The term innovation is one of the most bandied about terms in global business today and has become a nebulous catchphrase devoid of meaning.
As a business culture, we have become obsessed with the word innovation. Its definition has been stretched to the point where we’ve lost sight of its real meaning, and as a result, we have lost sight of its role and its value. We’ve needlessly muddied and complicated what should be a simple, clear mandate.
I Googled “what is innovation,” and here’s a small sampling of what came up:
- The action of innovating.
- A new method, idea, product, etc.
- The process of translating an idea or invention into a good or service.
- The process of implementing new ideas to create value for an organization.
- The application of better solutions that meet new requirements, unarticulated needs, or existing market needs.
Let’s clear it up.
The key driver for all innovation is value creation and, ultimately, the long-term survival of a business.
Here’s how it should be defined: “Innovation is the deliberate creation of new value.”
It begins when we look at a problem from a completely new angle. It becomes real only when human creativity is unleashed. When it’s on the right path it moves from the market and customer back to the business, product and service. It’s necessary because the natural state of the evolution of markets and customer needs dictate that new value will eventually become old value. Its usefulness and ability to be meaningful will erode, so there must be a continuous, deliberate creation of new value to replace the old value that’s no longer useful. It’s simple logic.
No one can argue with the logic that existing value erodes over time and needs to be replaced with new value, yet few organizations are inclined to innovate.
They put their all into supporting operations, also referred to as “the performance engine” and the creation of short-term gains, while not concurrently creating new value, a crucial driver of customer retention and a foundation for future growth. It’s not logical behavior. But I see it far too often in far too many companies.
Here are some of the more important characteristics of companies who are clear on the role of innovation. Breakthrough innovators practice all of them.
- They have dedicated innovation teams.
- They believe that ideas can come from anywhere.
- They believe innovation starts and ends with the customer.
- They subscribe to collaboration with external partners by engaging in the practice of co-creation, producing mutually beneficial outcomes for the customer and the company.
- They don’t isolate innovation from the rest of the company. Everyone is unleashed and creatively freed up.
- They collect rich data through qualitative studies that can provide full and deep expression of what consumers think, feel, do and why. And they support and maintain it with a continuous feedback loop.
- They avoid the creation of bureaucracies because they know that talented people don’t want to work in bureaucracies.
When I read Jerry Hirshberg’s book titled “The Creative Priority. Driving Innovative Business in the Real World” in 1998, it changed the way I viewed environments meant to be conducive to critical thinking and idea generation.
At the request of Nissan, Hirshberg left General Motors to create a new entity called Nissan Design International. One of his most significant acts in establishing NDI and its process of ideation and innovation was harnessing and finding value in friction. Based on the ability to recognize the positive dimensions of friction, he viewed it as being essential to the vibrancy of the process, creating a vital connection between the abrasiveness itself and original thinking.
To Hirshberg, it was a sudden interlocking of two unrelated matrices of thought, where, by design, all the systems did not move in the same direction, and where divergent ways of thinking produced a more viable and refined outcome. It demonstrated how innovation could actually thrive as a result of the bringing together of opposing forces.
He called this dynamic “creative abrasion.” It is yet another important characteristic we rarely see: Innovators embrace managed friction in teams.
Marc Romano is managing partner of New York of FirstPrinciple Group, an analytics and strategic advisory group. His company works with business teams and product owners to shift the internal conversation, challenge assumptions, make their world easier to navigate, and create alignment on business-critical direction. Reach Marc at firstname.lastname@example.org.