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 is the process through which products, services, experiences that were not previously imagined, and which create new value for both consumers, stakeholders and the organisation, are designed and delivered.
Distinguishing ideas, invention and innovation
If you can generate new ideas you are creative.
If you develop those ideas into new products or services you are inventive.
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 innovtaion 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 making incremental changes to optimise the performance of existing products for existing customers, and exploiting current business models. They are generally low risk to pursue, and within the capability of most established large organisations.
Adjacent innovation results from the development of entirely new products, services, or entrance to new markets, and making changes to your current business model. These are inherently riskier, holds the potential for greater rewards, but is considerably harder. Precedents exist outside the organisation to guide your effort, but your internal capability very often needs support.
Transformational innovation is the breakthrough result of exploring and inventing into entirely new arenas. These are the high risk bets within a carefully managed innovation portfolio that can deliver outsize returns. This is the frontier of start-up entrepreneurship, where uncertainty pervades every aspect of the proposition and the business model. For established organisations, building the capability to pursue transformational innovation whilst concurrently sustaining the core is both a huge challenge and the key to long term prosperity.