What do we mean by innovation?

by Tim Kastelle

What do we mean by innovation?A while ago John and I did in-depth individual interviews with almost all of the senior managers of a firm about their innovation process. We ran into a striking paradox while doing so.

One person said to us “This company needs to get rid of innovation.” He said this after he had explained all of the absolutely path-breaking projects on which he was working. It was an impressive body of work, and it was all highly innovative. Consequently, we were a bit confused about why he wanted to get rid of innovation, so we asked him what he meant.

He explained that the firm’s innovation program only encouraged incremental innovations, and that by concentrating there, they were missing the opportunities to pursue the big picture ideas that could transform the industry. Therefore, in his view they would be better off scrapping the innovation program entirely so that they could devote time and resources to the more disruptive ideas.

A bit later, a different person said to us “This company needs to drop its innovation program.” We again asked “Why?” This time, the reason was that the innovation program only encouraged the consideration of big ideas – it was too bureaucratic to consider and execute small ideas that would improve performance. As a result, they were falling behind because they weren’t improving their core business fast enough.

You probably couldn’t find two more opposite views of how innovation is doing within one firm.

There are a few lessons in this:

  • To successfully innovate, you have to have a shared language: these two people meant completely opposite things by “innovation.” One meant incremental improvements, while the other meant big ideas. This is why I use a broad definition of innovation – you have to be able to capture both types. If you only focus on one, you will run into problems, because:
  • You have to manage innovation as a portfolio: to successfully innovate, you need to be good at both incremental innovation as well as at developing more radical ideas. If you only focus on continuous improvement type innovations, eventually someone will disrupt your market, and then you’re in trouble. On the other hand, if you only concentrate on developing radical innovations, you will fall behind competitors that are continuously improving right now, and you could go out of business before you get a chance to execute your big ideas. Your innovation management process must be able to handle both kinds of innovation.
  • Finally, people often fail to take an enterprise-level view of strategy. Both of these managers were really only interested in their particular innovation efforts. Because neither felt very supported by the innovation program, they both thought that it should be dumped, but for opposite reasons. This is a sign that the firm’s overall strategy might be communicated very clearly. You need to be able to articulate where you are going, and how innovation can help your organization get there.

We’re continuing to work with this firm, and it seems like they’re making progress. But it just goes to show that often we don’t really know what we mean by “innovation”.

(photo from flickr/mrlerone under a Creative Commons License)


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Tim KastelleTim Kastelle is a Lecturer in Innovation Management in the University of Queensland Business School. He blogs about innovation at the Innovation Leadership Network.