Strategic innovation

Design of innovation units* with strategic value contribution

Publication data

September 2023
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*Innovation units include all organizational units involved in the development of new product/market combinations, e.g. R&D and product development departments, innovation management, innovation labs/hubs, digital labs, corporate venturing units, incubators, etc.

In today's uncertain and dynamic business environments, innovation has gone from being a nice-to-have add-on to a strategic necessity. Established companies must continuously renew their competitive advantages in order to adapt to the rapid changes in the environment and not lose their strategic fit.

To achieve this, innovation departments need to develop a continuous pipeline of strategically relevant new product/market combinations and business opportunities for future profitable growth. However, existing innovation units are rarely organized for such strategic value contribution.

Traditional integrated innovation functions such as R&D or product development usually focus on incremental innovations within existing product/market categories. Modern separate innovation units such as innovation labs, hubs or corporate venture builders overcome this limitation and mostly focus on radical or disruptive innovations. However, their separation from the core business hinders the use of the existing business for the development of future competitive advantages, which usually leads to only limited commercial success and scalability of the new business opportunities - far from the needs of an established company to build its future on them.

But there is another way: networked "strategic innovation units" can specifically develop organizationally relevant new business for the strategic renewal of their parent company. To achieve this, they need to build and apply a specific set of dynamic capabilities through appropriate organizational measures. In the following white paper, the necessary elements of a strategic innovation management system are presented in an application-oriented manner based on the latest academic research and experience from numerous practical projects.

White Paper Contents:

- Strategic renewal for future profitable growth

- Ambidextry to leverage existing core business to develop future business

- Use of innovation units for strategic renewal

- Dynamic capabilities for strategic innovation

- Structure of the StrategyLab: Organizational design of strategic innovation units

- Implementation of the organizational design for strategic innovation units

- Case Studies on Freeletics, Innogy SE and the Schaeffler Group

Download the whitepaper now

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