I’ve posted previously about the need to link foresight to strategy to innovation, but rarely seen concise articles that elaborate on this. Strategy and Business has just posted one, and it’s worth looking at. Here’s the first section of the article:
Strategic planning is different from innovation. When developing a strategy, you decide what your activities will be in the future, and you have to stay true to your predetermined course to see results. Furthermore, your plan includes a set of activities that you know how to do. But with innovation, your course of action is inherently unpredictable, and you know in advance that you’ll have to learn to do things that you don’t yet know how to do. Only after your innovation succeeds will you know what those things are.
That’s why your business strategy and your innovation practice must be kept apart: otherwise, the consistency of your plans may constrain your creativity and verve, and the surprises of innovation may distract you from your plan. At the same time, your strategy and innovation must also be aligned, or your organization will be incoherent and risk dissipating your efforts. So how can you integrate strategy and innovation, but still keep them separate?
The answer is simple in principle, but hard in practice. You probably have an annual strategy cycle of some kind; in most cases, the corporate office gives guidance to each unit, and then each unit maps out a strategic plan for the next one to five years. It is during this strategy cycle that you must ask the leaders of each unit to do two things:
1. Come up with a plan over the coming year for what that business unit knows how to do. This will involve about 99 percent of its time and activity.
2. Identify one or more innovations that the unit’s team would most like to tackle over that same year.