Profitable Growth 301 - Innovation
Profitable Growth 301 focuses on innovating in products and markets, and finalizing the Growth Plan so it can be executed and monitored systematically.
Innovation is the third step in a four step process and is the step that many organizations make the mistake of starting and ending with. The four steps I have found that work the best are:
- Understand the Current Condition and Confront the Facts
- Develop a barebones strategic plan focused at growth
- Innovation and finalizing the growth plan
- Execute, monitor and revise the plan
Without the first two steps, it is very difficult for a company to innovate and develop new ideas for products and services or to successfully find new markets. The reason is that companies have unrealistic expectations of their capabilities and they simply can’t execute, in addition there is no underlying strategy that supports growth.
It’s Not All About Innovation
The following activities need to occur to successfully innovate in products and markets and to develop a credible growth plan that can be executed:
- Innovation Priorities: Key Drivers,Products, Services, Processes
- Market Diversification Planning & Market Research
- Innovation Opportunity Generation & Further Research
- Opportunity Management Using the Three Horizons of Growth
- Go to Market Planning
- Marketing Message w/ 3 Laws of Marketing Physics: Overt Benefit, Reason to Believe, Dramatic Difference
- ID Key People, Roles & Responsibilities
- Sales and Marketing Strategy with an Inbound Marketing Plan leveraging the web and social media
- Deliverable: Strategy distilled to an A3 Growth Plan
Let’s take a look at a few of these:
Innovation Priorities
Identifying ideas for new products or services is process, not magic or a black box. Innovation must be a focused and managed process. That’s why it’s important to understand the current condition of the company and understand its strengths, and its Most Valuable Customers, Products and Markets. Focus on developing a baseline understanding of these and the priorities that should drive profitable growth before launching any innovation initiatives.
Sources for Innovation Process Management
I’ve also found that most companies don’t have the capability to manage the process of finding innovative new ideas and paring them down to the ones that the best chances of success. One terrific source for help for small and midsize manufacturers and related firms is through the Manufacturing Extension Partnership. Click this link to find an MEP center near your business: https://www.nist.gov/mep/
The Three Horizons of Growth
McKinsey and Company has developed an excellent explanation of the three horizons to managing growth:
The first horizon is to extend and defend the core business
The second horizon is to build new emerging businesses which will ultimately become part of the core business
The third horizon is to create new and viable options through innovating in products, services and markets, the best ones will become emerging businesses in horizon two.
Here’s a link to an interactive explanation of this process: https://www.mckinseyquarterly.com:443/Strategy/Strategy_in_Practice/Enduring_Ideas_The_three_horizons_of_growth_2485
Charlie Alter specializes in Business Growth, Innovation, and Coaching. Follow Charlie on Twitter at: https://twitter.com/#!/cpalter or check out https://bentbrookadvisors.com.
