Integrating innovation into your business strategy

It is important to develop an environment/culture which will foster innovation.

A framework to support innovation includes integrating it into your business objectives by:

  • taking a holistic approach to innovation
  • establishing strong channels of communication
  • fostering a culture of innovation.

Global surveys show that innovation occurs where leaders encourage and protect it and executives actively manage and drive innovation. Where executives talk about innovation but do nothing about it, innovation is inhibited (Dodgson et al. 2008).

For an innovation strategy to be effective, it needs to be integrated into senior leaders' agendas. Using performance metrics and targets for innovation helps senior management integrate innovation into their normal pattern of business and creates an environment where staff are comfortable with innovating and better use of existing talents is made.

Taking a holistic approach to innovation

Innovation is not limited to product development but includes improvements to processes, organisational structure, business modelling and marketing.

For example, 3M, best known for household brands such as Post-it® Notes, Scotchgard™ and Scotch® Tape, has developed a culture of innovation that permeates the business. Even accidental discoveries are captured and applied (such as the accidental discovery of a new adhesive that gave us Post-it® Notes). 3M's technical staff are encouraged to spend 15% of their time on projects of their own choosing or initiative.

When developing your innovation strategy, look to the overall organisation and to stakeholders, such as suppliers and clients. Look at your skills and the skills of your staff: can more effective teams be developed through combining right brain (imaginative) and left brain (logical) people?

Establishing strong channels of communication

Your communication networks will determine your innovation effectiveness. Effective networks allow people with different kinds of knowledge and ways of tackling problems to cross-fertilise ideas. New ideas breed more new ideas, so networks can generate a cycle of innovation (Barsh et al. 2008).

When developing your innovation strategy, think about how you can create conditions that allow innovation to become part of daily discussions.

Fostering a culture of innovation

A culture of innovation creates an environment in which employees are encouraged to take risks and test their ideas. It can be as simple as acknowledging employees' ideas and encouraging them to pursue ideas that add value to the business. Think about how this can be achieved and built into your innovation strategy.

Innovation prototyping

While many of these examples are large organisations with large research and development departments, your small-medium business can still be innovative. Developing a prototype is a great way to take an idea and cheaply develop a physical product which can be tested further and either accepted or discarded with minimal cost.


Barsh, J, Capozzi, MM and Davidson, J, 2008, 'Leadership and innovation'. McKinsey Quarterly, no. 1: 37.

Dodgson, M, Gann, D and Salter, A, 2008, The management of technological innovation: strategy and practice. Completely rev. and updated. Oxford: Oxford University Press.