Articles, Economics, Strategic Innovation

The Economist called innovation the “industrial religion of the 21st century. ” So what exactly is the new thinking about innovation and why is it so important? Why does it need to be taken so seriously by business and government? Very simply, innovation is the engine of economic progress. Without it many of our firms will go out of business, and those that remain will become second-rate, subservient to international leaders in decision-making and profit taking. Without innovation there won’t be the new businesses and jobs that are necessary to support economic growth.

But what is innovation?  First, we must remember that innovation is not invention. Invention is the creation of a new idea and its reduction to an application. Innovation is the commercialization of an idea. Innovation is often mistaken for research and development. R&D is a component of innovation, but it is only that, a component. Innovation is really about an economically valuable novelty. It is about new products, processes and experiences and all the scientific, technological, organizational and, financial activities that produce them.  Innovation is an emergent event; it happens when practitioners “on the ground” have worked on something enough to have discovered a new approach in the messy variety of practitioner effort, tons of conflicting quantitative research data and unfocused conversations. Innovation only occurs when there is sufficient variety of thought and action; it works more like natural selection, which requires lots of mutation. Innovation is, by its nature, unorthodox.

If you dig deep underneath the veneer of any innovation success story, and you will find lots of trial and error before the (sometimes accidental) eureka moment occurred. And even after that eureka moment, the only reason we think of the outcome as an innovation is because it found traction and really worked. Yes, innovation often sprouts from the messy, trial-and-error efforts of practitioners in the trenches. But there are ways to make purposeful innovation more manageable, there are so many half-truths and myths surrounding innovation that have made it sounds more complex than it is. In the next few weeks I will share my thinking on many of the myths and half-truths with clear steps on how to manage and organize innovation in any company, business unit, nonprofit organization, or government entity.  I will cover ideas on how to maximize your company’s Return On Innovation (ROI) by integrating the different types of innovation (business model, social, experience, marketing, process) and creating a diversified portfolio of innovations.

Image Sources: http://www.flickr.com/photos/barryslemmings/315915865/; http://dvice.com/pics/The-Evolution-of-the-iPod-Nano-2.jpg