Traditionally, companies’ strategies have been built from their competitive position, i.e. from the analysis of the present. Today, this approach is no longer valid. The strategies of today’s companies are built on the basis of forecasting the future. For this reason, innovation emerges as a discipline and an essential capability and becomes strategic innovation.
Strategic innovation helps answer questions that are on the table of almost every strategic committee. For example, what role will we play in the new economy, why will we be around in five or ten years, who will disrupt our industry, and how will they do it? And how will they do it, among others. None of these questions can be answered by analyzing the current situation; we must foresee the future and work with uncertainty.
In short, we must innovate and we must do so strategically because the growth of our business depends on it, in the best of cases. Innovation helps strategic redefinition by acting on three levels.
From strategic development to organizational development
If there is one thing that the environment of constant and unpredictable change is demanding of companies, it is undoubtedly a humility cure. The old organizations designed with their backs to the customer, under industrial production parameters and based on hierarchical relationships, no longer work or, at least, are not capable of meeting the new challenges that companies are facing.
There are three characteristics that an organization working from a strategic innovation perspective must incorporate:
- The first is that all your processes, from the first to the last, must be born and die in the customer. Radical but unavoidable. Any task that is not justifiable on the basis of improving the customer experience will be a cost factor and a source of inefficiency.
- The second is to increase self-management capability. Working in highly uncertain environments requires shorter and more executive chains of command. Departments will gradually disappear and the figure of the multidisciplinary work team will become the basic organizational core of any company.
- The third is sustainability. Organizations will be evaluated under ESG criteria. Any company that does not take care of its people and is not responsible for the impact of its activity on the environment has no future. Basically, it will not be vibrant, it will lose its social reputation, its market and its capacity for financing.
New tools for new problems
Strategic innovation works in the future and tries to foresee it. This means that the challenges and problems to be solved will be different and unknown compared to the problems we already know when we work in the present.
Just because they are different does not mean that there are no common patterns, which is why it is so important to rely on data analysis.
The use of data analysis technology allows us to anticipate possible situations with patterns similar to situations already experienced in the past, it also allows us to respond in real time and finally, it allows us to create knowledge constantly, since we can simulate and make mistakes in a controlled manner.
In other words, working with reliable data is a safety net that any organization should build as quickly as possible. At this point, it will be less important to find the right answers than to ask the right questions.
New ways of working to manage uncertainty
Being immersed in constant uncertainty, as an organization we must react immediately as soon as we have a glimpse of changing environmental conditions. We are required not so much to redo the strategy at every moment, but to monitor how the strategy is being implemented and how it is adapting to the changes.
This ability to adapt requires new ways of working based on agility criteria and new capabilities and skills. Let’s remember that we have introduced the customer variable, that we have a huge amount of data and that what is really important is to ask the right questions. Methodical and repetitive profiles will become anachronistic.
Strategic innovation requires creativity, improvisation and the ability to create solutions with a certain degree of disruption.
We need precisely those capabilities and skills that can never be automated or replaced by machines; we are referring to what makes us human and allows us to constantly evolve.
In short, we are moving towards organizations focused on the constant search for and delivery of solutions (to customers, colleagues, society, shareholders…) driven by strategic innovation, and we will leave behind models of companies built from the analysis of the present and the development of monolithic strategies.
