What You Need to Know About Aligning Innovation With Strategy
Last year, we released our Innovation Strategy Framework to help organizations invest in the right types of innovation to support their growth strategy. The Innovation Strategy Framework was built on extensive research, and we’ve continued to collect data on how companies approach their innovation investment strategies.
While data collection is still in process, we wanted to share a few interesting insights which have come out of the preliminary results.
First, let’s look at the averages:
- Core Innovation. Investments in existing offerings (or add-on or adjacent offerings) for a market and buyer that the company is already actively pursuing (~45 percent)
- New Market Extension. Investments in new or existing offerings to meet the needs of current buyer personas or buying centers within market segments, geographies, industries or organization types that the company is not currently actively pursuing (~20 percent)
- Existing Market Expansion. Investments in new or existing offerings to meet the needs of new buying centers or personas in markets the company is already actively pursuing (~25 percent)
- Breakthrough Innovation: Investments in new offerings to meet the needs of both a new buying center (or persona) in a market or segment the company has not previously addressed (~10 percent)
These averages may be helpful as a benchmark for how you allocate your investments across different markets and buying centers. However, not every company allocates investment to all four innovation types. In fact, our data shows that while around 60 percent of companies invest in all four innovation types, 35 percent invest in three of the four, and 5 percent invest in only two (and those instances are mainly investment in Core Innovation with a small investment in one other area).
Another interesting insight was what we didn’t find. We expected to see some differences in investment allocation by company size, but the results are remarkably consistent. Larger companies − those with more than $500 million in annual revenue − show a slightly higher tilt towards Core Innovation investment, but only by a few percentage points.
While we didn’t see much difference by company size, when we looked at industry and types of offerings, there were some sharper differences. We’re still processing the data − and analyzing it to understand how it can help companies make better decisions − so you’ll have to wait for the full results. If you’re a SiriusDecisions client and interested in a sneak peek − and the implications for your innovation strategy − contact your account executive to set up an inquiry to discuss.
If you want to be the first to see the full results, you will need to attend the SiriusDecisions 2014 Summit on May 21-23 in Orlando, FL. I’ll be presenting The SiriusDecisions Innovation Strategy Framework: One Year Later −where I’ll discuss the results of this research, lessons learned from organizations that have used the framework for strategic planning, as well as implications for your product roadmaps, marketing and sales planning.