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How to create a successful innovation strategy

How to develop a successful innovation strategy

A strong innovation strategy helps your business get the most out of its new ideas. With the right approach, you can boost resilience and create sustainable growth. Paul Cross is one of our Innovation Team Leaders. He discusses the growing need for business innovation and offers five steps to help you succeed.

In our experience, most businesses have some aspects of an innovation strategy. But those with a clearly defined plan most often achieve sustainable, long-term growth.

Paul Cross, Innovation Team Leader, Scottish Enterprise

What is business innovation?

Businesses innovate when they introduce new products, services, processes or business models that bring value to the organisation or its customers.  

You can do this by improving your existing products, methods or practices, or by developing something entirely new. The goal is to create new products and services that boost profit and productivity. This will allow you to reinvest in your business and drive sustainable growth.

Five types of business innovation 

Our Innovation team provides support and guidance to Scottish businesses looking create or improve their innovation strategy. We typically focus on five key types of business innovation:

1. Incremental 

This is when businesses make small, steady improvements to their products, services or processes.  

One example is the way Gillette continually updates its shaving razors, adding new features like extra blades. 

2. Sustaining

This is when you refine your initial innovations by improving their performance and removing flaws.  

Sustaining innovation is more common for companies that make large, complex products like cars. 

3. Disruptive

Disruptive innovation is when companies launch a new product, service, or business model that opens a new market segment.  

A good example is Netflix, which created a huge trend towards on-demand video streaming services. 

4. Architectural 

This means taking approaches, technologies or methods from one industry and applying them to another.  

Uber focused on architectural innovation by bringing geolocation and freelance work apps to the taxi market. 

5. Radical

Radical innovation occurs when a company develops disruptive technology that destroys or replaces existing business models.  

Apple’s iPhone brought smartphones into the mainstream – effectively eliminating the demand for keypad-based WAP phones.

One-to-one support

The approach is up to you. You can either choose to focus on just one kind of innovation or a pre-determined blend of different kinds.  

Whichever approach you choose, our Innovation team will work on a one-to-one basis with your business to support its unique innovation needs and goals.

Why innovation matters today 

Over the last few years, businesses have dealt with many serious changes, including: 

  • Changes to how they interact with customers 
  • A large-scale move from office to home working models 
  • Partnership challenges like supply chain shortages  

There’s no doubt that the pandemic has been an incredibly difficult time for businesses – but it has forced many to innovate at a rapid pace.  

Businesses have had to find new ways to engage with customers, like home delivery and online self-service. They’ve also had to focus on developing and providing products and services to meet new consumer needs. 

Despite the challenges, many businesses have taken the chance to embrace adaptability. This comes from an understanding that the way companies do business is likely to be very different over the next few years.

How innovation drives business resilience 

Innovation has traditionally been a low priority for most companies. It's often seen as taking valuable time and resources from important day-to-day operations. 

But, today, many businesses are looking at doing things differently. 

By focusing on new ideas, it’s much easier to adapt to a quickly changing marketplace. It will make your business more resilient and help it grow sustainably – even when dealing with a crisis.  

A recent McKinsey survey found that fewer than 30% of Chief Executives are confident they have the resources and expertise to handle the changes their businesses face.  

This highlights the likelihood that businesses will struggle to succeed if they continue exactly as they did before. That’s why – more than ever – a focus on innovation is so important.

Build a clear innovation strategy  

Our Innovation team have helped more than 6000 businesses over the last five years. We’ve worked with companies that have all sorts of relationships with innovation.  

We provide support to businesses that: 

  • Innovate by nature 
  • Are forced to innovate by changing circumstances 
  • Only innovate occasionally 
  • Have never innovated before 

One thing we've learned is that, regardless of their initial attitude, the most successful innovators always start with a clear strategy.  

In our experience, most businesses have some aspects of an innovation strategy. But it’s the minority – those with a clearly defined plan – that most often achieve sustainable, long-term growth.

Create your Innovation Roadmap

Our Innovation Roadmap Development programme will help you define clear, short-term (three-to-five-year) innovation goals. This will make it easier for you to build a strategy, deliver on your goals and clearly communicate your plans.  

Businesses in this programme have used their Innovation Roadmaps to: 

  • Increase turnover from innovation 
  • Reduce development costs  
  • Get more profitability from new innovations  
  • Achieve more sustainable business growth 

The support we offer 

Our Innovation team support businesses on a one-to-one basis, helping them shape an effective innovation approach while building solid innovation management practices.  

The support we offer is tailored to the needs of your business. You’ll have access to our Innovation Ecosystem – a bank of world-class thinking, approaches and tools that will help you shape your company’s culture, strategy, and processes. 

We’ll also coordinate our support with various specialist teams within Scottish Enterprise. Depending on your innovation needs and goals, we can connect you with specialists in many different areas.  

Whatever you’re looking to achieve, we’ll find the right people and resources to help you do it. 

Five steps to successful business innovation

If you want to get the most out of an innovative business opportunity, we recommend the following five steps as a starting point. They’ll help you add an extra level of detail to your strategy – bringing peace of mind and improved success.

There are many other tools available beyond those mentioned here – these are just examples. The right resources depend on your business and its innovation strategy.  

Following these steps will help you define and develop your new business opportunity. It’s a great place to start. You can work out your next steps by speaking with our Innovation Team.

Ready to get started?

Whether you’re starting a new innovation project or looking to refine your existing strategy, our experts can help.