Strategic planning inhibits innovation

In my workshops on Assessing the State of Innovation, we discovered that leading with strategy inhibits innovation, which was a bit surprise because it contradicts conventional wisdom. This provokative hypothesis, based on collecting anacdotes from about 30 companies, has now been supported by more thorough research.

In an article by Michael Song et. al. in The Journal of Product Innovation Management called “Does Strategic Planning Enhance or Impede Innovation and Firm Performance”, the authors compare several models of the firm and innovation and gather data systematically from 227 firms. Some of their findings:

“Managers should be aware that, in general, formal strateic planning decrease the number of NPD projects for innovation management. Improvised rather than planned activities are more condusive to creating NPD project ideas. moreover, innovations tend to emerge from improvisational processes during which the impromptu execution of NPD activities without planning spurs ‘thinking outside the box’ which enhances the process of creating NPD project ideas. Therefore, more flexible stratgic plans that accomdiate potential improvisation may be needed in NPD management since innovation-related activities canned be planned precissely due to the unexpected jolts and contingencies of the NPD process.”

This also supports another key finding of my work on assessing the state of innovation, which says that learning-based processes rather than traditional stage-gate processes create better results.