Wednesday, November 23, 2005

What's an innovation?

When we are out talking to people about innovation and idea management, there seems to be a "fork in the road" in many of our conversations. Like good adherents of the Yogi (Yogi Berra that is) when you come to a fork in the road, take it.

The metaphorical fork is to define what an "innovation" is. The fork drives whether we talk to people about innovations that are purely "product" in nature - that is, ideas that are really products or product extensions, or ideas that are more intangible. The fact is, both of these concepts are innovation, and both should be managed effectively.

In our definition, an innovation is an idea that you move into valuable action. This definition encompasses the idea, which is somewhat intangible, and suggests that innovation is more than simple creativity, which is idea generation with no tangible result. No, our definition suggests that real, valuable innovation creates a valuable outcome. That outcome could be a new product, a new service, a new business model, a new initiative, or a new program.

In this manner, every firm, every organization, small and large, for profit or not for profit, manages innovative ideas. A not for profit may generate ideas about ways to better serve its community. An automotive company may generate ideas about how to obtain greater fuel efficiency. A marketing firm may generate ideas about new marketing campaigns for its customers. All of these ideas should be captured and evaluated, and some of them launched as new products, services, programs or initiatives. The "launching" part of the definition is where part of the "valuable" action takes place.

Too many times, people assume a new idea has to be very tangible to be valuable, that it has to represent a product or a product extension. These folks believe ideas about intangible things or initiatives are too hard to manage and justify. We don't believe that is the case. In fact, many really innovative ideas are business model or service model changes.

A good example - Apple and the iPod. Apple didn't invent the portable music player. I'm old enough to have a Sony Walkman, a Sony Discman, an MP3 player and a portable radio in my closet gathering dust. What Apple did was combine the player with a trusted music distribution source and an easy way to obtain the music, get the music from the distributor to the hardware, and enjoy the music. Apple didn't change the music player - they changed music distribution.

I doubt that they "meant" to do it, but there it is, nonetheless.

Ideas that represent intangible initiatives, programs and business or service models are just as important as ideas that represent products, and should be valued as such and treated as carefully.
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posted by Jeffrey Phillips at 8:19 AM

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