Innovative Strategies Make Sales
Why innovative strategies to drive sales are critical and how you can create one.
The Situation
A constantly changing future
According to research by McKinsey, more than 80 percent of CEOs at large U.S. firms believe
innovation is crucial for their company’s future success.
Yet, many of these organizations need an effective innovation strategy.
As technology advances, so too does the pace of change. Your industry doesn’t matter —
the choice is the same for all companies: you need innovative strategies to drive sales or get left behind.
Unfortunately, many business leaders believe they have a strategy when what they have is a goal.
But, a goal without a strategy is simply a wish. To be successful, you need to turn your goal into a reachable and measurable objective.
And this objective could be –in descending order–a corporate, market, product, or marketing strategy.
You need to identify the top one or two critical problems and the pivot points you can use to multiply your effectiveness.
Then focus and concentrate actions and resources against those pivot points.
To do this, you need a strategy that creates a pathway to show you how to achieve and maintain your goals in our rapidly changing environment.
What Is An Innovative Strategy?
A brief description and example.
An innovation growth strategy is a clearly-defined plan a person or team must perform to achieve
the company’s growth and future sustainable goals. While all innovation strategies are different,
they should outline the objective of your organization’s innovation activities to help you achieve your objective.
The Harvard Business Review describes creating an innovation strategy as determining how innovation will create value
for potential customers and ways to capture that value. Plus, which types of innovation to pursue?
Product designs must evolve to stay competitive, and innovation strategies must evolve as the environment changes.
Good business innovation strategies must be simple, straightforward, and easily understood by all participants.
You want everyone on the same page. And if it is a product or marketing strategy, your innovation strategy must sync with your overall business strategy.
Suppose you maintain your traditional way of business because “that’s the way you have always done it,'”
sooner or later. In that case, that Strategy will have you in trouble.
Think Kodak and their inventions of digital photography or Blockbuster’s unwillingness to give up their retail stores and go to streaming.
The Difference Between Tactics And Strategy
These terms are not interchangeable.
Strategy and tactics are very different, although they are often used interchangeably.
Strategies are solutions to problems (objectives) and refer to long-term objectives. Tactics refer to the specific actions required to achieve those objectives.
Three levels of Innovative Strategy
The process is the same, but the three levels must be coherent.
There are three levels of Strategy: Corporate, business (units), and functional (departments).
Corporate: Senior management determines the company’s mission and long-term performance.
They guide decisions about growth, acquisitions, diversification, and investments.
Business: These strategies integrate into the corporate vision but focus on specific companies.
They focus on turning business objectives into Strategy and how the business will compete in the marketplace.
Functional. These strategies determine how the functional departments like production, marketing, R&D, H.R.,
and other departments will support the corporate and business Strategy.
The Key Elements Of Innovative Strategies That Drive Sales
The process of analyzing and creating a strategy
Strategies vary in depth and complexity depending on their objective. The following are the critical components of most strategies.
There are many different ways to analyze and create a strategy.
I am using a description and explanation from Professor Richard Rumelt’s book Good Strategy/Bad Strategy
that is easy to understand and use. They offer a simple understanding of a complex subject.
It starts with a vision, aggressiveness, and key objective or problem.
Here, your purpose is to determine the key (not multiple) objectives that must be solved to meet your goal.
Then you need to diagnose the problem or obstacle preventing success.
This research will be extensive and include many types of analysis, such as SWOT analysis,
market analysis, potential customer analysis, competitive analysis, industry analysis, and much more.
We cover more of these research techniques on our website and our online ClickVisor Program.
This step takes time, but it is critical and necessary.
This analysis also includes trends, opportunities, and potential issues that will or could impact the market positively or negatively.
A few examples: Design (BMW), chain-link systems (Walmart), and anticipation (Toyota and hybrid technology).
Ignoring trends can be harmful also (Kodak).
Insight and Innovation. Analyses look backward from yesterday’s data, which is necessary.
But, you also have to look forward to where the diagnosis can lead to creativity, insight, and innovation to create a solution to the problem.
Our minds a wired for creativity, and there are many techniques to help create “out-of-the-box ideas.
We also cover these kinds of techniques in our ClickVisor program.
The Guiding policy. The guiding policy is the approach chosen to cope with or overcome the identified obstacles in the diagnosis.
It’s what the company will do and will not do because of limited resources (time, talent, and money).
Coherent actions. These are the coordinated actions required to carry out the guiding policy.
Types of Innovation
Sustaining and disruption
What is sustaining and disruptive innovations? According to the Harvard Business Review, Business innovation can be sustained and disruptive.
Sustaining innovation continues to improve a company’s products, processes, and technologies within its existing market.
Disruptive innovation is when a company introduces a revolutionary new product or service
or introduces a low-cost product or service with limited performance or limited capabilities and a much lower price.
Or, the disruption can be aimed at a new market to gain new clients.
Think of Walmart creating a chain-link distribution system to market low-priced goods to small towns.
These innovative strategies to drive sales are essential considerations if you want to be more than just competitive.
How To Create A Business Model
What they are and how to use them
A business model lets you visualize the company’s components and overall concept.
Strategyzer.com’s famous business model canvas (template) includes nine elements:
customer segments, value propositions, channels, customer relationships,
revenue streams, key resources, key activities, key partnerships & cost structure.
This illustration is a copy of Strategizer’s business model canvas.
In addition to the nine key components you control, it has four elements you do not control (competition, market, industry,
and government regulations). Still, it is equally crucial for strategists to consider.
Update regularly, or the company might miss future trends or challenges.
Types Of Business Models
Following are a few more common models
There may be 50 or more different business models that companies use.
Many of which you already know. Following are a few to illustrate the variety of models.
E-Commerce or internet commerce is buying and selling goods or services using the internet.
Direct Sales involves selling a product directly to the consumer. That means there are no retail centers for companies that adopt this model.
Subscription business models charge consumers a subscription fee to access a service.
The razor blade model sells an inexpensive yet durable product, below cost, to capture higher margin disposables over a long period.
The Pay-as-you-go model is exactly as the name implies. You are pre-purchasing a certain amount of something, such as cell phone minutes,
and you are charged your actual usage at the end f the booing period.
Freemium models give you a free product or service and charge for premium features or services.
Brokerage models connect buyers and sellers and help facilitate a transaction.
They charge a fee for each transaction to either the buyer or the seller, and sometimes both.
Here are a few ways to approach business model innovation.
You can achieve innovation through any nine business units,
like a new or improved product or improving your value proposition.
Business models give you a visual concept of your business and enable you to imagine many different
ways to take the model apart and put it together differently and more effectively.
Or if you have a problem in one area, like a product not performing, you can focus on that problem
and develop solutions and see how those would work within your business model.
Check out our blog post: Want a creative solution to an unsolvable problem?
With innovative strategies to drive sales, you will come up with different potential solutions
and will need to decide which possible solution is the best.
Or, if you have a fiercely competitive market, you should examine each unit of your business model
to see how you add or eliminate parts to make that unit more effective or reduce costs or value to the entire business model.
If you reimagine and innovate each unit, you will improve your value proposition
and make it difficult for your competitors to copy what you have accomplished.
Or, if your market growth is slowing, you may want to change your business model with different products or services
or expand your marketplace beyond the traditional industry or market to convert current non–buyers into new buyers.
Or, you can create a business model canvas for each of your competitors to see
where their strengths and weaknesses are –and if they change over time — so you can improve your position or anticipate future changes.
Net: you will need to create innovative strategies to drive sales.
Innovative Strategy Benefits
Seven significant benefits of having an innovative strategy to drive sales.
To start, think about this: what if you took the opposite view?
How would you compete in the marketplace if you didn’t have a strategy?
You wouldn’t know where you stand or where you are going.
Answer: having a strategy is critical to a company’s success. Following are some of the benefits of having a strategy.
Creates A Competitive Advantage. An innovative strategy enables you to improve every aspect of your business model.
This Strategy allows you to maximize your resources, reduce unnecessary costs, improve your value proposition,
and create a competitive advantage that would be difficult for the competition to copy.
Improves Your Financial Success. A strategy requires you to review your costs and eliminate any unnecessary charges.
It also requires you to look for ways to enhance your offering, add premium pricing, create new offerings, or even enter new markets.
It enables You To Make Better Decisions. Because you are analyzing your current situation and creating a vision for the future,
you will use your experience and critical thinking skills and broaden your perceptions of the
company, industry, markets, products, and services. This type of analysis will enable you to make better decisions.
It helps Build Your Brand. Because of all your work in preparing your Strategy,
you know who you are and who your audience is; you can create a distinctive and memorable brand.
Plan For Today And The Future. To create a strategy, you must identify the key steps to reach your goals.
This requires you to define and evaluate your company and your offering (value proposition’s) strengths and weaknesses
to determine what, if anything, has to improve or be eliminated.
It also helps you plan and allocate resources more efficiently and anticipate resource requirements
that will be needed in the future. You will have to challenge some entrenched assumptions to do this.
Improves Your Organization And Processes. A strategy helps you organize the company to support your values
and help you reach your goals. It can get your entire organization on board and focused on
helping execute the tasks needed to reach your goals. This focus is vital because the execution of your Strategy is as important
as the Strategy itself. Poor execution — rather than the Strategy — is a significant reason plans fail.
It gives Management Control and Reduces Risks. A strategy gives you control over
all activities that affect your goals and let you measure progress toward those goals.
Conclusion
About 80 percent of companies believe strategies are essential, and many believe they have a strategy.
Unfortunately, few do. What they have are mission statements and goals.
But goals are wishes unless you have an innovative strategy to drive sales, so you have a pathway to achieving that goal.
An innovative strategy describes how the company will capture the new or additional value and which types of innovation to pursue.
There are also three innovative strategy levels: corporate, business, and functional (department responsibilities).
A business model canvas is a conceptual structure that explains the viability of the business
through the company’s essential nine components. Companies may use 50 or more different business models—
many of you already know- like E-commerce, subscription, and direct sales.
Business models are essential for both new and established businesses.
Also, you must update regularly, or the company could miss future trends or challenges.
The way to approach business model innovation depends on the company’s situation.
Does it have a significant problem preventing it from achieving its objective, or does it need to break out of the competitive market,
or the company’s market is slowing down, and it needs to find new buyers?
There are seven significant benefits to having an innovative strategy.
It creates a competitive advantage, improves financial success, enables leadership to
make better decisions, helps build your brand plans for the future,
enhances the function of your organization and gives management better control, and reduces risk.
The First Five Steps To Your Business Strategy Journey.
Go through the five steps below and begin to question and probe for answers to each question.
It will take some time to prepare an overview of how you will approach putting together your business plan.
Thistiewill be well spesnt. On the other hand, set a time limit for getting this done. Don’t delay all the benefits that result from a business strategy.
Step One: Establish a plan to keep up with the constant pace of change in your marketplace. Involve your team.
If you have three people, you will get three different answers to the questions and other responses to future suggestive ideas.
It would be best if everyone were on the same page when you executed your proposed strategy.
Step Two: Determine the overall objective of your future strategy. How aggressive do you want to be?
Do you have a specific problem to solve or an opportunity you want to achieve?
Are you looking for an incremental or radical program?
Step Three: Go through the first three steps in creating your strategy: define your objective
– which has to be the most critical objective, –it has to be achievable and measurable.
Then, diagnose the problem/opportunity– you only need information that helps you solve the problem, not an encyclopedia.
Step Four: Determining your general policy. This step is difficult because it means saying no often.
After all, you have a concept you want to implement and limited time, talent, and money to do everything,
so saying no to additional ideas is challenging. Then, put your plan together on how you will execute this strategy.
Step Five: Monitor and measure the results of your programs and adjust as often as necessary.
This strategy program is a work in progress, so there will be many starts, stops, and rewrites.
Try out some strategy ideas, and let me know how they worked out for you.
Jim Zitek
Innovative Strategies Make Sales
