What is innovation?

People have so many assumptions that it was even become part of buzzword bingo. We have selected a few attempts that we consider rather succesfull of trying to define innovation.

wikipedia.org/wiki/Innovation

The term innovation means a new way of doing something. It may refer to incremental, radical, and revolutionary changes in thinking, products, processes, or organizations. A distinction is typically made between Invention, an idea made manifest, and innovation, ideas applied successfully. (Mckeown 2008) In many fields, something new must be substantially different to be innovative, not an insignificant change, e.g., in the arts, economics, business and government policy. In economics the change must increase value, customer value, or producer value. The goal of innovation is positive change, to make someone or something better. Innovation leading to increased productivity is the fundamental source of increasing wealth in an economy. (source: wikipedia)

Disruptive technology by Clayton Christensen

Let’s rely on our gurus. Clayton Christensen lays out three points that helps identify a disruptive technology:

  1. Disruptive products are simpler and cheaper – they generally promise lower margins, not greater profits.
  2. Disruptive technologies typically are first commercialized in emerging or insignificat markets.
  3. Leading firms’ most profitable customers generally don’t want, and indeed initially can’t use, products based on disruptive technologies.

Therefore, a disruptive technology is initially embraded by the least profitable customers in a market. Hence, most companies with a practiced discipline of listening to their best customers and identifying new products that promise greater profitability and growth rearely able to build a case for investing in diruptive technologies unitl it is too late.

The fear of cannibalizing sales of existing products is often cited as a reason why established firms delay the introduction of new technologies.

Christensen then elaborates another list, five fundamental principles of organizational nature that managers in successful firms consistently recognized and harnessed. The firms that lost their battles with disruptive technologies chose to ignore or fight them. These principles are:

  • Resource dependance: Customers effectively control the patterns of resource allocation in well-run companies.
  • Small markets don’t solve the growth needs of large companies.
  • The ultimate uses or applications for disruptive technologies are unknowable in advance. Failure is an instrinsic step toward success.
  • Organizations have capabilites that exists independently of the capabilities of the people who work within them. Organzations’ capabilities reside in their process and their values – and the very processes and values that constitute their core capabilities within the current business model also define their disabilities when confronted with disruption.
  • Technology supply may not equal market demand. The attitributes that make disruptive technologies unatractive in established markets often are the very ones that constitute their greatest value in emerging markets.

(source: The Innovator’s Dilemma – Clayton Christensen).

Innovation powered by Guy Kawasaki

Guy Kawasaki, ex-Apple evangelist and current Twitter leader is another great source for the definition of innovation. Here’s how Guy defines innovation:

Innovation is creating something before people know they need it. The process involves building upon the work of others—a.k.a., “copying,” grinding it out, and deleting what doesn’t work to jump to the next curve.

Innovation isn’t a lightning bolt of inspiration in the middle of a muse. More often than not, it’s a process of grinding, cogitating, and doubting. There truly is no shortcut to innovation. Over the course of a career, you come up with dozens, if not hundreds of ideas, and reject most, try some, and you are lucky if handful succeed.