ELI5: What Is Innovation?
There’s a lot of confusion around the word “innovation,” so let’s establish a summary definition of innovation and then flesh this definition out by exploring:
- The three basic categories of business innovation and
- The 12 components of any individual business innovation.
At the highest level, innovation may be defined in three words: intentional, positive change. Let’s test this definition by looking at a few sample scenarios and answering the question: “Is this an innovation?”
SCENARIOINNOVATION?EXPLANATIONA co-worker has a brilliant idea for a product that could generate millions of dollars.NoAn innovation is a change – not just an idea.A new sign in the break room reduces coffee waste by 5%YesThis is intentional, positive change.The company creates and deploys a new product, but it proves to be a market failure.NoThis change was not positive.Penicillium mold contaminates a petri dish of bacteria and kills the bacteria.NoThis was not intentionalOver a period of years, the active ingredients of penicillium mold are isolated, purified, and effectively applied to create the drug now known as penicillin.YesThis was an intentional and (very!) positive change
The Three Categories of Innovation
While it’s helpful to have a simple, all-inclusive definition of innovation, it is also helpful to have a vocabulary that describes the nuance. Therefore, if we zoom in just a little, we can see that all business innovations may be lumped into three broad categories , depending on the benefits they provide, as follows:
IMPROVE – These are innovations that improve the efficiency and effectiveness of current business operations.
EXPAND – These are innovations that expand or extend the market reach of current lines of business.
CREATE – These are innovations that create entirely new lines of business
For example, let’s say your business is a hot dog stand.
An improve innovation might might consist of better advertising that attracts more customers or a better chili recipe that improves customer satisfaction and retention.
An expand innovation might consist of a line of kosher hot dogs or vegetarian hot dogs that allow you to serve a new market segment.
A create innovation might be a subscription-based lunch delivery service that delivers a healthy lunch to your office daily for a monthly fee.
The 12 Components of Any Given Innovation
If we zoom in up close to examine a specific innovation, we discover that, regardless of category, every innovation consists of four components, and 12 sub-components as described by the LaunchPath Innovation Framework pictured below -- these are the things we modify when making intentional, positive change:
When working with your colleagues to develop, evaluate, and implement innovations, draw on these simple concepts to facilitate more effective communication and collaboration.