After engaging in hundreds of organizational innovation initiatives, I can say this with certainty: there is no single formula that guarantees a successful transformation for every enterprise.
But I can share a way to greatly increase your chances if you are responsible for preparing your team, business unit, or organization for future success: you must build your transformation on a 10x foundation. At SU, we believe building exponential enterprises requires three foundational components:
- Crafting a future-focused strategy, which we call 10x Strategy
- Developing the leaders of tomorrow, which we call 10x Leadership
- Building future customer value, which we call 10x Innovation
A strong leadership team backed by a clear strategy and sound innovation practice will consistently outperform competitors that are missing one or more of these three components. Making the leap from 10% incremental gains to 10x outcomes requires an integrated approach that aligns your organization’s resources with its mission and purpose. In this post, we’ll focus on strategy and innovation, and how they contribute to driving transformation in the changing global business landscape.
It’s no surprise that innovation programs—indeed, entire organizations and industries—sometimes fail. And though there are many pitfalls that can stop innovation programs from succeeding, a leading culprit is a lack of strategic alignment. Innovation programs that are not strategically aligned with current and future business goals have little to no chance of success.
Here are seven steps to increase your odds of 10x outcomes with a sound innovation strategy:
1. Align your organization behind a strategic vision
In some organizations, innovation programs are categorized as digital transformation and are viewed as simply another technology project to be managed. And though exponential technologies are a primary driver of change, it’s necessary to view transformation through a broader lens. The linear-to-exponential acceleration is transforming how organizations and entire industries do business and every aspect of our global economy.
Because of the speed and complexity of organizational transformation, a single strategic vision that combines strategic planning with cultural change is necessary. The successful enterprise will create its innovation strategy to align with its overall strategy and future goals, not just technical requirements.
2. Understand emerging and exponential technology drivers
Because exponential technologies—including AI, blockchain, Internet of Things (IoT), nanotechnology, 3D printing, robotics, and others—are advancing and converging so rapidly, it’s vital to know how they’ll impact your organization. An understanding of technology trends that are most relevant to your organization and industry will help your team decide where to invest time and resources, and expand the possibilities for your organization’s future.
We have witnessed periods of accelerated technology development throughout history but never approaching today’s rate. To better understand this unprecedented rate of change, it helps to explore some of the driving forces behind the acceleration of exponential technologies.
3. Embrace analytics and experimentation
Apple, Alphabet, Amazon, Airbnb, Netflix—one thing these storied organizations have in common (in addition to frequent media mentions like this one) is that they’ve mastered the use of data and analytics to gain a competitive edge. And organizations like these that develop advanced data platforms gain a huge advantage when it comes to incorporating exponential technologies like AI and blockchain.
Your company’s innovation performance reflects the effectiveness of your business processes and ability to embrace data analytics and experimentation. A data-driven approach helps organizations optimize and improve current processes while planning for innovation-focused processes outside their current core businesses. The ability to measure, track, and understand your organization’s data is key to your organization’s future—and your own future as an exponential leader.
4. Develop ambidexterity
Ambidexterity is the ability to successfully do seemingly opposing things at the same time: achieve quarterly growth goals while developing entirely new products and services that will drive your organization’s future growth. Innovative leaders display ambidexterity by balancing organizational objectives and focus between the present and the future. Or, as we say at SU, it’s understood that leaders need to focus on achieving both 10% improvements and 10x growth.
A useful framework for balancing current and future priorities is called Horizon 1, 2, and 3 thinking. For more on the 3 Horizons model and how to develop a future-focused strategy, see our Innovation Leader’s Checklist.
5. Build an innovation pipeline
Many organizations seem to get stuck in the early stages of innovation projects because they lack a framework that enables them to track and measure progress from ideation to commercialization. To make sure projects can make the leap from the drawing board to marketable solutions, organizations should plan on building a portfolio of innovation options.
Organizations that have learned to manage innovation strategically often use a portfolio approach to evaluate a number of current innovation projects with regular reviews to discover which ones pack the most potential for future growth and impact. Regular reviews and analysis help leadership teams identify underperforming projects, and double down on the initiatives that show the greatest potential for future growth and impact for the organization. The ability to track innovation projects and their projected portfolio values and revenues through each phase of development helps organizations make smarter innovation decisions and investments.
6. Monitor the landscape
Traditional approaches to gathering competitive intelligence are of little use in today’s dynamic business environments. Today’s leading organizations must develop early warning systems to spot the challenges and opportunities driven by exponential technology trends. The ability to view and track relevant trends, technologies, and market activity can help organizations learn how and when to take action to minimize disruptive threats.
There has never been a better time for startups and smaller competitors to put together the technology, services, and resources needed to successfully challenge larger or established competitors. Fortunately, today’s technology also makes it easier to view and track the timing and trajectory of adjacent industries and technologies that may pose a threat to your own organization.
7. Be bold, take action
Of course, the greatest strategic plan means nothing without execution. Perhaps one of the most important lessons of the digital economy is that innovative, first-mover organizations are increasingly using exponential technologies to completely disrupt their industries and gain lasting competitive advantages.
In the last decade, some of the world’s most prominent brands have fallen prey to disruptive startups and competitors. Now is the time to explore, envision, and unlock the future of your organization. To help your organization learn to re-envision the future by anticipating, embracing, and capitalizing on exponential technologies, you can check out our 10x Strategy Development solution. And for actionable insights and expert strategies on how to practice creative disruption in your own organization, check out our ebook, The Exponential Leader’s Guide to Disruption.