by Jeffrey Phillips
You’d think with all the fawning press many companies and executives receive that defining a clear, concise corporate strategy would be a “no brainer”. After all, don’t we hire and pay executives exorbitant sums due to their vision and strategy? You’d think that with the hordes of “management consultants” available from a wide array of highly compensated consulting firms that well-conceived strategic plans would simply flow like water from these founts of knowledge. And let’s not forget the virtual library of books on corporate strategy, from the likes of Drucker, Porter, Hamel, Prahalad, and so forth. Clearly there is a wealth of information, advice and knowledge about corporate strategy. Or at least there is a good facsimile.
What kills innovation at the start, in the middle and at the end is the lack of a clearly defined, articulated and executed strategy. The reason is simple. If your firm can’t concisely define and communicate what it offers, and why it is different, than other firms, differentiation is almost impossible, and in some cases perhaps undesired. If it can’t define it’s position in the market, as a product innovator, or a service leader, or the operational excellence leader, then it isn’t a leader at all. Simply a follower who believes that “innovation” is quickly copying what other firms are doing. Trying to innovate in the absence of a clear strategy is like driving on a narrow, twisty road socked in with fog. Every turn is fraught with danger, and you move, if at all cautiously, continually testing the roadbed before committing.
The lack of clear strategy kills innovation at the start because it’s almost impossible to define the most important problem to solve or opportunity to address. In the absence of clear strategy, all possible options are equally valuable, since the options are ranked on opinion and not fact or plan. In our experience, we’ve often had to “assert” a strategy just to define the options and goals for an innovation effort. The reason many innovation projects die a quick and painful death at the start is that they can’t get traction because no one has any idea what’s important to do – and in the absence of clear strategy it’s more expedient to keep doing what you are doing rather than do something new.
The lack of clear strategy, clearly articulated kills innovation in the middle, because it’s almost impossible to evaluate ideas if they happen to get generated. Evaluating ideas requires a set of criteria and forces prioritization and tradeoffs, which can only be made in the context of a strategy. After all, strategy tells a firm as much about what it will NOT do as it does what it WILL do. In the absence of a strategy, evaluating and prioritizing the ideas you manage to create is difficult because the factors are ambiguous and based on previous experience rather than articulated strategy. It becomes, once again, about opinions and guesses rather than facts.
The lack of clear strategy kills innovation at the end when no product or service delivery team will accept, adopt or sponsor new ideas and convert them into new products or services. After all, these teams have a full pipeline of work, and no clear direction or incentive to pick up dangerous or disruptive new ideas. There’s little incentive to deviate from the traditional methods and rankings, so new ideas are shifted to the bottom of the priority stack if they get noticed at all.
The lack of strategic direction, clearly articulated is endemic in many organizations, surprisingly so. Given all the emphasis we place on good strategy, powerful, insightful CEOs and books and ideas about strategy, there’s relatively little of it in evidence in many organizations. That’s because it is easier to be “most things to most people” rather than have a clearly articulated and executed vision. When you attempt to be “most things to most people” there are no absolutes, no clear scope, and your vision and intent is watered down. It is exceptionally difficult to innovate in that environment.
Any executive worth his or her salt should occasionally pull a person three or four levels down in the organization and ask them what they believe the corporate strategy is, and whether or not that message is filtering down and being executed by the “rank and file”. My experience is that most people in most organizations have little to no idea what the executive team really values, and this lack of strategic direction or the difficulty of communicating a clear direction is one of the most significant barriers to innovation that exists. Which is a real conundrum given how much emphasis we appear to place on it.
Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of “Make us more Innovative”, and innovateonpurpose.blogspot.com.