Innovation of Business

and the
Business of Innovation™
 
Innovating Powerful, Profitable Businesses

Design and Strategy Through Strategic Pre-Planning™


Founding and creating a new company is complex, yet straightforward. Innovating a company is much less obvious, yet delivers powerful advantage. Creation performs mechanics such as incorporating and organizing. Innovation designs customer satisfaction around clear, distinctive value promises.

Let’s use the term “business” so that these concepts also apply to new functions within existing companies. We’ll use “customer” as shorthand for “stakeholder,” and “product” for the wide variety of ways to serve stakeholders.
Entrepreneuring is typically understood as creation of new companies. Intrapreneuring is creation of businesses within existing companies.



Founding and creation, then, are about the business. Innovation is about serving customers. Creation establishes an entity. Innovation establishes commitments. Creation is completed early. Innovation is the life of the ongoing business. Creation enables receipt of money. Innovation enables wealth.

Where should you put your energy? Ask where you will get your greatest return on investment. With creation, you will have a business. With innovation, you will have a vehicle for changing the world with your specific ideas and knowledge.

Creation is essential, yet experts can get those practical steps done right and done quickly. Reserve your own energies for innovation. You are a change agent. You can do what no one else has ever done. Anyone can create a business. Only you can change what is possible.

Innovation Systems


Innovation is simple in concept: Make and keep satisfied customers, at a profit, over time, in a competitive environment. Innovation begins with customer needs, continues with ideas and invention, and is not complete until customers are served so well that they buy your products and ask for more. In other words, innovation delivers wins for customers in exchange for wins for the business. Win-win is a system. Product for payment. Value for value. Innovation achieves win-win in the marketplace by designing win-win systems inside the business. In particular, corporate innovation delivers an ongoing flow of new products in exchange for an ongoing flow of funding and challenging opportunities. More on systems later.

Innovation and Invention


Invention focuses on the prototype. Innovation focuses on customer satisfaction. Invention needs funding to prove concepts. Innovation needs funding to create return on investment. Invention can be done without a business plan. Innovation creates visions of preferred products, then plans how to use them to create customer loyalty.

Invention asks and answers technical questions. Innovation asks and answers business questions. Without invention, you have no unique offering. Without innovation, you have no powerful business. Inventions may wind up on shelves, working perfectly yet impacting no markets. Innovated businesses live and breathe in markets, creating ongoing win-win relationships that deliver both revenues and ideas for new products.

Innovation designs products to delight customers. Functionality is never enough. Design criteria vary with situation yet the word “elegant” always seems to fit designs that delight. As you design your business, design for full commercialization of your inventions.

Business Pre-Planning™


Businesses are guided by plans which documents decisions – business, strategic, marketing, etc. Normal plans are written top down. Innovation planning stops to ask and answer a broad spectrum of questions about the new business. Normal planning makes decisions during planning. Innovation applies formal decision processes before planning.

Consider the issues involved in “pre-planning” a business: What decisions to make. What questions to ask. What team to involve. How to facilitate. How to know when answers are sufficient. What decision processes to use. How to achieve consensus. How to synthesize answers into clear decisions. How to synthesize decisions into an innovation vision.

Strategic Pre-Planning™ turns normal businesses into innovated businesses. More than that, Pre-Planning grows an innovation mindset, simplifies planning, improves odds of funding, develops leadership, enhances collaboration, and accelerates productivity. Investors love businesses that address all issues from invention to return on investment.

Elements of Business Pre-Planning™


One Pre-Planning approach designs businesses around four clusters of questions answered through brainstorming, prioritizing, wordsmithing, and decision making by an empowered team.
Strategic Identity: Who are we and who do we want to become?
Strategic Directions: Where do we want to go?
Strategic Decisions: How do we intend to get there?
Strategic Culture: How do we intend to behave?

Identity asks about focus, value, and image. Inquiry includes at least business focus, technical focus, key products, markets to serve, customers to satisfy, needs to meet, benefits to deliver, competition to address, uniqueness to develop, current image, desired image, image gaps to close, mission, name, slogan, and brand.

Ideally, innovation is driven by brands. Businesses own names and logo marks. Brands are owned by markets. Names live on paper. Brands live in the minds of customers. True brands are value promises, accepted by markets, and mentally attached to names.

Thus the value promise defines the core focus of a business. Innovation synthesizes the value promise from strategic identity, then defines, designs, and develops the business (and its products) to honor that value promise in everything the business does and says. Innovation develops durable stakeholder loyalty by making value promises very visible, then taking every opportunity to deliver value in excess of the promises.

Direction asks about goals and objectives. Goals are more strategic; objectives more tactical. Goals may last for years. Objectives change with plan period. Goals are more general and visionary. Objectives are precise, numerical, measurable, time-able, achievable, and assignable.

Objectives are elements of goals. If the goal is “profitability,” then an objective might be “$10,000,000 profit from product Alpha by end of fiscal year two.” Goals can be given simple names, each defined by a single sentence. Objectives always require a description sufficient to enable both delegation of responsibility and measurement of results.

Decision asks about strategies as methods for achieving objectives. Normal businesses organize around strategies such as product development, finance, and sales. Each box in their org charts identifies a strategy, either directly or by the title of its senior manager.

Innovation sees systems first. These diagrams are circles based on movement of knowledge and resources as directed by strategy. The “Innovation System” begins with investment and returns profitable products and growing share value. Money in, money out. At another level, innovation fits within a business. The “Business System” sets everything in context of market realities, then works to close five gaps between current and desired realities: knowledge, focus, customer satisfaction, customer perception, and profits.

With systems in mind, every strategy turns resources into progress toward customer satisfaction at a profit. Systems thinking enables adaptive organizations needed to keep up with market change. Again, normal businesses create organizations. Innovated businesses operate systems. The difference is huge!

Culture asks about values and principles. Values are more personal; principles more corporate. “Driving factors” represent underlying motivations and expectations. “Sales-driven” companies look and feel different to their customers than do “customer-driven” companies. “Value-driven” businesses are structured, led, and managed to consistently increase the win-win value of relationships with customers and stakeholders.

Innovation Plans


Normal business plans are about businesses. Innovation plans are about opportunities. Normal plans begin with organization. Innovation plans begin with markets. Normal plans state decisions defined by management. Innovation plans convey opportunities for stakeholders. That is, normal business plans are product or ego driven. Innovation plans are value driven.

Normal business plans are centered on the company. Innovation business plans are centered on the plan’s audience, including investors, employees, and potential allies. Normal plans promote from start to finish. Innovation plans explain value promises to each stakeholder and how those promises will be met. Normal planners assume reader knowledge and often speak in technical jargon. Innovation planners know they are proposing something new, and thus introduce the plan and its language with a “Technical Context” page.

Normal plans are rarely read. Innovation plans draw readers into a story of possibility combined with the logic of strategy.

Innovating Businesses


Businesses seen through an innovation paradigm are value-driven, strategic, and stakeholder centered. In part, they achieve those paradigms by asking key questions before planning. Well developed answers impact design decisions from fundamental perspectives through operating strategies to the fabric of interactions with employees, customers, allies, media, and market analysts.

Each included business function may be seen as its own businesses. Website management is a business within marketing communications within corporate marketing within the company. Business innovation may be applied at every level and within every business system.

There is no business as usual in today’s world. Innovators drive change that others must match. Fortunately, innovation can be introduced at any time. Rather than drive change by mandate that may raise resistance, innovators ask questions to leverage the energy and knowledge of team members while building buy-in to results.

An innovated business is NOT a normal business. You have a choice: the normal business, or the innovated business. You have a choice, and the time to decide is now!
 


 

30. In every respect the burden is hard on those who attack an almost universal opinion. They must be very fortunate as well as unusually capable if they obtain a hearing at all. (John Stuart Mill)

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