NPD Resources
Innovation Strategy Typologies (A Review)
Strategy typologies are most useful as general, conceptual categorizations to provide an understanding of how your firm is measuring up to its formal mission and vision statements. Each of Miles & Snow’s strategy types*, save one – the Reactor strategy, can be successful in certain markets with the appropriate technologies, and with clear responses to environmental changes. Of course, firms will have commonalities and differences in strategy typology elements, but most companies will find their intentional or unintentional innovation strategies will naturally fall into one of Miles & Snow’s types.
Gaining a deeper understanding of your organizations’ institutionalized, or automatic in-grained, internal responses to external pressures will help guide the company to take advantage of markets, technologies, and competition in ways that the structure of the firm is best suited to do. Identifying which strategic typology best matches your firm’s response to change helps to shape and form the decision-making process. Finally, implementation of specific elements of the strategy typology or redirection in strategic vision can help to build or refine the organizational structure to better achieve goals and objectives required to be successful.
A Defender firm values stability, cost efficiency, and centralized control. Therefore, it is not surprising that they would implement and enforce very strict NPD Processes through checklists, reviews, and extensive project evaluations. Because the Defender is working in a niche market and competing primarily on price, the company cannot afford to let quality slip in either the product or the manufacturing process. Other aspects of New Product Innovation, such as use of Portfolio Management tools, are not so important to a Defender firm, since decisions are made by a centralized, authoritarian group and since most projects will involve only incremental improvements as derivatives or enhancements to the company’s very strong core technology.
On the opposite end of the continuum, the Prospector firm will be most interested in speed to market variables since this type of strategy values being “first”. The Prospector will engage with their customers in early Market Research to a high degree so that they can deliver new ideas to the marketplace rapidly. Because a high degree of coordination across many technology platforms is required, the Prospector firm is more likely to use Portfolio Management tools; however, elements of Portfolio Management, such as mix and balance may be missing from their analyses. Finally, since the Prospector strategy addresses the Engineering and Administrative Problems by employing generalists rather than specialists, Cross-Functional Teams are nearly always active in their NPD efforts.
Next, straddling their dual role as Defender and Prospector, the Analyzer firm may also show dualities in implementation of some key NPD elements. For example, they may use a good deal of rigor to have a new idea enter into the NPD Process for development and prototyping, yet process improvements in the base technologies may be implemented without much senior management review in order to achieve product cost efficiencies. Again, since planning is very important to successful implementation of an Analyzer strategy, these firms will use Portfolio Management tools both effectively and extensively. Market Research will be thorough, and Cross-Functional Teams, especially involving operations and manufacturing teams, will be used on most NPD projects. Speed to market is important because the Analyzer wants to gain market share versus their competitors; however, because quality of the product and process is important, they will not rush to commercialization until satisfied with all elements of production. Often, the Analyzer organization will be a Fast Follower to the market, rapidly launching a new product just behind a competing Prospector firm.
Lastly, Reactor organizations will tend to have a “shot-gun” approach to NPD depending on the industry, maturity of the firm, and historical past performance. For example, a Reactor organization that is forced into innovation by a corporate dictate may use a rigorous NPD Process but fail to implement Cross-Functional Teams. Or a firm that was formerly a Defender organization but finds itself in the midst of radical technological change may value quality of the production process very highly but be unable to implement an NPD Process to ensure future innovations follow past performance.
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