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Strategic Innovation More Than Just a Concept

By José Concepción Arriaga Murcia - Tokio Marine Mexico


By José Concepción Arriaga Murcia | CIO - Thu, 05/25/2023 - 15:00

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We’ve always heard about the concept of innovation. The simplest definition is doing something different, and it is something that many companies normally want to implement to improve operations and to provide better service to clients. Innovation can be used in different contexts but maybe the most common focus is in a business context, as the general definitions align with companies expectations; for instance, innovation is the ability to conceive, develop, deliver, and scale new products, services, processes, and business models for customers.


It seems very easy to say we will innovate but, in real life and in daily operations, it is not that easy. It is necessary to consider a global and holistic vision across the entire company, involving core people and defining a specific plan. It means creating a complete strategy.

Regarding strategy, one concept is strategic innovation and regarding some possible different definitions, I will consider in this article that strategic innovation is an organization's process of reinventing or redesigning its corporate strategy to drive business growth, generate value for the company and its customers, and create a competitive advantage. This type of innovation is essential for organizations to adapt to the speed of technological change. It is a big project that must be planned carefully, involving all critical operating models.


Some concepts included in the definition are critical to achieve success so it would be interesting to go a little bit deeper into each one:

Redesigning: Companies look to redesign or to implement some reengineering process due to the necessity to create a better experience for users and improve usability, but also to increase their user base by creating and adding new content, products, or services.






Business growth: This is maybe one of the Top 5 challenges for all organizations, and depending on the different strategies, using innovation can really help to achieve the goal. The critical success factor is to do a correct cost-benefit and return on investment (ROI) analysis. Business growth is a stage where an organization experiences unprecedented and sustained increases in market reach and profit.


Generate Value: The concept or philosophy to look beyond profit can have a big impact on an organization that is focused on customer centricity or customer experience. Adding value could be a differentiator, but it is not easy because each client has different expectations and for companies, this implies thinking globally to address all the requirements using omnichannel and innovative processes and services. Value generation is the goal of every successful business as creating value for customers helps you sell your products and services with ease. This is an important goal because profit can support midterm plans as the organization continues transforming and adding important value holistically.



Competitive advantage: This is the favorable position an organization seeks to be more profitable than its rivals. There are three main types of sustainable competitive advantage: differentiation, cost leadership, and focus advantage.

Depending on what strategy any company decides to implement to get a competitive advantage, to consider innovation as a pillar will be useful and can reduce or simplify the gap in time execution. To implement time to market, it is key to be one step ahead of the competition. 


Speed of technological change: The main and important concept here is to avoid obsolescence. ALthough some systems applications or tools can continue working, sometimes it is necessary to update and sooner or later there is lack of compatibility so it is necessary to be prepared with scalable systems that can be updated easily to continue matching new trends in technology. Obviously, this is also an economic issue because it implies cost, but that could be planned and budgeted to avoid a negative impact on the organization.

The correct implementation of innovation can generate different benefits, depending on the maturity of the company, if there is a technology investment plan to automate processes or facilitate services, and depending on how deep the implementation, if it was created as a corporate culture with a continuous improvement process around innovation. Some possible benefits are:

  • Improved productivity.

  • Reduced costs.

  • Increased competitiveness.

  • Improved brand recognition and value.

  • New partnerships and relationships.

  • Increased turnover and improved profitability.

  • To replace a main set of employees. 

  • To become an adaptive, agile, and flexible company.

  • Be at the forefront of other companies.

It’s very important to consider that nowadays, an innovation strategy and processes to implement could be part of a digital transformation plan and could be implemented in parallel or as a complement of each one depending on the company’s vision.

Innovation never ends. Besides the big changes implemented in an organization, there will always be additional things to improve, depending on market trends and the requirements or expectations of clients. Particularly after the pandemic and due to the exponential growth in the use of technology, this situation is now a complete and important change in the lives of all people worldwide. Everyone is taking advantage of technological devices and if necessary they are learning how to use new ones. Here is a recap of the different generations:

  • The Greatest Generation – born 1901-1924. 

  • The Silent Generation – born 1925-1945. 

  • The Baby Boomer Generation – born 1946-1964. 

  • Generation X – born 1965-1979. 

  • Millennials – born 1980-1994.

  • Generation Z – born 1995-2012. 

  • Gen Alpha – born 2013 – 2025.

All companies must be ready to compete in this new way of working as a result of the pandemic. The exponential growth in the use of technology, flexible processes, better service and simple and easy ways to find solutions to any device is a result of improvements that come from innovation at different levels and using different strategies but it is a mandatory trigger for success.

Photo by:   José Concepción Arriaga Murcia

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