There are many definitions of innovation. In my view, there is a qualitative and quantitative component that helps to determine whether something is innovative as defined by users.
The qualitative component is newness i.e whether someone is new or is old done in a new way. The quantitative component is the multiple of user defined value created when compared to competitive offerings or the status quo. Research indicates that it takes at least a 5x multiple of user defined value to get a customer to switch form one product to the next. I’ve arbitrary set 10x as the metric to define whether something is innovative. So has Google in their 10x rule.
Here’s what the novelty-value matrix looks like?
As you can see, you want to be in the upper right hand corner. The upper left hand corner is for solutions looking for problems that create no substantial value.
Now that you know the definition of innovation, here are 10 things you should know about it.
6. You need to clarify your innovation expectations and encourge innovators to go beyond them or dial them back. Sometimes tinkering is the first step towards something bigger.
8. Rules create ecosystems. Ecosystems drive innovative business models. Think, TV, the Internet, electric cars.
The difference between creativity, inventiveness, entrepreneurship and innovation also depends on where you land on the continuum. Creatives come up with lost of ideas, however many fail to reduce them to practice (invent), let alone pursue opportunity to create user define value (entrepreneurship) that reaches the 10x hurdle(innovation).
Ideas are different from inventions, improvements and innovations. Be sure you don’t kid yourself and lump them together.
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