Innovation & Risk
84% of CEOs believe innovation is critical for growth. However, 54% of innovating companies struggle to bridge the gap between their product innovation strategy and business strategy. So, what's the hang-up?
For many brands, innovation is expensive, intimidating, and ultimately risky. But, you can't ignore what's in front of you—technology and industry disruption are happening at a breakneck speed leading companies into a future where agility matters. Failure to innovate can lead to failure to thrive—and let's face it, no one wants their brand or product on life support.
Given these challenges, there's only one solution, an innovation strategy that encompasses product and brand. Now, let's discuss what an innovation strategy is, why it's essential, and how you can kickstart innovation.
What's an Innovation Strategy Anyway?
We all know that "innovation" is a powerful word. Leaders like Apple, Amazon, and Tesla come to mind when thinking of innovative companies. But, you don't have to be a Fortune 500 company to have an innovation strategy that evolves your brand and product. Innovation strategies help companies of all sizes reach their goals. An innovation strategy is your plan to harness all the parts of your organization to research, design, develop, support, and achieve your aspirations.
Your innovation strategy is your product and brand roadmap to growth and success. It outlines your organization's vision, business goals, mission, and value proposition for defined customer markets, and how the products you offer will provide maximum value. How do you get started?
Key Elements of an Innovation Strategy
An innovation strategy will be your compass for navigating the uncharted waters towards your goals. But, coming up with an innovation strategy doesn't happen overnight. No, it takes time to develop and personalize a strategy that reflects your brand's unique goals. You'll need to assess where your company is at, where you want to be, and how you plan to get there. To maximize success, include these elements in your brand and product innovation strategy:
Outline Your Objectives
(Be Strategic) Your objectives are the "why" behind your innovation strategy. Take time to evaluate your long-term plans. What are you hoping to create? It's not enough to have an aspiration—you need to create a strategy to achieve it. Once you have your objectives, think about the most relevant metrics to track your progress and how you will monitor it. Tracking will ensure you stay on course.
Understand Your Industry
If you want to be innovative in your industry, you need to understand the field. Define your market, and know the players. This means researching your customers, competitors, and non-customers (those who didn't choose your product). By understanding these groups, you can find hidden opportunities for innovation and untapped markets to exploit. A great example of how industry knowledge can lead to innovative solutions is Wheat Thins.
Wheat Thins faced a major problem—they were losing customers. Launched in 1947, Wheat Thins grew to over a $400 million brand in 2009—but snack trends shifted, and by 2015 customers wanted "healthier crackers." Wheat Thins was losing momentum and losing customers. So, how could Wheat Thins win back snack consumers?
Firstly, they knew they needed to innovate, so they dove into understanding the cracker market—trends, competitors, and industry changes. Research showed that the snack market shifted to healthy crackers (especially gluten-free). When one in five Americas are actively trying to avoid gluten, what's a wheat cracker to do?
They quickly realized that "wheat" in the brand might be holding them back. Wheat wasn't desirable, and it wasn't trendy. Inspired by changes in the market, Wheat Thins made a plan and invested in R&D, and launched their first new snack product in over a decade—Good Thins. Good Thins combined the style of Wheat-Thins with the trendy "nutritious" ingredients of the snack market: gluten-free, no artificial ingredients, and no high fructose corn syrup.
Wheat Thins studied the snack market as a whole to understand where the problem was. By studying the market, they found an opportunity to innovate and freed up the resources to focus on the right changes for the brand.
Get To Know What Your Customers Need
Customers choose your product for various reasons, and short of being psychic, you won't know each reason. But, you can use consumer research to understand the general buying and decision-making choices of segments of your customers. Your customers can also highlight needs that are not being met by you (or your competitors) as well as opportunities for growth. Listening to your customers can help you create a unique value proposition and identify new uncontested markets. Chobani has excelled in listening to its customers and adapting new products to meet consumer desires.
Famous for its Greek Yogurt, Chobani takes pride in its relationship with its customers. Chobani invests in understanding its customers and pulls them into its development process to create new offerings. For example, in 2016, consumer interest resulted in Chobani launching its first pumpkin-pie flavored yogurt during Halloween. Its success led to future Halloween-themed yogurt and package designs.
Chobani's innovation strategy has led the brand to own nearly fifty percent of the Greek yogurt segment, which results in owning 20% of the overall U.S. yogurt market. By connecting with its customers, Chobani understands what its customers want and delivers it.
Assess & Set Up Processes
Take action in your innovation strategy by establishing processes to achieve your objectives. This means looking at your internal capabilities throughout your organization and matching them with your goals. By assessing your organization, you'll get to know exactly what you're capable of accomplishing (and any areas that need improvement). Often organizations don't realize they're understaffed or lack the tools to deliver on their goals. Processes will help you evaluate how you can execute your innovation strategy in a scalable and integrated way.
Be Nimble With Industry Shifts
What's in today may be out tomorrow. Unfortunately, every brand is subject to the ebb and flow of market shifts. So, ensure your innovation strategy is agile (not fragile). Your innovation strategy must be adaptive to industry changes and new insights. Remember, slow and intentional is the best approach to innovation—give yourself time to find your feet and allow for adjustments when necessary.
How Can You Make Your Organization Innovation-Ready?
Don't declare to your teams, "It's time to innovate!" and expect it to be done. Instead, have a way to implement your innovation strategy across all departments of your organization. These strategies can help your departments get on board with your innovation strategy on a range of projects:
Empower Teams To Make Decisions
When teams or individuals in your organization are not trusted to make decisions or implement new solutions, they can lose confidence in their ability to innovate. Create a culture of innovation top down in your organization by prioritizing innovation in all departments and encouraging your employees to pursue new, innovative projects.
Prioritize Opportunities for Innovation
You don't have endless resources or infinite time to develop new projects. So, it's important to prioritize innovations based on where you'll get the most value for your time and energy. Focus on 2-3 ideas with the most potential and explore those. Then make hypotheses that you can test through your targeted experiments and try them.
Listen To Your Customers
Customers can often be the best resource for ideas. Customers can be a helpful tool in discovering patterns, everyday needs, and gaps in what you offer. Start with looking into what your customers are saying by reading customer feedback, listening to customer calls, reviewing surveys, and gathering reviews.
Break Tradition & Evolve
It's easy to get stuck doing things a certain way—it's comfortable, it's the way it's always been, it's "safe." But, "safe" is not always "better," if you wait too long, it may be too late. To combat this, invest in market intelligence to understand your position in the value chain and consider how to deliver value to new customers. Look for emerging trends and research market changes. Ultimately, innovation can only grow when you step back from the norm and see the larger picture at play. Innovation is a long game, keep your pace and you'll see progress.
Let's Innovate Together
Don't innovate for the sake of it. Stay in lock-step with your customers, aligning innovation to your goals. Let's work together to innovate and future-proof your business. Contact us today.