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Innovation Strategy: Developing Innovative Strategies in Business

Published: 27 February, 2024

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Innovation has become an imperative for organizations worldwide, yet the multitude of methods and frameworks available often lead to confusion rather than clarity. While various approaches focus on specific aspects such as user experience or design thinking , they often fail to provide a cohesive strategy for innovation from start to finish. An innovation strategy is key to capturing and  sustaining innovation , it serves as a detailed roadmap, comprising a series of strategic steps that propel an organization toward its future objectives. Beyond being a mere guide for business success, this roadmap is essential for ensuring a company remains competitive in its industry by continually devising new and innovative approaches to address challenges.

At Digital Leadership, our core belief is that by harnessing emerging technologies and innovative business models , we can revolutionize customer experiences. Crafting an innovation strategy is crucial for a company’s success. It entails fostering collaboration within the organization to stimulate new ideas and establishing a well-thought-out framework for future growth. It’s crucial to understand that no two innovation strategy plans are identical. 

What is Innovation Strategy?

An innovation strategy is a planned and organized way of using new technologies and creative ideas to bring about significant changes in a company. It involves creating a detailed plan that closely matches the company’s main goals, encouraging a culture of constant improvement. Think of an innovation strategy as a commitment to a shared goal of innovation, including a structured set of activities designed to drive the future growth of the organization. 

Each innovation strategy is unique. This innovation strategy plan is more than just a guide for business success; it functions as a compass, steering the organization through new and creative approaches to address challenges. Developing a company innovation strategy includes clearly defining an innovation mission, aligning activities with long-term business goals , and promoting a culture that welcomes change and creativity. Following such a strategy ensures that organizations stay ahead in their industries, always adjusting and evolving to meet emerging needs.

Business Innovation Strategy: What is Innovation Strategy In Business

In the business environment, remaining competitive necessitates ongoing evolution to address evolving customer demands. Establishing an innovation strategy becomes imperative for organizations aiming to excel in this dynamic setting. One prevalent initial step in crafting such a strategy involves gaining a comprehensive grasp of the organization’s innovation initiatives and overarching business goals . This encompasses identifying the market landscape, comprehending customer requirements, and discerning the most effective strategies to optimize customer satisfaction while utilizing resources efficiently.

Once you have a grasp of your organization’s innovation landscape, the next step is to define a common innovation mission. This mission should align with your overall business strategy and focus your innovation efforts on creating value for your customers. An effective innovation strategy must also include setting specific innovation goals and metrics to measure success. By establishing clear objectives, businesses can better track their progress and adapt their innovation programs as needed.

So, Why are Innovation Strategies Important in Business

• Generating and capitalizing on returns from innovations serves as a primary source of competitive advantage.
• Complex and resource-intensive activities like R&D, product design, and collaboration can impact a firm’s competitive standing. Without strategic guidance, these efforts may yield fragmented and short-term outcomes.
• With globalization, firms face a multitude of opportunities and threats across various markets. A strategic approach to innovation helps navigate this landscape effectively.
• Organizational structures and innovation processes must align with the overall corporate strategy. For instance, R&D efforts may differ depending on whether the firm aims to lead or follow in innovation.
• Articulating long-term strategic objectives for innovation is crucial for engaging with public-sector policies, fostering collaborations, and attracting patient investors.
• A firm that prioritizes innovation strategically is more likely to attract talented individuals seeking opportunities for creative engagement.

The “UNITE Innovation Approach” Model acts as a guide for entrepreneurs to build a strong innovation strategy framework. This model smoothly combines market insights, aligns with business goals, and offers a structured way of generating and implementing ideas. By employing the UNITE model, entrepreneurs gain a strategic advantage, ensuring that their innovation efforts are intentional steps toward lasting success, not haphazard. 

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The UNITE Innovation Approach | Overview

Steps of developing innovation strategy framework.

Innovation is crucial not only for large corporations but also for small and medium-sized enterprises (SMEs). It serves as a vital competitive advantage and is often considered a core capability of firms. For SMEs, innovation is particularly important due to resource constraints, making it an effective means to enhance productivity and performance. However, research findings on Heineken Beverage Industry reveal that the organization’s innovative strategies, particularly in process, market, and product innovation, are weak and fail to significantly contribute to its performance and productivity levels. To strengthen their innovation efforts, SMEs can follow several steps in developing an effective innovation strategy.

Step 1: Innovation Strategy Setup

In the crucial first step of Setup within the innovation strategy , organizations lay the groundwork for success. This involves defining the business intentions and direction, outlining high-level Search Fields, and identifying detailed Opportunity Spaces. By articulating the Business Intention, organizations clarify the problem they aim to solve or the legacy they aspire to leave behind, ensuring alignment with organizational goals.

You can now access the complete Business Intentions Package, including a full presentation, related models and instructions for use.

The UNITE Business Intentions

Utilizing tools like the Search Field Matrix aids in analyzing dimensions like trends and market segments, guiding prioritization of areas for innovation within the overarching innovation strategy. Opportunity Spaces then pinpoint specific intervention sites, outlining Jobs to be Done and target customers in alignment with the innovation strategy’s objectives. Building the core team, led by an experienced entrepreneur, is essential for executing the innovation initiative effectively. Operating in a protected environment, clear goals are set for each stage, with regular updates provided to stakeholders, ensuring smooth organizational setup and progression through subsequent stages.

You can now access the complete UNITE DEFINITION OF SEARCH FIELDS & OPPORTUNITY MATRIX, including a full presentation, related models and instructions for use.

THE UNITE Definition Of Search Fields & Opportunity Spaces

Step 2: problem/solution fit.

In step 2 of developing an innovation strategy, the focus is on achieving Problem/Solution Fit , and aligning customer needs with viable solutions. This involves three key streams of work: Stream A delves into understanding Jobs to be Done, Stream B crafts a Value Proposition, and Stream C defines the Business Model. Bringing the team up to speed is essential, involving active briefings with stakeholders and thorough research to refine objectives. Properly framing the broader objective, clarifying the JTBD, and conducting initial market research are vital steps before proceeding further, ensuring a solid foundation for subsequent actions.

You can now access the complete UNITE PROBLEM / SOLUTION FIT, including a full presentation, related models and instructions for use.

The UNITE Business Model Innovation Patterns

The Jobs-to-be-Done (JTBD) framework is a powerful tool for understanding customer needs and driving innovation. By focusing on tasks rather than demographics, businesses gain deep insights into their target market. Through qualitative interviews and quantitative surveys , companies validate insights and identify growth opportunities. This approach helps in creating solutions that precisely match customer needs, reducing the risk of failure and increasing market success. Continuous iteration based on customer feedback ensures a competitive edge in today’s customer-centric landscape. Embracing JTBD is essential for fostering innovation and delivering value to customers.

You can now access the complete JTBD Customer’s Job Statement Package, including a full presentation, related models and instructions for use.

The UNITE Jobs-To-Be-Done Statement & Map

It offers a systematic approach to understanding customer needs and shaping innovative solutions. By focusing on the tasks or objectives customers are trying to accomplish, rather than just their demographic or psychographic profiles, businesses can uncover deep insights into unmet customer needs and opportunities for improvement.

To effectively outline the tasks and activities customers undertake to fulfill their job using the UNITE Jobs-to-be-Done Universal Job Map, convene your team and set up a whiteboard or wall with eight columns representing the eight steps in the Job Map. From defining and planning to concluding, each step provides insight into the customer’s journey. For example, when purchasing a bottle of wine, steps may include defining preferences, locating a store, preparing by comparing options, confirming the choice, executing the purchase, monitoring the taste, modifying preferences based on satisfaction, and concluding the purchase experience. Understanding these steps is vital for developing solutions that precisely meet the customer’s needs.

You can now access the complete Jobs to be Done Universal Map Package, including a full presentation, related models and instructions for use.

At this stage, having gone through the Jobs-to-be-Done process and developed initial Customer Promises, we find ourselves within a relatively narrow solution space ripe for exploration using methodologies like Design Thinking. The next step involves translating these initial promises into robust solutions by treating each promise as a mini-opportunity Space. Ideation is the key here. We encourage exploring a plethora of ideas, ranging from ambitious “moonshots” to targeted solutions addressing specific but unsolved problems. It’s about being smart in approach, knowing when to think big and when to focus narrowly, all while keeping the original customer needs at the forefront.

To navigate this process effectively, we recommend leveraging frameworks such as the Value Proposition Canvas . This tool provides a structured approach to deep dive into the value proposition, ensuring alignment with customer needs and market demands. Crafting a robust value proposition isn’t just about generating ideas; it’s about understanding the core essence of what your offering brings to the table. By embracing ideation, divergence, and strategic frameworks, businesses can unlock innovation potential and create value propositions that resonate deeply with their target audience.

You can now access the complete Business Model Canvas Package, including a full presentation, related models and instructions for use.

The UNITE Business Model Canvas

(3) solution/market fit (mvp).

In step 2, we’ve pinpointed our customers’ needs, tested potential solutions, and outlined a solid business model. However, jumping straight into execution is risky. While we may have a good grasp of what our customers want, our concept hasn’t been fully validated yet. Step 3 of developing an innovation strategy, where customers actually buy and use our product, is crucial for true validation. Rushing into scaling before perfecting our concept can lead to wasted resources and the need for costly adjustments later on. It’s essential to ensure our business concept is finely tuned before expanding.

Innovation strategy hinges on the meticulous execution of a Minimum Viable Product (MVP) , a streamlined version of your offering that validates key business assumptions while conserving resources. The MVP approach, epitomized by Zappos’ early success, emphasizes real-world validation over elaborate prototypes, focusing on tangible customer experiences. Yet, challenges like imitation and reputational risk loom large, necessitating strategic differentiation and brand management. Moreover, maintaining quality is paramount, ensuring that the MVP not only functions but delights users, fostering genuine feedback. Executing an MVP entails two phases: development and launch, followed by rigorous testing and iteration. This iterative process drives continuous improvement , steering your innovation strategy towards tangible value creation .

You can now access the complete Unite Solution/Market Fit (MVP) Scorecard, including a full presentation, related models and instructions for use.

The UNITE Problem-Solution Fit & Minimum Viable Product (MVP) Scorecards

In the initial phase of MVP development and launch, four key work streams drive the process: Marketing focuses on brand development and campaign planning, while the Business stream refines models and tests pricing strategies. Product & UX teams develop and test the MVP, while Technology sets up technical infrastructure. Phase B shifts focus to live testing and tweaking, with Marketing launching test campaigns and Business refining operating models.

Step 4: Build & Scale Your Innovation Strategy

After countless tests and a number of pivots and iterations, you have quantitatively proven with real customers that you have achieved a Solution/Market Fit. In other words, your product works and customers have actually bought it! In Stage 4 of developing an innovation strategy, you will be shifting gears and moving from incubation (concerned with finding a working Business Model) to acceleration (building and scaling the identified Business Model). With your business concept now proven and well-defined, the next challenge is getting it to scale. That is the core purpose of this stage: to build and scale the business concept that you have been working on thus far and now get it out into the market to scale as quickly as possible. But moving from your business concept (the strategy) to an actual business (the execution) is inherently difficult. Many organizations fail to bridge the Strategy-Execution Gap , meaning they fail to implement the strategy, or business concept, they originally designed. According to the available statistics, up to 70% of organizations struggle with moving from strategy to execution.

One key ingredient we propose to overcome the Strategy-Execution challenge is to establish how you are going to execute using a well-defined and communicated Operating Model. The Operating Model Canvas emerges as a potent solution, offering a blueprint for execution. Establishing a well-defined and communicated Operating Model is pivotal in overcoming the Strategy-Execution challenge.

You can now access the complete GROWTH-HACKING PROCESS, including a full presentation, related models and instructions for use.

The Growth-Hacking Process

To ensure the effectiveness of the innovation strategy , it is imperative to embed innovation within the organization’s processes and overall strategic framework. This necessitates the allocation of resources, including time, finances, and skilled personnel, to innovation initiatives, while fostering a culture that champions and rewards innovative thinking.

By adhering to these guidelines for formulating an innovation strategy , businesses can position themselves for sustained success and growth amidst a rapidly evolving market landscape. Through a steadfast commitment to customer value creation and adaptability to uncertainty, organizations can pave the path to industry leadership through innovation.

Types of Innovation Strategies

Elaboration on innovation strategy typologies has been provided by various scholars (Freeman and Soete 1997; Goodman and Lawless 1994). These typologies encompass proactive strategies, characterized by technological and market leadership with a strong research focus, often associated with firms embracing first-mover advantages and taking significant risks. Active strategies involve defending existing technologies and markets while remaining agile to respond swiftly to emerging opportunities. Reactive strategies, on the other hand, are adopted by firms with a slower response to innovation, often prioritizing cost-cutting measures over technological advancements. Finally, passive strategies entail engaging in innovation only in response to customer demands, typically involving low-risk initiatives.

Examples of passive strategies can be observed among supplier firms in industries like automotive manufacturing, where lower-tier suppliers often rely on fulfilling specifications rather than driving innovation themselves.

1) Proactive Innovation Strategy

Being ahead in innovation defines successful companies that stand out in the ever-changing business world. These forward-looking organizations don’t just react to changes; they actively search for new opportunities and predict future trends. This proactive approach allows them to take control of the market by introducing fresh and distinctive products or services that capture consumer attention.

Within proactive innovation strategies, several paths contribute to an organization’s overall success:

• Product Innovation: At the core of being proactive in innovation is making new and groundbreaking products. Companies that do well put money into research and development, always trying to do things that haven’t been done before to meet new needs and go beyond what customers expect. Whether it’s using the latest technology or coming up with creative designs, creating innovative products is a big reason why these companies lead the market.
• Process Innovation : To ensure internal efficiency and stay ahead of the competition, organizations with a proactive innovation strategy focus on optimizing their internal operations. Process innovation becomes crucial, streamlining workflows, improving productivity, and fostering a culture of continuous improvement.
• Business Model Innovation : Recognizing that how value is provided and money is made is as crucial as the products themselves, organizations embracing proactive innovation strategies engage in business model innovation. This involves reimagining the fundamental structure of the business, exploring new revenue streams, and adapting to changing market dynamics.
• Open Innovation : Proactive innovators often collaborate with external partners, startups, or research institutions through open innovation practices. By tapping into a broader pool of ideas, expertise, and resources, these organizations enrich their innovation ecosystem and stay at the forefront of industry advancements.
• Sustainability Innovation: Forward-thinking companies, under a proactive innovation strategy, increasingly incorporate sustainability into their product development and business practices. This aligns with societal and environmental expectations, positioning them as responsible and future-ready entities.

Essentially, a proactive innovation strategy goes beyond mere adaptation; it positions organizations as catalysts of change, architects of the future, and leaders in industries where innovation is the key currency.

For instance, proactive innovators like DuPont and Apple exemplify a commitment to technological leadership through continuous innovation. Microsoft, employing an active strategy, strategically leverages existing technologies while adapting swiftly to market shifts. In contrast, firms like Dell may adopt a more reactive approach to technology adoption but remain proactive in their production and distribution models.

2) Active Innovation Strategy

Active innovation represents a dynamic approach for organizations to swiftly respond to market changes and evolving customer preferences. Embracing flexibility and agility, companies adopting this strategy proactively lead rather than merely follow in the ever-changing business landscape. Key aspects of the active innovation framework include:

• Proactivity : Organizations take the lead in meeting the needs of the continually evolving market.
• Incremental Innovation : Constant, small improvements to existing products or processes keep offerings up-to-date and aligned with customer preferences.
• Service Innovation: Beyond product creation, organizations focus on enhancing the overall customer experience by listening to customer feedback and adapting services accordingly.
• Adaptability : Rapid response to new demands, including staying abreast of technological changes.
• Technology Innovation: A pivotal component, organizations prioritize staying updated on technological advancements to provide modern solutions in the digital era.

Active innovation places a premium on a proactive mindset, swift actions, and a deep understanding of the market. This strategy positions organizations not only to navigate changes effectively but also to capitalize on new opportunities, establishing them as leaders in their respective industries.

3) Reactive Innovation Strategy

In the Reactive Innovation Strategy , businesses respond to market changes as needed. While not always the first to introduce groundbreaking products, these companies prioritize adaptability in the competitive environment. Cautious in their responses, organizations employing this strategy carefully evaluate market shifts before making changes. Though the pace of innovation may be slower compared to proactive approaches, this strategy holds advantages, especially in industries where stability and a deep understanding of market dynamics are paramount.

Strengths of Reactive Innovation:

• Adaptive Innovation: Enables precise adjustments in response to changes, maximizing resource utilization.
• Cost Innovation: Focuses on finding cost-effective solutions and operational efficiencies.

For organizations embracing Reactive Innovation , balancing responsiveness with forward-looking anticipation is key. While not always the first movers, strategic and well-timed responses to market shifts make them resilient players in the ever-changing business landscape. This approach proves particularly relevant in industries experiencing gradual changes, where staying attuned to market demands remains the primary focus.

4) Passive Innovation Strategy

In passive innovation , organizations show limited involvement in the innovation process , often missing opportunities and potential advancements. This cautious approach relies on established practices, avoiding proactive exploration. However, this passivity, while providing stability, can be a double-edged sword, risking stagnation in a quickly changing landscape.

• Imitative Innovation: Organizations that embrace passive innovation may tend to copy successful ideas from competitors or industry leaders, finding security in proven models but sacrificing the agility and originality of more proactive strategies.
• Stability vs. Stagnation: While passive innovation gives a sense of stability, organizations must be aware of potential downsides, including the risk of falling behind in industries where rapid advancements are the norm.
• Open Innovation Bursts : To counteract potential stagnation, passive innovation strategies may benefit from occasional bursts of open innovation. Drawing on external ideas and collaborations brings in fresh perspectives and helps maintain relevance in dynamic industries.

Developing an effective innovation strategy requires a comprehensive approach, incorporating key elements and following a systematic framework. By understanding the market, aligning strategies with business goals , and fostering a culture of innovation , organizations can stay ahead in the ever-evolving business landscape. The examples of successful innovation strategies from industry leaders further highlight the importance of innovation in achieving sustained business growth and competitiveness.

This nuanced understanding of innovation strategy underscores the dynamic interplay between technological advancements, market dynamics, and organizational capabilities, shaping firms’ strategic orientations towards innovation.

Innovation strategies vary widely, each tailored to specific organizational contexts and objectives. Also, there are five styles of Innovation Strategies

• Leadership ignites entrepreneurial energy within teams.
• Culture of rapid innovation and creation of new business models.
• Suitable for industries facing rapid changes.
• Management involves sharing the vision, establishing internal markets for ideas, and encouraging intrapreneurship.
• Managers innovate within existing business structures.
• Transformation of business structures over time.
• Ideal for companies seeking significant yet sustainable change.
• Management practices include experimentation, empowering teams, and customer-centricity.
• Exploration of new directions beyond existing strategic assets.
• Pursuit of radical change in response to limited growth opportunities.
• Management involves identifying crucial assets, encouraging cross-pollination of ideas, and seizing opportunities beyond core areas.
• Conducting low-cost experiments to overcome obstacles hindering major innovations.
• Cautious yet progressive approach to innovation.
• Suitable when significant opportunities are sensed, but details remain unclear.
• Management practices include goal-focused research, patience, and continuous exploration.
• Outsourcing creativity and investing in startups.
• Acquisition of promising startups.
• Feasible with available resources to leverage discoveries from smaller players.
• Management involves maintaining internal R&D capacity, scouting for acquisition prospects, and efficient integration processes.

Innovation Strategy of the Four main Types of Innovation

Four primary types of innovation —radical, architectural, disruptive, and incremental—provide a comprehensive innovation strategy framework for organizations to navigate the complexities of innovation and achieve their strategic objectives. Each type offers unique opportunities and challenges, catering to different levels of risk tolerance and resource availability. Understanding these distinct approaches to innovation is essential for organizations seeking to adapt, evolve, and thrive in an ever-changing marketplace. Let’s explore each type of innovation strategy in detail to gain insights into their applications and implications for organizational success.

• Radical Innovation : Radical innovation involves the development of entirely new technologies, products, or services that often disrupt existing markets or create entirely new ones. It represents a significant departure from current offerings and requires a high level of investment and risk.
• Architectural Innovation : Architectural innovation focuses on reconfiguring or redesigning existing systems, processes, or components within an organization to create new value. It involves changing the underlying structure or design of a product or service while keeping its core functionality intact.
• Disruptive Innovation : Disruptive innovation refers to the introduction of a product, service, or business model that fundamentally changes the way an industry operates, typically by targeting underserved or overlooked segments of the market. It often starts at the low end of the market and gradually improves to challenge established competitors.
• Incremental Innovation : Incremental innovation involves making small, gradual improvements to existing products, processes, or services over time. It focuses on optimizing and refining existing offerings rather than introducing radical changes, making it a lower-risk approach to innovation.

Innovation Strategy Examples

(1) apple innovation strategy.

Apple’s innovation strategy revolves around creating groundbreaking products that seamlessly integrate hardware, software, and services. Their focus on user experience and design sets them apart in the technology industry. This dedication matches the core of t he marketing innovation strategy – putting user happiness first by creating new and exciting solutions.

(2) Amazon Innovation Strategy

Amazon’s innovation strategy centres around customer-centric approaches, such as one-click purchasing, Prime membership benefits, and advanced supply chain management. Their focus on enhancing customer experience sets the standard for e-commerce.

(3) Tesla Innovation Strategy

Tesla’s innovation strategy includes advancements in electric vehicles, renewable energy solutions, and autonomous driving technology. Constantly pushing boundaries, Tesla exemplifies the essence of value innovation strategy, delivering cutting-edge solutions that reshape the automotive industry.

(4) Netflix Innovation Strategy

Netflix’s innovation strategy lies in content creation, personalized recommendations, and streaming technology. They continually invest in original content and technological advancements to stay ahead in the entertainment industry.

(5) Microsoft Innovation Strategy

Microsoft’s innovation strategy encompasses a diverse range of products and services, from operating systems to cloud computing. Their commitment to empowering individuals and organizations through technology fuels continuous innovation.

(6) Google Innovation Strategy

Google’s innovation strategy revolves around search algorithms, online advertising, and a wide array of digital services. Their commitment to organizing the world’s information and making it universally accessible drives innovation in various sectors.

(7) Nike Innovation Strategy

Nike’s innovation strategy focuses on product design, materials, and technological advancements in sportswear. They continuously introduce new technologies, such as Nike Adapt, to enhance athletic performance and customer experience.

Types of Innovation Strategies Examples

Innovation strategies can vary significantly depending on the industry, organizational goals, and market dynamics. Here are several types of innovation strategies along with examples:

• Example: Apple’s continuous development of the iPhone, introducing new features and designs with each iteration.
• Example: Toyota’s implementation of lean manufacturing principles, led to streamlined production processes and reduced waste.
• Example: Netflix transitioning from a DVD rental service to a subscription-based streaming platform, revolutionizing the entertainment industry.
• Example: Airbnb’s platform, enables individuals to rent out their properties to travellers, disrupting the traditional hospitality industry.
• Example: Procter & Gamble’s Connect + Develop program, which sources innovation ideas from outside the company to fuel new product development.
• Example: Tesla’s electric vehicles disrupt the automotive industry by challenging traditional gasoline-powered vehicles with innovative technology.
• Example: Coca-Cola introduces new flavours or packaging variations of its beverages to maintain consumer interest and market relevance.
• Example: SpaceX’s development of reusable rocket technology, aims to revolutionize space travel and exploration.

Elements of a Great Innovation Strategy

Crafting an innovation strategy plan entails navigating a dynamic landscape, demanding a flexible and multifaceted approach.

• Nurturing an Innovation culture : Establishing an environment that fosters creativity and embraces change is crucial for fostering innovation.
• Embracing Digital Transformation strategy : Incorporating technology to enhance processes and business models is a key aspect of digital transformation.
• Top-Level Endorsement: Securing commitment and support from senior leaders is essential for successful innovation initiatives.
• Strategic Resource Allocation : Wisely allocating resources to support novel and imaginative ideas is paramount.
• Customer-Centric Focus : Prioritizing and comprehending customer needs throughout the innovation process is indispensable.
• Agile Adaptation : Remaining receptive to agile methodologies facilitates swift adjustments to evolving circumstances.
• Performance Measurement: Implementing metrics to assess the success and impact of innovation efforts is vital.
• Investment in Research and Development: Devoting funds to research and development endeavors represents a valuable investment.
• Learning from Risks and Setbacks: Cultivating a culture that embraces risk-taking and views failures as learning opportunities is critical.
• Innovative Business Models : Continuously reimagining and innovating fundamental aspects of the business model adds a layer of dynamism to the innovation strategy.

In essence, innovation is the cornerstone of organizational longevity and competitive advantage. By embracing diverse innovation strategies such as technological advancements, architectural refinements, disruptive shifts, and incremental enhancements, businesses can unlock fresh opportunities and deliver unique value propositions. Whether through revolutionary changes or gradual refinements to existing offerings, innovation is pivotal for adapting to market fluctuations and seizing value.

Central to these pursuits is the evolution or reinvention of the business model. By aligning with customer preferences, organizations can develop innovative solutions that resonate with consumers, thereby bolstering market presence and fostering growth. Ultimately, a well-crafted innovation strategy empowers organizations to stand out from the competition, achieve objectives, and ensure sustained success in today’s fiercely competitive business arena.

Frequently Asked Questions

(1) what role do senior leaders play in achieving innovation strategy.

Senior executives wield significant influence in propelling innovation strategy forward. Their unwavering commitment, backing, and visionary guidance establish the organizational ethos. They allocate resources judiciously and foster an atmosphere conducive to experimentation and bold risk-taking.

(2) How is product innovation strategy delineated in business?

Product innovation strategy in business encompasses the formulation and introduction of novel or refined products to satisfy consumer demands and attain a competitive edge. It revolves around the conception of pioneering features, designs, or functionalities that distinguish the product within the market milieu.

(3) What delineates the trifecta of Innovation Strategies?

The trinity of innovation strategies comprises proactive, active, and reactive approaches. Proactive strategies entail a proactive quest for novel opportunities, active strategies pivot swiftly in response to market dynamics, while reactive strategies are triggered only by exigencies.

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5 Effective Steps to Creating a Powerful Innovation Strategy

Updated on: 1 March 2023

Innovation is an organization’s path to survival. In a world of rapid change and increasing competition, innovation has become essential to maintaining business growth, competitiveness, and productivity.  

Innovation is one of the key activities in a company’s operations. Innovation is a long and complex process that takes an abstract idea and converts it into a successful product or service. A proper strategy in place to execute it ensures that you do it well. 

In this post, we are exploring 5 effective steps for developing a powerful innovation strategy.

What is an Innovation Strategy

“Innovation transforms insight and technology into novel products, processes and services that create new value for stakeholders, drive economic growth and improve standards of living.”

In the simplest of terms, innovation is the process of bringing new, unique, and creative ideas into reality. An organization following an innovation strategy uses innovation to execute its business strategy. In other words, an innovation strategy guides the process of resource allocation, enabling the organization to achieve its long-term goals through the use of innovation.  

“An innovation strategy guides decisions on how resources are to be used to meet a firm’s objectives for innovation and thereby deliver value and build competitive advantage.” – Mark Dodgson, David Gann, Ammon Salter (The Management of Technological Innovation: Strategy and Practice)

A company’s innovation strategy should specify how the different types of innovation fit into the business strategy and the resources that should be allocated to implement these innovations.

An innovation strategy paves the way to 

• Improve the ability to retain customers 
• Reduce competitive intensity
• Improve product or service performance  
• Increase the chances of becoming a market leader 
• Preserve bargaining power in an ecosystem and blunt imitators

Types of innovation

• Gradual/ incremental innovation (continuous innovation) is based on abilities that can be easily learned and developed in an organization and has a low-risk low return. 
• Radical innovation (discontinuous innovation) on the other hand may change the structure of an industry dramatically and has a high-risk high return. 

Innovation Matrix

The innovation matrix as introduced by VIIMA helps categorize innovation based on two dimensions; the technology it uses and the market it operates in. It, thus, visualizes the most common types of innovation.

Based on these categories, three major types of innovation an innovation strategy can be based on can be identified, 

• Product innovation; occurs in the development of new products, modifications in established products, or in the usage of new materials or components in the manufacture of established products
• Process innovation; refers to the development of and implementation of significantly improved organizational processes through the integration of new technologies
• Business model innovation; refers to the improvements done to an existing business model or the creation of a new one to better meet the needs of customers

The Innovation Value Chain 

The innovation value chain provides a framework to identify which innovation approach makes the most sense for a company to adopt. It enables managers to find the company’s weaknesses and become more aware of an apt approach to implement for success. 

The framework includes three phases 

• Idea generation ; creating and sourcing new ideas from internal and external environments to achieve a competitive advantage in the marketplace.
• Conversion ; selecting and screening the best idea and implementing them. While this involves transforming knowledge into innovations in the form of new products, processes, or organizational forms, special focus should be placed on the company budget and strict funding criteria to avoid shutting down the development of the idea. 
• Diffusion ; spreading the idea across the organization. Find the relevant communities in the organization to support and spread the new product or service, process, and practices across geographic location, consumer groups, and channels. 

How to Develop an Innovation Strategy 

Determine the innovation strategy objective .

Developing an innovation strategy should start with understanding the reason behind developing one in the first place or the objectives you want to achieve by implementing it. 

To identify your innovation strategy objectives, examine the overall business objectives that help the company achieve sustainable competitive advantage. This will clear the path for your innovation strategy as it should eventually support the overarching goals of the organization.

Get the executive team onboard 

Engage the leadership team in dialogue and ensure that they are aware of the innovation objectives established and what it means for them as well as the future of the organization. During the discussions also identify, 

• External changes that could be occurring at present and in the future as a result of innovation 
• The implication of such changes on the company 
• Scope of innovation; identifying opportunities for innovation, whether to improve existing products or services or introduce brand new products to new markets
• Business outcomes; financial results, social impact, new economic models, market leadership,  etc. 
• The gaps that must be closed to deliver the chosen innovation scope, especially in terms of processes, skills, and resources needed and company culture
• Barriers to and enablers of the innovation strategy.  Barriers can come in the form of embedded beliefs on how the business should operate and enablers can show up as core capabilities or resources.  

Their involvement is necessary to create a shared vision of success with innovation at the core.

Gather customer insight 

Understanding customer needs will inform the direction of the development of the innovation idea. It will also enable you to formulate a strategy that works and create value-creating innovations that will ultimately generate a good return on investment.

In order to create value for potential customers with your innovation strategy, you need a thorough understanding of your market and the customer segment you are catering to. 

(Utilize a customer persona to gather insight on customers’ demographic characteristics, needs, challenges, and ambitions and apply that knowledge to generate a solution.)

Allocate resources 

When allocating resources for new areas for growth and renewal, reserving resources for the core business growth should also be taken into consideration. By conducting a comprehensive audit on the current innovation landscape of the organization you can determine and understand how much time, effort, and money are allocated to different innovation initiatives. 

The Harvard Business Review has introduced the Innovation Ambition Matrix to determine how to allocate resources based on the type of innovation initiative.

The matrix describes 3 types of innovation and how resources should be split among them,  

• Core initiatives – refer to efforts to make incremental changes to existing products and incremental inroads into new markets. For example, through new packaging or added service convenience. Such efforts can draw on resources the company already has. 
• Transformational initiatives – refer to creating new offers to serve new markets and customer needs. This may require assets the company is unfamiliar with. 
• Adjacent innovations – involves leveraging something the company does well into a new space. This type of innovation allows a company to draw on existing capabilities but necessitates putting those capabilities to new uses.

Research conducted by HBR shows that companies that allocated about 70% of resources to core initiatives, 20% to adjacent ones, and 10% to transformational ones outperformed their peers.

However, the right balance will vary from company to company and according to factors such as industry, competitive position, and the company’s stage of development.

To learn more about striking and maintaining the right balance between the allocation of resources and the innovation initiative, refer to this article here.

Develop an innovation system 

Not all organizations are likely to possess the capabilities to execute successfully at all three levels of innovation ambitions identified above.

However, HBR emphasizes that the companies that have got it right, have usually focused on five key areas of management that help them excel at the three levels of innovation ambition, and hence enable them to maintain a sustainable innovation system with the organization. 

• Talent : includes the skills needed to execute core, adjacent, and transformational innovation initiatives. 
• Integration : refers to organizing and managing the skills in the right way, with the right mandate, and under the conditions that will help them succeed.
• Funding: refers to determining how to fund the innovation initiatives. Core and adjacent innovations can be funded by the relevant business unit’s P&L through annual budget cycles. Transformational innovations, on the other hand, require a sustained investment that comes from an entity (i.e. executive suite and the CEO).  
• Pipeline management : mechanisms to track and monitor ongoing initiatives and ensure that they are progressing according to plan.
• Metrics : what measurements should inform management. While traditional financial metrics are appropriate for measuring core and adjacent initiatives, a combination of noneconomic and internal metrics should be used to evaluate transformational efforts.

Developing an Innovation Strategy 

The innovation strategy of a competitor or an industry leader may not work for you. While you can learn from their best practices, an explicit innovation strategy to match your own competitive needs will be effective in the long run. 

Follow the innovation strategy steps explained above to formulate a robust strategy and better coordinate your innovation process. 

Got anything to add to our guide? Let us know in the comments below.

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Innovation Blog

Business innovation strategy: 9 key pillars for success in 2021.

• Published on: January 6, 2021
• Author: masschallenge

More than 80% of leaders at large corporations believe innovation is crucial for business growth. And yet, many companies have no innovation strategy.

Technology and digital disruption continue to advance at breakneck speed, leading all industries into a future where business agility counts just as much as having an experienced C-suite.

It doesn’t matter what industry you operate in now—the choice is the same for all companies:

Innovate or get left behind.

Without a solid plan that maps out how you will achieve your goals and establish a sustainable business built to adapt to a rapidly-changing digital landscape, you’re bound to struggle.

In this article, we’ll find out what an innovation strategy is, why it matters, and then we’ll give you the ideas and inspiration to start innovating at your company.

What is an Innovation Strategy?

An innovation strategy is a clearly-defined plan of structured steps a person or team must perform to achieve the growth and future sustainability goals of an organization.

Innovation  aims to create original value, such as new solutions to adapt in changing industries or solve impeding social, health, or economic challenges. A strategy is a plan that details precisely how you will bring your vision into reality.

Essentially, a strategy acts as a heuristic that we can rely on when facing tough decisions. Ergo, an innovation strategy provides people with a framework for critical decision-making relative to company innovation, such as:

• In what areas will we invest?
• How much will we invest?
• Who will make investment decisions?
• What capabilities will we need to develop to support our investments?
• What capabilities can we not build, which we must then acquire or form a partnership to provide?

All of these questions are long-term decisions. When devising an innovation strategy , we must consider our goals and the potential for change over several years.

Why Are Innovation Strategies Important?

Typically, the most effective business models, markets, and products follow a similar growth cycle, often visualized as an S-curve , where diminishing returns set in sometime after the initial growth trajectory.

This slowdown in growth is inevitable, and yet, many companies are taken off-guard. We can’t simply ignore these decisions. If you decide to wait until there is a lull in growth or sales until you gather more information, it may be too late.

In 2008, Blockbuster CEO Jim Keyes said, “Neither RedBox nor Netflix are even on the radar screen in terms of competition.”

This bold claim came even though Blockbuster had lost 75% of its market value between 2003 and 2005.

By 2010, the DVD rental store declared bankruptcy, succumbing to the indomitable rise of Netflix and the streaming television era.

Kodak fell to a similar demise. As smartphones became ubiquitous, Kodak could no longer compete, and in 2012, the company once synonymous with photography filed for bankruptcy and vanished from the camera industry.

These are, of course, highly visible and consumerist examples, but the same dilemmas befall more naunced areas is every industry, whether it be in healthtech, security, sustainability, or infrastructure.

Nothing grows forever, and you can never really know when the inflection point will hit, which is why it is best to always be ready. In other words, you should make innovation a continuous process. Otherwise, it’s only a matter of time before revenue starts tumbling.

Benefits of an Innovation Strategy

Holding on to traditional practices just because “that’s what we’ve always done” is not a strategy for success. That rigid approach is guaranteed to fail in the face of disruption, as proven by Kodak and Blockbuster.

With that in mind, here are four benefits of an innovation strategy:

Improve existing products

When selling any product or service, you must consider the three levers of the value proposition:

• Benefits and features
• Target customers

A good innovation strategy will experiment with these levers, helping sales and marketing teams to reinvent or revert the value proposition of existing products. In doing so, innovation helps to bring more value to the customer, and ultimately, more revenue for the business.

Develop new products

For many, the most appealing benefit of a business innovation strategy is its capacity to generate entirely new ideas. Innovation can birth new products and services to add to your existing lines, or it may open the doors to target new markets, or solve growing societal problems.

By analyzing the customer journey of different consumer types, you can develop a better understanding of purchasing behaviors. This research helps companies identify the key factors that motivate people to make purchases and discover new opportunities by finding markets or products that need improvement.

Optimize revenues

The three variables of profit are price, demand, and costs. For any business strategy to be deemed successful, it must increase profit by reducing costs or raising prices or demand.

Earnings innovation encourages businesses to seek out ways of maximizing their profit. Quite often, the most effective way to do this is by expanding your customer base.

Whether you’re creating a new product or improving your existing ones, the impact on your earnings should be a top priority of your business innovation strategy.

Optimize costs

Increasing revenue is not the only way to drive profits, as you can also use innovation to reduce costs. When you apply new practices and process throughout the organization, you can optimize internal operations in many ways, such as:

• Switching from legacy offline systems to cloud storage
• Moving to paperless systems for all records and communication
• Using live chatbots instead of human customer support staff

Through constant innovation, it’s possible to streamline workflows and teams so that you spend less on administration and more on activities that generate a higher return on investment (ROI).

9 Key Pillars of a Business Innovation Strategy

Creating an innovation strategy is a vital step that gives your team the understanding and directional insight into how individual, departmental, and organizational goals come together to deliver the business objectives.

Here are 9 pillars of an innovation strategy that enable a company to maximize its potential:

You can execute an innovation strategy using one of two models—business model innovation or leveraging existing business model.

• Business model innovation is the process an organization uses to adapt its business model to deliver more value to its customers. By making changes to its value proposition and the underlying business model, a company can gain a competitive advantage.
• Leveraging Existing Business Model focuses on continuous improvement of core business, rather than seeking to build new business models.

Once you have decided on your preferred model, you can experiment with the concepts below:

2. Intrapreneurship

Intrapreneurship is the practice of enabling employees to act as entrepreneurs while they work within a company.

By empowering individuals to think, act, and create their own ideas, a company benefits from a widespread internal culture of ongoing innovation. An organization can provide resources and support to intrapreneurs, helping them launch startups within the organization.

3. Corporate accelerator

A corporate accelerator is an innovation event or program funded by a large enterprise, which typically offers aspiring entrepreneurs the chance to acquire seed capital, mentorship, and important connections.

These programs usually culminate with a demonstration day, where startups pitch their ideas to the host corporation for the chance to secure investment or a partnership.

By including a corporate accelerator in your innovation strategy, you get the chance to build your network with promising new talent in your industry. Moreover, there is an excellent chance you will discover startups and concepts that align with your own business needs and goals.

4. Innovation labs

An innovation lab is a business department that provides a base and supporting resources for startups or R&D teams to work on new ideas that could disrupt the current market.

While these labs may operate independently from the parent company, it’s also possible to house an innovation lab within the main company building and staff it with existing employees.

5. Open innovation program

The traditional model of research and development relies on internal resources and expertise. Existing employees work together to generate, manage, and sustain new business ideas and retain all information within the company, usually within the R&D department.

Open innovation takes a novel approach by opening the company’s doors to external input, welcoming experts, researchers, and bright minds from outside the company to come and share their ideas.

6. External accelerators

An external accelerator is a little different from an in-house corporate accelerator, as your company will not cover the full costs of running the program. As such, this is a low-risk tactic in an innovation strategy, with the potential to deliver fantastic rewards. Like a corporare accelerator, purview to new startups and concepts that align with business needs and goals are exhibithed, but additionally there’s the benefit of opening your eyes to advantageous approaches that were not intially apart of your goals.

By becoming involved, you can actively participate in advancing startups and focusing on particular solutions that appeal to your business, making this type of accelerator a worthwhile venture.

7. Collaboration

The ideas are just the beginning, but it’s only through interaction and discussion with subject matter experts, researchers, and other innovators that you can successfully bring ideas to life.

Having more conversations around an idea with various outside sources makes it easier to identify potential issues and iterate a basic idea until it is something genuinely worth producing.

You should seek praise and criticism at this stage, as it’s important to challenge the concept and debate the pros and cons in-depth.

8. Ideation

Approximately 4 of every 5 employees has an idea to improve the company. Finding ideas is not a challenge—gathering, analyzing, and implementing the best ideas is the struggle for many companies.

Many companies fail because they lack an effective system to take a simple idea and turn it into a practical process that will deliver results. In other words, they don’t have an innovation strategy.

It’s important to explain your ideation processes to all employees to be aware of how the company captures ideas. When you have this system in place and encourage people to contribute, it’s easier to collect and organize new ideas.

9. Measurement

You can’t manage what you don’t measure. And so, one of the most important pillars of your innovation strategy is a plan for how you will measure success.

Think about your goals and the most relevant metrics to track. For example, if your goal is brand awareness, you could track social shares, website traffic, and email subscribers.

With every new idea, monitor its progress, and gauge performance by taking periodic measurements of your key metrics. It’s not always easy to measure innovation, but doing so from the start allows you to determine whether your efforts are successful.

Innovation Strategy Examples

We can see innovation strategy examples in every industry, as companies strive to get an edge in increasingly competitive marketplaces.

As the rise of café culture birthed hipster pop-ups and independent shops, the dominant chains began to lose ground. Keen to avoid a Kodak moment, Howard Schultz jumped to action . The Starbucks CEO invited store managers from all over the world to come together for a conference to redesign the café experience.

As a leader in technology and sustainability, Bühler invests up to 5% of its turnover every year in research and development. To optimize these efforts, in 2016 Bühler identified five core topics that are decisive for driving change:

• Food and Feed Safety: spend 50% of food relevant R&D projects with focus to improve food and feed safety
• Energy, Waste and Water Reduction: reduction by 50% in the value chains of their customers by 2030
• Mobility: make lighter cars with die-casting solutions and create more efficient batteries for electric vehicles
• Nutrition: spend 20% of food relevant R&D projects with focus to improve nutrition
• Digitalization: improve transparency through digitalization and collaboration

By working with an external accelerator, in the case MassChallenge, Bühler received early access to emerging, high-impact technologies and startups across their five core initiatives.

In 2018, Bühler teamed up with Givaudan to support Legria , a new natural sweetener made from waste streams, supporting their waste reduction initiative. The new business model was made more public-appealing by having two companies in support of it, however maintaining economic independence of each other.

The dating app, Tinder , was the first of its kind to gamify dating. The development team approached potential users at college sororities, recruiting signups from a largely female audience before pitching the app to men in the same colleges’ fraternities.

With a personal touch, the company’s clever innovation strategy quickly grew the app’s user base, as many college students joined because they knew other people on the app.

Sometimes, people can be concerned about offending with their reviews online, and therefore, they may not be totally honest.

Airbnb set 14-day deadlines and implemented a double-blind review process, so neither party can view the other’s review until both have been completed. This change paved the way for more spontaneous reviews and more candid, detailed feedback.

Airbnb turned reviews into a bonafide trust factor on their site with this simple move, which people use to make booking decisions. In the long-term, the strategy has helped grow the authority of the website and company.

The growth of the software-as-a-service (SaaS) industry tempted many customers away from traditional hardware technology companies. In the cloud age, IBM knew change was needed and decided to take a startup-like approach to innovation.

In 2014, IBM launched a growth hacking team to explore new ideas and tap into new markets through data-driven creativity. Now, the legacy tech corporation operates with a collection of lean, startup-sized teams within its workforce, encouraging team members to work in an innovation lab style to test new marketing strategies.

Our vision for a better company, product, or value for the customer may feel clear, but how we get there isn’t always so simple. Faced with market trends, changes in consumer preferences, new technology, and disruptive competitors, companies will need a blueprint to stay on track.

An innovation strategy goes beyond simple tactics like campaign ideas and marketing ploys to develop the company’s mission, vision, and unique value proposition against this ever-evolving landscape.

Nowadays, it’s no longer an option.

“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.”  – Sun Tzu

MassChallenge gives partners the tools to meet this moment head on while realizing results that make the difference for their businesses. See how companies like MassMutual , Barry Callebaut , Columbia Threadneedle , and Elta Systems  have partnered with MassChallenge to drive their innovation.

Join the MassChallenge program today to give your corporation the edge in the startup era.

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A New Approach to Strategic Innovation

• Haijian Si,
• Christoph Loch,
• Stelios Kavadias

Companies typically treat their innovation projects as a portfolio, aiming for a mix of projects that collectively meet their strategic objectives. The problem, say the authors, is that portfolio objectives have become standardized, and innovation projects are often only weakly related to a company’s distinctive strategy.

This article introduces a new tool to help leaders better align their innovation investments. The strategic innovation tool kit has two elements: a strategy summary framework and an innovation basket. Leaders start by clarifying a unit’s strategy and determining what needs to change to achieve it. The change needs are translated into innovation goals, and leaders create their “innovation basket” by plotting each project against those goals. They can then cut projects that aren’t aligned and create new ones that are. It’s an iterative and creative process: Projects are adjusted to fit the strategy but can also shape it.

Examples from the authors’ research demonstrate how the process of creating an innovation basket gives managers fresh insight into what their innovation activities are really doing for their strategy.

A tool for connecting your projects with your goals

Companies typically treat their innovation projects as a portfolio: a mix of projects that, collectively, aim to meet their various strategic objectives. Some projects, for instance, will improve business processes, others develop new products and services.

• HS Haijian Si is the former CEO of Chinese new energy companies Linuo Power Group Co., Huanyu Power, and Hanergy Thin Film Power and is a doctoral candidate at the University of Cambridge’s Judge Business School.
• CL Christoph Loch is a professor at and the former director (dean) of the University of Cambridge’s Judge Business School.  He is also a visiting professor at PHBS Business School, Shenzhen, China
• Stelios Kavadias is the Margaret Thatcher Professor of Enterprise Studies in Innovation and Growth at the University of Cambridge’s Judge Business School and the director of its Entrepreneurship Centre.

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Five Steps to Implementing Innovation

We’re all familiar with stories about breakthrough products, services, and processes—the disruptors that grab the headlines and garner eye-popping valuations. And then there are the entrepreneurs who end up on the cover of Bloomberg Businessweek and write best-selling books about the keys to their success. The message seems to be that, through good timing or genius, innovation is the purview of a select few.

But at its core, innovation is simply a way to solve problems and create value in new ways. Overhauling an inefficient process, using customer feedback to breathe new life into a stale product—innovations don’t have to be splashy or game-changing to lead to sustained organizational success. These small but mighty initiatives seldom come from top management or an “idea lab,” but rather from individual contributors and frontline leaders who are closest to the customer and best positioned to understand their needs.

When employees from throughout the ranks learn to see themselves as innovators and take steps to make their ideas a reality, the results can be powerful. In addition to furthering a company’s purpose and bolstering its bottom line, employee-driven innovation engages people in ways that carrying out top-down directives never will.

Tips to get you started

Given the growing interest in innovation, it’s no surprise that organizations are looking for clear guidelines on how to implement it. Every innovation is unique. Even so, certain strategies and skills are useful across a range of projects and at all levels of an organization:

• Spot opportunities for innovation. As innovation expert Greg Satell puts it, “No matter what form innovation takes—short, agile sprints or long-term, grand-challenge investments—innovation is fundamentally about solving problems.” As you think about your organization, what problems need solving? Where do opportunities lie? Once you land on some promising ideas, continue to explore them from different angles. By doing so, you may discover even more exciting possibilities.
• Prioritize opportunities. You don’t have infinite time and resources, so prioritize potential innovations depending on where you think you’ll get the most bang for your buck. Narrow in on the two or three ideas you think are most worth digging into, testing, and refining. Then express them as hypotheses you can test through targeted experiments.
• Test your potential innovations. Keep your experiments modest in scope, especially when you’re starting out. You may want to begin with “paper prototypes,” or simple drawings of the new product or process that your end users can interact with to see what works and what doesn’t. They are quick and inexpensive, and they help you figure out where you need to tweak your concept. With each round of testing, move to progressively more complex experiments involving more users.
• Build support for your innovations. Don’t be shy. Make sure the time is right and tell your story to all your stakeholders, including those whose resource backing you need and those who’ll directly benefit from your innovation. You’ll want to tailor your approach based on what’s important to each person and what you need from them.
• Learn from your innovation efforts. You’ve probably heard the mantra “fail fast, learn fast.” After each innovation, list what you would do again and what you wouldn’t. And don’t overthink failure; the key is learn from it and apply those lessons to your next innovation.

We’ve seen these steps work at all levels in an organization. In fact, we even followed them when redesigning our Harvard ManageMentor® innovation-related topics. What process do you follow when implementing innovation in your organization?

Janice Molloy is senior manager, online learning at Harvard Business Publishing. Email her at [email protected] .

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Innovation in Business: What It Is & Why It’s Important

• 08 Mar 2022

Today’s competitive landscape heavily relies on innovation. Business leaders must constantly look for new ways to innovate because you can't solve many problems with old solutions.

Innovation is critical across all industries; however, it's important to avoid using it as a buzzword and instead take time to thoroughly understand the innovation process.

Here's an overview of innovation in business, why it's important, and how you can encourage it in the workplace.

What Is Innovation?

Innovation and creativity are often used synonymously. While similar, they're not the same. Using creativity in business is important because it fosters unique ideas . This novelty is a key component of innovation.

For an idea to be innovative, it must also be useful. Creative ideas don't always lead to innovations because they don't necessarily produce viable solutions to problems.

Simply put: Innovation is a product, service, business model, or strategy that's both novel and useful. Innovations don't have to be major breakthroughs in technology or new business models; they can be as simple as upgrades to a company's customer service or features added to an existing product.

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Types of Innovation

Innovation in business can be grouped into two categories : sustaining and disruptive.

• Sustaining innovation: Sustaining innovation enhances an organization's processes and technologies to improve its product line for an existing customer base. It's typically pursued by incumbent businesses that want to stay atop their market.
• Disruptive innovation: Disruptive innovation occurs when smaller companies challenge larger businesses. It can be classified into groups depending on the markets those businesses compete in. Low-end disruption refers to companies entering and claiming a segment at the bottom of an existing market, while new-market disruption denotes companies creating an additional market segment to serve a customer base the existing market doesn't reach.

The most successful companies incorporate both types of innovation into their business strategies. While maintaining an existing position in the market is important, pursuing growth is essential to being competitive. It also helps protect a business against other companies affecting its standing.

Learn about the differences between sustaining and disruptive innovation in the video below, and subscribe to our YouTube channel for more explainer content!

The Importance of Innovation

Unforeseen challenges are inevitable in business. Innovation can help you stay ahead of the curve and grow your company in the process. Here are three reasons innovation is crucial for your business:

• It allows adaptability: The recent COVID-19 pandemic disrupted business on a monumental scale. Routine operations were rendered obsolete over the course of a few months. Many businesses still sustain negative results from this world shift because they’ve stuck to the status quo. Innovation is often necessary for companies to adapt and overcome the challenges of change.
• It fosters growth: Stagnation can be extremely detrimental to your business. Achieving organizational and economic growth through innovation is key to staying afloat in today’s highly competitive world.
• It separates businesses from their competition: Most industries are populated with multiple competitors offering similar products or services. Innovation can distinguish your business from others.

Innovation & Design Thinking

Several tools encourage innovation in the workplace. For example, when a problem’s cause is difficult to pinpoint, you can turn to approaches like creative problem-solving . One of the best approaches to innovation is adopting a design thinking mentality.

Design thinking is a solutions-based, human-centric mindset. It's a practical way to strategize and design using insights from observations and research.

Four Phases of Innovation

Innovation's requirements for novelty and usefulness call for navigating between concrete and abstract thinking. Introducing structure to innovation can guide this process.

In the online course Design Thinking and Innovation , Harvard Business School Dean Srikant Datar teaches design thinking principles using a four-phase innovation framework : clarify, ideate, develop, and implement.

• Clarify: The first stage of the process is clarifying a problem. This involves conducting research to empathize with your target audience. The goal is to identify their key pain points and frame the problem in a way that allows you to solve it.
• Ideate: The ideation stage involves generating ideas to solve the problem identified during research. Ideation challenges assumptions and overcomes biases to produce innovative ideas.
• Develop: The development stage involves exploring solutions generated during ideation. It emphasizes rapid prototyping to answer questions about a solution's practicality and effectiveness.
• Implement: The final stage of the process is implementation. This stage involves communicating your developed idea to stakeholders to encourage its adoption.

Human-Centered Design

Innovation requires considering user needs. Design thinking promotes empathy by fostering human-centered design , which addresses explicit pain points and latent needs identified during innovation’s clarification stage.

There are three characteristics of human-centered design:

• Desirability: For a product or service to succeed, people must want it. Prosperous innovations are attractive to consumers and meet their needs.
• Feasibility: Innovative ideas won't go anywhere unless you have the resources to pursue them. You must consider whether ideas are possible given technological, economic, or regulatory barriers.
• Viability: Even if a design is desirable and feasible, it also needs to be sustainable. You must consistently produce or deliver designs over extended periods for them to be viable.

Consider these characteristics when problem-solving, as each is necessary for successful innovation.

The Operational and Innovative Worlds

Creativity and idea generation are vital to innovation, but you may encounter situations in which pursuing an idea isn't feasible. Such scenarios represent a conflict between the innovative and operational worlds.

The Operational World

The operational world reflects an organization's routine processes and procedures. Metrics and results are prioritized, and creativity isn't encouraged to the extent required for innovation. Endeavors that disrupt routine—such as risk-taking—are typically discouraged.

The Innovative World

The innovative world encourages creativity and experimentation. This side of business allows for open-endedly exploring ideas but tends to neglect the functional side.

Both worlds are necessary for innovation, as creativity must be grounded in reality. You should strive to balance them to produce human-centered solutions. Design thinking strikes this balance by guiding you between the concrete and abstract.

Learning the Ropes of Innovation

Innovation is easier said than done. It often requires you to collaborate with others, overcome resistance from stakeholders, and invest valuable time and resources into generating solutions. It can also be highly discouraging because many ideas generated during ideation may not go anywhere. But the end result can make the difference between your organization's success or failure.

The good news is that innovation can be learned. If you're interested in more effectively innovating, consider taking an online innovation course. Receiving practical guidance can increase your skills and teach you how to approach problem-solving with a human-centered mentality.

Eager to learn more about innovation? Explore Design Thinking and Innovation ,one of our online entrepreneurship and innovation courses. If you're not sure which course is the right fit, download our free course flowchart to determine which best aligns with your goals.

About the Author

Innovation Strategies Types, Examples, and Framework

Welcome to the exciting world of innovation, where creativity meets strategy to drive business growth and success!

In today’s rapidly evolving market, understanding various innovation strategies types is crucial for any organization aiming to stay ahead.

Whether you’re a startup or an established company, the right innovation strategy can catapult you ahead of your competitors.

In this blog post, we’ll explore different innovation strategies types, dive into some compelling innovation strategies examples, and discuss how an innovation strategy framework can systematically guide your efforts.

By the end of this post, you’ll have a clearer understanding of how to apply these concepts to foster innovation within your own business.

What is an Innovation Strategy?

An innovation strategy is essentially a game plan that a company uses to introduce new ideas and make positive changes to their products or services.

Think of it as a roadmap that guides a business on how to be more creative and competitive in their market.

This strategy isn’t just about throwing out random new products; it’s about smart, thoughtful updates and inventions that really meet the needs of customers.

For example, a coffee shop might decide to start offering digital ordering through an app.

This isn’t just a cool new feature—it’s a strategic move to make buying coffee easier and faster for customers, which could lead to more sales and happier customers.

By having a clear innovation strategy, businesses can focus their efforts where it counts.

They can decide whether they should make small tweaks to what they already offer, come up with something totally new, or even find ways to deliver their services more efficiently.

It’s all about making changes that will help the business grow and thrive in the long run.

Types of Innovation Strategies

Download the bellow infographic in PDF

1. Incremental Innovation

When businesses think about innovation, many start with incremental innovation.

This is one of the safest and most common types of innovation strategies.

Imagine you have a recipe that everyone already loves, but you decide to improve it slightly—maybe by adding a new spice or making the dish healthier.

That’s incremental innovation.

Companies use this approach to make small, yet impactful, changes to their products, services, or processes.

This way, they keep their current customers happy and stay ahead of their competitors, without taking on too much risk.

2. Disruptive Innovation

Disruptive innovation is all about shaking things up.

It’s like coming up with a completely new recipe that nobody has thought of before, targeting customers who didn’t even know they needed it.

This strategy involves creating products or services that eventually overturn established industries.

For instance, when smartphones were introduced, they completely changed the way we use phones and computers.

Disruptive innovation can be risky because it attempts to create a new market , displacing older technologies and sometimes even entire businesses.

3. Radical Innovation

Radical innovation is the big game changer—it introduces breakthrough products or technologies that can completely transform industries.

Think about the first time people went to space or when the internet was invented.

These are examples of radical innovations.

They open up new possibilities and can create massive new markets.

However, they require a lot of resources and are highly risky, as they venture into uncharted territories.

Only companies that are willing to take big risks for potentially huge rewards pursue radical innovation.

4. Architectural Innovation

Architectural innovation might sound complex, but it’s essentially about rearranging existing ideas into a new format.

Think of it as taking the pieces of several puzzles you already own and putting them together in a way that makes a completely new picture.

This type of innovation can be seen in companies that reorganize their existing technologies to explore new markets.

It’s a mix of safety and creativity—using known components but in innovative configurations that can open up additional revenue streams or improve operational efficiency.

5. Open Innovation

Open innovation is like a potluck dinner—everyone brings a dish to share, and in the end, you have a feast that no one could have created alone.

This strategy involves collaborating with external partners, such as other businesses, researchers, or the public, to find and use ideas that exist outside of the company’s own labs.

By doing so, companies can speed up their innovation processes and introduce new products by combining internal and external innovations.

It’s particularly useful in today’s connected world, where keeping up with all technological advances internally can be challenging.

6. Sustaining Innovation

Sustaining innovation focuses on making good things even better. It’s about upgrading and refining existing products, services, or processes to appeal more to current customers.

This strategy doesn’t necessarily create new markets but rather strengthens the company’s position in existing ones.

For example, a car manufacturer might introduce new models each year with the latest technology and refined designs to meet ongoing customer expectations.

This approach is less about breaking new ground and more about growing and improving within the current framework.

7. Service Innovation

Service innovation is all about enhancing how customers experience your services.

It’s like finding new and better ways to serve your guests at a party—not just through the food and drinks you offer, but through how you offer them.

This could mean implementing new technologies to make services faster, such as using apps to order food online, or it might involve completely new service concepts, like virtual reality tours of properties for real estate agents.

Service innovation helps businesses differentiate themselves in the market by providing superior customer service or unique service offerings that meet the evolving needs of their clients.

8. Platform Innovation

Think of platform innovation as building a stage where everyone can perform.

This strategy involves creating a base technology or service that other products or services can utilize.

For example, a smartphone is a platform; app developers can create countless mobile apps that function on it, from games to productivity tools.

Platform innovation creates a foundation that enables a wide range of other innovations, often resulting in robust ecosystems around which entire industries can form.

Companies like Apple or Google excel in this strategy by continuously developing their platforms to support and integrate various services and applications.

9. Process Innovation

Process innovation may not be glamorous, but it’s incredibly important.

It’s like improving the behind-the-scenes operations at a restaurant so that dishes are prepared faster and more efficiently, leading to happier customers.

This strategy focuses on enhancing the methods and processes used to produce and deliver goods and services.

By improving operational processes, companies can reduce costs, increase production speed, and improve quality.

This can involve new manufacturing techniques, implementing sophisticated data analytics, or adopting new software tools.

Process innovation is essential for maintaining competitiveness in fast-moving industries.

Each of these types of innovation strategies plays a unique role in a company’s growth and adaptation to changes in the market.

Whether it’s improving service delivery, creating a platform that others can build upon, or enhancing production processes, successful innovation requires a clear understanding of both market needs and the company’s own capabilities.

By wisely choosing and combining these strategies, businesses can thrive even in the most competitive environments.

Examples of Innovation Strategies

Incremental Innovation

Example: Coca-Cola

Coca-Cola frequently uses incremental innovation to tweak its recipes and marketing strategies. For example, the introduction of Coke Zero offered a no-calorie option that tastes more like the original Coke than Diet Coke, meeting consumer demands for better-tasting, low-calorie beverages without abandoning the classic Coca-Cola formula.

Disruptive Innovation

Example: Netflix

Netflix started as a mail-order service that disrupted the traditional video rental industry, primarily dominated by Blockbuster. Later, it shifted to streaming media, fundamentally changing how people consume television and movies, effectively leading the cord-cutting movement in home entertainment.

Radical Innovation

Example: Tesla

Tesla’s development of electric cars and the proprietary technology around their batteries and software represents radical innovation. They not only made electric vehicles more desirable but also pushed the entire automotive industry toward electric mobility.

Architectural Innovation

Example: Amazon Web Services (AWS)

Amazon leveraged its massive infrastructure to offer cloud services, which were initially developed to handle its online retail operations. This shift marked an architectural innovation, repurposing existing capabilities into an entirely new business area that has since dominated the cloud computing industry.

Open Innovation

Example: Procter & Gamble

Procter & Gamble’s “Connect + Develop” initiative invites people outside the company to contribute their ideas and innovations. This open innovation strategy has led to successful products and has fostered a network of collaborative partnerships enhancing P&G’s product lineup.

Sustaining Innovation

Example: Apple’s iPhone upgrades

Each new iPhone release usually includes enhancements such as better cameras, faster processors, and improved software. Apple uses sustaining innovation to strengthen its market position and meet the ongoing expectations of its tech-savvy consumers.

Service Innovation

Example: Starbucks Mobile App

Starbucks revolutionized coffee shop service with its mobile app, which combines loyalty rewards with the ability to order and pay in advance. This service innovation significantly improved customer convenience and increased throughput in stores.

Platform Innovation

Example: Google’s Android OS

Google’s Android operating system serves as a platform for countless mobile devices. Unlike Apple’s iOS, Android is used by various manufacturers, creating an extensive ecosystem of apps and services that span many devices, significantly expanding Google’s reach and influence in the mobile market.

Process Innovation

Example: Toyota’s Lean Manufacturing

Toyota’s introduction of lean manufacturing techniques is a classic example of process innovation. By optimizing production processes, Toyota not only reduced waste and improved efficiency but also set new industry standards in automotive production.

These examples illustrate how companies across different sectors implement various types of innovation strategies to maintain competitive edges, explore new markets, or redefine their industries.

Each strategy serves a unique purpose and is chosen based on the company’s goals, market conditions, and internal capabilities.

Understanding the Innovation Strategy Framework

If you’ve ever wondered how companies manage to keep coming up with new ideas and better products, much of their secret sauce can be attributed to using an “innovation strategy framework.”

This might sound fancy, but it’s basically a plan or a guide that companies follow to make sure their innovations are not just random shots in the dark but are systematic and effective.

What is an Innovation Strategy Framework?

An innovation strategy framework is a structured approach that helps a company decide how to innovate purposefully.

It’s like a map that guides you through unfamiliar territory.

This framework helps companies figure out what to focus on, how to allocate their resources, and how to time their innovations for the best impact.

Key Elements of an Innovation Strategy Framework

To get a better idea, let’s break down the typical elements you might find in an innovation strategy framework:

1. Vision and Objectives : Before anything else, a company needs a clear vision of what it wants to achieve with its innovation. This could be anything from entering new markets, improving current products, or creating completely new product categories. Setting clear objectives helps align the innovation efforts across the organization.

2. Type of Innovation : As we discussed earlier, there are many different types of innovation strategies—like incremental, disruptive, or radical innovation. A framework helps a company decide which type to pursue based on their market position, competition, and internal capabilities.

3. Processes and Tools : Innovation doesn’t happen in a vacuum. It requires a set of processes and tools to manage ideas, develop prototypes , and implement solutions. This might include software for managing innovation projects, methods for testing new concepts, or systems for gathering customer feedback.

4. Culture and Leadership : For innovation to thrive, the company culture should support creativity and risk-taking. Leadership also plays a crucial role in fostering an environment where new ideas are welcomed and employees feel empowered to experiment.

5. Resource Allocation : Deciding how much money, time, and manpower to invest in different innovation projects is crucial. The framework provides a blueprint for resource allocation, ensuring that the company invests wisely in projects that align with its strategic goals.

6. Metrics and Incentives : Lastly, a company needs to measure how well it’s doing in its innovation efforts. This involves setting up the right metrics (like return on investment for new products) and designing incentives for teams and individuals to reach innovation targets.

Why is an Innovation Strategy Framework Important?

Here are a few reasons why having a structured innovation strategy framework is critical:

• Focuses Efforts : It helps companies focus their resources and efforts on the most promising opportunities, rather than spreading themselves too thin across too many projects.
• Increases Success Rates : By following a systematic approach, companies can improve the success rate of their innovation initiatives. This means less money and time wasted on projects that don’t pan out.
• Creates Competitive Advantage : A well-executed innovation strategy can set a company apart from its competitors. It allows the company to lead the market with new products and services, rather than just catching up with what others are doing.
• Adapts to Change : Markets are always changing, and what worked yesterday might not work tomorrow. An innovation strategy framework helps companies stay flexible and adapt their strategies as needed.

Innovation is not just about having one great idea; it’s about consistently coming up with lots of great ideas and successfully bringing them to market.

An innovation strategy framework is essential for any company that wants to stay competitive and relevant in a rapidly changing world.

It ensures that a company’s innovation efforts are deliberate, systematic, and aligned with the company’s overall goals.

Think of it as the blueprint for turning creative ideas into successful products or services that really make a difference.

FAQs about Innovation Strategies

1. What are innovation strategies? Innovation strategies are methodologies that organizations use to guide the development and implementation of new ideas, products, services, or processes. These strategies help businesses maintain competitive advantages, improve efficiency, and meet evolving market demands.

2. Why are innovation strategies important for businesses? Innovation strategies are crucial because they provide a structured approach to creativity and development, ensuring that innovation efforts align with business goals. They help companies stay relevant and competitive in a fast-paced world, adapt to technological changes, and satisfy customer needs more effectively.

3. What are some common types of innovation strategies? Common types of innovation strategies include incremental innovation, disruptive innovation, radical innovation, architectural innovation, open innovation, sustaining innovation, service innovation, platform innovation, and process innovation. Each type offers a different approach to growth and development.

4. Can you give examples of successful innovation strategies? Yes, successful examples include Apple’s continuous improvements to its iPhone series (sustaining innovation), Amazon’s development of AWS (architectural innovation), and Tesla’s creation of market-leading electric vehicles (radical innovation).

5. How do I choose the right innovation strategy for my business? Choosing the right innovation strategy involves understanding your business’s current market position, resources, capabilities, and goals. It’s important to assess the potential risks and rewards of each strategy type and consider how well it aligns with your company’s long-term objectives.

6. What is an innovation strategy framework? An innovation strategy framework is a structured plan that outlines how a company will pursue its innovation goals. It includes the vision, types of innovation, processes, cultural aspects, resource allocation, and metrics for success. This framework helps ensure that the innovation efforts are systematic and effective.

7. How often should a company revise its innovation strategy? Companies should regularly review and revise their innovation strategies to respond to new market conditions, technological advances, and competitive dynamics. This could be as often as every year for high-tech industries, or every few years for more stable sectors.

8. What role does company culture play in innovation? Company culture plays a significant role in innovation as it influences how employees think, behave, and make decisions. A culture that encourages curiosity, risk-taking, and openness to new ideas is essential for fostering an innovative environment.

9. Are there any risks involved with implementing an innovation strategy? Yes, innovation strategies carry risks, including the potential failure of new products or services, significant financial investments, and the disruption of existing business processes. However, these risks can be mitigated through careful planning, pilot testing, and incremental implementation.

10. How can small businesses implement effective innovation strategies? Small businesses can implement effective innovation strategies by leveraging their agility and capacity for rapid change. They can focus on open innovation to collaborate with external partners, invest in niche areas that larger companies overlook, and use customer feedback to drive incremental innovations.

These FAQs provide a solid foundation for understanding the complex yet rewarding world of innovation strategies. Whether you’re looking to disrupt a sector or enhance your current offerings, the right strategy can make a significant difference.

As we’ve seen, navigating the realm of innovation requires a thoughtful blend of creativity, strategy, and systematic planning.

By understanding the different innovation strategies types, learning from real-world innovation strategies examples, and utilizing a robust innovation strategy framework, businesses can enhance their innovative capabilities and secure a competitive edge.

Innovation isn’t just about generating ideas—it’s about executing them effectively to achieve strategic goals and meet market needs.

So, take what you’ve learned here today and start integrating these strategies into your business model to see tangible results.

Remember, in the dynamic field of innovation, being well-prepared with the right strategies is the key to success. Let’s innovate for a brighter, more successful future!

About The Author

Silvia Valcheva

Silvia Valcheva is a digital marketer with over a decade of experience creating content for the tech industry. She has a strong passion for writing about emerging software and technologies such as big data, AI (Artificial Intelligence), IoT (Internet of Things), process automation, etc.

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Innovation Plan Template

What is an Innovation Plan?

An innovation plan is a detailed approach to help companies identify and pursue new ideas and opportunities. It is a strategic plan that defines focus areas and objectives, sets measurable targets (KPIs) and implements related projects to achieve those goals. This plan allows organizations to stay ahead of the competition and foster a culture of innovation.

What's included in this Innovation Plan template?

• 3 focus areas
• 6 objectives

Each focus area has its own objectives, projects, and KPIs to ensure that the strategy is comprehensive and effective.

Who is the Innovation Plan template for?

This innovation plan template is designed for teams of any size and industry. It provides a framework for creating a strategic plan to develop new products, services, and processes. This template includes resources and guidance to help teams create actionable objectives, set achievable targets and plan for success.

1. Define clear examples of your focus areas

A focus area is a broad area of the business that needs to be addressed. It outlines the purpose and the desired impact of the innovation strategy. Examples of focus areas include Invest in Innovation, Improve Efficiency, and Strengthen Collaboration. When defining focus areas, it is important to keep them specific.

2. Think about the objectives that could fall under that focus area

Objectives are the specific goals that need to be achieved to meet the focus area. Examples of objectives include Identify new opportunities and Pursue new opportunities. Objectives should be actionable and measurable.

3. Set measurable targets (KPIs) to tackle the objective

KPIs (Key Performance Indicators) are metrics used to measure progress towards achieving the objectives. Examples of KPIs include Increase number of market opportunities identified, Decrease time to develop and test prototypes, and Increase percentage of processes automated. KPIs should be numerical, specific and measurable.

4. Implement related projects to achieve the KPIs

Projects are the actionable steps that need to be taken to achieve the KPIs. Examples of projects include Conduct market research, Develop and test prototypes, and Automate processes. Projects should be actionable and measurable.

5. Utilize Cascade Strategy Execution Platform to see faster results from your strategy

Cascade is a strategy execution platform that allows teams to create, manage, and track their strategy in one place. It helps teams to visualize their progress and measure success. With Cascade, teams can quickly implement their innovation plan and see tangible results faster.

What is innovation?

When you think of innovation, what springs to mind? Maybe it’s a flashy new gadget—but don’t be mistaken. There’s much more to the world of innovation, which extends far beyond new products and things you’ll find on a store shelf.

Get to know and directly engage with senior McKinsey experts on innovation.

Marc de Jong is a senior partner in McKinsey’s Amsterdam office, Laura Furstenthal is a senior partner in the Bay Area office, and Erik Roth is a senior partner in the Stamford office.

If products alone aren’t the full story, what is innovation? In a business context, innovation is the ability to conceive, develop, deliver, and scale new products, services, processes, and business models for customers.

Successful innovation delivers net new growth that is substantial. As McKinsey senior partner Laura Furstenthal  notes in an episode of the Inside the Strategy Room podcast , “However you measure it, innovation has to increase value and drive growth.”

As important as innovation is, getting it right can be challenging. Over 80 percent of executives surveyed  say that innovation is among their top three priorities, yet less than 10 percent report being satisfied with their organizations’ innovation performance. Many established companies are better operators than innovators , producing few new and creative game changers. Most succeed by optimizing existing core businesses.

Why is innovation important in business?

Some companies do succeed at innovation. Our research considered how proficient 183 companies were at innovation, and compared that assessment against a proprietary database of economic profit  (the total profit minus the cost of capital). We found that companies that harness the essentials of innovation see a substantial performance edge that separates them from others—with evidence that mastering innovation can generate economic profit that is 2.4 times higher than that of other players .

Learn more about our Strategy & Corporate Finance  practice.

How can leaders decide what innovations to prioritize?

Successful innovation has historically occurred at the intersection of several elements, which can guide prioritization efforts. The three most important elements are the who, the what, and the how :

• An unmet customer need (the ‘who’): Who is the customer and what problem do they need to solve? Are macrotrends such as automation driving changes in customer needs?
• A solution (the ‘what’): Is the solution compelling and can it be executed?
• A business model that allows for the solution to be monetized (the ‘how’): How will the solution create value? What is the business model?

Successful innovation requires answers to each of these questions.

An example from inventor and businessman Thomas Edison helps illustrate the concept. “In every case, he did not just invent the what, he also invented a how,” says Furstenthal in a conversation on innovation . “In the case of the light bulb, he created the filament and the vacuum tube that allowed it to turn on and off, and he developed the production process that enabled mass production.”

Introducing McKinsey Explainers : Direct answers to complex questions

How do organizations become better innovators.

McKinsey conducted research into the attributes and behaviors behind superior innovation performance , which were validated in action at hundreds of companies. This research yielded eight critical elements  for organizations to master:

• Aspire: Do you regard innovation-led growth as critical, and have you put in place cascaded targets that reflect this?
• Choose: Do you invest in a coherent, time- and risk-balanced portfolio of initiatives, and do you devote sufficient resources to it?
• Discover: Are your business, market, and technology R&D efforts actionable and capable of being translated into winning value propositions?
• Evolve: Do you create new business models that provide defensible, robust, and scalable profit sources?
• Accelerate: Do you develop and launch innovations quickly and effectively?
• Scale: Do you launch innovations at the right scale in the relevant markets and segments?
• Extend: Do you create and capitalize on external networks?
• Mobilize: Are your people motivated, rewarded, and organized to innovate repeatedly?

Of these eight essentials, two merit particular attention : aspire and choose . Without these two elements, efforts may be too scattershot to make a lasting difference. It’s particularly crucial to ensure that leaders are setting bold aspirations and making tough choices when it comes to resource allocation and portfolio moves. To do so successfully, many leaders will need to shift their mindsets or management approaches.

What are examples of successful innovators?

Real-world examples of successful innovation, related to some of the eight essentials listed , can highlight the benefits of pursuing innovation systematically :

• Mercedes-Benz Group invested extensively in digitizing its product development system. That allowed the company to shorten its innovation cycles significantly , and its capabilities for personalizing cars have improved, even as assembly efficiency rose by 25 percent.
• Gavi, a public–private partnership founded to save children’s lives and protect their health by broadening access to immunization, used nonfinancial targets to help drive its innovation efforts —and this helped the organization broaden its aspiration for impact in a way that was bold, specific, measurable, and time bound.
• Lantmännen, a large Nordic agricultural cooperative, faced flat organic growth. Leadership created a vision and strategic plan  connected to financial targets cascaded down to business units and product groups. Doing so allowed the organization to move from 4 percent annual growth to 13 percent, on the back of successfully launching several new brands.
• The information services organization RELX Group brought discipline to choosing its innovation portfolio  by running ten to 15 experiments in each customer segment in its pipeline every year. It selects one or two of the most successful ideas from the portfolio to continue.
• International insurance company Discovery Group mobilized the organization around innovation  by creating incentives for a thousand of the company’s leaders using semiannual divisional scorecards. Innovation isn’t a choice; it’s a requirement and a part of the organization’s culture.

These examples aren’t necessarily what you may think of when you imagine disruptive innovation—which calls to mind moves that shake up an entire industry, and might be more associated with top tech trends  such as the Bio Revolution . Yet these examples show how committing to innovation can make a sizable difference.

How can my organization improve the volume and quality of new ideas?

Steps to help aspiring innovators  get started include the following:

• Hold collision sessions: Cross-functional groups gather in a structured process to think through the intersection of unmet customer needs, technology trends, and business models, bringing creativity and specificity to the process of idea generation. Then, a venture panel considers these ideas and iterates on them, prioritizing what to do.
• Challenge orthodoxies: Participants gather and describe beliefs that are common but that prevent the organization from innovating for customers. Examples of these orthodoxies include statements such as “budgets are limited” or “we don’t have the digital capabilities to pull it off.” Once the orthodoxies are laid out, teams brainstorm after being prompted to consider if the opposite of the statement were true.
• Make analogies to other industries: A team might create a list of companies with unique value propositions. Then, they systematically apply these value propositions to their ideas to see if the analogy can create new sources of value or fresh opportunities.
• Apply constraints: Rather than searching for blue-sky ideas, tighten the constraints on an idea’s business or operating model and explore potential new solutions. What if you served only one type of customer? What if the only channel you could access was online?

In the words of chemist Linus Pauling, “The way to get to good ideas is to get lots of ideas and throw the bad ones away.”

What is an innovation portfolio?

An innovation portfolio  is a thoughtfully curated bundle of potentially innovative initiatives, with clear aspirations and required resources defined for each. Managing the portfolio this way helps find new opportunities and determine the appropriate number and mix of initiatives, including the following:

• confirming the total value of the portfolio needed
• evaluating existing innovation projects based on incremental value delivered, risk, and alignment with strategic priorities
• getting comfortable saying “no” to stop projects that are dilutive, and resisting the siren song of incremental initiatives that are unlikely to pay for themselves
• reallocating resources—including competencies and skills—to new initiatives or to current ones that additional support can accelerate or amplify
• identifying portfolio gaps and defining new initiatives to close them

How to measure innovation?

One way to measure innovation is to look at innovation-driven net new growth, which we call the “green box.”  This phrase refers to how you quantify the growth in revenue or earnings that an innovation needs to provide within a defined timeframe. This concept can help clarify aspirations and influence choices on the innovation journey.

While many imagine that innovation is solely about creativity and generating ideas, at its core, innovation is a matter of resource allocation . To put it another way: it’s one thing to frame innovation as a catalyst for growth, and another to act upon it by refocusing people, assets, and management attention on the organization’s best ideas.

The green box can help to solidify a tangible commitment  by defining the value that a company creates from breakthrough and incremental innovation, on a defined timeline (say, five years), with quantifiable metrics such as net new revenue or earnings growth. Crucially, the green box looks at growth from innovation alone, setting aside other possible sources such as market momentum, M&A, and so forth. And once defined, the growth aspiration can be cascaded into a set of objectives and metrics that the company’s various operating units can incorporate into its individual innovation portfolios.

It’s useful to note that some organizations may find that measures not solely financial in nature are more appropriate or relevant. For instance, metrics such as the number of subscribers or patients—or customer satisfaction—can resonate. What’s critical is selecting a metric that is a proxy for value creation. A large US healthcare payer , for example, looked to spur innovation that would improve patient satisfaction and the quality of care.

Separate from the concept of the green box, two simple metrics  can also offer surprising insight about innovation vis-à-vis the effectiveness of an organization’s R&D spending. Both of these lend themselves to benchmarking, since they can be gauged from the outside in, and they offer insight at the level of a company’s full innovation portfolio. The two R&D conversion metrics are as follows:

• R&D-to-product conversion: This metric is calculated by looking at the ratio of R&D spending (as a portion of sales) to sales from new products. It can show how well your R&D dollars convert to actual sales of new products—and it might reveal that spending more doesn’t necessarily translate into stronger performance.
• New-products-to-margin conversion: This metric considers the ratio of gross margin percentage to sales from new products. It can indicate how new-product sales contribute to lifting margins.

While no metric is perfect, these may offer perspective that keeps the focus squarely on returns from innovation and the value it creates—often more meaningful than looking inward at measures of activity, such as the number of patents secured.

How do you create a high-performing innovation team?

Innovation is a team sport. Experience working with strong innovators and start-ups has helped identify ten traits of successful innovation teams . Those fall into four big categories: vision , or the ability to spot opportunities and inspire others to go after them; collaboration , which relates to fostering effective teamwork and change management (for instance, by telling a good innovation story ); learning or absorbing new ideas; and execution , with traits that facilitate snappy decision making even when uncertainty arises.

Being strategic about the composition of an innovation team can help minimize failures and bring discipline to the process.

What innovation advice can help business leaders?

One broad piece of advice centers on creating a culture that accounts for the human side of innovation . When people worry about failure, criticism, or the career impact of a wrong move, it can keep them from embracing innovation. In a recent poll, 85 percent of executives say fear holds back their organization’s innovation efforts often or always—but there are ways to overcome these barriers .

Additionally, the Committed Innovator podcast and related articles share perspectives from leading experts who have helped their organizations tackle inertia and unlock bold strategic moves. If you are looking for words of wisdom, their insights can help spark inspiration to innovate:

• Naomi Kelman, CEO, Willow . “Creating a safe environment for innovation is really what you need to do to get the greatness out of the people who work with you, which is ultimately what drives growth.”
• Safi Bahcall, author, Loonshots . “Most of the important breakthroughs failed many times before they succeeded. That is where ‘fail fast’ goes wrong. Most companies are too impatient.”
• Amy Brooks, chief innovation officer, National Basketball Association . “You can use data or examples to convince people about what is working in the market or what other industries are doing. We like to share best practices within our own leagues and within sports, but we also pay attention to every other industry that sells to consumers.”
• Tanya Baker, global leader, Goldman Sachs Accelerate . “If someone knowledgeable thinks what you are doing is a bad idea, make sure they have a seat at the table. Put them on your board; make them one of your advisers so you don’t have any blind spots.”
• Neal Gutterson, former chief technology officer, Corteva . “[A] key skill is being able to hold two divergent thoughts and approaches in your brain and in your team at the same time. The great companies will be ambidextrous innovators, able to disrupt themselves in the future while serving the core [business] today.”
• Anjali Sud, CEO, Vimeo . “What keeps me up at night is execution and, within that, focus. Because when you are in a market like ours, at a time like now, the opportunity is huge. We are this nimble, fast-growing, fast-moving company, and everywhere I look I see opportunity. But am I providing enough focus for my teams so that we can truly be great at something? You don’t want to miss a big boat, and it’s hard sometimes to say no to valid, exciting ideas that could be transformative.”

For more in-depth exploration of these topics, see McKinsey’s insights on Strategy & Corporate Finance . Learn more about McKinsey’s Growth & Innovation  work—and check out innovation-related job opportunities if you’re interested in working at McKinsey.

Articles referenced include:

• “ Fear factor: Overcoming human barriers to innovation ,” June 3, 2022, Laura Furstenthal , Alex Morris, and Erik Roth
• “ Innovation—the launchpad out of crisis ,” September 15, 2021, Laura Furstenthal  and Erik Roth
• “ The innovation commitment ,” October 24, 2019, Daniel Cohen, Brian Quinn, and Erik Roth
• “ Fielding high-performing innovation teams ,” January 17, 2019, Matt Banholzer , Fabian Metzeler, and Erik Roth
• “ Taking the measure of innovation ,” April 20, 2018, Guttorm Aase, Erik Roth , and Sri Swaminathan
• “ The eight essentials of innovation ,” April 1, 2015, Marc de Jong , Nathan Marston, and Erik Roth

Want to know more about innovation?

Related articles.

Fear factor: Overcoming human barriers to innovation

The innovation commitment

The eight essentials of innovation

Protein ice cream company wins 2024 Rice Business Plan Competition

Ice cream company Protein Pints took home the grand prize at the 2024  Rice Business Plan Competition  (RBPC) April 6 as the best student ventures from top universities across the world competed for prizes in front of nearly 350 angel, venture capital and corporate investors and members of the business community.

During his acceptance speech, Founder and CEO of Protein Pints Paul Reiss said, “The love and support that we’ve been shown during our time here at Rice, and the relationships and the friends that we’ve made, is something that I know I and every other student here is going to remember for the rest of our lives.”

Hosted annually by the  Rice Alliance for Technology and Entrepreneurship  and Rice University’s  Jones Graduate School of Business , the RBPC is the world’s largest and richest student startup competition.

The RBPC offers real-world opportunities to learn what’s required to successfully launch a new business. In addition to the substantial cash, investment and in-kind prizes, the heart of the competition is the mentoring from investors and experienced entrepreneurs. RBPC alumni have raised more than $6.1 billion in capital and 288 are in business or have had successful exits.

The winners were announced at the conclusion of the three-day pitching, mentoring and networking event, which included an elevator pitch competition, practice round, semifinals, wildcard and final round. At the award celebration, more than 80 prizes were announced totaling $1.5 million in investment and non-dilutive cash prizes. Every team took home cash.

“We award the competitors $1 million in prizes, prizes that serve as foundational capital to launch their startup,” said RBPC Director Catherine Santamaria in her welcome speech at the awards gala April 6.

“That’s a large number of prizes, but the biggest thing our startups leave with is a feeling of generosity and community from this room. This community is always ready and willing to help our founders and support our vision for the competition by investing time, money and resources in these student innovators.”

The 42 competing startups represented 35 universities from four countries. They were chosen from more than 450 applicants to compete in one of five categories: energy, clean tech and sustainability; life sciences and health care solutions; consumer products and services; hard tech; and digital enterprise. Learn more about all of the startups here .

The seven finalists based on the judges’ overall scores were:

Protein Pints, Michigan State University — first place and the $150,000 GOOSE Capital Investment Grand Prize.

• Protein Pints is a high-protein, low-sugar, ice cream product designed for people who would benefit from having access to a functional ice cream and/or better tasting and more enjoyable protein options.

Somnair, Johns Hopkins University — second place and the $100,000 Investment Prize, sponsored by David Anderson, Jon Finger, Anderson Family Fund, Finger Interests, Greg Novak and Tracy Druce.

• Somnair is a Novel Non-Invasive Neurostimulation device for the treatment of obstructive sleep apnea.

Power2Polymers, RWTH Aachen University — third place and the $50,000 Rice University investment, provided by the Rice Alliance for Technology and Entrepreneurship and sponsored by Finger Interests, the Anderson Family Fund at the Greater Houston Community Foundation, Greg Novak and Tracy Druce.

• Power2Polymers tackles the pressing issue of “forever chemicals,” which have been linked to over 6.5 million deaths in the U.S. alone, by offering safe alternatives free of forever chemicals.

Informuta, Tulane University — fourth place and the $5,000 prize, sponsored by Norton Rose Fulbright.

• Informuta’s proprietary technology leverages DNA sequencing to predict if bacteria will respond to different antibiotics or, for the very first time, develop future resistance thus causing treatment failure.

Icorium Engineering Company, University of Kansas — fifth place and the $5,000 prize, sponsored by EY.

• Icorium Engineering Company is a chemical engineering startup and University of Kansas spinout developing technologies to make sustainable, circular economies a reality for refrigerants and other complex chemical mixtures.

EndoShunt Medical, Harvard University — sixth place and the $5,000 prize, sponsored by Chevron Technology Ventures.

• EndoShunt is transforming trauma surgery with a rapid, targeted blood flow control device.

D.Sole, Carnegie Mellon University — seventh place and the $5,000 prize, sponsored by Shell Ventures.

• D. Sole is advancing the development of remote patient monitoring in podiatry with foot insoles designed for the early detection and monitoring of diabetic foot complications, such as ulcers and deformities.

The fourth through seventh place startups were also awarded an additional investment prize of $25,000 each provided by Rice Alliance and sponsored by David Anderson, Jon Finger, Anderson Family Fund, Finger Interests, Greg Novak and Tracy Druce, bringing their finalist prize totals up to $30,000.

Other  significant prizes  this year and the teams that won them include:

• $200,000 Goose Capital Investment Prize — Osphim, RWTH Aachen University
• $250,000 OWL Investment Prizes — MesaQuantum, Harvard University
• $100,000 OWL Investment Prizes — Icorium Engineering Company, University of Kansas
• $100,000 Houston Angel Network Investment Prize — Somnair, Johns Hopkins University
• $100,000 The Indus Entrepreneurs (TiE) Texas Angels Investment Prize — Protein Pints, Michigan State University
• $60,000 nCourage Courageous Women Entrepreneur Investment Prize — MesaQuantum, Harvard University
• $40,000 nCourage Courageous Women Entrepreneur Investment Prize — Icorium Engineering Company, University of Kansas
• $40,000 Pearland EDC Spirit of Entrepreneurship Cash Prize — Informuta, Tulane University
• $25,000 New Climate Ventures Sustainable Investment Prize — Oxylus Energy, Yale University
• $25,000 Dream Big Ventures Latino Entrepreneur Investment Prize — Dendritic Health AI, Northwestern University
• $25,000 NOV Energy Technology Innovation Cash Prize — LiQuidium, University of Houston
• $25,000 Urban Capital Network Diversity Investment Prize in Partnership with South Loop Venture Investment Prize — TouchStone, University of California, Berkeley
• $25,000 Southwest National Pediatric Device Consortium Pediatric Device Cash Prize — EndoShunt Medical, Harvard University
• $25,000 Jacobs, Intuitive Machines and WRX Companies Rising Stars Space Technology and Commercial Aerospace Cash Prize — MesaQuantum, Harvard University

For more information about the 2024 Rice Business Plan Competition, visit  rbpc.rice.edu .

This story was originally published on APNews.

About the MSU Innovation Center:  

The MSU Innovation Center is dedicated to fostering innovation, research commercialization, and entrepreneurial activities from the research and discovery happening across our campus every day. We act as the primary interface for researchers aiming to see their research applied to solving real-world problems and making the world a better place to live. We aim to empower faculty, researchers, and students within our community of scholars by providing them with the knowledge, skills, and opportunities to bring their discoveries to the forefront. Through strategic collaborations with the private sector, we aim to amplify the impact of faculty research and drive economic growth while positively impacting society. We foster mutually beneficial, long-term relationships with the private sector through corporate-sponsored research collaborations, technology licensing discussions, and support for faculty entrepreneurs to support the establishment of startup companies.    

Is your company interested in working with MSU’s Protein Pints Team? Click Here .

Inflection AI has a new game plan after Mustafa Suleyman defected to Microsoft

• Inflection AI unveiled a new strategy to focus on building empathetic chatbots for businesses.
• It comes after Mustafa Suleyman resigned as CEO and joined Microsoft with most of the team.
• The startup's new leadership team told VentureBeat that it's "well funded for 18 months." 

Inflection AI seems to have found a way to steady the ship.

The startup laid out a rehashed strategy following its partial implosion about two months after CEO Mustafa Suleyman decamped to Microsoft along with most of its 70 staff.

Inflection's executive team told VentureBeat that its new plan of action is focusing on business-centric "empathetic" chatbots to help stand out in the highly competitive AI sphere.

Related stories

Its new leaders hope its emotional quotient bots will set it apart from rivals. Inflection is now a 12-person team, which it plans to expand by recruiting more engineers.

Sean White, who took over as CEO, announced in a press release on Tuesday that Vibhu Mittal, a former senior Google scientist, has become chief technology officer, while Ted Shelton joined from Bain as chief operating officer.

However, there was no mention of whether it'll continue offering its main product, the "kind and supportive companion" chatbot Pi , to consumers. Instead, it seems like the company's repurposing it for corporate customers.

Inflection believes companies will want AI chatbots that are considered emotionally intelligent to deliver a more considerate and personal customer support experience, according to Shelton.

The company's also betting on businesses wanting bots to help employees in their work, or to even license the tech that makes its chatbots empathetic.

Shelton said a finance firm it's working with said it could take weeks to train a human worker to speak to customers as a call center agent. According to the report, the chatbot for businesses can allow firms to offer AI customer support agents with a particular tone and personality as its models are trained on people's emotive conversations.

Despite recent challenges, cofounder Reid Hoffman insists that a shortage of cash is not one of them. He told VentureBeat that Inflection has "real money" and is "well funded for 18 months." White also said it has the backing of its first investor Greylock, where Hoffman is a partner.

Last year, Inflection raised more than $1 billion from investors, including Bill Gates, Eric Schmidt, and Nvidia, and got $650 million from Microsoft to license its tech when Suleyman left to lead its AI efforts.

Inflection AI didn't immediately respond to a request for comment from Business Insider, made outside normal working hours.

Watch: What is ChatGPT, and should we be afraid of AI chatbots?

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VMware by Broadcom Dramatically Simplifies Offer Lineup and Licensing Model

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By Krish Prasad, Senior Vice President and General Manager, VMware Cloud Foundation Division

Broadcom’s close of the VMware acquisition has brought together two engineering-first, innovation-centric teams to help build the world's leading infrastructure technology company. Together, we are well-positioned to enable global enterprises to embrace private, hybrid and multi-cloud environments. And we are committed to driving customer success through faster innovation, a simpler portfolio and a robust ecosystem.

Over the past two years, VMware has been on a journey to simplify its portfolio and transition from a perpetual to a subscription model to better serve customers with continuous innovation, faster time to value, and predictable investments.

Today, VMware by Broadcom has reached a new milestone with the announcement of the following:

• A dramatic simplification of our product portfolio that allows customers of all sizes to gain more value for their investments in VMware solutions. The portfolio simplification across all VMware by Broadcom divisions stems from customer and partner feedback over the years telling us our offers and go-to-market are too complex.
• Complete the transition of all VMware by Broadcom solutions to subscription licenses, with the end of sale of perpetual licenses, Support and Subscription (SnS) renewals for perpetual offerings, and hybrid purchase program/subscription purchase program (HPP/SPP) credits beginning today (effective dates will vary). Additionally, we are introducing a bring-your-own-subscription license option, providing license portability to VMware validated hybrid cloud endpoints running VMware Cloud Foundation.

Portfolio Simplification

Today, we’re announcing specific changes coming to the VMware Cloud Foundation division portfolio. Going forward, the division will feature two primary offers:

• VMware Cloud Foundation , our flagship enterprise-class hybrid cloud solution for customers to run their business critical and modern applications – in a secure, resilient and cost efficient manner. To allow more customers to benefit from this solution, we’ve reduced the previous subscription list price by half and added higher support service levels including enhanced support for activating the solution and lifecycle management.
• The new VMware vSphere Foundation delivers a more simplified enterprise-grade workload platform for our mid-sized to smaller customers. This solution integrates vSphere with our intelligent operations management to provide the best performance, availability, and efficiency with greater visibility and insights.

Both VMware Cloud Foundation and VMware vSphere Foundation will have optional advanced add-on offers. Our storage offering, ransomware and disaster recovery service, and application platform services are available on both offers. And Application Network and Security offerings are available for VMware Cloud Foundation. Additional advanced services and offerings, including Private AI, will be available soon.

Subscription Licenses

VMware has been on a journey to transition to a subscription model for more than a year now, and the industry has already embraced subscription as the standard for cloud consumption. With a simplified portfolio in place, we’re completing our transition to subscription offerings. Offerings will solely be available as subscriptions or as term licenses following the end of sale of perpetual licenses and Support and Subscription (SnS) renewals beginning today.

The subscription model helps us deliver what customers want:

• Continuous innovation.
• Faster time to value.
• Predictable investments.

Customers may continue using perpetual licenses with active support contracts. We will continue to provide support as defined in contractual commitments. We encourage customers to review their inventory of perpetual licenses, including Support Services renewal and expiration dates. Broadcom will work with customers to help them “trade in” their perpetual products in exchange for the new subscription products, with upgrade pricing incentives. (For additional details, see FAQ).

The simplification of our portfolio and shift to subscription and term offerings are a culmination of our multi-year business transformation efforts. The steps we’re taking today will further enable customer and partner success by delivering the innovation, simplicity and flexibility they need as they undertake their digital transformations.

Frequently Asked Questions

Q: what is vmware by broadcom announcing.

A: Today, VMware by Broadcom has reached a new milestone in its journey and announced the following:

• Complete the transition of all VMware by Broadcom solutions to subscription licenses, with the end of sale of perpetual licenses, Support and Subscription (SnS) renewals for perpetual offerings, and HPP/SPP (generic) credits beginning today. Additionally, we are introducing a bring-your-own-subscription license option, providing license portability to VMware validated hybrid cloud endpoints running VMware Cloud Foundation.

Q: How do these changes benefit customers?  

A: Over the past two years, VMware has been on a journey to simplify its portfolio and transition to a subscription model, the industry standard for cloud consumption, and to better serve customers with continuous innovation, faster time to value, and predictable investments. We’re also helping more customers benefit from VMware Cloud Foundation by reducing the list price by half and including higher support service levels including enhanced support for activating the solution and lifecycle management.

Q: Why is this good for partners?

A: The industry has already widely embraced subscription and SaaS, and many partners in our ecosystem have already developed success practices in this area. Subscription and SaaS models provide an opportunity for partners to engage more strategically with customers and deliver higher-value services that drive customer success. It also helps accelerate their own transition to a business model focused on annual recurring revenue.

Q: What are the changes to perpetual licenses?

A: As part of our transition to subscription and a simplified portfolio, beginning today, we will no longer sell perpetual licenses. All offerings will continue to be available as subscriptions going forward. Additionally, we are ending the sale of Support and Subscription (SnS) renewals for perpetual offerings beginning today.

Q: Why make this change from perpetual licenses to subscription? 

A: This shift is the natural next step in our multi-year strategy to make it easier for customers to consume both our existing offerings and new innovations. VMware believes that a subscription model supports our customers with the innovation and flexibility they need as they undertake their digital transformations.

Q: Can customers continue to use their perpetual licenses?

A: Yes, customers can continue to use perpetual licenses that they’ve purchased for products.

Q: Can customers still purchase and add additional perpetual licenses after today?

A: After a customer’s effective date for the end of availability of perpetual licenses, customers will not be able to purchase new perpetual licenses. Customers will be able to purchase subscription software or term licenses to supplement or replace their current perpetual-licensed install base.

Q: Can customers renew their Service and Support (SnS) contracts after today?

A: No, customers cannot renew their SnS contracts for perpetual licensed products after today. Broadcom will work with customers to help them “trade in” their perpetual products in exchange for the new subscription products, with upgrade pricing incentives. Customers can contact their VMware account or partner representative to learn more.

Q: Do customers have to collect and submit their perpetual licenses to Broadcom when they “trade-in” their products for subscription?

A: No, Broadcom does not require customers to submit their perpetual licenses to Broadcom when they “trade in” their products for subscription.

Q: Will VMware by Broadcom continue to provide support for active Service and Support (SnS) contracts?

A: We will continue to provide support as defined in contractual commitments.

Q: What will happen to customers’ existing perpetual licenses with active SnS contracts when they are up for renewal?

A: Customers should contact their VMware account or partner representative for upgrade pricing from perpetual to subscription.

Q: What can customers with perpetual licenses do now to prepare?

A: This is an excellent time for customers to assess their current state with VMware infrastructure and management products. We encourage customers to review their inventory of perpetual licenses, including refresh cycles and renewal dates, and become more familiar with VMware's available subscription offers. Customers should also contact their VMware or partner representative for more information. 

Q: What VMware Cloud Foundation division offerings are available for purchase?

A: The product simplification across the VMware Cloud Foundation division stems from customer and partner feedback requesting we reduce the complexity of our offers and go-to-market. Going forward, the VMware Cloud Foundation division will feature two primary offers: VMware Cloud Foundation, the new VMware vSphere Foundation and our Hybrid Cloud services and offers. Additionally, we offer VMware vSphere Standard and VMware vSphere Essentials Plus for deployments with more limited requirements.

Q: What is VMware vSphere Foundation?

A: VMware vSphere Foundation is a new solution that combines our full-featured server virtualization platform, vSphere with intelligent operations management to deliver the best performance, availability, and efficiency with greater visibility and insights. For customers seeking an HCI solution, we offer VMware vSAN as an add-on to vSphere Foundation, which includes all the capabilities of vSAN including vSAN Max.

Q: What happens to customers that have purchased HPP/EPP credits and still have an outstanding balance of unredeemed credits?

A: We are honoring existing agreements and will work with our customers to help with the redemption of credits on our new offerings.

Q: What products and bundles are impacted by this new policy?

A: Here is a list of products impacted by the new licensing policy:

• VMware Cloud Foundation
• VMware vSphere
• VMware vSAN
• VMware Site Recovery Manager
• VMware vCloud Suite
• VMware Aria Suite
• VMware Aria Universal
• VMware Aria Automation
• VMware Aria Operations
• VMware Aria Operations for Logs
• VMware Aria Operations for Networks
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AI companies make fresh safety promise at Seoul summit, nations agree to align work on risks

World leaders are expected to adopt a new agreement on artificial intelligence when they gather virtually on Tuesday to discuss AI’s potential risks but also ways to promote its benefits and innovation. The AI Seoul Summit is a follow-up to November’s inaugural AI Safety Summit at Bletchley Park in the United Kingdom, where participating countries agreed to work together to contain the potentially “catastrophic” risks posed by galloping advances in AI.

A screen shows an announcement of the AI Seoul Summit in Seoul, South Korea, Tuesday, May 21, 2024. World leaders are expected to adopt a new agreement on artificial intelligence when they gather virtually Tuesday to discuss AI’s potential risks but also ways to promote its benefits and innovation. (AP Photo/Ahn Young-joon)

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FILE - Britain’s Prime Minister Rishi Sunk, center, speaks during a plenary session at the AI Safety Summit at Bletchley Park in Milton Keynes, England, on Nov. 2, 2023. South Korea is set to host a mini-summit this week on risks and regulation of artificial intelligence, following up on an inaugural AI safety meeting in Britain in 2023 that drew a diverse crowd of tech luminaries, researchers and officials. (AP Photo/Alastair Grant, Pool, File)

SEOUL, South Korea (AP) — Leading artificial intelligence companies made a fresh pledge at a mini-summit Tuesday to develop AI safely, while world leaders agreed to build a network of publicly backed safety institutes to advance research and testing of the technology.

Google, Meta and OpenAI were among the companies that made voluntary safety commitments at the AI Seoul Summit , including pulling the plug on their cutting-edge systems if they can’t rein in the most extreme risks.

The two-day meeting is a follow-up to November’s AI Safety Summit at Bletchley Park in the United Kingdom, and comes amid a flurry of efforts by governments and global bodies to design guardrails for the technology amid fears about the potential risk it poses both to everyday life and to humanity.

Leaders from 10 countries and the European Union will “forge a common understanding of AI safety and align their work on AI research,” the British government, which co-hosted the event, said in a statement. The network of safety institutes will include those already set up by the U.K., U.S., Japan and Singapore since the Bletchley meeting, it said.

U.N. Secretary-General Antonio Guterres told the opening session that seven months after the Bletchley meeting, “We are seeing life-changing technological advances and life-threatening new risks — from disinformation to mass surveillance to the prospect of lethal autonomous weapons.”

The U.N. chief said in a video address that there needs to be universal guardrails and regular dialogue on AI. “We cannot sleepwalk into a dystopian future where the power of AI is controlled by a few people — or worse, by algorithms beyond human understanding,” he said.

The 16 AI companies that signed up for the safety commitments also include Amazon, Microsoft, Samsung, IBM, xAI, France’s Mistral AI , China’s Zhipu.ai, and G42 of the United Arab Emirates . They vowed to ensure the safety of their most advanced AI models with promises of accountable governance and public transparency.

It’s not the first time that AI companies have made lofty-sounding but non-binding safety commitments. Amazon, Google, Meta and Microsoft were among a group that signed up last year to voluntary safeguards brokered by the White House to ensure their products are safe before releasing them.

The Seoul meeting comes as some of those companies roll out the latest versions of their AI models .

The safety pledge includes publishing frameworks setting out how the companies will measure the risks of their models. In extreme cases where risks are severe and “intolerable,” AI companies will have to hit the kill switch and stop developing or deploying their models and systems if they can’t mitigate the risks.

Since the U.K. meeting last year, the AI industry has “increasingly focused on the most pressing concerns, including mis- and dis- information, data security, bias and keeping humans in the loop,” said Aiden Gomez CEO of Cohere, one of the AI companies that signed the pact. “It is essential that we continue to consider all possible risks, while prioritizing our efforts on those most likely to create problems if not properly addressed.”

Governments around the world have been scrambling to formulate regulations for AI even as the technology makes rapid advances and is poised to transform many aspects of daily life, from education and the workplace to copyrights and privacy. There are concerns that advances in AI could eliminate jobs, spread disinformation or be used to create new bioweapons.

This week’s meeting is just one of a slew of efforts on AI governance. The U.N. General Assembly has approved its first resolution on the safe use of AI systems, while the U.S. and China recently held their first high-level talks on AI and the European Union’s world-first AI Act is set to take effect later this year.

Chan contributed to this report from London. Associated Press writer Edith M. Lederer contributed from the United Nations.

RINA hits 800 million euros in 2023 revenue and unveils Strategic Plan aimed at 2 billion euros by 2030

27 may 2024, the future of rina will continue to be built on people. the strategic plan envisions an average annual employee growth of 8%, aiming to reach a global workforce of 10,000 by 2030.

The shareholders' meeting of RINA, the multinational inspection, certification and engineering consultancy group, approved the financial statement for the fiscal year ending 31 December 2023, showing net revenues of 797 million euros, up 10% compared to 2022 and 13% EBITDA. Net profit rose to 12.5 million euros. 

The figures confirm the growth rate of revenues and profitability seen in recent years, setting solid foundations for the next cycle, which will also benefit from the capital injection led by Fondo Italiano d’Investimento, RINA new shareholder.

Thanks to a positive start of the year, RINA closed the first quarter of 2024 with a new order intake of approximately 310 million euros (in line with 2023 first quarter) and operating revenues of 210 million euros (+17% vs 2023 first quarter). Based on such results, the Company confirms the guidance for the year.

Carlo Luzzatto , CEO and General Manager of RINA , stated: " I’m delighted to have joined such an extraordinary team and humbled by the opportunity to lead my colleagues into the next growth cycle of RINA. As set out in our new strategic plan, over the next few years we aim at becoming more and more an essential reference point for our clients by supporting them with our broad-based knowledge and leveraging a unique ecosystem built on the continuous sharing of expertise, the cross-functional application of our technical know-how, and our ability to innovate across all sectors in which we operate. RINA’s commitment to innovation has been recently boosted by the launch of the “AI Factory”. The newly formed team of top-notch professionals will drive breakthrough developments of our services, enabling our customers to better read and anticipate the evolving and often challenging dynamics of the industries in which they operate and, therefore, succeed in achieving their business goals. "

To drive the next growth phase, RINA has launched a new strategic plan aimed at achieving 2 billion euros in organic revenues and 20% EBITDA by 2030. Further growth may be enabled by M&A. The Company, in fact, is currently active on the market, focusing on opportunities which may fuel the strategic streams highlighted in the new industrial plan. The capital recently injected by the new shareholders, along with their strong commitment to further support the Company in its growth trajectory provides important resources to be deployed in M&A opportunities.

Ugo Salerno , Executive President of RINA , said: “ I am very pleased to have had the opportunity to complete the operation which led to the entry of Fondo Italiano d'Investimento into our shareholding. The new shareholders have shown that they believe in RINA's potential, supporting a new phase of development that will take place both organically and inorganically. "

RINA is actively expanding its brand presence in international markets, with a renewed focus on the United States, the United Kingdom, Latin America, and the Middle East, while continuing to invest in India and Asia, and reaffirming its leading position in Italy.

The future of RINA will continue to be built on people. The strategic plan envisions an average annual employee growth of 8%, aiming to reach a global workforce of 10,000 by 2030.

RINA’s strategic plan has identified several streams that will play a significant role in achieving the Group's objectives:

- Energy transition : RINA reaffirms its role as a partner, guiding companies through their energy transition by designing, supporting, and verifying the implementation of decarbonisation plans and initiatives, leveraging its extensive knowledge and the use of innovative technologies. -  Integrated asset management : By leveraging the multidisciplinary competencies acquired from extensive knowledge and experience in various sectors – from energy to infrastructure, from shipping to real estate- the company is fast establishing itself as a benchmark for the management of facilities, infrastructure, and operations. -  Smart compliance : Thanks to its strong historical position, RINA is at the forefront of the rapidly evolving Testing, Inspection & Certification (TIC) sector. The company is pioneering new compliance strategies, addressing technological advances and navigating the dynamic national and global regulatory landscape, including the latest developments in ESG and digital compliance. -  Infrastructure & urban transformation : Over the years, RINA has developed specialised skills by playing a key role in numerous urban transformation projects, spanning infrastructure, transportation, real estate, and building refurbishment. The cross-disciplinary expertise at both national and international levels allows the Group to further assert itself in both large-scale public tenders and private sector projects. -  New economies : In recent years, market segments characterised by advanced technical content and significant interdisciplinary challenges, including underwater, cybersecurity, aviation and space, have seen considerable increase. In each of these sectors, RINA traditionally provided highly specialised services to customers and, for this reason, is today ideally positioned to play a leading role in supporting the exponential growth of the relevant value chains. 

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Kao Releases Progress Reports on its ESG Strategy —the Kirei Lifestyle Plan

Report on Implementation of New Biodiversity, Respect for Human Rights and DE&I Initiatives, Improved Traceability for Palm Oil Procurement, and Impact of ESG Activities on Financial Results and Business Growth

TOKYO, May 24, 2024—Kao Corporation, a Japan-based Group whose brand portfolio includes Attack, Bioré, Goldwell, Jergens, John Frieda, Kanebo, Laurier, Merries, and Molton Brown , has released a progress report on its ESG (Environmental, Social, and Governance) strategy—the Kirei Lifestyle Plan in the Kao Sustainability Report 2024. In 2023, with biodiversity an urgent global-scale issue, Kao amended its policy on biodiversity and carried out information disclosure according to the TNFD *1 framework. The company also continued activities relating to respect for human rights, which is the foundation of all corporate activity, including formulating its Diversity, Equity and Inclusion (DE&I) Policy. With regard to palm oil, one of the main raw materials used by Kao, the company is aiming to establish traceability throughout the supply chain, down to oil palm plantations, in order to ensure sustainable procurement of resources. The progress report also includes quantitative data on results of Kao’s ESG activities, contributions to its financial results and envisioned future growth, describing the contributions of its ESG strategy to its Mid-term Plan 2027 (K27). The following outlines the results of new 2023 activities for Kao’s key leadership action themes.

• * 1 The Taskforce on Nature-related Financial Disclosures officially launched in 2021 in order to build a corporate risk management and disclosure framework related to the resources of nature.
• Kao Sustainability Report 2024

Kao’s ESG Strategy Kirei Lifestyle Plan

For over 130 years, Kao has worked to help consumers lead fulfilling lifestyles. In April 2019, Kao established the Kirei Lifestyle Plan, which is an ESG strategy that includes 19 leadership action themes to achieve a sustainable and desirable way of living. The Japanese word ‘kirei’ describes something that is both clean and beautiful. For Kao, Kirei not only encapsulates appearance, but also attitude—to create beauty for oneself, other people, and for the world around us. Since 2021, Kao has been promoting the Kao Group Mid-term Plan with its vision of “protecting future lives” and “sustainability as the only path.” The Kao Group will continue to integrate its ESG strategy into its management practices. It will also develop its business, provide better products and services for consumers and society, and work toward its purpose “to realize a Kirei world in which all life lives in harmony.” The Director, Managing Executive Officer in charge of Kao’s ESG Division, Dave Muenz, delivered this message regarding the announcement of progress of the Kirei Lifestyle Plan: “At Kao, we strive to optimize our business operations across the value chain through ESG-focused Yoki-Monozukuri , and bring value to our communities through solutions to social issues. Our ESG strategy the Kirei Lifestyle Plan puts the consumer at its center, illustrating the direction of our action and setting ambition targets. Based on this, in 2023, we accelerated our initiatives looking towards our mid-term plan K27 with the visions of ‘sustainability as the only path’ and ‘protecting future lives’. In the Kao Sustainability Report 2024, we share our progress in the three commitments of the Kirei Lifestyle Plan looking towards the year 2030, as well as new efforts to promote the Kirei Lifestyle. This includes the publication of the Action Policy on Biodiversity and disclosure based on the TNFD framework, driving forward in human rights and DE&I, and efforts towards further transparency. Aiming to clarify how our ESG strategies contribute to the mid-term plan K27, we have worked to demonstrate the impact of our ESG activities financially and otherwise, as well as expected future growth. As the transition to a more sustainable society accelerates, at Kao, we will strive to embed sustainability into business to succeed in both ESG and Economic Value Added <EVA®> *2 .”

• * 2 Stern Stewart & Co.: Developed EVA in theory and applied it to corporate EVA management. Registered EVA as a trademark

These efforts have been recognized by the CDP, a leading international nonprofit organization, which included Kao in its prestigious ‘A List’ in all surveys across the three categories of climate change, forests and water security for four years in a row. Kao is one of only 10 companies included in the top-rated ‘A List’ across the three categories, out of more than 21,000 companies determined by a global survey of businesses and an evaluation of their activities. In addition, the Ethisphere Institute, a leading US think-tank, has named Kao one of the World’s Most Ethical Companies® for 18 consecutive years.

• News Release from February 2024 Kao Rated Triple-A for Climate Change, Water Security, and Forests for Fourth Consecutive Year by CDP
• News Release from March 2024 Kao the Sole Japanese and Asian Company Included in the World’s Most Ethical Companies® List for a Record 18th Consecutive Year

New Initiatives to Promote a Kirei Lifestyle

Kao’s action policy on biodiversity and information disclosure based on tnfd’s framework.

Kao operates by benefiting from many biological resources such as palm oil, paper and pulp. Given social expectations that businesses engage in activities more focused on conserving and restoring biodiversity and regenerating nature, in 2022 Kao revised its Basic Policy on Biodiversity. In October 2023, the company revised its Action Policies on Conservation of Biodiversity, renamed the Action Policy on Biodiversity. This policy sets out specific biodiversity-related actions and information disclosure in accordance with an international framework. In addition, a new section, Aiming for Symbiosis between People, Nature and Chemistry, was added to the policy to assess the impact of chemical substances on biodiversity and to demonstrate the company’s stance on addressing the challenges of both biodiversity and climate change.

• News Release from November 2023 Kao Releases Action Policy on Biodiversity

Since 2021, Kao has been identifying material issues by examining the relationship between its supply chains and biodiversity. To respond promptly to developments regarding information disclosure, the company participated in the TNFD Forum in April 2022, collecting information and providing feedback on the information disclosure framework then under development. In April 2023, in collaboration with Accenture Japan Ltd., Kao released a report which analyzed the company’s business activities based on the TNFD (β v0.3) LEAP approach *3 . In May, Kao identified 13 risks and opportunities after examining the relationship between its business and biodiversity related to detergents, one of its leading product categories, and included them in the Kao Sustainability Report 2023. In the Kao Sustainability Report 2024, Kao has looked at the expected financial impact of risks identified the previous year, based on its analysis in accordance with the final recommendations for the TNFD framework announced in September 2023. Kao has registered as an adopter, in response to TNFD’s solicitation of “TNFD Adopters,” businesses willing to engage in information disclosure in accordance with the TNFD Recommendations. Kao will continue taking specific actions to propose nature-positive biodiversity strategies and set target objectives.

• * 3 The analytical approach proposed by TNFD, which stands for Locate (identify priority areas), Evaluate (understand dependencies and impacts), Assess (identify and evaluate risks and opportunities) and Prepare (strategy, goal setting, evaluation and reporting).
• News Release from April 2023 Kao Releases Biodiversity Report Based on the TNFD Framework
• TNFD Adopters list
• Kao Sustainability Report 2024: Biodiversity

Promoting Respect for Human Rights and DE&I

Kao’s corporate philosophy, the Kao Way, upholds “integrity as the only choice” and “we trust, respect, and need each other” as two of its core values. Across all of its corporate activities, Kao aims to completely eliminate infringement of human rights and commits to taking prompt action if any infringement occurs. In addition to “respecting human rights,” the company’s ESG strategy the Kirei Lifestyle Plan, emphasizes other key aspects of human rights such as “responsibly sourced raw materials,” “inclusive and diverse workplaces” and “employee wellbeing and safety.” Kao conducts a yearly assessment of human rights risks, which are detailed in the Kao Sustainability Report. This assessment is carried out by employees from several departments, including members of the Human Rights and DE&I Steering Committee, who discuss plausible risks from various perspectives. With input from experts in the field, in a list of human rights risks across the Kao Group compiled in 2023, Kao identified “producers and farmers from whom Kao procures raw materials” and “foreign workers (including those at subsidiaries or affiliates and in the supply chain)” as particularly high-priority issues within the “working environment of people we work with” category, an important human rights theme for Kao. Concerning “producers and farmers from whom Kao procures raw materials,” in 2020 Kao initiated the SMILE (Smallholder Inclusion for better Livelihood & Empowerment) program for palm oil plantation smallholders in Indonesia to support yield improvements and help them obtain RSPO *4 certification. A grievance mechanism was also launched in 2022. Where “foreign workers (including those at subsidiaries or affiliates and in the supply chain)” are concerned, Kao has proposed to contractors the introduction of a grievance mechanism for foreign workers and has had third parties interview workers to ascertain working conditions.

• * 4 Roundtable on Sustainable Palm Oil: A roundtable to promote the production and use of sustainable palm oil

The 2023 assessment also added a list of human rights risks connected to climate change. This list includes the negative impact that climate change and measures implemented to mitigate its effects could have on human rights, for example, the destruction or loss of livelihood bases due to natural disasters, or on health or daily life. Kao is also accelerating DE&I, creating a new DE&I Policy in June 2023. The company is working to employ the numerous opportunities gained via Kao’s broad range of businesses and working together with its stakeholders—employees, business partners and all people—to promote implementation of DE&I to contribute to its business and create a more inclusive society.

• News Release from June 2023 Kao Creates A New Diversity, Equity and Inclusion (DE&I) Policy
• Kao website: Diversity, Equity and Inclusion
• Kao Sustainability Report 2024: Respecting human rights
• Kao Sustainability Report 2024: Responsibly sourced raw materials
• Kao Sustainability Report 2024: Inclusive & diverse workplaces
• Kao Sustainability Report 2024: Employee wellbeing & safety

New Information Disclosure Initiative in the Kao Sustainability Report 2024

In the Kao Sustainability Report 2024, Kao has undertaken a new information disclosure initiative. To tie in activities based on its ESG strategy Kirei Lifestyle Plan and its Mid-term Plan 2027 (K27), in addition to the impact of ESG on its activities and contribution to financial results, Kao has disclosed new information to forecast anticipated future business growth. The new Executive Summary groups Kao’s main activities in 2023 under the headings “new values for life and society” and “reducing the burden on life and society.” Progress in these areas is shown quantitatively, further broken down into the categories of life, society, environment and business foundation for additional clarity.

• Kao Sustainability Report 2024: Executive summary

Key Leadership Action Themes: 2023 Activity Results

Decarbonization.

As we work toward the goal of becoming carbon zero (reducing CO 2 emissions to net zero) by 2040, and becoming carbon negative by 2050, besides aiming to reduce CO 2 emissions in our own business activities, we also aim to contribute toward realizing the decarbonized society and sustainable business by helping to reduce emissions in society as a whole, and through carbon fixation to reduce the amount of carbon dioxide in the atmosphere.

• Kao Sustainability Report 2024: Decarbonization

Kao announced new decarbonization targets in May 2021, setting goals of zero CO 2 emissions by 2040 and becoming a carbon negative business by 2050. Kao’s mid- to long-term goals are to achieve these targets, which include those certified by the global Science Based Targets initiative (SBTi) as a 1.5°C target. Kao is also a member of RE100, a global initiative of businesses committed to using 100% renewable electricity. In 2023, 100% of the electricity purchased by Kao in Japan came from renewable energy sources, and the company reached the target of reducing Scope 1+2 *5 CO 2 emissions (absolute value) by 28% by 2025 two years ahead of time. For more information, please see the April 2024 news release on Kao’s progress on decarbonization in 2023.

• * 5 Greenhouse gas emissions by other than businesses and other entities.
• News Release from May 2021 Kao Is Aiming to Reduce Its CO 2 Emissions to Zero by 2040, and to Be Carbon Negative by 2050
• News Release from April 2024 Accelerating Efforts to Reach Carbon Zero by 2040 and Carbon Negative by 2050

2023 Results

With the aim of creating a resource-circulating society, Kao promotes the reduction and recycling of resources used for packaging and products that are used in and generated from business activities, and contributes to the sustainable development of its business and society.

• Kao Sustainability Report 2024: Zero waste

Aiming to achieve resource circulation in society, Kao set a target of achieving plastic packaging net zero waste by 2040 and negative waste by 2050 *6 for plastic containers used and discharged in its business activities. In 2023, Kao formulated a roadmap for achieving those targets. Furthermore, the first products making use of used refill packs, utilizing the company’s film-to-film recycling technology, reached the market in May. For more information, please see the April 2024 news release on Kao’s progress in 2023 toward achieving its zero waste targets.

• * 6 Kao’s net zero waste initiative aims to make the quantity of plastic recycled equivalent to the quantity of plastic packaging it produces. Negative waste means reaching the stage where the quantity of plastic recycled is greater than the plastic packaging produced by Kao.
• News Release from May 2023 Announcing a Roadmap for Reaching Plastic Packaging Net Zero Waste by 2040 and Negative Waste by 2050
• News Release from April 2024 Kao Accelerates Activities to Achieve Plastic Packaging Net Zero Waste by 2040 and Negative Waste by 2050

Responsibly Sourced Raw Materials

Source our raw materials in a more sustainable way that protects natural resources, the environment, safety and human rights through supply chain traceability and dialogue with suppliers.

• Kao website: Palm Oil Dashboard

Aware that its business is dependent on natural resources, Kao has been taking steps to source natural raw materials sustainably, positioning palm oil, the main ingredient in surfactants, and paper and pulp, which are used for disposable diapers and container materials, as key natural resources. To achieve “no deforestation,” Kao supports NDPE *7 , requiring and verifying that its suppliers and their group companies, as well as their portfolio companies, observe NDPE sustainability commitments.

• * 7 No Deforestration, No Peat and No Exploitation

With regard to palm oil, Kao is endeavoring to establish traceability throughout the supply chain, down to smallholder oil palm plantations. In 2023, traceability had been confirmed for 99% of oil palm mills and 87% of plantations. As for the purchase of certified sustainably sourced palm oil, Kao aims to convert to using 100% RSPO-certified palm oil for the Kao Group by 2025, including Book & Claim *8 , up from 40% in 2023.

• * 8 A certification model in which RSPO-certified credits are traded online between producers and end-product manufacturers/sellers

In the SMILE program launched in 2020, Kao, together with Apical Group, a global palm oil processor and exporter, and Asian Agri, a plantation and palm oil company, is striving to build a sustainable palm oil supply chain in Indonesia, supporting yield improvements and providing help for obtaining RSPO certification to smallholders in the provinces of North Sumatra, Riau and Jambi. Education was provided in the areas of farm management, occupational safety, fire management and obtaining RSPO certification to a cumulative total of 3,080 smallholders in 2023, with 839 of them obtaining RSPO certification. Kao has purchased all RSPO-Certified Credits from the oil palm smallholders who obtained the certification, helping provide them with a steady source of income, since they are allowed to directly receive the premiums paid by Kao. To improve smallholders’ revenue by boosting yield, reducing agrochemical use and lessening the burden on the environment, Kao distributed Adjuvant *9 free of charge to a total of 628 smallholders in 2023. In September 2022, Kao launched a grievance mechanism to receive complaints and inquiries from smallholders. By the end of December 2023, the mechanism had been introduced to 212 smallholdings and had received a total of 213 inquiries since its inception.

• * 9 A very efficient agricultural spreading agent developed by Kao that is derived from plant materials and helps spread pesticides when sprayed on plants.
• News Release from October 2020 Kao, Apical and Asian Agri Launch ‘SMILE’ Program to Help Oil Palm Smallholders Improve Yields, Acquire Certifications, and Secure Premiums
• News Release from April 2022 Progress of Helping Oil Palm Smallholders in Indonesia
• News Release from August 2022 Kao Launches Grievance Mechanism for Indonesian Oil Palm Smallholders

About the Kirei Lifestyle Plan

Over the past 130 years, Kao has worked to improve people’s lives and help them realize more sustainable lifestyles—a Kirei Lifestyle. The Japanese word ‘kirei’ describes something that is clean, well-ordered and beautiful, all at the same time. The Kao Group established its ESG strategy Kirei Lifestyle Plan in April 2019, which is designed to deliver the vision of a gentler and more sustainable way of living. By 2030, Kao aims to empower at least 1 billion people, to enjoy more beautiful lives and have 100% of its products leave a full lifecycle environmental footprint that science says our natural world can safely absorb. Please visit the Kao sustainability website for more information.

Kao creates high-value-added products and services that provide care and enrichment for the life of all people and the planet. Through its portfolio of over 20 leading brands such as Attack , Bioré , Goldwell , Jergens , John Frieda , Kanebo , Laurier , Merries, and Molton Brown , Kao is part of the everyday lives of people in Asia, Oceania, North America, and Europe. Combined with its chemical business, which contributes to a wide range of industries, Kao generates about 1,530 billion yen in annual sales. Kao employs about 34,300 people worldwide and has 137 years of history in innovation. Please visit the Kao Group website for updated information.

Media inquiries should be directed to:

Public Relations Kao Corporation

• [email protected]

Related Information

Kao launches new ESG Strategy “Kirei Lifestyle Plan” to support consumer lifestyle changes

Kao’s New Challenges for the Future: Accelerating Purposeful Business Commitment with ESG

Kao sustainability website

Kao Releases the Kao Integrated Report 2024

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Jacqui Lambie reveals bold plan to build national guard

A politician has called for Australia to follow the UK’s lead and consider bringing back mandatory national service.

Deadly Rafah strikes a ‘tragic mishap’: Israel

China drops ominous invasion video

PM vows to bring back national service

Jacqui Lambie has called for Australia to establish a national guard in the wake of Rishi Sunak’s plan to reinstate mandatory national service.

The Tasmanian senator has proposed a domestic arm made up of young Australians not working or studying to help the ADF meet the requirements of non-traditional missions – such as assisting with natural disasters and pandemics.

Offering slogan to go with her plan: “If you’re not earning or learning, then you are serving”, she suggested incentives may be needed but stopped short of calling for mandatory service.

“I want to speak really out there to those kids who are 21 and below: you can see what’s going on with climate change, you can see especially when we need to go in there and we need to do the clean up, we haven’t got the feet on the ground,” she told Sky News.

“I would like to see some sort of compulsory (service), but I have to work around the kids of today and say ‘What can convince you to come in and get the training that you need, and what do we need to repay you back?’”

She floated the idea of cheaper university fees to encourage people.

Senator Lambie, a veteran herself, has lamented how heavily Australia relied on the military during the Covid-19 pandemic.

Her comments come after the United Kingdom Prime Minister kicked off his snap-election campaign on the weekend by announcing the Conservative Party would require 18-year-old Britons to either join the military full-time or volunteer one weekend a month in community service.

The UK Labour Party has labelled it “desperate”, while Mr Sunak says it would help young people learn “real world skills, do new things, and contribute to their community and our country”.

Senator Lambie, whose own idea is not for mandatory service, said Mr Sunak’s plan would “scare the bejesus out of the younger generation”.

“I don’t want to scare you, I just want you to have some skill sets where especially with natural disasters we can use you for domestic use and we can go ‘Hey guys, 24 hours, grab your packs, go and help out there, we’ve got a massive flood … come and help us out’,” she said.

Israeli’s PM has said an attack that killed 45 Gazans was “tragic” as international condemnation against the country grows.

A haunting new video has sent a clear warning to Taiwan following China’s two-day military operation that sent a chill across the globe.

Everyone aged over 18 would be expected to serve their country for a year under a proposed new scheme for compulsory national service.