When was the last time you saw the word innovation? Ten minutes ago? The fact is, there are many different types of innovation but they’ve all been bucketed into one big category. In other words, many people struggle with what innovation means.
We’re here to help.
We believe that ideas fall on a scale that looks like this:
When we talk about innovation, we end up referring to all these different ideas as “innovation” which makes it pretty hard to have a clear definition of what “innovation” actually is. Here’s a quick, non-exhaustive list of terms we see associated with innovation:
- Continuous Business Improvement
- Six Sigma
- Frugal Innovation
- Hacking or Hackathon
- Design Thinking
- Blue Ocean
- Open Innovation
- Disruptive Innovation
However, if you dissected all of these different types of innovations, you would still be left with 3 requirements that apply to all types of innovation.
Let’s look at each of these individually:
Innovation starts with a new idea. This could be a completely original idea, using an existing idea in a novel way or an incremental improvement to an existing idea. Ideas can fall anywhere on the scale for innovation to happen.
Value can also come in different forms but ultimately, value is a positive result or impact. For a business, value may include things like increased revenue, decreased cost, increased market share, time-savings or increased engagement.
Execution is the difference between an idea the would create value and an idea that does create value. Most companies miss this part of innovation. From our experience, it’s not generating ideas that is challenging but actually implementing the ideas to create value that defines innovation.
However you choose to define innovation, just having good ideas is not enough. Execution is the most important ingredient in innovation.
No one ever innovated by sitting on their brilliant idea and twiddling their thumbs.
We have arranged our definition into a Venn diagram (who doesn’t love a good Venn diagram?) to show you how the different components work together and overlap.
Now let’s take a look at some of the overlapping sections:
Everyday, employees perform tasks, follow routines and execute processes that create value for the organization. These processes are established, documented and well understood. In essence, operations are the regular processes in an organization that create value but are not the result of a new idea.
Have you ever had an idea that you knew would produce amazing results? That is what we call potential. Potential refers to a new idea that could provide value, if executed.
Learning occurs when new ideas are executed but do not create value. While there is value in learning itself, to qualify as innovation the newly gained knowledge from learning must be executed and more importantly, the value must be captured.
Of course at the very center is innovation that uses all three components, new ideas, value and execution.