Design a Winning Innovation Strategy
How to Apply a Ventures Mindset for Sustainable Growth
Many companies have an innovation strategy; a “plan to win” that includes staying on top of macro and micro trends, identifying customer pain points and needs, and investing in new technologies. However, the ability to operationalize that strategy and consistently translate it into well-timed and profitable new offerings eludes even the most well-established market leaders.
At IA, we apply a ventures mindset to innovation strategy. We believe the organizations that apply this mindset are able to consistently enter the market with cohesive, vetted, well-timed new offerings.
The following article describes how organizations can benefit from applying a ventures mindset to their innovation strategy to place smart bets on their organization’s future.
The Winning Approach: Ventures Strategy for Growth
A ventures mindset to innovation strategy is a proactive approach where organizations continuously explore key forces of change in the market in the context of their current and future business to identify multiple venture opportunities. Through testing, iteration, and prioritization, ideal options emerge and are quickly brought to market.
With this process, organizations have multiple opportunities at their disposal and develop criteria for advancement of the most promising and market-ready options. This discipline of ventures strategy – in the context of innovation – creates early awareness of latent opportunities and enables swift stakeholder alignment.
Because several possible market opportunities are continuously identified, a business can consistently define and launch new ventures before others do – creating a sustainable growth model with corporate ventures that create the conditions to win in a highly competitive marketplace.
A continuous portfolio of possible opportunities creates the conditions for organizations to win in a highly competitive market.
Activating a Ventures Mindset
To apply a ventures mindset to their innovation strategy, leaders must continuously conduct research with their current and future users, assess technology shifts and other macro and market factors to identify signals of changing demand, and align these forces with corporate strategy.
Exploring Ongoing Forces of Change
Three categories of change must be monitored:
- Macro changes: societal, economic, and technological trends
- Demand-based changes: how users’ wants, needs, and behavior are evolving
- Market shifts: emerging disruptors and changing customer loyalty
Technology – and how we use it – is an especially important indicator of change. Consider tech at both the high-end of the market – where the tech is interesting, but may currently be too expensive or advanced for today’s customers – and the low-end of the market – where the tech is affordable, but not robustly solving current customer needs. At either end, how users interact with the tech (or could interact with it) can clue organizations in on how customer needs and desires will evolve.
Changing technology is just one of many forces of change to consider, but all take part in shaping the future of business, users, and society.
Aligning on Corporate Strategy
By taking a ventures mindset, an organization takes key forces of change, translates them into user insights, and filters the insights through corporate strategy. For new venture options to surface, ask:
- How does this insight speak to our enduring mission and vision?
- What is our innovation ambition? Do we seek to improve our current experience, transform society, or something in between?
- Do we have the capabilities to accomplish our goals? What must be created or evolved?
- How might the opportunity drive our economic gain? What ROI might it bring?
By aggregating company mission and vision, ambition, and economic advantages in combination with user insights, key stakeholders can align on priorities and set innovation goals to ground new ideas.
Designing Early Stage Options
Through this continuous process, multiple possible market opportunities – or “options” – emerge. The most promising opportunities are defined, tested, and refined for prototyping and piloting. An organization will identify whether they need to build the offering from the ground up, acquire a complimentary business, or identify a strategic partner to make the offering a reality.
Prototyping & Piloting Options for Innovation
Once the options are identified and fleshed out, an organization can begin prototyping and piloting them in the market. Using immersive research, business prototyping strategies, and digital testing, both qualitative and quantitative data can be collected. A business then identifies whether an option needs to pivot, should be divested, or should be scaled for success.
Quickly getting options into the prototyping process is important, because the earlier a business is able to invest in a new development, the lower the cost of entry becomes. Early identification and investment also provides more time to monitor technical progress, to prototype new offerings, to test, and to learn, as well as more flexibility to time market entry correctly.
Ventures Mindsets in Action
IA Collaborative recently worked with a global pharmaceuticals company to deliver several possible market opportunities to help the organization understand and influence the future of their industry. Our team explored forces of change by analyzing broader macro-trends – from hyper-personalization to changing subscription service models. We then contextualized how these changes impact buyer behavior and produced a holistic view of competitor dynamics. By framing this data to the company’s mission, capabilities, and goals, the team aligned corporate strategy with user needs to create several market opportunities focused on the future of personalized medicine.
With early stage options at their disposal, the client is now confidently and proactively piloting opportunities that benefit their future users and their future business – before their competitors do.
We’re also working with one of the world’s largest investment companies to disrupt the market with future-forward products and offerings. In this instance, we explored forces of change by focusing on a single key user and identifying several possible market opportunities based on macro trends, market research, and user research. By contextualizing innovative ideas with corporate strategy, brand-aligned concepts emerged centered on the relationships between parents, children, and finances. We designed early stage options for collaborative money management and tested several low fidelity future products to gauge market feasibility, iterate on user feedback, and prioritize opportunities aligned with organizational goals.
By testing multiple options simultaneously, we are proactively identifying innovative solutions and piloting them in the market – minimizing risk of future investment for new innovations.
Applying a Ventures Mindset to your Innovation Strategy
Innovation strategy is not a “once a year” or an “ad hoc” activity. Organizations investing in proactive innovation initiatives should continually collect indications of the future, aggregate observations into patterns and guiding principles of need, and evolve criteria for advancement.
Organizations that apply a ventures mindset will be uniquely positioned to maintain market leadership, can more effectively prioritize innovation and corporate development resources, and make better strategic decisions.
Want to learn more about how you can design a winning innovation strategy? Start a conversation at firstname.lastname@example.org.