Strategy Sets the Agenda

Your competitive strategy determines what you
will do and what you won't do, and how you will
focus your efforts and resources.

It sets the agenda for all the decisions which
will be made in the course of business. The
question should always be asked "Does this fit
with our strategy?"

Innovation is good - if it's strategic. There's
no point coming up with lots of random ideas -
innovation needs to be in pursuance of the
strategy.

A recent article in Strategy + Business
magazine*, reported that, in a survey of 600
companies globally, about half reported that
their innovation strategy was inadequately
aligned to their overall corporate strategy.

The study found that companies with poor
strategic alignment significantly underperform
their competitors.

Here's an important distinction - "innovation
strategy" is not the same as "competitive
strategy":

• Your competitive strategy is the choice of how
and where to compete, in order to achieve
competitive advantage - choice of markets, how
you will serve those markets differently from
your competitors, and what will enable you to
compete on that basis.

• Your innovation strategy is the choice of how
to innovate in order to carry out the competitive
strategy. The article identified three types of
innovation strategy - "Need Seekers", "Market
Readers" and "Technology Drivers".

The study found no relationship between financial
performance and innovation spending. Success
depended more on how the money was spent.

For innovation to be "strategic", your
competitive strategy must be clear, easy for
everyone to understand and frequently
communicated.

Strategy sets the agenda.




* _The Global Innovation 1000: Why Culture Is
Key_ by Barry Jaruzelski, John Loehr and
Richard Holman, October 25, 2011/Winter
2011/Issue 65