How can companies leverage IT’s innovation skills to increase product success rates and exploit new market opportunities?
Product innovation and differentiation are critical to success in a global economy still emerging from the Great Recession, and innovation ranks among the top strategic priorities of business executives.
Meanwhile, CEOs consistently rank IT as the most innovative of their companies’ functional organizations, and IT has some unique abilities as a driver of the strategic agility businesses needed to achieve consistent innovation across the enterprise.
Yet chief executives and directors rarely invite IT to the innovation strategy table. That needs to change if companies hope to build an operational model that can:
- Match innovation initiatives to strategic business objectives
- Reprioritize initiatives and product portfolios in response to changing market conditions
- Balance investment in sustaining and disruptive initiatives
- Infuse customer responsiveness into everyone’s job
- Uncover new market opportunities and respond with the right products
Making this operational model workable requires an open and agile approach to innovation management. It also requires continuous alignment between executive and development organizations. These two elements define a new enterprise state of being for innovative companies—one called strategic agility.
Strategic agility keeps executive strategy in tune with market conditions and ensures that functional organizations react in unison to changes in that strategy. Specifically, it defines a set of operational practices and supporting technologies that keep all eyes focused and all hands synchronized.
Why Strategic Agility Matters
Achieving organizational alignment is no small feat. Linking strategy to execution is a tricky job, and a disconcerting number of R&D investments never yield a return. There has been progress, via initiatives such as more liberal data-sharing and product lifecycle management (PLM) processes, which have in many cases significantly reduced the delays and waste that have historically plagued product development, while increasing the number of products launched on time and within budget.
But these changes are primarily focused on improving efficiencies. They do not address the fundamental issue that prevents companies from remaining competitive: Namely, that technology, competition, customer preference and economic forces are always changing.
Within such a constant state of flux, senior managers struggle to stay abreast of changing customer needs, reprioritize innovation initiatives, cancel initiatives that no longer support the strategy, reassign or acquire resources, modify investment strategies, and alter the requirements of products already in development.
These are not new activities. But today, such decisions and their implementation need to occur within days—not weeks or months—of market changes. And they need to be driven more by up-to-the-minute data and less by gut instinct.
Accordingly, strategic agility incorporates four essential operational practices that help innovative companies make better product decisions through improved market responsiveness, and then carry out those decisions with speed.