What innovation means: a short report

The word innovation is used in so many different ways that I had to sit down recently and categorize them for writerly sanity (An oxymoron for sure). Here’s the short report:

Innovation means:

A New idea: Innovative = creative thinking. It doesn’t have to necessarily be a good idea, or something that can be made into a product, just interesting, different or creative.
A New + Good idea: an innovation has to be new, but also good or better than previous things in some way. Something can be innovative in concept, before it’s a product or a tangible, usable thing.
A kind of product: Some people seperate ideas from innovations and they draw the line at products. To be an innovation means you not only have an idea, but successfully deliver it to the world as a product. It’s not an innovation if it isn’t out in the world in someones service. So you can take someone else’s ideas, and if you’re the first to make a product out of them, you’re an innovator (e.g. Edison and the lightbulb, Apple and the iPod).
A kind of successful product: Some business books mark new ideas that fail commercially as below the innovation bar. So the Apple newton and The Apple Lisa, wouldn’t qualifiy as they were commercial failures. But the Macintosh and the ipod qualify as innovations.

I’m not saying any of these are right or wrong, only that this is usage I’ve seen. Things get even messier when people talk of innovative organizations (another popular trend). Here, innovation means one of three things:

Results: An innovative organization is one that produces innovations (whichever definition you pick from the above). Think of research labs or teams of people directed to create new products.
Processes: It’s not the results that are necessarily innovative, but the way the group goes about doing it’s work is. So a bank might still use U.S. currency and offer loans, but the way they organize or make decisions is creative, new or different. Of course it is possible to have both innovative processes and results (e.g. IDEO).
Strategies: Books like Seeing what’s next and Dealing with Darwin, aimed at executives, offer ways to think about business and beat competitors. Innovation is driven at the management level and on strategic terms (Results/Processes are generated, or not, by strategic choices).

What does all this mean?

I keep asking the following question: when in the history of business has there been a time when innovation wasn’t important? Never. There has always been competiton and greater rewards for people who could execute on better ideas for things.

If you agree, then why has the term, as fragmented as it has become, grown so popular? and what does this means for popular perception of what innovation is, and how it happens? And did I miss any common uses of the word innovation?

(Note: there should be a law against using a picture of a light-bulb when talking about ideas. Is there a greater innovation cliche? Sigh.)

Posted Wednesday, July 5th, 2006 at 2:22 pm

in Innovation, Management | 12 Comments » |

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Scott (admin) - July 5, 2006 at 4:12 pm

More definitions from wikipedia:

1. the process of making changes to something established by introducing something new
2. the act of introducing something new: something newly introduced (The American Heritage Dictionary).
3. the introduction of something new. (Merriam-Webster Online)
4. a new idea, method or device. (Merriam-Webster Online)
5. the successful exploitation of new ideas (Dept of Trade and Industry, UK).
6. change that creates a new dimension of performance Peter Drucker (Hesselbein, 2002)

Richard Kuo - July 5, 2006 at 8:11 pm

From my notes on a presentation at SnapStream:

The definition of innovation, according to Peter Drucker, is “Purposeful and focused changes that create new or enhanced potential for creating wealth.”

Alexander Schmid - July 5, 2006 at 11:04 pm

Hi Scott,

you are right with: “when in the history of business has there been a time when innovation wasnÃ¢â‚¬â„¢t important? Never.” But in my opinion that is not the point. Never in history there was more inovation than today (my subjective view ;-). In the past you could win over a competitor when you have a new brilliant idea. Today if you are not producing inovation day by day you are out of business.

In the past someone who build horse carriages had a business that lived for centuries (without great inovations). Today a car manufacturer that always hasn’t the newest technologies will be out of business in just a few years.

So the impact of inovation might be the same, but the frequency changed the game completely…

Ciao Alex

Allen Eskelin - July 6, 2006 at 10:02 am

Innovation can also be a double-edged sword. Too much focus on innovation can cause you to miss opportunities in your current business/products. It’s not always necessary to have a new idea. Sometimes it’s better to just do more of what’s already working. Take Starbucks for example. Their stores are vitually the same as they were 15 years ago. They’ve dabbled in innovation but their primary focus has been in multiplying what’s already working for them (building more stores). Every dollar spent on innovation takes a dollar away from opening a new store. So I think innovation is necessary to discover what works but it shouldn’t be placed ahead of capitalizing on what’s already proven to work.

Kevin Morrill - July 6, 2006 at 11:23 am

There is a great book not cited yet called “They Made America” by Harold Evans about innovation.

I learned an important lesson reading that book about separating invention and innovation. It’s fabulous to come up with a new idea, but it’s a whole new step to take it into the marketplace successfully. Evan’s points out people who do this really well find a way to systematize. Edison recognized the lite bulb wasn’t going to be very useful unless he lobbied for the right electrical grid. Apple realizes it’s great to have a cleanly designed MP3 player, but it won’t really take off until there is a smooth end-to-end experience, including shopping for music, that the player fits into. My favorite example is actually a guy (name escapes me) who mentions who invents some farming equipment, and realized none of his customers can afford to buy it until they get to use it. He ends up being one of the first pioneers to sell his product on a credit installment plan.

Peter Kua - July 11, 2006 at 7:48 am

Many people fail to merge “great ideas” with “time to market”. They usually equate innovation with “great ideas” without taking into consideration actual product development. So your article aptly covers all vital aspects of innovation. Well written!

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