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Balancing innovation and strategy for business growt

on Monday, 02 December 2019. Posted in Leadership, People

Technology is all around us, so for companies whose business centres on technology provision, the opportunities are huge.

Balancing innovation and strategy for business growt

Technology is all around us, so for companies whose business centres on technology provision, the opportunities are huge. Get it right, and the potential growth is exponential. Get it wrong, and you risk falling by the wayside. If you want proof, look no further than the likes of BlackBerry, AOL and MySpace.

Small and medium-sized enterprises (SMEs) focused on technology have a unique opportunity. Despite having fewer resources at their disposal, their relatively compact size and more streamlined operations allow them to have a greater focus. With less bureaucracy, they can be more agile, reacting quickly to remain at the forefront of new technology as it emerges and evolves.

But, in order to harness their potential and fuel growth, SMEs need a solid business strategy underpinning everything they do. Without a framework to guide them, it’s very easy for SMEs to get caught out by their own success.

Agility and strategy – those two concepts might seem at odds, particularly if one considers strategy as a recipe that doesn’t change. But strategy is not a silver bullet. The context is always shifting, meaning that what led to success yesterday may not today. Businesses must constantly reappraise what they are doing and adapt as they go to keep their strategy relevant. 

Remaining responsive to mercurial markets and the tantalising speed of technological change requires companies to stay alert to new opportunities and to search what might matter next. Success comes from exploiting what works over time. Good strategy is a hybrid of both. It is about searching for problems that need to be solved, exploring possible solutions, and implementation after thorough investigation.

For it to work in the long-term, it needs to be constantly challenged in the short-term, and this requires agility, know-how and resilience. Think of it as a continuum – too far down the long-term, fixed view is problematic, as you won’t keep pace with the rate of change, as is a business plan that is too reactive, constantly shifting focus to whatever is new and exciting. Too much focus either way opens the door to competitors who are able to combine both and deliver value for customers by understanding what they will need tomorrow as well as fulfilling what they want today.

The key to success is to see strategy as a guiding framework that can be flexed, adapted and changed as necessary to suit new opportunities, rather than as a straightjacket that constrains or limits you to a set path. A long-term view of where you are heading, an openness to change, and an understanding that this change may alter that long-term goal at some point, and that you need to be constantly examining, questioning and exploring to determine at what point that needs to happen – that is a business strategy.

Businesses should set out clear priorities around where they compete in their marketplace, what their competitive advantage is, and the capabilities they both have and need to develop in order to delivery that strategy. The framework should acknowledge that there will be choices to make along the way, and offer a guide to how to approach such decisions with the long-term goal in mind. It should also allow for experimentation, for testing new ideas.

Differentiation is key 

The high-tech sector is changing rapidly, with new innovations emerging all the time. Organisations need to have their finger on the pulse and make quick but sound decisions on where to invest their money and focus for the best long-term reward. 

Without doubt, the winners among SMEs operating in this sector will be the ones who make a better job of exploring technology innovations as they evolve, understanding what makes them different and evaluating what different angle or knowledge of application they can bring to the table to offer value to their customers.

It is easy to imagine that technology is universally good or universally useful, in other words that there is some value or opportunity for all the technological innovations out there. That may be true, but not all will represent the right avenues for any given business to pursue. And, if there is value or opportunity to be gained, it may not always be apparent on first inspection. It often has to be discovered through further analysis.

By following a good business strategy that has innovation at its heart, and a clear set of priorities around where and how to compete as the ‘head’ to guide that heart, businesses won’t go far wrong. 

Top tips for balancing innovation and strategy:

  • Understand the value technology has for your customers, and appreciate that the technology, their needs and your customer base may evolve over time
  • Build diverse teams and encourage colleagues to share fresh perspectives and new ideas
  • Build a strong network: partnerships and alliances may offer opportunities for faster, cheaper and safer success
  • Support your employees through periods of change – they are your most important asset
  • Develop a system for analysing new opportunities and follow it each time
  • Consider expanding into adjacent markets – think Dyson with hand dryers and hair dryers
  • Be innovative with your business model
  • Imitation is ok – just do it better. Most of the world’s most successful technological innovations were not the first of their kind
  • Don’t be afraid to fail but, if you do, learn from it quickly and move on.

 

At Cranfield School of Management we have extensive experience and knowledge of what it takes to start and grow a successful business. With over 30 years of working with owner-managers of SMEs on the Business Growth Programme, combined with world-class research in business and management, Cranfield is a leading center for the development and training of business managers and their teams.

This article comes courtesy of Cranfield School of Management

 

 

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