A language and framework for innovation
Innovation is the newest of the management sciences and, as with design, there is often confusion around the meaning, and between the process and the outcomes. If you are to be intentional about driving innovation within your organisation, an essential prerequisite is to establish clarity around the language of innovation.
Innovation process
Innovation is the process through which products, services, experiences or ways of working that were not previously imagined, and which create new value for customers, employees, end users or ecosystem stakeholders, as well as for the organisation, are designed and delivered.
Distinguishing ideas, invention and innovation
If you can generate new ideas you are creative. Every one of us is born creative. Ideas are plentiful.
If you can develop those ideas into new products or services you are inventive. Unfortunately, a lot of effort is expended creating products and services that nobody wants.
If you can invent new propositions and experiences that create new value for customers, stakeholders or society, and a business model that both delivers and captures value for your organisation, you are innovative.
Innovation outcomes
Creating new value requires identifying the problems that matter to your customers and stakeholders and exploring these using a disciplined process to deliver elegantly designed solutions. Leading innovators pursue a portfolio of innovation initiatives, strategically aligned to their innovation ambition and weighted to their capability.
Distinguishing different levels of innovation ambition
The greater your innovation ambition and the more aspirational your north star, the greater is the need to develop your innovation capability, to reduce the risk inherent in the discovery and realisation of higher returns.
Core innovation results from introducing changes to optimise the performance of your current business model. The focus is on improving the efficiency and effectiveness of your operations and the performance of your existing products and services.
As it involves exploiting what you are already good at, core innovation is generally low risk to pursue and within the capability of most established large organisations. Continual process improvement programs are a part of this bucket.
Adjacent innovation results from the development of new products, services, or entrance to new markets, but also from the introduction of new elements the augment your current business model. The focus is on sustaining growth over time.
As adjacent innovation derives from exploring precedents that exist outside your organisation, you have data to guide your effort. Whilst inherently riskier, it holds the potential for greater rewards. Your internal capability may need support as adjacent innovation requires stepping beyond what is known to them.
Transformational innovation is the result of the successful exploration and invention into and design of new business models in arenas beyond the traditional boundaries of an organisation. It is a higher risk endeavour that can be de-risked through the application of a disciplined process, and which, within a carefully managed innovation portfolio, can deliver outsize, breakthrough returns. It is the key to avoiding disruption and assuring long term prosperity.
Pursuing transformational innovation requires an entirely different skill set, mind set and operating model. This is the frontier of start-up entrepreneurship, where uncertainty pervades every aspect of the proposition and the business model. Your team will almost certainly need the support of dedicated innovation professionals.