“We need to be more innovative. We need our whole culture to value innovation more.” These words have become so ingrained that they have moved from mandate to mantra to empty refrain to cliché. And yet they are true. You need to be more innovative – specifically more innovative than your competitors.
But what does it mean to be more innovative? The answer to this question is both subtle and important.
Here’s the description that I have found most useful: An innovation is any product, process, system, or relationship that creates differentiable value.
Let’s break that down – starting from the end.
Value – If “the thing” you do differently doesn’t bring value, it’s not an innovation. Does this mean that your new widget isn’t an innovation on its release day? Of course it doesn’t. You have a value proposition, and anticipated benefit – an expectation that the widget will be greeted as an innovation. Will it be? Time will tell. It is equally important that you recognize the various forms of value. The easiest is sales: are customers willing to pay you for it? But don’t discount the value created through savings, through reduction in time spent, through creating a happier (and therefore more productive) workforce – along with many other sources of value.
Differentiable – Can you describe how the thing you do, the thing you make, or the way you do it is distinctly different from others – or different from the way you did it before? If you don’t have a succinct answer, at best you have a continuous improvement.
Create – an innovation must be the source of value for others. Art is differentiable. It HAS value, but it does not create value. Make art. Enjoy art. Don’t confuse art with innovation.
Product, process, system, or relationship – If you’re limiting your concept of innovation to the next great product you have missed the boat. Innovative products are critically important. Where would we be without our smart phones?!? But products are just one way to innovate. Do you have a unique set of partnerships or approach to partnerships (relationships)? Can you retool faster and better than the competition? Do you have workflows or data analysis capabilities that others can’t, or haven’t imitated? Do these things bring value? Good for you. You are innovative! Appreciate it, celebrate it. But don’t rest on it.
Look at your business carefully. Look at your project portfolio as well. Are you creating technologies in search of problems? Are you creating art?
Or are you creating differentiable value? Are you innovating?
