Note: This article is updated at 10 High-Leverage Strategies for Innovation.
What are the high-leverage strategies that the leaders in innovation use? In "Smart Spenders, the Global Innovation 1000," an article in strategy+business magazine, Barry Jaruzelski, Kevin Dehoff, and Rakesh Bordia write about the successful strategies that the 94 high-leverage innovators use.
Example High-Leverage Strategies
Here's a sampling of the high leverage strategies:
- Have systematic ideation processes, including involving senior management in the conception and definition of new ideas.
- Have competence at all stages of your value chain.
- Involve end-users in your innovation strategy. Spend a lot of time focusing on where they work, where they play, where they buy, and where they learn. This helps to increase your efficiency of your new product introductions.
- Favor flatter and nimbler management structures that make the innovation process more transparent to your executive team.
- Keep R&D costs down by keeping R&D focused and closely aligned with your business units. This allows you to target your R&D efforts to meet specific customer needs versus doing a great deal of early-stage, academic research.
- Keep an internal innovation engine running efficiently through a core engineering team that designs and developers a variety of product lines (this helps provide common engineering and design as well as actual code reuse.)
- Place greater value on economies of speed, scope and skill rather than simply economies of scale.
- Look outside your organization for partners, suppliers and customers for new and innovative ideas.
- Build capabilities along the innovation value chain to generate significant improvements in return on your research and development spending.
- Pick the elements to generate a competitive advantage based on your industry, competition and internal capabilities.