9 - 3 - 2021 - Expert blogs

Tools for fast strategic innovation: part 2

In this blog series, I present the process and methods I have developed for the early stages of strategic innovation. In this part, I open up the concept of strategic innovation, the critical importance of the beginning of the innovation process, and ways to avoid risks.

DesignSoftware development

All businesses can feel the world becoming increasingly fast-paced, competitive, and unpredictable. This can be witnessed in the number of disruptions in different markets and by the fact that even the most successful and distinctive products lose their dominant position in a flash. Getting regular customers, faster time-to-market, and innovating the right value for the customers are the key to success.

Strategic innovation focuses on this challenge, thriving for feasible and profitable inventions that prosper in the markets. It combines creativity and execution: designing competitive advantage and systematically implementing the plans.

It is clear that professional skills in strategic innovation are critical for businesses, and the need will continue to grow.

Risks and challenges in business innovation

From the perspective of competitiveness and profitability, it is alarming that approximately 90 percent of innovations fail. The research shows that the beginning of the innovation process has the most significant impact on the end result.

From a business perspective, the innovation process's fuzzy front-end contains a considerable amount of unclarity and uncertainty. It is met on the one hand with the lack of information, on the other hand with the interests of different stakeholders, which makes progress difficult.

Typical stumbling blocks at the beginning of business innovation are:

  • Wasting time for scrubby ideas

  • Focusing too little on good ideas

  • Insufficient reduction of unclarity

  • Insufficient attention on customer needs

  • Using only in-house competence

  • Failing to link the product development to company strategy

  • Insufficient understanding of competition and technological advancement.

Quite often, companies also fail in segmenting by forgetting to find out what the customers really want and in which context. This leads to unsuccessful and unprofitable value propositions.

Businesses are not lacking in good ideas, but they do need directions for getting through the innovation process's fuzzy front-end. This is where methods that offer versatile thinking and risk-minimizing come in handy.

Supporting strategic innovation with customer-centricity

One suitable approach that supports innovation is design thinking. It is a process for creative problem solving that focuses on three key aspects that are also important for strategic innovation: the desirability, feasibility, and viability of the solution.

It aims to provide a deep understanding of:

  1. Competing solutions and how the customers relate to those

  2. What customers value the most and what are their genuine needs

  3. How to build a solution that tackles 1. and 2. with existing or attainable capabilities.

Research shows that the holistic and systemic approaches of design thinking direct to products, services, and business models that are hard to copy and attain loyal customers. It can lead to reduced expenses and improves the profitability of strategic innovation. These are some of the reasons why design thinking is often seen as a competitive advantage.

Risk management with a fast and agile approach

As failure is possible, you want to fail before significant investments. To eliminate the risks, working in short iterations is recommended. Because the risks are highest at the beginning of the innovation process, it is essential that the initial studies and trials are fast while still providing sufficient information that helps to make agile decisions. Widescale business plans and market studies are the wrong places to start, even though they might be relevant later in the process.

While simultaneously tackling the increasing speed and complexity of the business environment and focusing on eliminating the risks of business innovation, companies need methods that help them be fast and agile. Two applicable methodical approaches are Lean Startup and Value Proposition Design.

In Lean Startup, the business plan is considered as a hypothesis that is modeled and validated fast and cheap to estimate viability as soon as possible.

Value Proposition Design follows the same philosophy combining design thinking and a business-oriented approach around its core idea: designing and implementing sustainable value for the customer and the company. Value Proposition Design is a methodical process by which companies can create services that customers really value. Like Lean Startup, Value Proposition Design also vouches for speed and small, iterative learning cycles.

Both approaches advise testing the hypothesis continuously. By validating the ideas, only the one with real potential will come through.

Combined, these three approaches (design thinking, Lean Startup and Value Proposition Design) provide sufficient process, methods, and tools that can help

  • Tackling the typical risk in the innovation process

  • Seeking and finding answers to all the relevant questions

  • Understanding and connecting aspects like customers and segmenting, competition and markets, technology, and macroeconomic forces in a meaningful way.

In the next parts of this blog series, I'll

  • Introduce my 5-day strategic innovation process and methods that are developed based on design thinking, Lean Startup, and Value Proposition Design

  • Reflect the utility, effectiveness, and generalizability of the solution and the possibilities for developing it further.


Heidi Vaarala

Would you like to know more? contact:

Tom Hannelius

Director, Software Consulting


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