“Some companies and leaders navigate this type of world exceptionally well,” states best-selling author Jim Collins. “They don't merely react; they create. They don't merely survive; they prevail. They don't merely succeed; they thrive. They build great enterprises that can endure.”
This quote begs the question — how exactly do they build those enduring enterprises? I believe strategy is 90% execution and, in the current environment, innovation is a huge part of strategy. To execute well in business, you need a strategy that aligns with customer values and expectations and centers around growth and innovation. From my experience, the following steps will help you develop an innovation strategy in your business.
To frame up what an innovation strategy looks like for your business, it is important to define what innovation means. I define innovation as the practice of making things better through new ideas, methods and processes. At the heart of successful innovation is the need to collaborate and learn from others. This collaboration must be both internal and external. Learn what is working in other industries and see what can be brought into your own profession. At the end of the day, for any business to succeed you must focus on and delight your customer. If you can win with customers, you should win in business.
Assess Your Business
Next, do a quick assessment of your business in relation to other businesses, and expand your assessment beyond your profession. Keep in mind that a customer’s experience with you will not be judged against just your business and your competitors, but also against the last positive customer experience they had. I have said repeatedly that in a world of Amazon, businesses cannot sell people on a 1970s Kmart experience. It does not matter if your industry is “behind” other industries in the minds of a consumer. You must rise to the level of service and delight they receive in their daily lives as consumers.
Filter Innovative Ideas
Once your strategy is developed, and you commit to executing that strategy, it is important to identify innovative ideas that will help drive your business to the next level. Undertaking a true innovation strategy is not for the weak. You will not have endless resources, so focus and intentional deliberation is imperative. In my opinion, Steve Jobs is the most famous innovator of our time – according to him, innovation is about saying no to 1,000 ideas. He believed that strategy is not simply about saying yes to the best idea, but also saying no to one hundred good ideas that won’t get you where you need to go. Jobs was actually prouder of the things their team said no to than what they said yes to. If innovation is saying no to that many things, it is pretty clear that efforts in innovation will be messy and frustrating at times as we will all inevitably say yes to ideas that do not work. It requires one to have an open mind, try new things in a continual process and work quickly to learn and pivot.
Evaluate Your Purpose
Once you’ve assessed your business and identified innovative ideas to pursue, then you must begin the process. Why are you going to undertake this effort? This could include any of the following:
- Grow market share
- Strengthen your brand
- Enhance customer experience
- Develop new products or services
Once you know why you are pursuing an innovation effort, then you must evaluate your current assets to accomplish your goal and begin to put efforts in place to measure outcomes and success.
- What data do you have that you can leverage to deliver best-in-class experiences?
- What are your crown jewels (what makes your business what it is)?
- How will you fund any innovation efforts? Can you self-fund the efforts?
- Can you optimize current customer relationships further?
- How will you test your efforts and measure success?
Execute Your Strategy
After evaluating why you wish to pursue the efforts, what resources/abilities you have at your disposal and how you will measure success, it is time to execute. Strategy and innovation without execution is just an idea.
Once you commit to undertaking innovation and trying new things in your business, it is best to start small. Focus as much as possible on your “Return on Learning.” What you learn early on is as important as the “Return on Investment” at the end. It is almost guaranteed that what you think will work likely will not, or at least not in the way you thought. Focus on what you learn first, so you know what to say no to and how to effectively deploy resources and efforts. By testing out a number of ideas you will get better at idea generation and eventually executing and focusing on the ones that matter most.
Innovation is about having a customer-first focus. Focusing on your customer’s needs and desires helps ensure success. Innovation is a tool that helps you deliver a delightful experience to your customers and ensures they will promote your business, products and services. Companies that successfully execute in this customer-focused economy have raving fans who are sure to be your best marketing tool.
Nick Gerhart, J.D., M.H.A., joined Homesteaders Life Company in August 2020 as Executive Vice President-Chief Innovation Officer. In this role, he oversees Homesteaders’ ventures, new market opportunities and strategy.