An innovation strategy that helps people make choices

An innovation strategy explains where the organisation wants to create value, why those opportunities matter and how it will direct scarce resources towards learning and delivery. It should help people choose between plausible projects. If every proposal can claim to fit, the strategy is probably a statement of enthusiasm rather than a useful set of choices.

You do not need a long document to begin. You do need a clear ambition, a view of the situation, a few search fields, an honest account of capabilities and a way to decide what receives further support. The difficult part is making those elements agree with each other.

Separate ambition, strategy and activity

Consider a fictional furniture business serving small offices and rental properties. Its ambition is to make furniture useful for longer while building a dependable service business. That ambition does not yet say whether it should develop modular products, offer repairs, build a rental platform or work with property managers.

A strategy chooses a direction among such possibilities. For example, the business could focus first on repairable seating for existing regional customers, use its workshop and service relationships, and investigate replacement-part logistics before expanding geographically. A workshop, prototype or partnership meeting is then an activity in support of that direction.

Do not dismiss incremental changes as unworthy of strategy. The Oslo Manual’s business-innovation definitions cover significantly different products and business processes that have been introduced or brought into use. Novelty does not have to mean a world-first invention. The strategic question is which changes matter to this organisation and its customers.

Describe the problem the strategy must address

Write a short diagnosis using evidence you can inspect. Where is value being lost? Which customer situations are poorly served? Which capabilities are underused or becoming less useful? Separate current observations from expectations about the future.

For our furniture business, hypothetical service records suggest that otherwise usable chairs are replaced when a seat or leg becomes damaged. Customer conversations suggest uncertainty about repair availability. The team does not yet know whether this is a frequent enough problem or whether customers would choose repair at a sustainable price.

That uncertainty belongs in the strategy. It is not a defect to hide behind a confident market forecast. A diagnosis can say, “We have reason to investigate this situation, but these assumptions could invalidate our direction.” Link those assumptions to customer research and a named review.

Be careful about generic diagnoses such as “technology is changing everything.” They offer little help in choosing work. Describe the mechanism: what becomes easier, harder, cheaper, more valued or less dependable for a particular group?

Choose search fields and explicit exclusions

Translate the diagnosis into a small set of innovation search fields. The furniture business might investigate easier repair diagnosis, replaceable high-wear components and reliable collection-and-return arrangements. These fields leave room for different concepts while sharing a strategic purpose.

Strategyzer’s innovation-leadership checklist stresses strategic guidance and a portfolio mix suited to the organisation’s context. That is more useful than treating a familiar allocation ratio as a universal rule. Choose the mix because it addresses your situation, not because the numbers look established.

Now state what is outside the current scope. The business will not launch a broad consumer marketplace, develop unrelated home accessories or promise nationwide collection during the investigation. Each might be attractive in another strategy. Excluding them protects attention and clarifies what would require a separate decision.

An exclusion should have a reason and a review condition. “Not now because we lack service coverage” is more informative than “not innovative enough.” If a partner later changes the capability picture, the choice can be reconsidered openly.

Connect the direction to real capabilities

List what must be possible for the strategy to work. Repairable seating requires more than a clever joint. Someone must identify parts, hold or obtain stock, explain compatibility, perform repairs and handle exceptions. A service promise also needs a credible response when the customer cannot wait.

Distinguish capabilities already available from those that need development or access through partners. Ask for evidence: who has performed the work, under what conditions and with what limitations? Do not mistake a slide listing “digital capability” for an available person who can maintain the service.

The Cambridge Institute for Manufacturing’s open-innovation report examines implementation challenges and organisational culture. External collaboration can be part of a strategy, but finding a partner does not remove internal coordination work. Someone inside must be able to assess, integrate and use the contribution.

For our example, a logistics partner could help with collections. The furniture business would still need clear packing requirements, customer communication and responsibility for damage. Put those dependencies into the strategy before celebrating the partnership as a completed capability.

Make the resource choices visible

Show the work that will stop, slow down or remain protected. Otherwise the strategy is an additional demand placed on the same people. The scarce resource may be a skilled repairer or an operations manager’s attention rather than a budget line.

Strategic choice	Practical commitment	Boundary	Review question
Investigate repairable seating	Protected time for service research and component trials	Existing regional customers first	Does the problem justify further work?
Preserve current service reliability	Keep named repair capacity available	No unstaffed launch promise	Is exploration disrupting current commitments?
Explore collection support	Assign an internal owner to partner discussions	No national expansion commitment	Can handoffs work under realistic conditions?
Defer unrelated products	Record proposals for later review	No parallel accessories launch	Has evidence changed the reason for exclusion?

These are original planning examples, not recommended staffing levels or spending ratios. A small business may need one narrow investigation at a time. A larger organisation may support several, but it still needs to understand shared bottlenecks.

Use staged innovation funding to separate the next learning commitment from eventual expansion. Reserving capacity for an investigation is not the same as approving the whole business model.

Set different expectations for learning and delivery

Early work should produce clearer evidence and better decisions, not invented revenue certainty. Later work should demonstrate increasingly dependable delivery, adoption and economics. The transition deserves an explicit decision rather than a quiet change of project vocabulary.

GOV.UK’s discovery guidance allows stopping after investigating a problem. That is a useful principle for strategy execution too. If customers can already obtain repairs easily and the proposed service adds little, closing the field may be the responsible outcome.

For each initiative, name the next question, the evidence needed and who can decide. Include an option to revise or stop. A review that can only approve more work encourages teams to package activity as progress.

Keep delivery measures separate from learning measures. Completing interviews on time tells you that research happened. It does not tell you whether the opportunity is attractive. Likewise, a promising concept test does not establish that service quality will hold at higher volume.

Test the strategy against awkward proposals

Before finalising the document, apply it to three real or realistic proposals. One should fit clearly, one should be attractive but outside scope, and one should expose a trade-off. Ask colleagues to explain the decisions using the strategy without help from its author.

For the furniture business, a replacement-seat trial fits. A decorative lamp range does not fit the present direction. A national repair subscription exposes unresolved service capability and financing questions. If the strategy cannot distinguish these cases, sharpen the choices.

Then compare the written strategy with actual resource allocation. Repeated exceptions may reveal a different strategy emerging in practice. Sometimes that is useful learning; sometimes it is avoidance of a difficult choice. Discuss it rather than maintaining two conflicting accounts.

Keep the document revisable

A strategy is not a prediction that must be defended at all costs. Review it when important evidence changes, a dependency fails or the organisation’s constraints shift. Preserve the earlier reasoning so revisions are understandable.

The limitations are substantial: incomplete information, uncertain customer behaviour, competitive responses and internal politics all affect decisions. The workflow here is practical guidance, not a proven formula for superior returns. It cannot remove the need for judgement.

A useful final document lets a colleague answer five questions: what are we trying to improve, where will we look, what will we not do, what can we commit and what would make us reconsider? When those answers guide everyday decisions, the strategy is doing its job.