#8220;routine&#8221; innovation that leverages a company&#8217;s existing technical capabilities and business model and extol &#8220;disruptive&#8221; innovation, but that is a simplistic view. A company&#8217;s unique competitive circumstances should dictate the innovation portfolio it pursues.</p>
<p>Because innovation cuts across functions, only senior leaders can set an innovation strategy. In doing so, they must recognize that the strategy, like the process of innovation itself, requires continual experimentation and adaptation.</p>
<p class="reprint">HBR Reprint R1506B</p>

You Need an Innovation Strategy

Why is it so hard to build and maintain the capacity to innovate? The reason is not simply a failure to execute but a failure to articulate an innovation strategy that aligns innovation efforts with the overall business strategy. Without such a strategy, companies will have a hard time weighing the trade-offs of various practices—such as crowdsourcing and customer co-creation—and so may end up with a grab bag of approaches. They will have trouble designing a coherent innovation system that fits their competitive needs over time and may be tempted to ape someone else’s system. And they will find it difficult to align different parts of the organization with shared priorities. As Corning, a leader in glass and materials science, has found, an innovation strategy must address how innovation will create value for potential customers, how the company will capture a share of that value, and what types of innovation to pursue. Critics tend to discount “routine” innovation that leverages a company’s existing technical capabilities and business model and extol “disruptive” innovation, but that is a simplistic view. A company’s unique competitive circumstances should dictate the innovation portfolio it pursues. Because innovation cuts across functions, only senior leaders can set an innovation strategy. In doing so, they must recognize that the strategy, like the process of innovation itself, requires continual experimentation and adaptation. HBR Reprint R1506B

You Need an Innovation Strategy

Summary.

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