Discussions about innovation are often made difficult because people are unclear about the exact meanings of some key terms. In particular there is confusion about the difference between creativity, innovation and invention. Let us start with some definitions:
- Creativity is the capability or act of conceiving something original or unusual.
- Innovation is the implementation of something new.
- Invention is the creation of something that has never been made before and is recognised as the product of some unique insight.
If you have a brainstorm meeting and dream up dozens of new ideas then you have displayed creativity but there is no innovation until something gets implemented. Somebody has to take a risk and deliver something for a creative idea to be turned into an innovation. An invention might be a product or device or method that has never existed before. So every invention is an innovation. But every innovation is not an invention. When your company first published its website that was a major innovation for the company even though many other websites already existed.
We tend to think of an innovation as a new product but you can innovate with a new process, method, business model, partnership, route to market or marketing method. Indeed every aspect of your business operation is a candidate for innovation. Peter Drucker said, ‘Every organisation must prepare for the abandonment of everything it does.’ So do not restrict your vision of innovation to products. Some of the most powerful innovations you can make are in business methods and customer services. If we look at companies like Dell, eBay and Amazon we see that their great innovations were with their business models rather than in new products.
Innovations can be incremental or radical. Every improvement that you make in products or services can be seen as an incremental innovation. Most businesses and most managers are good at incremental innovation. They see problems in the current set-up and they fix them. Radical innovations involve finding an entirely new way to do things. As such they are often risky and difficult to implement. Most larger organisations and most managers are poor at radical innovation. If you had been making LP records then you could have introduced incremental innovations in your design and marketing. However if this was your strategy then a radical innovation, the CD, would eventually kill you. The CD manufacturer could similarly introduce various incremental improvements. Once again a radical innovation, music downloads over the internet, would make your offering obsolete. So we need to constantly look for incremental innovations and radical innovations. We need to develop creativity and turn it quickly into innovation.