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Begin a Systematic Innovation Practice - Step Two

By Praveen Gupta

Developing a systematic innovation strategy from scratch is a challenge many companies are facing in today’s fast-paced world. This series of articles will focus on the steps a company should take in creating its own innovation practice, one that is developed specifically for its product, process or service. Step one is identifying the company’s type of innovation. This article describes step two – scouting and strategizing for innovation. Step three is committing to, and cultivating, an innovation environment. Step four is to innovate disruptively. The fifth, and final, step is to sustain innovation.

Strategize for Innovation

An organization must look for opportunities for innovation by understanding the types of innovation and recognizing its domain expertise. Common questions asked by a company are why to innovate and what to innovate. Consider an R&D division – employees try to innovate to further their careers, expand their horizons, publish papers or file for patents. As a result, many researchers are engaged in exploration in multiple directions with few aligned to their company’s domain expertise and strategy of sustaining profitable growth.

There are many ways to turn this situation around. The organization’s marketing department should explore new product or service opportunities based on the customer feedback, supply chain interaction, and related industries. Operations staff should look for internal opportunities for innovation to improve efficiency, and productivity through process innovations. Business strategists must look into competitive benchmarking and explore opportunities for business model innovations. Knowing the scope of a company’s products or services shows the myriad of opportunities for product, process and business model innovation. One must assess scope of the innovation based on the fundamental (creative idea that leads to a revolution in thinking), platform (leads to the practical application of breakthrough innovations), derivative (secondary or product or surface derived from a platform innovation) and variation (tertiary-level innovation that requires less time to develop and is a slight variation of the next-level products or services based on a derivative innovation) breakdowns.

Scout for Innovation

A business must be fully aware of its surrounding environment and its own ecosystem in order to identify opportunities for innovation by not only completing competitive benchmarking, but also looking for customer pain, inconveniences, conflicting situations in design, and implicit or explicit demand for new capabilities. Making use of a company’s existing product or services, by making them more convenient, less costly and more fun are simple beginnings for creating innovation opportunities.

Innovation is sometimes thought of as glamorous – looking for the “next big thing.” But innovation breaks down into determining what the next big thing is, what it takes to produce it and how to make it a success. In order to expand into future products, a company must first learn the historical trends and evolutions of similar products. Performing regression analysis, accelerating the evolving trend and expanding the horizon can help identify new opportunities for breakthrough innovation.

Besides extending and exploring, enlisting established networks can create potential for new innovation. Table 1 serves as a guide for feasibility analysis and resource planning (the present) to develop innovative solutions (the future).

Table 1: Resource Planning and Feasibility Analysis
Time to Innovation Scope of Innovation Estimated Head Counts Resources Required
This moment to days Variation Individuals Experiments, trial and error, tools
Days to weeks Derivative Small group (10s) Knowledge, thinking, simulations, computers
Weeks to months Platform Large group (100s) Expertise, deeper thinking, larger experiments, larger computers
Months to years Fundamental Larger group (1000s) Experts, dedicated thinkers, super-computers, theorists

Analyzing opportunities to innovate helps a business further recognize, prioritize and maximize return on investment. This also helps to define innovation targets in terms of performance, value, price, cost, resources and time.

Strategize for Innovation

Prior to developing an innovation strategy, a company first must develop a baseline performance level. Innovation diagnostics will identify areas of strengths and weakness to incorporate in the strategic planning. For a corporation to institutionalize innovation to sustain profitable growth, a corporate commitment must be made to achieve continual growth in terms of revenue, profit margin, job opportunities and employee development. The main drivers for successful, strategic innovation are profitable growth, intellectual involvement of employees, a creative and fun culture, and a visionary leadership.

Strategic planning must address the following issues in relation to an innovation practice:

  • Leadership
  • Value proposition
  • Resources
  • Measures
  • Identification of key players responsible for the initiative
  • Methodologies
  • Organization structure
  • Roadmap (with toll gates)
  • Culture of creativity and risk taking
  • Excellence in idea management
  • Incentives and controls
  • Rapid commercialization
  • Sustaining innovation on demand

An innovation initiative should be launched with incremental milestones after the planning and preparation is complete. A company’s innovation plan can follow the target, explore, develop, optimize, commercialize (TEDOC) phases described below:

(T)arget – A clear need for innovation based on opportunity analysis
(E)xplore – Research, benchmark and analyze the opportunity, and gain expertise knowledge in the domain
(D)evelop – Alternative innovative breakthrough solutions to maximize innovative components
(O)ptimize – The final solution for minimal diversion in operations and delivery
(C)ommercialize – Rapid access to the marketplace and customers to ensure premium margins and above market return on investment


Institutionalizing innovation must establish processes for innovation on demand and innovation driving demand for growth. Continually scouting opportunities for innovation and scheduled demand-driven innovation provides a competitive edge to a business and facilitates profitable growth.

About the Author:

Praveen Gupta is the lead author of Business Innovation in the 21st Century that organizes various aspects of innovation from concept to commercialization. He is the president of Accelper Consulting, which provides training and consulting services in innovation and teaches business innovation at Illinois Institute of Technology, Chicago. Contact Praveen Gupta at praveen (at) or visit