The authors begin by presenting two companies – Corning Glass and Nortel Networks – both of whom worked in the same technology-intensive industry, and both of who were similarly thriving until they were faced with the financial crises. Only one company emerged successful with strong growth, the other filing for bankruptcy.
What was the reason for the contrasting fortunes of these two similar companies? Where Nortel appeared lacking in direction and devoid of a coherent strategy, Corning “took charge, developed a strong product innovation and technology strategy for the firm, and provided leadership and direction to see that strategy through” p 33.
Cooper and Edgett used the above example to drive home the point that a technology and innovation strategy is key to survival, growth, and market leadership. They explain that such strategy must have clearly defined objectives and areas of focus with a long-term commitment. Importantly, it must be driven and supported by the business’s leadership team.
The authors go on to provide a practical strategy development framework based on their observations of top-performing businesses.
- Define goals and objectives: developing an innovation and technology strategy begins by setting and clearly articulating innovation goals. Importantly, these must tie into the broader business goals and also translate into specific and concrete objectives, e.g. in terms of expected sales or profits.
- Select strategic arenas: identifying, at a strategic level, the market opportunities to attack and profitably operate in, or the technologies which the business would focus its new product efforts on is central to a new strategy. Cooper and Edgett provide a set of dimensions and questions to help businesses select their areas of strategic thrust (or arenas) that provide new and profitable prospects.
- Develop attack and entry strategies: the authors explain that a business may choose to attack its chosen strategic arenas as an industry innovator or a fast follower, a low-cost provider, differentiator or a niche player. These attack strategies guide the policies, activities and the businesses initiatives, and whatever is chosen should align with the business’s unique strengths and the knowledge of industry success drivers.
- Resource commitments and deployment decisions: determining strategic priorities and allocating resources to them is a key part of a technology strategy. This translates as effective portfolio selection and management that ensures projects and other initiatives are aligned with the business objectives and are balanced against one another.
- Define a strategic roadmap: a roadmap helps senior management understand and communicate how they intend to achieve their innovation and technology strategy objectives. Using roadmaps, they are able to map out timings of their initiatives, including indications of where technology development or acquisition is necessary, as well as when product platforms would be crucial.
Cooper and Edgett conclude their paper by impressing upon the reader than developing a coherent innovation and technology strategy requires steady effort, and time and resource commitment. However, the evidence they provide in the paper show that such effort is normally rewarded by good success.
Read the full paper:
Developing a product innovation and technology strategy for your business, Robert G. Cooper and Scott J. Edgett, Research Technology Management (Routledge), 2010