What is Innovation?

September 3, 2020

If you asked 10 different people to define innovation, you’d get 20 different responses.

It’s one of those things that seems simple to define and understand but turns complicated when you’re pressed for specifics. It’s no wonder. Innovation has turned into one of the biggest cliché words executives use to talk about how they differentiate their companies and lead industries but never actually define or explain. The truth is, we don’t have a common, agreed-upon definition of innovation. That’s because people have a hard time understanding and recognizing it, much less defining it.

Let’s take a look at some of the definitions from industry experts:

We define innovation as creativity plus delivery, helping our clients transform their innovation performance by focusing on four requirements for innovating at scale: strategy, pipeline of ideas, execution, and organization.
McKinsey & Company

Innovation is the process through which value is created and delivered to a community of users in the form of a new solution.
Fast Company

…an approach…that addresses a major imminent want or need that people have, [something] they know they want or need or that they will want or need once we provide it.
George Damis Yancopoulos, president of Regeneron Laboratories and chief scientific officer of Regeneron Pharmaceutical

Innovation generally refers to changing processes or creating more effective processes, products and ideas.
Department of Industry, Australian government

An innovation is a feasible relevant offering such as a product, service, process or experience with a viable business model that is perceived as new and is adopted by customers.
Gijs van Wulfen, author of the FORTH innovation methodology

Can you actually tell me what innovation is after reading those definitions? I can’t, and I make a living in this line of work!

Innovation is an amazing thing that can have a tremendous number of benefits, but does anyone really know what it is? I’m guessing that even if you had your company’s definition in front of you, you’d still feel confused.

This is because people have a hard time explaining something they don’t understand themselves.

The difference between innovation and creativity

For example, most people confuse innovation and creativity. They think they are synonymous, but that’s because they misunderstand the relationship between them. It’s especially important for business leaders who compete in an innovation-driven world to get the difference, because it’s a huge deal when it comes to a company’s culture.

Creativity

Most of us think of creativity as a unique talent that relates to art—the ability to paint, sculpt, draw, compose music, or do anything that’s expressive. More broadly defined, creativity is the mental ability to imagine new, unusual, or unique ideas.

The Creativity Research Journal points out that originality is vital for creativity, but it’s not enough. For me, creativity is bringing a new perspective to anything and having it add value. Investing in creativity is almost a loss leader—it won’t make money as soon as you invest in it. But six months down the road, you’ll begin to see a change in the performance of both employees and your overall company for having encouraged it.

Innovation

Not only is this a confusing word, but it’s also intimidating because of how it’s thrown around in business today—especially disruptive innovation.

The distinction between creativity and innovation is important because one can’t exist without the other in any environment. It’s impossible to develop a truly innovative company if creativity isn’t recognized, appreciated, and nurtured. And without effective processes to transform creative thinking into practical, high-value applications, creativity doesn’t mean squat.

Yet, when people think of both of these topics, they think of creativity as optional and innovation as a business necessity.

To be fair, there’s a lot of pressure on the C-suite to focus on innovation. As the world adopts new, fast, and frequently changing technologies, businesses scramble to keep up through digital transformation and changing customer expectations. Execs want to prevent customer churn and revenue slumps. Boards of directors demand agility and efficiency, and they have keen memories of the Kodaks, Borderses, and Polaroids of the world who failed to keep pace with change. They look at the likes of Amazon and Netflix and see that innovation is where the money is. The fact that it’s not happening either quickly or consistently means that it has to be hard to understand, right? There’s no CEO or executive consultant who would last a day if they didn’t tell the story of how they, personally, understand the complexity, complicated processes, high-dollar investments, and bloated teams that make it a reality.

How to define innovation

Innovation isn’t actually complex at all—once you stop trying to make it that way. Here’s the definition of innovation that I’ve developed over more than 20 years of doing this work.

Innovation is about consistently coming up with new, great, and reliable ideas.

It doesn’t matter where in the organization you work, what your title is, or how long you’ve been there. An innovation culture understands why you need all three of these attributes to be successful. When you only have one, your approach to innovation isn’t sustainable.

Let’s take a look at the characteristics of new, great, and reliable ideas.

New Ideas

Look at the news from any business media outlet and you’ll see that every company is being told to innovate. Experts tout executing on new ideas as the savior for bigger market share, bigger customers, and bigger revenues. That’s music to every shareholder’s ears.

However, when companies hunt for new ideas for the sake of new ideas, their efforts invariably fall flat. Coca-Cola tried New Coke before rebranding it Coke II and going back to the original recipe. Myspace tried moving into entertainment and music after users jumped ship for Facebook. Colgate launched a line of frozen foods (Colgate beef lasagna anyone?). Bic tried extending its brand into disposable underwear and pantyhose. Frito-Lay made a Cheetos lip balm. Swedish weapons manufacturer Bofors added toothpaste to its product line. Harley-Davidson tried its hand at cologne. R.J. Reynolds found its smokeless cigarettes a tough sell, especially when the company’s own CEO said, “It tastes like shit and smells like a fart. We spent $350 million and ended up with a turd with a tip.”

People think coming up with new things is the answer to business growth without understanding why or even if they should create new things in the first place. We think new = good simply because it’s new. A lot of innovation is actually just coming up with a new idea, assuming it’s good because it’s new, and then watching it crash and burn.

A new idea can be something completely disruptive, like personal computers, video streaming, or smartphones. But to be a new idea, it doesn’t have to be completely revolutionary. It can simply take the essence behind another successful idea and massage it to fit in a new, yet drastically different, environment. For example, the BMW iDrive system was inspired by the video controls from the gaming industry. Retired aeronautical engineer Owen Maclaren used the idea of an airplane’s retractable landing gear to develop the first lightweight foldable baby stroller. McDonald’s based its drive-through design on the principles of a fast Formula 1 pit stop. A new idea simply needs to go beyond the same old thing that’s always been done and bring in fresh inspiration from the outside world. At its root, a new idea is something that’s unexpected.

But truly innovative companies understand that being new is just one aspect of a successful idea.

Great Ideas

A great idea makes you feel really good. It inspires you, gets you excited, and engages you emotionally. It has a big wow! factor. David Ogilvy describes great ideas as the ones that make you gasp when you first see them and make you jealous you didn’t think of them yourself. Whether people realize they needed the idea or not, it creates appeal and excitement.

I’ll be honest, great is much more of a subjective term than either new or reliable.

A great idea is something that people actually want. The business landscape is awash with ideas that seemed revolutionary but ended up failing because there was no value to be delivered (or the value didn’t match the price tag), and therefore there wasn’t a market demand.

We were once big fans of brands that are long gone. AOL was an early pioneer in the mid-1990s of using the internet to connect people. As the first company to open up access to the internet en masse, AOL was the most recognized brand on the web in the United States. The PalmPilot helped people organize their lives. It was the first true personal digital assistant and sported a touch screen, stylus, and apps that helped you manage your calendar and tasks and synced with your desktop computer. Of the original handful of social media sites, Myspace had the greatest popularity and influence. MapQuest was the first commercial mapping service that let people pitch their oversized atlas. TiVo gave people freedom from their TV with the ability to pause, rewind, and record TV. All were incredibly innovative in their prime. But when’s the last time you talked about any of them other than as the butt of a joke?

Coming up with an idea that’s a great idea is the first step. However, if the only redeeming quality of your idea is that it’s great, your innovation strategy won’t last. You’ve seen companies like these come out of the box and experience amazing, huge success.

Everybody went crazy over them…but they had one great idea. That’s the best they ever did, and their shooting star quickly fizzled.

It’s not enough for an idea just to be great. You have to be able to rely on it for the long run.

Reliable Ideas

A reliable idea is one on which you can build your business. It will make your company money. It doesn’t matter how cool or exciting your idea may sound, if it’s out of scope for your business, it’s not the direction you should go, or if doesn’t tie into the purpose of your company, then it’s not feasible.

You can execute a reliable idea. It contributes to the growth of your organization and has a cost benefit. This could be in generating revenue, saving money, using resources (people, time, equipment, etc.) more efficiently, or any other way of delivering financial value.

Reliable ideas also have longevity. There’s the telephone in all of its iterations. Portable music players and being able to carry a thousand songs in your pocket, as Apple showed us, or the ability to Shazam a tune. Think of how the travel industry changed when people could book airline and hotel reservations directly. All of these ideas have endured the test of time.

There are a lot of ideas we wouldn’t rely on (flashing back to Colgate’s frozen lasagna meals). To be considered innovative, you must to deliver ideas that people can trust will turn into something that delivers the results you want.

But reliability in and of itself isn’t enough to make your company innovative. There are business that have one highly reliable idea, and then over time they just cling to that success. After their initial boom, they never really come out with anything new. Every other idea turns into just a slightly different twist on their first success. Companies like Blockbuster and Sears were guilty of this. They both had ideas that served them well for decades, but ultimately that wasn’t enough to withstand changes in either of their industries. The glory days were too great to let go of, so they never did. And we know how those strategies worked out.

People say coming up with ideas is the easy part. It’s the execution that makes or breaks innovation. I beg to differ. I believe the reason most ideas are so hard to implement is because they don’t have all three aspects of success: being new, great, and reliable.

A new idea surprises and delights people because it’s unexpected.

A great idea inspires and excites you.

A reliable idea makes you money.

Our task is to consistently come up with new, great, and reliable ideas.

The Perpetual Innovators

When all three of these criteria come together in ideas on a consistent basis, you have what it takes to build an iconic, innovative company. I call these brands and the people behind them Perpetual Innovators.

Perpetual Innovators have a consistent track record of new, great, and reliable ideas. Organizations that are persistent and open to new things welcome experimentation. They understand that every new idea has a height that plays out, and that’s when they identify the next opportunity. They’re able to deliver innovative ideas consistently over a long period of time—decades or even centuries. They get people—both employees and the outside world—excited about what they do, because others want to see what comes around the next corner. These are the Amazons, the Googles, and the Teslas of every industry. They’ve made perpetual innovation something that’s an innate part of their culture.

Look at Netflix, one of the most successful Perpetual Innovators in the history of business. It started as a front-door DVD delivery service that rivaled movie-rental stores like Blockbuster. As a Perpetual Innovator, the company has grown through subscriptions to a physical product to subscriptions to a streaming one. It wooed a team of writers and developers so it could deliver original content. The brand created prestige and credibility for itself through shows like House of Cards and Orange Is the New Black. Netflix continually innovates the experience with new, great, and reliable ideas that remove pain points before subscribers realize they exist.

Don’t want to click to watch the next episode? No problem—Netflix now has a six-second countdown that takes away the need to decide. Too impatient to sit through the trailer on each episode of your favorite show? No problem—just click to skip the intro. Through consistent, perpetual innovation, Netflix has revolutionized the way people watch movies and TV shows.

Innovative companies like Netflix—the Perpetual Innovators—do this because the leaders of the organization and the employees who work there have a clear definition and understanding of innovation.

Photo credit: ar130405 on Pixabay

About Carla Johnson

Image

Carla Johnson is a world-renowned storyteller, an entertaining speaker, and a prolific author.

Over the last two decades, Carla has helped architects and actuaries, executives and volunteers, innovators and visionaries leverage the art of storytelling to inspire action. Her work with Fortune 500 brands has served as the foundation for many of her books.

In her latest project, Fast Forward Files, she contributes to a larger collection of thoughts by some of the world’s greatest minds -  Shazam co-founder Dhiraj Mukherjee, activist and entrepreneur Heather Mills and behavioral designer, technologist and mental-health champion Peter Trainor. Consistently named one of the top influencers in B2B, digital and content marketing, Carla regularly challenges conventional thinking. 

Today, she travels the world teaching anyone (and everyone) how to cultivate idea-driven teams that breed unstoppable creativity and game-changing innovation.