Obviously, Innovation and Strategy are two distinct aspects of the business. But did you ever wonder what drives what?
This is how we perceive the matter:
In short: Strategy (Howto/Plan) needs to bring about the Vision (Whereto/Progress), which is then executed through the Mission (What/Product) and performed with Purpose (Why/Promise).
When executives feel compelled to go through a digital transformation process without first having a clear picture (Vision) of what they want the future of their business to be, they are bound to miss the mark. This was confirmed in a study by McKinsey, disclosing that 70% of digital transformation (DT) initiatives failed, causing a waste of 900 billion USD (!) while research by IBM even reported an 85% chance of failure. The root causes relate to Leadership and Culture: People appeared unaware of the challenges and drivers of DT, causing them to trip up, fall over, and be massively disappointed while doing it. This was confirmed by a study by Duarte, stating that empathy and employee engagement are critical for any organizational change program.
So, if your starting point happens to be Strategy, for instance, to adapt to competitive forces, or because you’ve decided to develop a new market, or develop new products, or both, you’re well-advised to walk the sequence of the Road to Epiphany in reverse order (from Strategy upward) before overhauling the entire business operation. The same applies for a decline of customers orders following customer feedback that the product no longer fits the needs: just move up the ladder from Customers to Vision to refit the need.
Again, Strategy needs to bring about the Vision, i.e., the future you desire for your business. So, before turning things up-side-down, rethink your Vision while incorporating the assumed opportunities (or threats) and demonstrate Leadership by driving a Culture that allows Creativity to blossom while building a support structure for favorable Innovations to surface to the top with which to create differentiating Value. Then, realign your Mission and Purpose with the new Vision to attract the right Customers that produce real Results.
And now and then, ask your self the question: Is our Vision still valid? Is our Mission relevant, viable, feasible, fulfilling, sustainable, differentiating, and defensible? What is our current situation in the market? Can we be disrupted? What’s next?