Strategic innovation isn’t just about lightbulb moments and “eureka!” exclamations. New roles and responsibilities have to be created, employees must be trained in new skills.

It’s no secret that innovation is crucial for the success of the modern-day organization. Nowadays, trends come and go in the blink of an eye and technology is advancing at a faster pace than ever before. Companies have to actively invent and reinvent in order to keep up.

However, there’s more to business innovation than just coming up with new ideas and staying ahead of the tech curve. This same inventiveness should also be applied to a companies’ overall business strategy. And that’s where strategic innovation comes in.

What is strategic innovation?

Innovation in the business world and the digital era is about creatively designing surprising new products or services. Strategic innovation goes one step further: it is an organization-wide reinvention, or agile redesign of corporate strategy.

The goal of strategic innovation is to drive business growth and to generate greater value for both the company and the customer. The process of continually reevaluating corporate strategy to include innovative new practices provides an invaluable competitive advantage, keeping businesses one step ahead of the pack.

This is what makes strategic innovation so key to the success of businesses today. In a world where technological advancements are paving the way for change, the ability to innovate, adapt, and switch lanes is crucial as markets prove increasingly unpredictable.

IBM vs. Microsoft

Plenty of companies have implemented strategic innovation at an executive level—and to impressive effect. In 1991, responding to a changing market and fierce competition from rival Microsoft, IBM began the process of moving away from hardware sales and towards scalable solutions, recognizing software and IT services as a key opportunity for growth.

IBM center computing

Fast-forward 20 years to IBM’s 100th birthday in 2011, and the company passes Microsoft’s market value for the first time in 15 years. This major reversal of fortunes was spurred on by the success of fearless, strategic innovation.


Nintendo plays the innovation strategy game too. Their early products, like the beloved ‘90s console Game Boy, were considered quintessential “boys’ toys.” But when competitors like Sony arrived and began to crowd the market, Nintendo started to distance itself from any specific, core customer. Instead, the company aimed to attract as many gamers as possible.

Super Nintendo Controller

And with the advent of Nintendo Wii in 2006, the video game company actively and successfully expanded its customer base. Women, adults, the elderly—this console was marketed as the universally fun game, for everyone, and their grandparents, to enjoy.

As Nintendo CEO Satoru Iwata has explained, “We’re not thinking about fighting Sony, but about how many people we can get to play games. The thing we’re thinking about most is not portable systems, consoles, and so forth, but that we want to get new people playing games.”


Ikea is known the world over for innovative retailing. And the company’s ability to continuously adapt and innovate where necessary has allowed for expansion into diverse global markets and emerging economies. Different consumer cultures pose a serious challenge to aspiring international companies—and strategic innovation is the solution.

IKEA Building

In China, for example, Ikea came up against a series of challenges, the main one being its “low-price” strategy. These “low prices” were in fact considered expensive by Chinese standards, and their positioning confused a market where these Western-style pieces and prices were considered something to aspire to.

As a result, Ikea slashed its prices in China by 50%, sourcing materials locally, and began targeting the young, middle-class population—a departure from the European value proposition of furniture that everyone can afford.

Now a successful player in this East Asian nation, it seems Ikea has learned from its experience and has applied this adaptability to expansion into India, where the company is well-positioned to ride the waves of success.

How did they do it?

So, what’s the trick? Why was IBM able to move so smoothly into their new sector, leaving Microsoft in the dust? How has Ikea maintained its international foothold through cultural and financial confusion?

The key is to foster innovation across all teams and functions, and at all levels.

As IBM Ireland Country Manager Paul Farrell explains in an interview with Silicon Republic, “To gain an advantage of digital technologies, companies must also change how they work, where they work and what principles they use to guide their work. Businesses and organisations need to adapt to keep pace with these changes by reskilling their people.”

Strategic innovation isn’t just about lightbulb moments and “eureka!” exclamations. New roles and responsibilities have to be created, employees must be trained in new skills, and new structures need to be established. Companies may be able to successfully reinvent themselves, but ensuring the sustainability of that process is an entirely separate challenge.

And in an era full of change and unpredictability, now is the time to hone the skills needed to confront these issues, and become the next leading expert who can change organizations for the better.