The Future Of Innovation Per Se Is Unclear

Mr Svend Haugaard

The future of innovation belongs to those who deeply understand how to formulate, execute and live a strategy for tapping into customers’ unfulfilled but yet unknown needs while delivering true beneficial changes to their markets and industries.

Business strategy has been studied for decades by academicians and industry professionals who have formulated a plethora of tools, tips and tricks for analyzing an organization’s external opportunities and threats, internal strengths and weaknesses, for laying out possible scenarios of the future and for successful strategy implementation.

To gain competitive advantage a strategy process demands creativity and mental space for big thoughts, which however exposes the organization to risk of failure – the ‘new strategy’ may be wrong (only the future can tell, and for sure it will), it is deemed to have shortcomings, it may lack flexibility or it may be impossible to implement. Real life often mixes these issues so business strategy is no easy task.

A starting point should be to recognize that business future per se is uncertain no matter how many business school tools being applied to the strategy process and how much effort is put into it, so an organization must be flexible to adapt its strategic direction to whatever comes around externally or internally to the organisation. Keeping track of the future becomes more important than ever before due to decreasing product lifecycles and increasing globalization – what is launched on the market today may be difficult to sell tomorrow because customer habits change rapidly or because some remote and rather unnoticed competitor made a better offer on the marketplace.

How then achieve sustainable competitive advantage when the future is more unpredictable than ever before?

A possible answer is that future successful organizations must live by strategy and values of open innovation in close cooperation with lead users of attractive markets. Management and employees alike must accept and appreciate that their organization has no full control of the innovation process, that game-changing innovations inevitably will occur outside their command and control (this is already happening today, in case you didn’t notice it) and that there are always more subject matter experts outside the organisation than inside it, no matter how big an organisation is. These experts may reside at competitors, suppliers, customers or in other industries outside the organizational scope of business. Organizations must also face that attractive lead users may be someone else’s customers in an industry, where the organization has no presence and no strategic intend to enter.

The concepts of Open Innovation and Lead Users are still fairly new and poorly understood by the bulk of innovators, and they to some extent still need to prove their value. Nevertheless, they should be considered carefully as a path for future business success.

Organizational attitude is deemed to change and we are all a part of the game, which starts with a simple question: How will we compete on the future marketplace, where industries and markets can change at the speed of light?

Article © 2009 Mr Svend Haugaard. All rights reserved.

about the author...

Mr Svend Haugaard

Mr Svend Haugaard

affiliation:   Danfoss As

position:  R&D Project Manager

country:  Denmark

area of interest:  Innovation Strategy

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