What are successful scale-ups doing right? 3 key moves to factor into your innovation strategy

Why do most scale-ups fail to build and maintain innovation momentum?

We have persistently talked about the important role that innovation plays in every company’s long-term success. And yet, striving for consistent and sustainable business transformation continues to be the trickiest puzzle scale-ups are trying to solve.

For scale-ups to effectively maintain innovation momentum and consistently hit growth milestones, their strategies must address the following questions:

– How their innovation efforts will create more value for their existing and future clients/customers

– How their company will safeguard their innovations’ value

– What types of innovation initiatives they need to chase

Without such a well-built strategy, scale-up leaders run the risk of struggling to devise a logical and consistent innovation infrastructure that addresses their evolving needs. This, in turn, may cause them to desperately adopt systems that work well for others, but not for their company.

In this article, we will guide you through how you can create a robust innovation strategy that answers the 3 abovementioned questions and, finally, unlock your scale-up’s capacity to innovate and grow for years to come.

1) How will your innovation efforts create more value for your existing and future clients?

We all know developing different product/service capabilities takes a lot of time and resources, so figuring out and focusing on what value your innovation initiatives can create is crucial.

As an example, our client espresso Displays took their time developing their flagship product before launching it into the market. Today, their portable monitor has won numerous awards and is dubbed the thinnest in the world.

But the path to their success was not always crystal clear.

Initially, their product road map focused on a lot of random things at once and they struggled to prioritise what was important. Luckily, they had a focused innovation strategy that allowed them to stay in the game efficiently and effectively in terms of answering 1) what value they want to create and 2) how they can bypass the barriers and make it a reality.

Their Research and Development efforts — which led to the creation of their award-winning portable monitor — were driven by the need to add value to their target customers’ professional and personal lives.

By giving them a sleek and reliable tool that seamlessly integrates with a range of tech brands (and, in the process, boosting their productivity wherever they may choose to work), espresso was able to differentiate themselves from the industry giants who were already commanding their market.

So, ask yourself: Is your innovation strategy persuading potential clients to spend more on your products/services? Saving them money? Making your current products or services work better/more convenient/durable/cheaper? Contributing to social good? 

If not, shift your focus on something that creates the most value and stick with it.

2) How can your company safeguard your innovations’ value?

Safeguarding your innovation’s value for yourself, from an ecosystem filled with potential copycats, can only be done with consistent investment in this space. 

After all, patents, trademarks, and the like, are not enough to stop your competitors from creating products/services that are the same as (or even better than) yours.

Still using espresso as an example, they were not the first to market portable monitors. And yet they still manage to protect their stronghold in their market since their launch, despite having giants like HP as contenders. 

How do they do this?

Apple does not offer an operating system that gives touchscreen support. This meant that Mac users needed to download third-party applications that will enable them to use portable touchscreen monitors (that are not an iPad; but even then, they will still need a third-party app to make it work).

And even then, these third-party applications do not exactly live up to their promises.

espresso was able to successfully entice Mac users to stay loyal by developing espressoFlow — a complementary software that allows seamless integration of touch controls into the MacOS.

So, keep asking what additional assets, capabilities, products, or services can successfully stop your existing customer base from deserting your brand for better rival options. Your ability to fully tune into your customer base and address their unmet needs is key to securing your share of the market for years to come.

3) What type(s) of innovation initiatives does your scale-up need to chase?

And, more importantly, what and how much of your resources should each of these initiatives get? 

This is now where you must decide how much of your efforts and money will be focused on technological and/or business model innovations.

To effectively explain this, we will briefly go through the four types of innovation, namely: 

  • – Routine innovation: Building on your current strengths and aligning them better with your existing business model; where the majority of profits are generated (think of Intel, Microsoft, Apple, and espresso’s consistent minor iterations/upgrades of their breakthrough products)
  •  
  • – Disruptive innovation: Developing your business model but not exactly developing your tech assets (think of Google giving away the Android OS for free and disrupting Apple and Microsoft in the process)
  •  
  • – Radical innovation: The opposite of disruptive innovation where you focus on developing your tech and leave your business model as is (think of the pharmaceutical industry’s decades-long focus on Research and Development alone)
  •  
  • – Architectural innovation: A combination of both business model and technology model disruptions (think of Polaroid and Kodak’s major shift to digital photography; the most challenging type of innovation for standard-bearers)
  •  

So, which one is best? 

There is no one preferred type of innovation, but rather a balanced combination of different types that will complement each other in the long term.

There is also no proven formula on how many resources to allocate for each type of innovation that works across the board. But one way to figure out which one(s) fits your business goals and needs is to answer questions like:

1) Where is your company currently at and where do you want it to go?

2) What are your company’s strengths and weaknesses?

3) How big are your technological opportunities?

4) At what rate can you sustainably enact technological change?

5) How big are your competitors and what are your chances of surpassing them?

6) What is your current core market growth rate and how fast do you want to grow further in the future?

7) How fast are you meeting your clients’ needs?

Once you decide which innovation strategy(ies) will work best for your company and how much of your resources will go into it, set a definite target (if you choose more than one type of strategy, set targets for each), commit to the process, review the progress, and decide if it is worth pursuing further in the long term.

Remember, your innovation strategy must evolve with the real world. Pay attention to market changes, technology trends, industry regulations, and incoming competitors. Only then will you be able to leverage innovation for everything it can offer.

Your company’s ability to innovate starts with a robust strategy. As leaders, it is your duty to develop and mobilise these multi-level systems across the infrastructures, processes, talents, and behaviours that impact the business’ ability to seize innovation opportunities, turn ideas into realities, and choose the best paths forward. 

Our team has collectively participated in these developments for decades and helped numerous scale-ups transition into the mass market through high-impact innovation strategies. Partner with us if you want us to do the same for you.

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