Article

Robert Kerner
Robert Kerner 26 April 2016

Strategy And Innovation, Lost In Translation

I have worked for years trying to ensure that strategy execution happens seamlessly. This is still a major struggle for most organisations as they find themselves tied in knots (and frameworks) while the average employee is still baffled when strategists articulate "the plan".

Although the intersection between strategy and execution is certainly important, in the last few years especially, the intersection between strategy and innovation has maybe become more important. The root of the problem, like strategist talking to front line staff, lies in translation.

I see 3 major disconnects:

1. Strategy cycles disconnected from innovation cycles

2. Different success criteria

3. Language barrier between teams

Let's take a look at each in turn.

1. Typical strategy functions still run on quarterly/yearly cycles. This normally suits the financial reporting and budgeting cycles creating a soothing feeling across the organisation, i.e. "It is December, here comes the annual objectives for next year." Not a bad thing but this is completely at odds with how innovation teams work. Most innovation teams continuously scout new ideas, evaluate options, identify capability gaps etc. Calendar timing is irrelevant; clock speed from discovery to implementation is the bench mark. Issue is how can these learnings/decisions feed from and into the strategy cycles? This needs to be bidirectional and in my opinion rarely happens.

2. Another challenge to sync these processes is the desired outcomes of the two are vastly different and usually at odds. Strategy seeks to take a chaotic world, both internally and externally, and make order of this chaos to help point the organisation in the right direction. Congruency of thinking and action is the desired outcome. Innovation teams normal aim is actually to disrupt the status quo, creating more chaos. Many will say this "healthy tension" is a good thing but from my experience this tension just creates two circular processes that only touch occasionally and it normally produces confusion/ frustration on both sides.

3. The age old problem of two people speaking English and having no idea what the other is talking about (kind of like a Brit and American trying to explain the parts of a car). Innovation teams have their own language (accelerators, cells, ideation etc.) which leaves most people "outside the know" completely lost.

These 3 factors create a chasm of understanding between these teams/functions when what is needed is full integration of latest learnings from the market and long term strategic intent.

I don't pretend to have the solutions to these issues, but certainly at a minimum people in the organisation who are able to "speak both languages" need to be identified and employed to tie these functions together. Other firms have successfully used a light integration process ensure that at least the 2 cycles intertwine at various times during the year to "share notes". The best in class firms, example Lego, have taken this integration extremely seriously and see it as key business differentiator.

Where is your firm on is spectrum? Where should it be? What does it cost you to not do this well? Something to think about in your next strategy or innovation meeting. 

Rob Kerner is Head of Strategy for the Personal & Business bank at RBS and also speaks externally at conferences on strategy, innovation and customer experience. For more details, see profile at: https://uk.linkedin.com/in/robkerner

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