Defining Innovation

Issue 124, August 31, 2023

Innovation is one of the most hackneyed, misinterpreted, and overused buzzwords in today’s business vocabulary. Ask anyone – including yourself – to define innovation in context of the strategy and operations of doing business in the ever-changing digital economy. You may struggle to define it and asking others will often result in wildly different responses.

We did a straw poll to see what the general consensus was on what innovation means. Here are just a few interpretations:

• Thinking differently
• Thinking outside the box
• Imagination
• Being creative
• Discovery
• Connecting the dots
• Breakthrough
• Holistic vision
• Invention

Practical Innovation

However you define it, innovation requires a blend of ingenuity, timing, and often dumb luck. The closest synonym is transformation (another widely defined term that implies forward progress). But, using transformation still doesn’t quite capture all the nuances of innovation. And without innovation, an organization is doomed to irrelevance.

So, on a practical level, some key elements of innovation influence its outputs and outcomes.

• Newness. Innovation is about creating something different from what already exists.
• Value creation. Innovation should create value for the customer, business, or society at large.
• Implementation. Innovation is not just about having a new idea, it is about putting that idea into practice and making it work.
• Risk-taking. Innovation often involves taking risks as there is no guarantee that a new idea will be successful.
• Collaboration. Innovation often requires collaboration among different people and teams.

And its applications can fall into the following buckets:

• Product: Creating new products or improving existing ones.
• Process: Improving the way products are made, how work is accomplished or how services are delivered.
• Business model: Changing the way a business operates, such as offering new pricing models, new packages, or delivery channels.
• Marketing: Finding new ways to reach and engage customers.
• Social: Creating new solutions to social problems. Think healthcare, transportation, food security.

How Innovation Works

Innovation is both a process and an outcome — an iterative process and a unique event. That said, the most common innovations are iterative. Here are a few examples, from the everyday to the game-changing.

Iterations

Roller wheels on suitcases

Slack and other group message programs

Zoom

Streaming video

Zippers instead of buttons

Drive-thru Starbucks

Car cupholders

Uber and ride shares

Solar power

EVs

Unique Events

The smartphone

Electricity

Drones

Spotify

Chat GPT

Microwave ovens

Autonomous robots

RNA vaccines

Post-it notes

Laptops

Innovation Theater

There’s a lot of questionable or downright bad innovation out there in the business world. We have written about innovation theater in our book, The Truth About Transformation. This dramatic phenomenon is basically fake innovation. In other words, what innovation is not.

So, what is the difference between authentic innovation and a pastiche of innovation that doesn’t power true transformation or change? Ongoing innovation becomes as complex a task for startups as it is for mature organizations. Some describe innovation as a possibility, chasing a shooting star, creating something unique and often delivering something that society doesn’t know it yet needs. Recognizing what is new and unique is often based solely on one’s knowledge and life experiences (perhaps peppered with a bit of research). Since no one can know everything, innovation can be missed because we are biased by what we know (or what we don’t know).

Many traditional organizations and their leaders seek to generate an organizational culture of innovation, so they look to startups to figure out how to be innovative. They make assumptions that their smaller, more agile counterparts know something they don’t. What results is the attempt to adopt what is seen as startup innovation strategies and tactics with an immediate, closed-loop approach (section, department, function, product) that segregates the innovators from the rest of the organization. Although mature organizations think they can act like startups, they majorly miss the point that startups exist in a very different context, culture, and system. What happens? Innovation may start in a closed loop but will only succeed in catalyzing innovation if it gets incorporated into the larger organizational system—and the system itself understands how it will be changed. Otherwise, innovation becomes a square peg that cannot fit into a round hole.

According to Alex Moazed, entrepreneur, author, and CEO of Applico, “Innovation theater is any innovation initiative that is done to signal that innovation is happening (somewhere in the organization) but that doesn’t have a significant business impact or connectedness to the organizational system. These initiatives are often accompanied by large press releases with little tangible detail.” Innovation theater performances please internal desires to be “innovative,” be seen internally as “innovative;” attempting to fix a problem; or simply to be  externally recognized as “innovative.” Innovation theater can also be triggered by a particular change, response to shareholder criticism, or recognition of a much larger problem whose solution seems elusive or too complex. Does this sound cynical? Maybe, but innovation is a much-abused concept.

Steve Blank describes innovation theater in the Harvard Business Review as the temptation for “large organizations to focus on checking all the boxes in their top-down processes rather than improving the results — what they make, how they serve customers, and the prescribed means they take to achieve those ends.” He adds, “As organizations get larger, they start to value the importance of process over the product.”

Based on our experience, the focus on process over product is typically endemic and can consume organizational thinking and decision-making. The bigger an organization becomes, its ability to manage the expansive system and its parts must become stronger. Process can become a trap. When so much time is spent managing the system and its processes, what time, if any, is left to reconsider the system itself to identify innovations?

An additional restraint is that over time organizations become risk-averse, seeking to protect and ensure that organizational performance continues. But that comes at a cost to any new or enlightened thinking.

Innovation Posturing

Innovation theater is supported by a misguided notion that innovation can solve all an organization’s problems and make it more competitive. How many times have you heard (perhaps in your own organization) let’s innovate. How many CEO presentations and annual reports cite the word innovation?

The common result is that innovating for innovation’s sake generally has nothing to do with your business model or any product or service your customers would want. And then the process of innovation can bog everyone down and they never get to the solution. So, it’s pretend-innovation. Yet, there is a proliferation of Chief Innovation Officers in organizations of all sizes. What do they do? And what does it take to be an innovator?

The Innovators

Let’s look at some of the qualities, skills, and talents it takes to be an innovator starting with thinking differently. It’s not so easy, especially when you try too hard and your attention is distracted by minding the store and its processes. Some individuals really do see the world differently. They connect seemingly disconnected threads of information and insights to reveal a new idea, product, or service. Consider our article focused on pattern recognition that shares how connected dots and threads can be revealed if we only take the time and use our abilities to see. Critical thinking is, and always will be, paramount to being able to see and connect the dots.

You can be trained to think differently, but it often results in forced outcomes or leads to limited results. Since thinking differently is not intuitive to many people here are some tips to kick-start that common sense process.

• Challenging the Status Quo

How would you solve problems for the more compromised groups in society? If you can find solutions for the neurodiverse, hearing impaired, blind, and physically disabled, you have innovated for society at large. Think street crossing signals (and elevators) that speak; barriers-free entrances and exits; voice-activated computer programs; audiobooks; Siri and Alexa voice assistants, and grippable kitchen tools. And there are many, many more.

• Put Yourself in Your Customers’ Shoes

Instead of innovating what you think would be good for your customers – or worse, what you think they want – reverse the process and think like your customers. This seems easy but far too many organizations struggle with taking the outside-in approach, repressing what they know and the biased influence that knowledge has on truly seeing what the customer sees.

• Innovation Is Not a Fad

Don’t push innovation for the sake of looking smart or keeping up with the trends. Innovation is relevant when it solves a specific problem, not as an overall veneer of buzzwords and memes.

• Don’t Try Too Hard

Understand the value of iteration. Most breakthroughs, discoveries and inventions are the result of iterating and standing on the shoulders of those who came before. Take an idea and augment it for the better.  Twist a product to add an enhancement or improvement. Work with a team. Talk and share ideas to trigger building a better mousetrap – but only if you need one.

What Organizational Innovation Needs

Innovation is dependent on the human factor. Mandating innovation often doesn’t take into account the processes, policies, and human element that must come together to support how the current work will evolve, as catalyzed by the innovation. It also ignores the need for transition management and setting forth how the innovation would be assimilated, plus how the organizational system would change and evolve in response to the innovation.

Innovation is often conceived and manifested in decisions made at upper levels of the organization, encased as a single-focused strategy without context of how the organization operationally and functionally meets its purpose (producing products, and serving customers).

Innovation cannot happen if the inter-relationships and co-dependencies of the parts of an organizational system are overlooked, purposely avoided, or considered outside of the scope, focus, or intent of the innovation. In this case, a workforce has no choice but to work around the innovation system. The result is a binary system with each part revolving around the other but always remaining separate. As opposed to leading, managing, and operating one organization, the human system now must manage two systems.

What Innovation Really Is

It would be tempting to think that innovation is in the eye of the beholder, and you could be right.  Sophisticated tech heads and scientists are going to view innovation differently than novices. But what they share in common is an understanding that successful innovation is the result of thinking differently and critically, correlating a real need to the innovative solution, clearly communicating the innovation to all stakeholders, and getting buy-in from everyone involved in building and deploying the innovation. Sounds simple, but more often it’s the case that innovations fail either from irrelevance or lack of support.

A Note on Technological Determinism 

The theory and concept of technological determinism come into play when considering innovation. Technology is broadly defined as a process, device, programming or even a physical object like a wheel, or a gas engine. According to one deterministic school of thought, is something truly an innovation if we have always had the innate desire and ability but lacked the tech application/platform to manifest it (think device, interface, mechanism). Another deterministic school of thought states that sheer luck enables innovation. And then there is the technological determinism school that states innovations have holistically permeated our society and influenced our behaviors and who we have become. The chicken and egg considerations of technological determinism require a deeper discussion for another day, but we wanted to plant the seed of what is or isn’t “innovation.”

At 2040 we help clients navigate the murky waters of innovation, and use critical thinking to ensure innovation is authentic and aligned with what customers/users need and want. It’s not easy …but it’s essential.