Innovation vs. Improvement
One more distinction rounds out our foundation: the difference between improvement and innovation. Every business improves things - making the current offering a little faster, cheaper, or better. That is valuable and necessary, but it is not the same as innovation, and treating the two as identical causes businesses to under-invest in the change that actually secures their future.
Making your existing product 10% faster and 10% cheaper each year - is that innovation?
Pick the answer that fits you best - there's no wrong choice.
A spectrum of change
Think of change as a spectrum. At one end is optimisation - refining what already exists. At the other is innovation - creating meaningfully new value. Both are legitimate and both are needed, but they serve different purposes and carry different risks and rewards.
| Improvement | Innovation | |
|---|---|---|
| Focus | Doing what we do, better | Doing something meaningfully new |
| Change | Incremental, continuous | Step-change, discontinuous |
| Risk | Low and predictable | Higher and uncertain |
| Protects against | Falling behind on today's basis of value | Being made irrelevant by a new basis of value |
What proportion of your organisation's effort goes to improving today's offering versus creating genuinely new value? Is that balance right for the change happening in your market?
Sources
- Global Innovation Institute (GInI), Foundations of Innovation body of knowledge.
- Christensen, C., The Innovator's Dilemma, 1997.
- Davila, Epstein & Shelton, Making Innovation Work, 2006.