Everybody in business and politics knows that innovation is vitally important, yet companies still struggle to innovate on a continual basis. One of the reasons for this is that there is considerable confusion about what innovation is (its definition); the vocabulary of innovation; and innovation’s associated constructs. The following facts about innovation help reduce some of this confusion:
- innovation is the profitable implementation of ideas
- innovation is a multi-dimensional construct.
- an innovation can be described by type (process, product, service, business model, value, market, brand, price, channel etc.).
- and degree (incremental, semi-radical, radical, transformational etc.).
- an innovation can be described as a user innovation (the developer benefits by using it) or
- a manufacturer innovation (the developer benefits by selling it to a market).
- a definition will emphasize a particular unit of analysis (e.g. task, project, individual, group, SBU, firm, region, or nation).
- a definition can, therefore, take a broad or narrow perspective.
- a definition can take a supply- or demand-side view.
- viewing innovation as either product or process, while useful, is overly simplistic.
- a sustaining innovation can be radical or incremental.
- a disruptive innovation, by contrast, emphasizes a dimension of a product that incumbent firms’ most profitable customers don’t especially value.
- the same author may use a number of different definitions, depending on which dimension is being discussed.
- innovation can also be viewed as attitude: “There must be a better way.”
Understand the above and you will be well on your way to understanding innovation and making it happen at your own organization.