In order to stimulate innovative growth, it is essential you have a strategy that provides clear direction for growth across short, medium and long horizons. This will drive the implementation of the growth strategy, but equally as important it will provide a communication framework both internally and externally stimulating excitement and collaboration.
Without a leadership endorsed, and widely communicated strategy for innovation growth, success becomes a notional way point rather than a prescriptive and measurable target. The adverse effect is a lack of cooperation towards innovation initiatives from the business and customers who are working towards their own very clear strategies and targets, and a very disillusioned innovation team that despite working tirelessly to make innovative change (it’s in their DNA), they will struggle!
So how do you build a growth strategy?
1. Identify the growth gap.
- The first question to ask is ‘what are the aspirations of the business for growth over the next 5 -10 years’ to provide a target for your plan,
- Secondly, you need to understand what the core business is capable of; what has been the growth pattern in the last 2-5 years and what organic growth is anticipated. This will provide the contribution from the core business to the growth aspirations.
So, by deducting the core business growth from the growth target you will know your growth gap. The next question is, how will we fill the growth gap?
2. Develop a growth portfolio across three horizons of growth
You need to determine the preferred shape of this new growth by attributing the contribution of the target across the three horizons of growth depending on your risk appetite. I highly recommend you distribute across all horizons so you can work on current and future options simultaneously;
- Horizon One will be quicker to market by optimizing existing products and services,
- Horizon Two will be incremental products and services, taking slightly longer to market however higher expected revenue,
- Horizon Three being totally new products and services with a longer time horizon, potentially far higher revenue, albeit at bigger risk.
Now we know how much revenue per horizon we aim to achieve, we need a clear understanding as to the domain space your portfolio needs to focus on, otherwise there will be very little alignment to the strategic intent of the business.
3. Develop target domains
To develop clear target domains:
- Consider the intersection of your current and future capabilities ,
- Consider unmet or latent customer needs,
- Consider the changes in your environment.
This is where you will find domain areas and within this platforms for growth. These domains will drive the themes for your ideation, which will find the ideas that become the concepts for your projects.
You need to determine how many projects you need to fill your portfolio targets remembering there will be variable probabilities of success depending on the horizon of the idea (H1 has a higher probability of success than H3).
4. Execute the strategy
So now, you know what your targets are, how many projects you need in your portfolio and the domains the projects should come from, all you need to do is start generating ideas. Use the domains as themes for campaigns and collaboration opportunities with customer and suppliers for ideation. Synthase the many ideas into concepts for projects, and by applying Discovery Driven Planning (see previous blog here) as your innovation system, you will unlock the potential for growth within your portfolio sooner.
For more coaching in developing an Innovation and Growth Strategy, and The Discover Driven Planning Innovation System, please contact us today!