We have a rich history in helping leaders develop and implement and fit strategy with innovation.

Download an in depth discussion of Strategy and Innovation.

Where there is a strong strategy, the potential for conflict with innovation is very real. Since breakthrough innovation means a new product or service, which cannot be known at the beginning, this research can lead in directions not encompassed by - or in conflict with - the strategy. On the other hand, a strong strategy may lead teams working on innovation to stay away from certain areas, with the potential loss of opportunity. Finally, where there is not a strong strategy, clearly implemented - innovations in fact determine at least part of the actual strategy.

Consider the following examples of initial conflict:

• A pharmaceutical company's strategy was to focus on growth in the U.S. - but an innovation team discovered an opportunity to sell another firm's AIDS drug in Africa.
• A manufacturer had decided to focus on immediate customers, but a team discovered a tremendous potential opportunity to partner further downstream with retailers.
• An innovation team examined what appeared to be a profitable way to cook prepared foods in a central kitchen for a grocery retailer whose strategy was to do fresh food preparation at each store's deli.

The good news is that leadership teams that monitor activity and implications for strategy can determine fit and make adjustments as they deem appropriate - either in strategy or in implementation of potential innovation.

Important Questions:

How important is strategy?

Fast-growing organizations are nearly always driven by leaders with a strong, clear strategy that differentiates them in powerful ways from the competition. Strategy focuses the company and guides decisions. Strategy is more important in today's fast-changing and competitive environment than ever.

What goes wrong?

Research by Kaplan and Norton, designers of the Balanced Scorecard, reveals that

• 86% of executive teams spend less than one hour per month discussing strategy
• 60% of organizations don't link budgets to strategy
• Only 5% of the workforce understands the company's strategy

What are the implications?

Most organizations are not driven by a great strategy. The real strategy of most organizations is reflected in the sum of daily tactical decisions that are often made by people with inadequate information about the big picture. This means the opportunity for a powerful competitive advantage awaits those with the wisdom, commitment and discipline to craft and implement a revolutionary strategy.

What is Dynamic Strategy?

The continuous monitoring and upgrading of strategy is key. Strategy must become a living guide, not a static list. Leaders must devote significant and regular time to strategic thinking and acting, in order to create a truly strategy focused and strategy driven company.

• The creation of strategy depends on bright leaders with a clear picture of the environment, the customer and the value chain. More than ever, strategy development requires innovative thinking.
  
  
• Dynamic Strategy must focus; it must differentiate from the competition in ways important to the consumer; it must move the organization boldly toward an inspiring vision of the future; it must be owned by leadership.
  
  
• Dynamic Strategy must be implemented. The implementation must include:

• Rolling out so all understand the strategy, the vision, the case for change
• Projects to implement key aspects
• Linking to scorecard
• Linking to work on innovation
• Linking to budget and to incentives for performance
• Monitoring progress of work and strategy
• Making adjustments in the work and potentially the strategy