Find out how industry experts define innovation and why they believe it’s critical to every company’s long-term success.
Innovation. Every company wants it. Entire books have been written about it. Scores of business consultants make their living off it. And the press are always applying it as a label to whatever product, company, or idea is hot at the moment. But the use of the term ‘innovation’ to describe so many different things has pushed the concept dangerously close to becoming nothing more than an overused corporate buzzword with no real meaning. And meaning matters.
Knowing the definition of a concept gives us a target at which to aim our efforts. Without a clear understanding of what ‘innovation’ actually is, we won’t know how to get there, how to measure our progress toward the destination, or even what the destination looks like. (This holds true even if ‘innovation’ isn’t an endpoint, but in reality a process.)
INNOVATION: NEW, USEFUL AND REAL
What is the definition of ‘innovation’? In her book Collective Genius, Dr. Linda Hill, the Wallace Brett Donham Professor of Business Administration at the Harvard Business School, and her co-authors describe innovation as “the creation of something both novel and useful.” And that specific ‘something’ can be a product, service, process, business model, or even a novel way of organizing. Innovations can big or small and occur via a breakthrough or incrementally.
Dr. Darin Eich, founder of InnovationLearning.org and author of Innovation Step-by-Step: How to Create & Develop Ideas for your Challenge, also uses the concepts of newness and usefulness to define innovation, but takes it one step further. “An innovation is a high-impact new idea that was developed and brought to life in response to a challenge,” Eich wrote. “An innovation could be for a product, service, technology, communication, method, application, or new and better way of doing something.” And that innovation can be built off something that already exists or be completely new. Eich likes to define innovation so that it’s accessible to anyone and the unique challenges they face.
So, innovations must be new and useful. Anything else? Yes. There’s at least one more concept we should add to our definition, and it’s a big one. Innovations must also be real. According to venture capitalist and speaker Terry Jones, “creativity is about thinking up new things, innovation is about doing them.” Jones, who was also the founder of Travelocity, founding Chairman of Kayak and Chairman for Wayblazer, told me that it’s all about putting ideas to work. “I hold four patents but they are not innovations, only paper on a wall, as the company I worked for never reduced them to products!”
I know defining innovation as something that’s new, useful and real might seem overly general and meaningless, but the work of Hill and her colleagues shows otherwise. “The leaders we studied,” Hill told me, “wisely defined innovation in broad terms as well, which sent a message to their teams that innovation is not the sole province of one group or function — it can come from anywhere in the organization.”
INNOVATION IS ALSO NECESSARY
Now that we have a better understanding of what innovation is, we must ask ourselves if it’s actually something we should work toward. Answering this question is critical, because building a culture of innovation within an organization is often a difficult process, especially for companies that don’t have a history of fostering creative behavior or following through on new ideas. So, is innovation critical to a company’s success?
“Even very traditional organizations are starting innovation initiatives because they know their future growth depends on it,” Eich told me. IT and business leaders agree. In a 2015 Tech Pro Research study, over 90 percent of respondents said innovation was ‘very important’ or ‘somewhat important’ to their company’s success right now. An even greater number (95%) said the same when thinking about the success of their company over the next five years.
“Most companies will have to be more innovative whether they like it or not because new technologies, methods, trends, and business models are transforming multiple industries,” Eich continued. “These changes or new innovations have ripple effects, sometimes in a disruptive or game changing way, that cause non-innovative companies to have to respond or wither.”
Jones echoed the importance of innovation for a company’s future growth. “Innovation is critical to any company’s success if they are in it for the long term,” he wrote. “And the long term today is getting shorter and shorter. Consumer tastes and technology are pushing companies to innovate at a quicker and quicker pace if they mean to stay relevant to the market.”
Innovation must also be a continuous process. A single innovative product or service does not ensure long-term success. Companies, like popstars, can be one-hit-wonders. “There is no question that innovation can drive success, but in today’s rapidly changing and uncertain world, it actually takes more than a breakthrough to sustain competitive advantage,” Hill said. “What will really set a company apart is if it can innovate not just once, but time and again.”
“That is why we admire innovators like Tesla, Apple, Google, Amazon, Netflix, and even our local coffee shop or design firm who is committed to adding value for its customers in new ways,” said Eich.
WEAVING INNOVATION INTO THE VERY FABRIC OF YOUR COMPANY
Armed with a definition for innovation and the knowledge that it is critical to one’s long-term success, organizations must take the next step, which is building a culture of innovation. And this is when the real work begins, because organizations can’t just spend their way to successful innovation.
Corporate leaders must manage innovation as a core business function. They must put policies and practices in place that cultivate innovation. They must provide adequate resources for the process. And most important, leaders can’t become roadblocks.
“Many of the challenges we now face as a global community are so complex that organizations also need to become skilled at building innovation ecosystems that can cut across industries and even sectors,” Hill said. “In order to do so, we need to rethink much of what we have previously learned about leadership.”