how to align innovation with your business goals

Have you recently been asked to “just incorporate AI” into your company’s products because your boss saw an inspirational quote from a random influencer on Linkedin? You’re not alone. 

Everyone has opinions on what should be done next. However, nothing beats the actual business goals. So how is it so hard to align innovations with business goals? Because true innovation is rarely easy and rather filled with uncertainty. 

Many innovation managers face issues of finding company goals to be unclear, having misalignment with top management, and facing scarce resources and prioritisation challenges. While each of these have their own set of solutions, a shared job to be done is clarifying how your innovation aligns with your business goals. If you can make that link clear, you’ll have helped a lot of people in your organisation work more efficiently, including yourself. 

In this article, I won’t focus on different frameworks and models, for this, see [this article]. Instead I’ll go through the different types of goals you might be mandated with reaching and then how to go about reaching them. To save you time, I’ve collected knowledge from books, reports, and academic articles to help you create this alignment. 

I’ll discuss five types of business goals and their link to innovation, moving from the more incremental innovations towards bigger strategic innovations. You can easily sift through each section and read the one relevant to you. Are you working on marginal improvements of operation, read section one. Are you disrupting the industry, read section five. 

  1. Internal efficiency coals
  2. Incremental growth goals
  3. Market expansion goals
  4. Building future capabilities goals
  5. Radical Innovation Goals

Matching innovation efforts to types of business goals

Let’s map five categories of business goals and their link to innovation. While you’ll need to tailor these to your organization, this framework can help you navigate how business goals both influence and are influenced by your innovation work.

types of innovation goals

Goal type 1: Internal Efficiency Goals 

(e.g., Cost Reduction, Process Optimization)

Some might not call this true innovation. But who cares? If you’re an innovation manager and it makes sense for your team to focus on creating innovation centered on internal efficiency, it’s totally allowed. Your job here might be to reduce cost, minimize waste, accelerate workflows, and optimize quality. 

When trying to improve internal efficiency, there are a few useful areas to explore. For each, I suggest both where the innovation opportunity lies and how it directly links back to enabling your broader business goals.

Cost Structure Optimization

If you’re mandated with optimizing cost structures, your focus should be maximizing efficiency, profitability, and value. Start by identifying which parts of the cost structure block strategic execution. Break costs into strategic categories: those that directly support revenue growth, those that protect core operations, and those that can be reduced or redesigned without damaging value delivery.

Focus on making internal cost drivers more visible and manageable. To make progress, start by understanding the cost structures that are silently shaping decision-making. Do you have money locked up in siloed teams, duplicated efforts, or unexamined legacy processes? Focus on the big picture of whole mechanisms that can be rethought, rather than going line by line. 

Unit-level transparency, for example cost per transaction, per service, or per internal request can give you better levers than general budgets do.

There’s a reason your innovation team is working on this. So focus not on the jobs that the finance department would do. Redesign high-friction processes, standardize non-core activities, and replace guesswork with data. Your team should work cross-departmentally to fix inefficiencies that pile up into systemic waste.

Ask yourself: 

  • Are there cost-heavy workflows that we haven’t revisited in years? 
  • Are there any duplicated costs or efforts within our workflows?
  • Could shared services or internal service agreements streamline spending?
  • Can unit economics at the process level be modeled more transparently?
  • Could greater visibility into variable costs change how teams make resourcing decisions?
  • Which areas are overfunded relative to their contribution to current or future goals?
  • Where do we lack cost transparency that prevents data-driven prioritization?
  • What internal financial structures prevent reallocation of resources to more important areas?

Doblin’s Ten Types of Innovation framework also has useful pointers for what they call “configuration”: innovation focused on the inner workings of an enterprise. In that lies network, structure, and process. 

Network

Network innovation means improving how internal teams and systems coordinate to deliver value. When connections between departments are slow, unclear, or overengineered, they create structural drag across the organization. That drag often shows up as delays, rework, or duplicated effort, but the root cause is usually in how people and processes are linked.

Focus on making operational dependencies visible. Identify the workflows that require multiple handovers, unclear ownership, or constant alignment meetings just to function. These are the areas where innovation can remove blockers.

Use innovation to simplify interfaces between teams, automate coordination-heavy processes, and reduce handoff failure. Create shared protocols for recurring collaboration points like approvals, resource sharing, or internal service requests. Build visibility around cross-team performance: Where are requests delayed? Where is there no clear SLA? Which dependencies break most often?

Innovation aligned with internal efficiency means removing avoidable complexity. If teams can interact more predictably and asynchronously, you reduce waiting time, context switching, and internal firefighting. The goal is throughput, fewer blockers, and faster delivery on core work.

You can ask yourself:

  • Are internal handoffs between operational teams (e.g., procurement to production, logistics to sales support) slow or error-prone?
  • Can certain non-core processes (e.g., payroll, IT maintenance) be more efficiently managed by outside providers?
  • Could digital collaboration platforms reduce communication friction?

Structure

Structure innovation organizes your core assets like people, capital, and systems to drive lasting value and competitive advantage. By aligning roles, incentives, and resources with core operational priorities, you can reduce friction, eliminate redundancy, and free more capacity.

Start by identifying where the current structure creates drag: overlapping functions, misaligned incentives, or talent that’s trapped in low-leverage roles. Look for underutilized assets like facilities, platforms, or capabilities that could be reconfigured to create more value without requiring major new investment.

In the context of internal efficiency goals, structure innovation ensures your organizational design actively supports operational excellence. It creates an environment where talent is focused on the right priorities, infrastructure is fully leveraged, and internal bottlenecks are minimized thus freeing up resources to be redirected toward growth initiatives.

Ask yourself: 

  • Can cross-functional or agile teams replace siloed functional structures?
  • Are roles and responsibilities aligned with current business priorities?
  • Is there latent capacity in existing infrastructure that’s underused?
  • What underused assets or capabilities could increase throughput if reorganized?

Process

Process innovation means reengineering workflows for speed, accuracy, and cost-effectiveness. Innovation managers have to focus more on building a culture and system where processes are continuously challenged and improved, rather than minor easy tweaks.

Start by mapping your key processes end-to-end. You can use Lean or Six Sigma methodologies to identify non-value-added steps, bottlenecks, and sources of error or delay. The challenge is to reimagine the workflow to eliminate unnecessary approvals, redundant data entry, or outdated technology constraints.

According to Porter’s Value Chain framework, optimizing both “support” and “primary” activities directly strengthens competitive advantage by reducing operational cost and increasing process reliability.

Both continuous improvement (e.g., Kaizen) and step-change transformation (e.g., Business Process Re-engineering) have roles to play. Often, real results require radical redesign followed by sustained refinement.

Ask yourself:

  • Have you mapped and measured key processes for waste and delay?
  • Where can automation or digitalization have the biggest impact?
  • Which processes are constrained by outdated systems or unnecessary approvals?
  • How do your process metrics link to broader business performance goals?
  • Are you building a culture where process innovation is everyone’s responsibility?

Generally helpful metrics for optimizing internal efficiency

Internal efficiency innovation can be defined in many metrics, but some include:

  • Cycle time reduction: time to market, order-to-cash cycle, hiring cycle time,
  • Cost per transaction/process: cost to onboard an employee, cost to process an invoice
  • Error rates: defect density, rework percentage, customer complaint rate,
  • Utilization rates: asset uptime, resource allocation percentage, system capacity utilization, 
  • Time-to-decision / time-to-resolution: time to approve a budget, time to resolve a service ticket, 
  • Employee productivity (e.g., output per full-time equivalent (FTE), transactions per employee), 
  • Throughput (e.g., number of cases processed per hour, units produced per shift), 
  • Compliance adherence (e.g., reduction in audit findings, adherence to regulatory standards), 
  • Internal customer satisfaction (e.g., Net Promoter Score (NPS) for shared services, internal stakeholder feedback), 
  • Technical debt reduction (e.g., number of legacy systems retired, lines of deprecated code removed), and 
  • Resource reallocation (e.g., FTEs freed up for higher-value activities).

Goal type 2: Incremental Growth Goals 

(e.g., Marginal Revenue Increase, Enhanced Customer Satisfaction):

When your business goals focus on incremental growth, your objectives relate to refining existing offerings, channels, and customer experiences to generate measurable gains. This could mean a marginal increase in revenue, better customer satisfaction, or greater share of wallet from your current base. 

I find it useful to unpack Incremental Growth Goals using Doblin’s Ten Types framework, specifically what they call Offering and Experience innovations. These types are typically customer-facing and product-adjacent, aiming to deepen value without fundamentally altering the strategic position of the business.

Let’s unpack the most relevant innovation types as defined by the Ten Types Framework:

Product Performance

If your incremental growth goal is to drive measurable gains by making your current products better, your focus is targeting improvements in features, quality, or usability that will directly impact customer satisfaction, retention, or revenue per user.

I recommend starting by identifying the most critical “value gaps” in your current offerings. 

You can use customer feedback, support data, and competitive benchmarks to pinpoint where your product underdelivers for your best customers. 

It’s important to prioritize changes that address these high-impact gaps and can be tied to a specific business metric, such as NPS, ARPU, or churn. 

For every proposed enhancement you have, make sure you require a clear hypothesis: “If we improve X, we expect Y result for Z customer segment.” 

I like to make pilot improvements through A/B tests or limited launches as a way to filter projects and only scale what moves the needle for my chosen metric. 

Product System

If your incremental growth goal involves increasing share of wallet or deepening customer relationships, your focus is on developing add-ons, integrations, or complementary services that expand the value of your core offering.

I recommend you analyze which current add-ons or integrations have the highest attach rates or drive the most incremental revenue. Then double down on these. 

You can also involve cross-functional teams (product, sales, customer success) to design and test new bundles or integrations that solve broader customer problems. 

To keep it crisp and closely tied to your goals, make sure that every new system extension should be justified by its potential to increase cross-sell, upsell, or retention, directly supporting your incremental growth KPIs. Avoid launching complements that add complexity without clear, measurable business impact.

Service

If your incremental growth goal is to enhance customer satisfaction or reduce churn, your focus is on improving the support, onboarding, maintenance, or return experiences that surround your core product.

I recommend you map the customer journey to identify the most frequent or costly pain points in your service experience. There are countless frameworks for this. 

When you’ve mapped the pain points, then quantify the business impact of them. This can be lost renewals or high support costs and then prioritize improvements that address the biggest problems. 

I’ve seen many companies setting clear internal benchmarks for responsiveness and resolution for example having it as a goal to have a customer-to-onboarding-time of 7 days. 

Channel

If your incremental growth goal is to boost conversion rates or make your offerings more accessible, your focus is optimizing or expanding the ways customers find, buy, or use your product.

I recommend you conduct regular audits of your sales and service channels to identify where customers drop off or encounter friction. You might think you know, but you don’t until you measure.

Then to boost performance, you can run targeted experiments to streamline the purchase or onboarding process and challenge teams to reduce steps, forms, or clicks by a set percentage each quarter. 

If you want to explore channels, you can open up new ones such as chat, social commerce, or partner marketplaces and make some KPIs for acquisition or retention. The chorus becomes the same: only scale what delivers measurable results. 

To ensure you’re goal focused, link every channel improvement to a specific business outcome, such as conversion rate or customer acquisition cost, to ensure alignment with your growth goals.

Brand

If your incremental growth goal is to reinforce loyalty or improve customer perception, your focus is on making strategic refinements to how your offering is positioned and perceived.

I recommend you start by clarifying the “promise” your brand makes to customers in your current markets. You can then audit every touchpoint like communications, service interactions, digital channels, employee conduct to ensure that promise is delivered consistently. 

Incremental brand innovation might seem superficial, but how your brand’s values and identity are expressed can impact how customers see you. This is very important. 

Customer Engagement

If your incremental growth goal is to drive loyalty, reduce churn, or increase customer lifetime value, your focus is on deepening the frequency, quality, and personalization of your interactions with customers.

I recommend you start by digging into the deeper aspirations and unmet needs of your customers, not just their functional requirements, but what they hope to achieve, feel, or become through your product or service.

Use qualitative research like surveys, ethnography, or social listening to uncover what your customers genuinely care about. I cannot highlight how important it is to speak with customers directly. Do not fall for the trap of believing you know them. They will always surprise you. 

Then, design engagement initiatives that help them explore, learn, or connect in ways that feel personal and valuable. For example, create interactive experiences, communities, or content that empower customers to get more out of your offering, or that help them achieve goals beyond the immediate product use. This must take root in what they expressed. 

Those were some common areas of improvement you might want to focus on when mandated with incremental growth goals. In general, with this type of goals, these principles might be useful for you to follow and teach your team: 

Deep Customer Insight: You can use tools like Jobs to Be Done (JTBD) and Osterwalder’s Value Proposition Canvas to understand where your existing offer could be better aligned with evolving needs. Set up a recurring cadence (quarterly, biannually) for structured customer insight reviews, and make sure findings are translated directly into your innovation backlog. Make someone accountable for synthesizing and socializing these insights across teams.

Avoid Feature Creep: Adding functionality that isn’t clearly linked to customer value adds complexity without return. You can create a “feature kill” or “feature audit” process for example: every quarter, challenge teams to identify and retire features or processes that are underused, redundant, or unsupported by evidence of value. Tie every new feature proposal to a specific, testable business outcome.

Align Across Teams: Even small product changes can create internal ripple effects. Ensure that you align with support, marketing, and operations to avoid friction. Before greenlighting any incremental initiative, you can run a short “ripple check” with all affected functions, requiring sign-off or at least visibility from each team. Document learnings from cross-team misalignments and feed them back into your playbooks.

Guiding questions

When working with these goals, your guiding questions should be sharp and customer-focused.

Offering:

  • Can we simplify our core offering to make it more intuitive or easier to adopt?
  • What specific performance attributes (e.g., speed, reliability, usability) matter most to our key customer segments, and how can we demonstrably improve them?
  • Are there opportunities to bundle offerings or create tiered versions that cater more precisely to different sub-segments of our current market?

Experience:

  • Where are the primary points of friction in our current customer journey, and how can we smooth them out?
  • Can we enhance our customer service touchpoints to be more proactive, personalized, or empowering?
  • How can we leverage digital channels more effectively to deepen engagement or streamline transactions for our existing clientele?
  • What small brand refinements could better communicate the evolving value we deliver?

Helpful metrics

While incremental growth innovations often yield subtle results, measurement is still critical. Depending on your focus area, track:

  • Feature adoption rates
  • Customer satisfaction (CSAT) / Net Promoter Score (NPS)
  • Revenue per user/customer (ARPU)
  • Churn or retention improvements
  • Customer support resolution time / complaint volume

Goal Type 3: Market Expansion Goals 

(e.g., New Geographies, Customer Segments, Industries):

When your business has the goal of market expansion, your focus is to grow by offering existing or lightly modified products to new customer segments, geographies, or adjacent industries. 

This means extending the current business model into unfamiliar contexts, often without fully changing the core offering. Unlike radical innovation, you should let your expansion goals focus on scaling the proven value propositions by adapting them to new settings.

I recommend you do a mindset change here. Your job is not changing the product, though it is often the intuition. Instead focus on being translational. Your focus should be on recombining existing capabilities to address new user needs, infrastructures, behaviors, or business environments. The challenge is less about inventing new technologies and more about rethinking the business model to ensure relevance and viability in a new context.

This is a classic scenario for business model innovation, particularly in how companies rework their Channels, Customer Relationships, Revenue Models, and Key Partnerships to succeed in new arenas. Tools like the Business Model Canvas (BMC) and Value Proposition Canvas (VPC) help visualize and structure these necessary shifts. Mapping the current business model clarifies which elements must adapt for a new segment, helping you prevent costly assumptions or misaligned go-to-market strategies.

If you haven’t used the business model canvas systematically before, I suggest you start by mapping out your current business model for your existing products and customer segments. This forces clarity on your current path, making it much easier to identify the specific shifts required when you design a new business model canvas for the expansion opportunity.

For example, imagine an IT company that provides on-premise IT infrastructure monitoring software. Their primary customers are large enterprises in sectors like finance and healthcare. Their current offering is powerful, but it requires significant customization, involves long sales cycles, and needs on-site expert deployment.

To enter the SaaS startup market (a faster-moving, mid-market segment) the company must keep its technical expertise while shifting how it delivers and captures value. They must recontextualise their core competency and adapt their offering for a new delivery model (cloud SaaS instead of on-premise) and a new customer segment (SaaS companies instead of traditional enterprise). This means significant changes across their business model:

  • Value Proposition: From deep customization to ease-of-use and affordability.
  • Channels: From direct sales to digital acquisition and self-service onboarding.
  • Customer Relationships: From high-touch account management to automated support.
  • Revenue Streams: From one-time licenses to recurring SaaS subscriptions.
  • Their Key Activities and Resources: Reoriented toward cloud-native development and scale.

Goal type 4: Building Future Capabilities Goals 

(e.g., Faster Cycle Times, Cross-functional Learning, Experimentation Culture):

When your business is focused on building future capabilities, your innovation focus becomes creating the organizational infrastructure that enables consistent innovation performance. 

I recommend you start by identifying which strategic challenges your organization faces that are fundamentally capacity problems, not resource problems. 

Ask: 

  • Is my company struggling to respond to market changes quickly enough? That’s a sensing and response capability gap. 
  • Are promising innovations dying in the implementation phase? That’s an execution capability gap. 
  • Are different departments unable to collaborate effectively on complex projects? That’s an integration capability gap. 

You can also establish your innovation maturity baseline using frameworks that assess your organization across key dimensions: strategy and intent, practices and processes, values and culture, and support infrastructure. Most organizations discover they’re operating at maturity levels 1-2 (initial to repeatable), when sustained innovation requires reaching levels 3-4 (defined to managed).

Focus on system-level bottlenecks

I believe the more important capability investments address system-level constraints that limit your organization’s strategic execution. These typically fall into three categories:

  1. Decision-Making Speed: How quickly can your organization make and implement strategic decisions? If innovation ideas get stuck in approval cycles or die from analysis paralysis, focus on building rapid experimentation and validation capabilities. This directly supports business agility and competitive responsiveness.
  2. Learning Velocity: How fast does your organization learn from failures and successes? If teams repeat the same mistakes or fail to scale successful innovations, invest in knowledge capture and transfer capabilities. This connects to operational efficiency and risk reduction.
  3. Adaptation Capacity: How well does your organization reconfigure itself when market conditions change? If your company struggles to pivot strategies or reallocate resources quickly, build portfolio management and strategic sensing capabilities. This links to long-term sustainability and market position.

The translation challenge

I see that the biggest challenge with capability-building goals is translation: helping stakeholders understand why investing in “soft” capabilities will deliver “hard” business results. 

To mitigate this, you can try and connect each capability-building initiative directly to a business outcome that leadership finds strategic. For example, instead of proposing “better cross-functional collaboration,” frame it as “reducing time-to-market by 30% through streamlined decision-making processes”. This connection makes the business case self-evident rather than theoretical.

Remember your goal focus: for each capability initiative, articulate: 

  • What strategic execution challenge does this solve? 
  • What happens to our competitive position if we don’t build this capability? 
  • How will we measure progress toward both capability development and business impact?

I like using pilot projects to create proof points. This can save you a lot of time. Start with focused experiments that can demonstrate measurable business impact within 90-120 days. Success here creates momentum and credibility for larger investments.

McKinsey’s research highlights that effective innovation is a sustained strategic asset that prepares your organization, builds resilience, and allows you, if you’re aiming for disruption, to actively shape markets. Setting up and consistently upgrading your system for innovation can be a powerful enabler and a foundational first step towards achieving your broader business goals. This type of work doesn’t always come with launch parties, flashy demos, or press releases. But it’s essential.

Goal type 5: Radical Innovation Goals

(e.g., New Business Models, Redefining Market Role, Disruptive Offerings):

When your business sets radical innovation as a goal, you’re dealing with the hardest alignment challenge. Unlike the other four goal types where you can at least predict some outcomes, radical innovation means you’re trying to connect fundamental breakthroughs to business objectives that your leadership can actually understand and support.

Research shows that if a company strategizes to pursue radical innovation, it must first secure the freedom to deviate from current corporate strategies, yet management must also accept that the two cannot be fully aligned (Søndergaard, Knudsen, Søndergaard, 2021).

Your main challenge is organizational and methodological. Your job is to identify profound market shifts, unarticulated needs, or technological breakthroughs that could redefine your industry or create completely new ones. This requires moving beyond traditional problem-solving to a mindset of foresight, deep discovery, and bold experimentation.

There are millions of pages dedicated to explaining this topic, but I recommend focusing on three core areas that help you focus on the process of radical innovation: 

Research

Your biggest challenge is researching weak signals, emerging technologies, changing societal values, and potential disruptions that could alter your industry or create new ones. Your innovation efforts here should define “future business value” options by actively seeking out and mapping what is possible beyond the current knowledge. This helps leaders grasp the potential scope of a breakthrough, even if its path remains uncertain.

Discovery and needs 

Once you’ve researched potential directions, your focus should shift to understand the human problems behind them. Understanding the customers through ethnography, testing, experimentation, can help reveal the value propositions that can give you the competitive edge. 

Because there’s a big level of uncertainty, you must have a deep understanding of the “why” in investing in these new projects. 

Venturing and experimenting

Because traditional ROI calculations are not as useful for radical innovation, you can treat these ideas as ventures. This means you should experiment and focus on validating or invalidating your core assumptions about the project (technical feasibility, future market acceptance, potential business model viability). 

I recommend you use business model experimentation (using tools like the BMC for entirely new models), rapid prototyping, and strategic partnerships for early R&D.

While you’re focusing on hitting radical goals, you also have to focus on your organisation as it is. Balancing between being ‘free’ from the organisation and having support from them is interesting and sometimes challenging. I cannot stress enough the importance of creating tailored governance and funding models for these types of projects. You want to ensure that leadership is productively involved in your project, not too nosey, not completely detached (no funding). 

Conclusion

As an innovator, it’s important to ensure that you keep the right focus for the right things. With potentially unlimited ideas at your hand, prioritising innovations based on their business value is super important. 

The five goal types: internal efficiency, incremental growth, market expansion, capability building, and radical innovation, give you a practical way to diagnose where you are and focus your team’s energy on the right type of innovation. Each goal type needs different approaches and metrics. Importantly, your job is making deliberate choices about what to prioritise rather than trying to pursue everything simultaneously.

This is just the starting point though. Every innovation, from incremental to disruptive, has their own universes to explore. 

If you have questions or ideas for future articles on specific innovation approaches, reach out to me or anyone at Prelaunch.