How Business Leaders Can Build Effective Innovation Strategies to Improve Business Success?

Mostafa Sayyadi, Author, Leading Between the Lines

How Business Leaders Can Build Effective Innovation Strategies to Improve Business Success?

he business environment is constantly changing as organizations are increasingly participating in global markets. Hypercompetition has become the norm. Innovation is also a crucial part of hypercompetitive environments. Organizations can design, copy, or update products and services easier with more adaptability then ever today.

Leaders can apply innovation strategy to create more innovative solutions for organizational problems. They also employ this kind of strategy to develop vision of adopting more comprehensive information about the future. In addition, innovation strategy can be applied by leaders by taking into account the objectives of strategic implication that seeks to decrease organizational costs and redundancies. While leaders focus on implementing changes, an innovation strategy can be used to modify the current processes to enhance organizational efficiencies. Innovation strategy also incorporates a pro-active approach that identifies the opportunities that are available but not always addressed in the business, the global environment, and the political regulation changes. Innovation strategy can be enhanced by organizational leader as they adopt a strategic posture that inspires employees to identify better opportunities in both the internal and external environment.

Leaders that employ innovation strategy may enhance goal achievement. For example, this strategy could enhance the knowledge creation process through identifying new opportunities in order to provide better alternatives for managers to make a more effective decision. In fact, innovations strategy is highly associated with a company’s capacity to create new knowledge. In many ways, this strategy could enhance knowledge transfer by developing interactions with both departmental units and the business environment. When adopting an innovation strategy, leaders can enhance the knowledge utilization process, thereby developing guidelines for future pathways and determine future trends in the external environment and allocate their resources accordingly.

Innovation strategy can also play a critical role in improving business success. Firms’ innovation strategy can be categorized into two prominent streams: the first being that research indicates that there is a strong alignment between business strategy and external environment that potentially leads to higher degrees of performance at the organizational level. Other stream sheds light on different typologies of business strategies, and argues that one typology of these existing typologies can create better results for organizations when compared to others. It can be seen that these two streams have highlighted business strategy as an important enabler to improve organizational performance. In terms of STROBE strategy dimensions, analysis strategy can in turn develop opportunities for human resources development within organizations operating in various industries, by assessing current situations in details. Analytical orientation has major effects on the performance of companies through focusing on analytical decision making process. Human resources development can potentially facilitate financial performance, by improving profitability for companies. Defensive strategy as a necessary requisite enhances profitability, which enhances efficiency in companies’ current positions in hypercompetitive markets. Since pro-activeness manifests itself in behaviors such as continuously exploring the emerging opportunities to invest, this strategy can positively contribute to the efficiency of companies through helping them to find better opportunities for investment that potentially leads to better financial performance for these companies in terms of return on investment (ROI) and profitability. Futurity strategy, which implements basic studies to develop an effective and comprehensive vision for future, can also enable companies to identify and actively response to the changes occurred in the external environment. In line with this, I suggest that business consultant in various industries should consider the critical role of strategy in improving organizational performance for companies.