Defining Innovation
If you ask ten people to define innovation, you will likely get ten different answers - "new technology", "a big idea", "disruption", "creativity". This vagueness is a problem, because a practice you cannot define is a practice you cannot manage. So let us begin with a precise, working definition that we will use throughout this entire course.
Innovation is the successful realisation of new value. It is something new (novel) that delivers real value and is actually adopted in the world. New + valuable + adopted - remove any one and it is no longer an innovation.
Unpacking the three parts
New (novel)
It represents a meaningful departure from what came before - new to the world, the market, or at least the organisation. Novelty alone, though, is not enough.
Valuable
It solves a real problem or meets a real need - creating value for customers, users, and the business. Value is what separates innovation from novelty for its own sake.
Adopted (realised)
It is actually taken up and used in the real world. An idea sitting in a drawer, or a product no one buys, has not yet crossed the line into innovation.
Peter Drucker put it memorably: innovation is the act that endows resources with a new capacity to create wealth - it is useful novelty, not novelty for its own sake.[2] Notice, too, that nothing in this definition mentions technology. A new business model, service, experience, or process can be every bit as innovative as a new gadget.
Think of something recently hailed as 'innovative' in your industry. Run it through the three-part test - new, valuable, adopted. Does it actually qualify?
Sources
- Global Innovation Institute (GInI), Foundations of Innovation body of knowledge.
- Drucker, P., Innovation and Entrepreneurship, 1985.
- OECD/Eurostat, Oslo Manual, 4th ed., 2018.