Innovation as a strategy

While all businesses will be seeking to imporve, some organisations put innovation at the heart of their strategy. These are companies in industries such as electronics, pharmaceuticals and computers. A failure to innovate in these industries mean you will fall behind. If innovation drives your strategy:

• You must be prepared to invest for the long term. There may be a big projects that will only pay back over 15 years, if at all.
• You must be prepared for failure; not every new idea will work. The culture people to try. This means your Human Resource Management team must recruit people with ideas, people willing to challenge, and people looking to move things forward. You must provide a reward strategy and management style that fosters such creativity. 
• Your marketing strategy may well be one of differentiation as you 'sell' the benefits of your new products and systems. The product may cost more money but the benefits are much greater for the customer. Alternatively, if the innovation is about finding cheaper ways of delivering the service then a low-cost strategy may be appropriate. 

A strategy of innovation therefore has an impact on all the other functions of the business. (Surridge&Gillespie 2009:149)