As an innovation geek, I always enjoy reading over the latest reports about innovation. Like a kid at Christmas I eagerly await reports on innovation from management consulting firms like PWC or Booz Allen. They provide a yearly assessment of the world of innovation, and especially what CEOs believe to be true about innovation. And, like Christmas, many of them occur at this time of year. Recently, GE published an innovation report entitled the GE Global Innovation Barometer. It is worth taking a look at if you haven’t done so already.
One of the items that surprised and, yes, troubled me the most is to be found near the back of the overview presentation, on page 30 of 32 pages. That’s where the report analyzes how CEOs define innovation.
The report offered five definitions and asked the respondents to choose two. Here are the five definitions:
- The implementation of new processes, products, organizational changes or marketing changes
- An environment/culture that embraces positive change, creativity and continuous improvement
- Research and development, new intellectual property (IP), and inventions
- Staying ahead in the market and being a market leader
- Solutions that benefit society and societal outcomes (including environmental outcomes)
These definitions don’t trouble me too much, although they define very different things. What troubles me is that no definition above was selected more than 35% of the time by the respondents.
I’m sure we could spend hours debating about the definition of innovation, much like ancient scholars argued about how many angels could dance on the head of a pin. Unlike the angels on a pin, however, the definition of innovation MATTERS. While it could get academic and esoteric, it needn’t be. The reason a definition of innovation is so important, if not at a global level at least at company level, is that a definition signals intention, commitment, direction and importance.
Innovation is tough enough when well defined. After all, in most cases an organization is asking its people to dream up new products or services that aren’t aligned to existing products or services at a time when there are few resources or dollars to accomplish the most rudimentary tasks. If innovation is poorly defined, innovation is like discovering a new continent without a map, without a compass, and without knowing what’s important when you discover it. Columbus went west to discover gold and spices. Imagine his disappointment to discover just a bunch of sandy islands with little demonstrable wealth. That’s what innovators who work without clear definitions face.
Returning to the definitions GE used, the first (implementation of new processes, products, organizational changes, etc) is a COMPONENT of innovation, but only if those changes add significant value, are truly new and unique and important and relevant to a customer. Implementing change is only innovation when it brings new concepts or new ideas that are valuable to a customer or stakeholder.
The second definition (environment/culture that embraces positive change, creativity and continuous improvement) is an ATTRIBUTE of innovation, not a result! Good innovators know these conditions must exist, and by the way, this definition is too limiting. It only mentions continuous improvement, not disruptive innovation.
The third definition (research and development, IP, inventions) is an INPUT to innovation, and too limiting. R&D and IP are definitely a part of innovation, but this definition doesn’t consider commercialization and market success. Creating new ideas and new IP is great, but only if there is a market that needs and wants the concepts. Moreover, this definition limits innovation to products, when innovation can clearly be applied to business models, services and customer experiences.
The fourth definition (Staying ahead in the market) is a STRATEGY, and not even a well-defined one. You could accomplish this by cutting costs, acquiring other firms.
No wonder the CEOs struggled to define innovation – because true definitions of innovation are complex. What a CEO says about innovation matters, in terms of the commitment of the rest of the organization, in terms of direction, in terms of investment, in terms of strategy. The starting point for any successful initiative or venture in any business is a clearly articulated goal, definition or strategy, which is then backed by deep commitment. If we can’t define innovation well, how can we possibly be committed to its success?
Here’s a really simple tip for any firm trying to become more innovative: create your own definition of what innovation should be for your business – and not just for an initiative, but an overarching definition for innovation. Then, ensure you have the commitment to follow through on the definition and that the people responsible for carrying out the definition understand it, and the vision, strategy and goals behind the definition. Otherwise, like a rowboat with only one oar, you’ll find your team constantly circling.
Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of “Make us more Innovative”, and innovateonpurpose.blogspot.com.