Innovation Balanced Scorecard (Step1/5): Design your Innovation Strategy Map

25 Jul

The innovation strategy map is the graphical representation of your innovation strategy, the idea behind this tool is to see all the links between the strategic objectives and how are aligned to the ultimate goal of the organization.

It is important to note that prior implementing an innovation scorecard, first the company need to clarify its innovation scope and a time frame. This is a complex task that requires extend research and analysis regarding the company´s future position in the market.

Draw the Innovation Strategy Canvas

When drawing your strategy map have in mind that the BSC it´s divided in four perspectives: financial, customer, internal processes and learning and growth. The financial and customer perspectives contain strategic objectives that are external to the organization, therefore we call them “result oriented. The internal process and learning and growth perspectives are internal to the organization, contain objectives that are within the boundaries of the organization, therefore we can act upon them. The performance in these objectives will determine to results in the two upper perspectives.

Define the Strategic Objectives

The financial perspective should contain an objective that represents the “innovation premium” intended for the company. This perspective should have a balanced number of objectives associated financial outcomes between those ensuring the revenue growth and those promoting cost savings.

The customer perspective conveys the unique and differentiated customer value proposition and associated market outcomes, such as market share and customer loyalty. The customer perspective objectives comprehend the market mix that will lead to the financial outcomes, such as whether our incomes will come from selling new products to our existing customers, new products to new customers, if innovation will detonate new segments or facilitate entry to new geographical markets.

According to Jonash and Donlon in the Balanced Scorecard Report of March – April 2007 state that the internal process perspective contains three key strategic themes: Growth and Innovation Platforms, Portfolio/Pipeline, and Sourcing and Partnering.  In another approach some companies place the objectives that seek to excel at the innovation process from idea management to scaling them to the market.

The learning and growth perspective articulates the employee value proposition and related enablers of innovation success— objectives such as “Build innovation competencies and skills.” This perspective should identify the set of innovation competencies and make sure that are brought to strategic level.

The Leverage Test

Once we have our set of objectives we need to run a test in order to make sure that our innovation strategy map is aligned to the innovation premium. This test consist in taking the growth and costs objectives and walk through the map identifying those objectives that leverage them and their result contributes to the performance of the growth objectives. If we have an objective that does not sustain any of these we should consider deleting it from our map.

Now that we have our strategy map the next step is to work in the design of our set of innovation metrics, more about this in our coming post of this series: Innovation Metrics.

Jesus Mascareno


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