The world of business never stands still. Not only are there different economic challenges, changing government regulations and other large-scale developments that can affect everyone, but there will also be specifics that impact your own sector.
Whether these arise in the form of new market entrants, changes to the strategies taken by your established rivals or the emergence of market-disrupting new technology, the need to be ready to adapt and change is vital.
Having a corporate innovation strategy is central to this. Understood properly, innovation is something more substantial than just change. Change can, after all, be reactive, with your enterprise potentially finding itself in a situation where it needs to abandon its existing plans and do something new to copy and keep up with rivals who have just blindsided everyone with a great new idea.
While reacting to change can be necessary, it is not usually the best position to be in. Not only do you have to move fast without the luxury of being able to plan ahead, but you lack the advantage of being the ‘first mover’ that your rival will have.
Being a first mover has a range of advantages. Firstly, whoever achieves this position gets the benefit of brand recognition and loyalty in being, even if only for a short time, the sole provider of a new product or service. Also, the first mover is able to plan ahead with their marketing strategy ahead of a product or service launch, whereas the rest have to scramble hurriedly to respond.
Your corporate innovation strategy should, therefore, be based on being a first mover. But, it should be noted, there is one potential downside of this, which is that a competitor, by dedicating a lot of time, effort and money, might not only copy your new innovation, but improve on it, without having had to spend so much on research and development first.
As such, adopting a fast second approach can also prove useful, where the second market entrant takes the majority of market share by learning from the first mover… and doing it better.
For this reason, an effective innovation strategy is not just about being a first mover, but having your own plans to start improving your product or service further before the rest catch up. This should be treated as a key task for management, your design team, marketing and everyone else who can contribute.
Take a firm like Apple, for instance; they did not just invent the iPhone or the iPad, but continued to innovate by bringing out successor products and updates, ensuring they were able to keep up with the alternatives being introduced by their rivals.
It is not hard to see what can happen to a firm whose corporate innovation strategy does not operate this way.
For instance, Polaroid innovated with its instant camera technology that enabled users to print off photos right away, instead of having to take them to be developed. However, this first mover advantage (backed by patents) vanished when digital photography emerged, with the original company falling into bankruptcy in 2001.
Borders was another such example, establishing itself as a successful book retailer in the 1970s, but failing to adapt to the world of online and digital books in the 21st century.
This all goes to show that success today is achieved by innovation and great ideas, but you need to carry on having them if you are not to be overtaken in the future.