Where does innovation ‘fit’ or ‘factor in’ with your organisational strategy? Most organisations have goals or targets (some more specific than others) which implicitly provide a strategic direction but often, the targets themselves create what we call a “growth gap.”A growth gap is the gap between the targets you have set; and what you will achieve if you carry on doing business as usual, making only small ‘incremental changes’ as you go. To bring this to life, follow these steps to begin thinking about a growth gap that may exist in your strategy.
1. Consider how some of the following indicative variables might underpin a growth gap for your organisation: Are you in a market that is contracting or expanding? Is your market share growing or declining? What role will current economic factors play in affecting your organisation reaching its target(s)? Is there likely to be increasing competition in your market? Is there a significant risk of disruption from new competitors, substitutes or technologies? What other factors might affect business as usual continuing as usual?
2. Based on your answers from the questions in step 1 (and other similar questions relevant to your organisation and strategy), think about how much ‘growth’ you are likely to experience if you do nothing but implement incremental changes to what you are doing and what is in your current plan (look closely at your levels of certainty). It is also worth noting that there may be no growth, or negative growth, depending on the results of your analyses of the variables.
3. Use this information to plot and create your expected trajectory of growth (or negative growth) over your desired planning period, for example, say 3 years.
4. Now plot and create the growth trajectory (using your business’ targets) that you would like to be on for that period.
5. The difference between the two is your growth gap. What’s important is that you have a plan for how you are going to fill this gap (if you have a gap – which almost all organisations do!). If you are to actually achieve the targets, you are going to have to create and/or capture value in new and different ways, otherwise, you’re just hoping for a miracle!
An organisation’s innovation missions provide the areas and territories for focus, in which an organisation can create and deliver innovative changes that will successfully fill the growth gap. Developing these missions should be an integral part of your organisational strategy and are likely to result in the development of new ways through which your organisation can create and/or capture value by developing new products, services, business models, processes, the list goes on.We love working with our clients at this level because it takes so much ambiguity out of their future performance and makes innovation very commercially focused – something that’s mandatory for us at Inventium.