The creative genius inventing something that changes the world? A hidden lab shrouded in secrecy and security? A race to see who can implement an emerging technology the fastest? Probably a bit of each, but it is not just about groundbreaking inventions or scientific breakthroughs; it's a mindset, a way of thinking that challenges the status quo, seeks improvements, and fosters creativity in all aspects of life.
At its core, innovation is about finding novel solutions to existing problems or creating entirely new possibilities. It involves looking beyond the ordinary, questioning conventions, and being open to change. Innovation is not limited to technology, rather it encompasses every facet of human existence, from art and culture to business and science. It is what transforms imagination into reality.
What does this mean in practice though?
Innovation tends to be this thing that people talk about with so much emphasis, importance, and aspiration, but it can be defined in so many ways that its very definition starts to become incoherent.
Adding to the confusion are numerous white papers and headlines with broad statements like 80% of companies now rank innovation as a top-three priority, and 66% of companies plan to increase spending on innovation initiatives. Innovation now lends such a massive advantage that it begets more innovation.
So I’ll get more innovation if I make sure it’s important and spend a lot of money on it?
But what is ‘it’?
Coming back to the idea of innovation being a mindset, I believe ‘it’ can be categorized in three different ways:
Innovation as ‘Types’
Innovation as ‘Characteristics’
Innovation as ‘Outcomes’
1 - Innovation as Types
When we consider innovation as a ‘type’, what we are talking about is where this mindset is applied in the business. Harvard Business School describes innovation as the following types:
Product or service innovation: This focuses on creating a new product, service, or product feature. Examples range from the internet to the pivoting head of Gillette razor blades.
Process innovation: This refers to changes made to make a process more efficient. For example, assembly lines were a breakthrough in manufacturing.
Business model innovation: This is when you transform business operations. Ride-sharing platforms, such as Uber or Lyft, are an example of this. They took the taxi and car service companies’ business model and altered it to a peer-to-peer, digitized model.
2 - Innovation as Characteristics
When we talk about innovation as ‘characteristics’ we are talking about the alignment, communication, and belief in principles that drive innovative behavior. McKinsey defines innovation through the following characteristics:
Aspire: Do you regard innovation-led growth as critical and do you have targets that reflect this?
Choose: Do you invest in a coherent, time and risk balanced portfolio of initiatives with sufficient resources to win?
Discover: Do you have differentiated business, market, and technology insights that translate winning value propositions?
Evolve: Do you create new business models that provide defensible and scalable profit sources?
Accelerate: Do you beat the competition by developing and launching innovations quickly and effectively?
Scale: Do you launch innovations at the right scale in the relevant markets and segments?
Extend: Do you win by creating and capitalizing on external networks?
Mobilize: Are your people motivated, rewarded, and organized to innovate repeatedly?
3 - Innovation as ‘Outcomes'
In our opinion, talking about innovation as ‘outcomes’ is the most impactful. It grounds ideas and initiatives against the three things that are critical to success - the customer, the business, and the technology and services that bring the two together. Typically credited to IDEO in the early ‘00’s, innovation is described as the overlap of these three outcomes:
Desirability: What’s the unique value proposition? Do people want this product or service? Does it make sense for them?
Feasibility: Does this work? Is it functionally possible in the foreseeable future?
Viability: Can we build a sustainable business? What has to be true for this business to work? What are the costs? How will you pay for it?
By thinking about innovation as either a Type, set of Characteristics, or Outcomes, what is easily ambiguous becomes much more focused and actionable. It allows organizations and teams to come together around a shared vision and take the steps necessary to turn that vision into a successful reality.
Innovation is the driving force behind human progress. It has shaped our past, and it holds the key to our future. As we face an ever-changing world with complex challenges, the importance of innovation cannot be overstated. Whether it's in the form of groundbreaking technologies, social initiatives, or new business models, innovation is the compass that guides us toward a brighter and more promising tomorrow. It is up to individuals, businesses, organizations, and governments to foster an environment where innovation can flourish and continue to reshape the world for the better.
It’s no surprise, many small and mid-market organizations struggle with innovation. The culture needed, and the methods required to enable these programs can be outside of the capabilities of these teams, simply from lack of exposure. Engaging a partner can be an ideal approach to help initiate and facilitate these efforts. If you’re beginning to explore ways of kick starting new ventures within your organization, reach out to us. We can help.