In a WARC Best Practice paper, How to deliver effective innovation: Four models for success, Alex Waters, North American President at The Value Engineers, cites a study that showed the most successful businesses follow an innovation strategy which is closely aligned with their business strategy.
“Furthermore, their innovation culture and capabilities were aligned to deliver the innovation strategy. In short, they built their innovation approach around a clear vision of where growth was coming from.”
He advocates an approach that sees brands determine new paths of growth through four distinct strategies: by stealing share in their current market; occupying new market space by establishing a presence in a related market; colonising new occasions and unmet needs; or exploring completely novel opportunities or business models.
“This allows businesses to focus efforts on the right routes to growth before they start innovating,” Waters states.
Having established a route map, businesses can then consider particular types of innovation.
Disruptive innovation is exemplified by Uber, which has transformed a taxi-hire business where “riders had become so used to a bad experience they hardly noticed it anymore”.
So, start with an honest look at the customer experience, Waters advises. “Map the customer experience as broadly as possible and long list all the category clichés. Which are ripe for disruption?”
Design-led innovation is also aimed at solving problems, beginning with user empathy and building to understand the problem before applying the principles of design to create a solution.
Brand-led innovation requires an initial vision and sense of purpose for the brand; only then is it possible to “explore different pathways of new product and service launches” that can grow out from the core, says Waters.
Finally, co-creation sees customers involved early in the product development lifecycle. “Working in teams with customers directly over longer periods builds relationships that reveal their motivations in greater depth,” Waters notes.
“Plenty of innovations fail but critical to control the rate of failure is to always ensure that a new product or service is meeting a customer need or, better still, an unmet need,” concludes.
Sourced from WARC