What is innovation?

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Innovation is something new that has an impact.

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Innovation is about newness. It's about change. The Harvard Business Review has been cited with describing innovation as "the difficult work of newness." The definition I like is "something new that has an impact." Innovation is not merely inventing; it is the work of utilizing something new in a way that creates change—ideally in a positive direction. But like so many things in life, sustainably creating new value is easier said than done. I have found that applying Strategyzer's framework of three types of innovation (Efficiency, Sustaining, and Transformative) helps me communicate and collaborate more effectively.

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Different definitions for innovation

The question, "what is innovation?" has many answers because that word means something slightly different to everyone based on their experiences and the particular challenges they face. My goal in this post is to offer a framework of innovation that helps you understand its basic nature. Then, you can take your next step either toward deeper learning or action in your work.

Innovation is about creating. It is about changing something. The Harvard Business Review has been cited with describing innovation as "the difficult work of newness." The definition I like is "something new that has an impact" (Sadly, I can't recall who coined this phrase so if you know please reach out so I can cite them). Innovation is not merely inventing something but it is the work of utilizing something new in a way that creates change. Ideally, change in a positive direction which I call value. But like so many things in life, sustainably creating new value is easier said than done.

Why innovate?

The only reason to innovate is to create more value. Companies and start-ups innovate to make money. A customer exchanges money for some kind of value from the company. In the social sector, the value generated by an organization is measured in a positive impact on their goals. The target stakeholders in social innovation are trading their time or attention to gain a positive outcome. It is difficult and expensive work, but there is no way to increase the value our organization produces without changing things. As organizations become more complex, the value chain gets longer. There are opportunities for innovation everywhere. By understanding the types of innovation and mastering the use of design and other methods we can increase the reliability of our innovation efforts to produce results.

Three types of innovation

Alexander Osterwalder's book Invincible Company lays out three types of innovation. It is the most helpful framework I have found for understanding the basic types of innovation. Building on this model, you can better plan your approach for the particular change you are trying to make.

Efficiency Innovation

Efficiency innovations are about improving something you are already doing. It could be reducing waste, improving quality, automation, or any other way of increasing the value generated in a system. The key is that you are not changing the core model of the original system. For example, A nail factory might innovate a new machine that can produce 1000 more nails per hour for the same or less cost to operate.

Sustaining Innovation

Sustaining innovations are about extending the value or lifespan of an existing system or model. It might be a new or upgraded product line for the same customer base or marketing existing products in a new way to attract a new customer base. The key attribute of sustaining innovations is that they allow your model to evolve with changing customer needs and changes in the environment. For a nail company, this might look like a new type of nail that is more effective for particular uses of your customers.

Transformative innovation

Transformative innovation is when you break away from an established model or process and generate value by solving a new problem in a new way. The key to this type of innovation is that it creates a completely new value chain, sometimes a new market altogether.

So far, I've found that every innovative effort I've been a part of fits into one of these categories. And being able to articulate the difference has been extremely valuable in decreasing the communication challenges in the early stages of a new effort. Each type of innovation has its place and requires different methods and approaches to be successful.

How to be innovative

Here are a few takeaway thoughts to help you be more innovative:

1. Understand what type of innovation you need and align your approach accordingly.
2. Focus on the problem more than any particular solution - The more you understand the people you want to create value for, the more likely you can create something valuable for them.
3. Do good design - design is the process that can reliably produce innovative outcomes, invest in doing it well.
4. Collaborate - innovation is a team sport. The best ideas come from the synergy of different people sharing their unique perspectives and expertise. Project success comes from shared understanding, goals, and coordinated effort.
5. Diversity is fuel for innovation - having the right mix of perspectives, thinking, and expertise in the process leads to more complete solutions.

I hope this article sparks thought for you as you endeavor to create more value in your particular corner of the world. I would love to hear your feedback and questions.