Strategy is about making choices between a number of feasible options to have the best chance at "winning," and innovation is just one of the means to achieve your strategic goals. Without a good one, it's actually quite difficult to achieve long-term success and orient your business for speed in order to secure a competitive advantage.
What's interesting is that, according to statistics, 96% of executives have defined innovation as a strategic priority. However, the lack of a clear innovation strategy is a fundamental problem, especially for established companies when optimization of existing business becomes a priority.
While developing an innovation strategy for your marketing operations isn't necessarily difficult in itself, aligning it with your overall business goals and ways of working is what takes most of the time and effort. This time, we've decided to try to make sense of the broad topic by introducing the steps for developing your own innovation strategy. We'll also cover what are innovative marketings strategies and why it's important.
Adopt These Perspectives from Marketing Operations Process Innovators
Part of the process for making marketing operations process improvements is to come up with innovative and creative solutions. Here are some ways to innovate your marketing operations process.
Multi-channel marketing will give way to a hyper-personalized approach
We know that your consumers spend enormous amounts of time online, and the pandemic only increased this tendency. People now visit their doctor online, do their banking and grocery shopping from the comfort of their couch, work remotely, and connect with friends and family via videoconferencing.
Because of the ubiquity of handheld devices and the reality of constant digital connection, multi-channel marketing is no longer sufficient, and 1:1 marketing campaigns are on the rise. These campaigns involve putting highly targeted messaging in front of your audience daily, everywhere they spend time.
All these digital channels collect copious amounts of consumer data that give you the opportunity to speak directly to individuals rather than segments or groups. Therefore, you have the option to personalize your message to an audience of one.
In order for your organization to implement a more dynamic, real-time, and perhaps personalized marketing strategy, you must invest in the appropriate technology and resources that can analyze and translate data insights into actionable plans. The other vital step you need to take is to hire data analysts that can dig into the data and identify the patterns that matter most to your prospects, which brings us to the next trend for marketing operations management.
How do your company's brand and marketing operations measure up
Now more than ever, marketers are expected to do more with less. Efficient brand and marketing operations are essential to achieving this mandate. Download a cheat sheet of the five characteristics of an effective brand and marketing operations function.
Marketing teams will need to add data analysts and strategists to harness data insights into action effectively
Over the past several years, there has been a decrease in emphasis on following broad, innovative marketing strategies. Instead, lean into what works and what doesn't for your specific audience. The good news is there's plenty of data available to inform your business decisions and deliver the results your organization needs. But the challenge lies in making sure you can keep up with the proliferation of information at your fingertips, let alone get ahead of it.
It's not enough to look at the "Digital 1.0" metrics of success we're all accustomed to, like analyzing time spent on website pages and the number of clicks. These won't provide the insight into consumer behaviors that will take your marketing program to the next level.
That's why marketing leaders will need to add new data-driven roles to their marketing operations teams.
Data analysts are adept at identifying underlying patterns that inform consumer behavior. For example, they're able to use complex regression analysis to find if/then behaviors in your data. They might look at whether a prospect spends a certain amount of time on one page and then proceeds to complete a specific sequence of behaviors. Tracking each move enables analysts to predict what consumers will do next. Then by cross-referencing those patterns with other trends, your marketing team can create campaigns that reach your audience in very targeted ways.
The war for talent will make getting ahead of this trend all the more challenging. One of the ways that brands are setting themselves apart as an employer of choice in this talent shortage is to really lean into their values and impact on communities and causes.
Companies will increase their brand's social impact to differentiate themselves from the competition and to elevate as an employer of choice
In the battle for talent and market share, companies that demonstrate a genuine commitment to social concerns like environmental, social, and governance (ESG) and diversity, equity, and inclusion (DEI) have a greater chance of winning the hearts and minds of both customers and employees. Therefore, to recruit the people you need to position your brand for success, consider how you can align your brand's values with opportunities to make a positive impact in the world.
That might mean investing in sustainable packaging solutions for your products or identifying tangible ways to support marginalized members in the community your organization serves.
To recruit the people you need to position your brand for success, consider how you can align your brand's values with opportunities to make a positive impact in the world.
Whatever it may be, once you've zeroed in on the social impact you want your brand to make, be sure to operationalize it across your organization through robust employee training and engagement. You do not want to risk any misunderstanding or miscommunication about what your brand stands for. Therefore, make sure your employees fully understand how your social impact investments function as part of your overarching brand promise and strategy.
Marketers will face increasing pressure to prove the ROI of in-person experiences and events — and may need to shift to virtual permanently.
During the pandemic, virtual marketing events replaced in-person gatherings as a matter of necessity. And since COVID-19 continues to present health and safety concerns, you'll likely need to provide alternatives to meeting in large groups for the foreseeable future. That might mean embracing a hybrid approach to events — or shifting to a virtual setting until the pandemic is truly behind us.
But even when the coast is clear, and marketers can once again plan grand-scale events with confidence, should you? After all, organizations will want to measure the ROI of in-person events versus less expensive virtual options. And you might find it difficult to quantify the value of meeting in person truly. If you can't prove that in-person events deliver the ROI your organization wants to see, you may not be able to justify the budgetary investment they require.
Perhaps it's time to look at whether digital events can offer measurable results that in-person events can't. If you invest in the right marketing technology and the people who know how to use it, could virtual events become more than a short-term trend and instead be the way of the future? Could they give you the insight you need to reach your audience more effectively?
Your experiential team will need access to robust technology and reporting tools to demonstrate the ROI your organization is looking for.
Building a Marketing Operations and Innovation Strategy
An innovation strategy is a common innovation mission and a detailed plan that aims to create new value for which customers are willing to pay. It includes a set of policies or behaviors geared toward achieving future organizational growth. The most innovative businesses understand that big, new ideas don't just happen. Instead, innovations arise out of environments and procedures that are deliberately designed to facilitate their development.
Why Innovation Strategy is Important
An effective innovation strategy can:
- Clarify priorities and goals. An innovation strategy outlines the goals of the organization's innovation activities and helps focus efforts on reaching those goals.
- Foster alignment. With a plan in place, diverse groups within an organization will all be working toward common goals rather than pursuing their own individual priorities.
- Keep a business from resting on its laurels. Even businesses that start out as innovators must continue to innovate in a strategic way, as copycats and innovative competitors are likely to take market share over time.
- Help a business achieve long-term success. Without ongoing innovation, a company is unlikely to gain a competitive advantage or keep customers engaged over the long term.
How to Build Your Innovation Strategy
Building an innovation strategy requires deep dive reflection, planning, and continuous feedback. Follow these steps outlined to develop your company's innovation strategy.
1. Determine objectives and strategic approach to innovation
The first step in the strategy choice cascade is to define your winning aspiration. In other words, your innovation objectives and the why behind your innovation strategy. Like any other strategy, the planning process of your innovation strategy starts with defining your objectives: What do you want to achieve with innovation?
If we take a step back, think about your long-term business goals and the things that are most likely to drive your business forward even after some time. As already mentioned, your innovation strategy should help support your business objectives and vice versa.
An example of a good strategic approach introduced in Playing to Win is Olay. Olay's winning aspiration is to become a leading skincare brand that wins convincingly in its chosen markets and channels. Along with hair care, it will help establish a key pillar in the Procter & Gamble beauty-care business.
It's likely that your approach to innovation will be something different. Typically, there are two different approaches to innovation strategy: business model innovation and leveraging existing business models.
2. Business Model Innovation
Business model innovation is the development of new, unique concepts supporting an organization's financial viability, including its mission and the processes for bringing those concepts to fruition. The primary goal of business model innovation is to realize new revenue sources by improving product value and how products are delivered to customers.
The purpose of business model innovation is to address the choice of the target segment, product or service offering, and revenue model. At the operating model level, the focus is on driving profitability, competitive advantage, and value creation.
Business model innovation is the art of enhancing advantage and value creation by making simultaneous and mutually supportive changes both to an organization's value proposition to customers and to its underlying operating model. Also, it requires a deep understanding of your company's competitive advantage and can be approached in four different ways:
3. Leveraging Existing Business Model
Leveraging the existing business model refers to continuous improvements and incremental/sustainable innovations. As opposed to the business model innovation, the strategic focus of organizations that leverage the existing business model is on improving the core business rather than building new business models to create new value. Based on these two approaches to innovation, we can identify three innovator archetypes:
4. Know Your Market: Customers and Competitors
The second step in the strategy choice cascade is defining the right playing field, as in, the market you're operating in and the customer segment you're offering value for. To be able to innovate and respond to your customers' needs, you should listen and understand what your customers really want and remove the rest. To be able to do that, knowing what happens in the market is essential.
However, because competitive needs are individual and often very specific, a strategy that worked for another player in your field shouldn't be copied but learned from. Although defining your playing field is important, your unique value proposition is what will make or break your innovation strategy.
5. Define Your Value Proposition
Next, and probably the most important step, is to define that unique value proposition. How will you win? What type of innovations allows the company to capture that value and achieve a competitive advantage?
Because the purpose of innovation is to create competitive advantage, you should focus on creating value that either saves your customers money and time or makes them willing to pay more for your offering, provides larger societal benefit, makes your product perform better or more convenient to use, or becomes more durable and affordable compared to the previous product and the ones in the market.
To be able to create a unique value proposition, the ability to identify and exploit new uncontested markets is recommended. This can be done through value innovation.
6. Value Innovation
Value innovation was first introduced in the HBR article called Blue Ocean Strategy and later in the classic book bearing the same name. The purpose of value innovation is to achieve sustainable competitive advantage by looking beyond your current understanding of the industry and reforming your value proposition to stand apart from the competition.
Securing a new competitive advantage is done by making the competition irrelevant, also referred to as the blue ocean. To succeed, one must adapt existing products or services through differentiation and lower cost.
Often, companies imitate their competitors offering slightly improved products and services with slightly more competitive prices. Because rivals and imitators are about to attack fast, both the value proposition and the profit proposition should be outstanding. This makes your business model more difficult to imitate and gives the best chance for you to be able to swim in that blue ocean.
To reach value innovation, try to clarify which customer segments your competitors are focused on and how do these segments overlap with the ones your new offering targets. Is it possible to adapt any of your existing products to differentiate them further for the geographies or segments that will face the most pressure?
7. Assess and Develop Your Core Capabilities
The first three steps in the strategy choice cascade really come down to one thing; your fundamental capabilities are required for winning.
When assessing your set of capabilities that need to be in place, consider the following:
For example, if you want to win at delivering breakthrough technology, you must have internal skills and knowledge to be able to build that. The ability to connect and develop these capabilities is key to innovation.
8. Establish Your Innovation Techniques and Systems
Last but not least, to be able to execute your innovation strategy in a scalable and integrated manner, you should find out what systems need to be in place.
Define: which innovation techniques and systems do we need to be able to link our innovation infrastructure elements together? What are the most important systems that support and help measure the results of our innovative marketing strategy?
According to a recent study, Christopher Freeman defines the system of innovation as 'the network of institutions in public and private sectors whose activities and interactions initiate, import, modify and diffuse new technologies.
This includes the following elements:
- The role of company R&D, especially in relation to technology
- The role of education and training related to innovations
- The conglomerate structure of the industry
- The production, marketing, and finance systems
Example of Innovative Marketing Strategies
Here are exemplary models of innovation and marketing operations strategies used by large fortune 500 companies.
Apple builds innovations by acquiring startups and partnering with other companies to develop new products, such as a partnership with Volkswagen to produce driverless shuttle vans for employees. The company also has an internal accelerator that leverages Apple employees to push forward new research projects, such as Titan, an electric car project.
For almost 200 years, Corning has repeatedly introduced new innovations and transformed its business model. It continues to succeed by investing in ongoing research at its R&D laboratory, where researchers from diverse disciplinary backgrounds can collaborate, applying science to
Polaris implemented an automated system for crowdsourcing new ideas from employees, making the process of ideation to execution 80 percent faster. The crowdsourcing innovation initiative has resulted in four cutting-edge vehicles, such as the Polaris Slingshot, that are all bestsellers and award winners in the ATV market.
In addition to an innovation lab that creates new hardware devices such as the Kindle and Echo, Amazon also encourages all employees to pitch innovative ideas. For example, an employee spontaneously pitched the idea for Amazon Prime in a memo, and leaders provided internal funding to make it happen.
Google offers innovation classes for employees and runs an R&D facility that has launched products like self-driving cars and Google Glass. But the company also looks to bring in innovations from external sources, with GV, its own venture capital fund for innovative startups, and an incubator for promising entrepreneurs.
Transform Your Marketing
Six areas are vital to developing a Marketing Ops team capable of transforming Marketing into a Center of Excellence.
We know with statistical significance that BIC marketers take a different approach to aligning Marketing with the business. They connect marketing activities and investments to business results and take their alignment efforts beyond the Sales function. Marketing Oops in these organizations facilitate the alignment process and oversees the development of a customer-centric marketing plan that ensures that the Marketing investment portfolio supports measurable marketing objectives that will have a direct impact on the business.
Marketers have a framework for establishing the metrics to measure and report on marketing's value, impact, and contribution. They know which outcomes and metrics matter to the leadership team. Marketing Ops drives the development of the framework and key performance indicators (KPIs). They manage the mechanics of measurement, perform the analysis, and publish the performance results. Marketing Ops translates marketing metrics into an actionable marketing dashboard that the leadership team and the marketing team can use to make strategic, tactical, and investment decisions.
In today's fact-based environment, data and analytics are table stakes. Marketing organizations need to be able to synthesize data quickly and gain actionable insights. Marketers need the analytical muscle to build and use models to make smart investments and strategic decisions. Marketing Ops constructs and maintains an environment that enables Marketing to better use data and analytics.
The technology available to help Marketing measure and report on performance is extensive and growing. From marketing resource management to business intelligence to data management systems to reporting platforms to scenario analysis tools, Marketing Ops selects, deploys, and manages the automation and technology infrastructure to support the department. The deployment of technology infrastructure, training, and change management falls under the auspices of Marketing Ops and serves as the big "I"—the infrastructure that Marketing needs to guide decisions, improve its capabilities, and prove its value.
Much has been written about the need for Marketing to form strong, more explicit alliances with Sales, IT, and Finance, as well as with the service and product functions. Marketing Ops is the conduit between Marketing, Sales, Finance, and the executive team. It forms and manages these alliances, so everyone on the team is "rowing in the same direction." As part of its work, Marketing Ops should craft the operating level agreement that serves as the "rules and roles of engagement" for each of these partnerships and ensures that the liaisons from each group are included in meetings and decisions.
Continuous improvement is at the heart of assessment and benchmarking. It can only be achieved within a culture where there is a genuine concern, dedication, and a willingness among management and employees to improve. While the marketing executive sets the direction and vision for the team, Marketing Ops conducts the benchmarking and assessments to determine what standards,
Integrating Operations and Marketing Perspectives
Innovation marketing strategy is about making the best-educated choice between a number of feasible options. To succeed in developing the best possible innovation strategy for you, you need to identify and map the best possible strategic choices required to win. However, making those choices is only half the battle, as it's equally important to test and validate your approach.
For your innovation strategy to work, integrating operations and marketing for strategic alignment is key. Clear communication as well as supporting metrics on the company and individual levels will help you make innovation a continuous practice. Succeeding in innovation takes a combination of knowledge, the right skills, and practices, as well as a lot of hard work.
Universal Creative Solutions offers operations consulting and marketing strategy consulting to help you develop and implement your innovation strategy. Book a call today to learn how we can help you carve new avenues for your business.