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?”
|A co-worker has a brilliant idea for a product that could generate millions of dollars.||No||An innovation is a change – not just an idea.|
|A new sign in the break room reduces coffee waste by 5%||Yes||This is intentional, positive change.|
|The company creates and deploys a new product, but it proves to be a market failure.||No||This change was not positive.|
|Penicillium mold contaminates a petri dish of bacteria and kills the bacteria.||No||This was not intentional|
|Over a period of years, the active ingredients of penicillium mold are isolated, purified, and effectively applied to create the drug now known as penicillin.||Yes||This 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.