What is Innovation?

Too often, our understanding of innovation is based on our experience with inventions such as the Internet, cell phones, and other new technologies


The word “innovation” means different things to different people. Organizations struggle with determining what is meant by innovation. What is it? How is it defined? How is it different from invention? So let me explain what innovation really is and why it is considered a major driver of the economy.

What is innovation?

Too often, our understanding of innovation is based on our experience with inventions such as the Internet, cell phones, and other new technologies. True, innovation led to the development of these new products, but innovation is much more than that. Innovation goes beyond technology.

IBM’s global CEO study in 2006 defined innovation as “new ideas or current thinking applied in fundamentally different ways resulting in significant change.”

David Neeleman, founder and CEO of JetBlue, said “Innovation is trying to figure out a way to do something better than it’s ever been done before.” Innovation is invariably about bending, if not breaking, the rules. It is about change—not repetition; about daring—not submission. So maybe, it’s also about exceptions and not definitions.” Amit Mayer, SIT (Systematic Inventive Thinking, Tel Aviv)

The traditional model for launching an innovation was to look at the cost and then add the profit. This would create a market price. Current thinking is to identify the market price, subtract the profit required, and then determine how to create the product or service to match that total cost to market. This model drives innovation in a very different way. It no longer assumes the market will pay any price.

The difference between invention and innovation

According to Jan Fagerberg, professor of economics at the University of Oslo, where he is affiliated with the Centre for Technology, Innovation and Culture, there is an important distinction between invention and innovation: “Invention is the first occurrence of an idea for a new product or process, while innovation is the first attempt to carry it out into practice.”

Innovation and creativity

We often use the words “creativity” and “innovation” interchangeably, but we should not. Creativity is about coming up with ideas, while innovation is about bringing ideas to life.

According to Teresa Amabile, author of a number of books about the social psychology of creativity, creativity is typically seen as the basis for innovation, and innovation as the successful implementation of creative ideas within an organization. From this point of view, we can conclude that while individuals may display creativity, innovation occurs in an organizational context only, by bringing creative ideas to life.

Innovation as a collaborative process

Over the years I have worked with many different organizations and conducted research in a number of operational areas, including idea generation—sometimes referred to as “suggestion systems” or “quality circles.” I have observed how different organizations generated ideas, what happened with these ideas, and how they were moved forward in the organization. I started to realize that some individuals and some organizations seemed to be great at managing ideas and others were miserable at it. Part of my research included exploring whether great inventions are driven by individuals who are just more creative and persuasive than the average person or whether these individuals have some system to their approach.

I started to realize that the successful implementation of ideas was really a form of “innovation” and that innovation was, in fact, a collaborative process that required people from different areas to contribute to moving from idea into reality. Furthermore, I learned that this cooperative process, if properly implemented, is a very powerful strategy for achieving organizational advantage.

The lone inventor is a myth. During his lifetime Thomas Edison patented 1,093 inventions. However, he did not work alone—this is a misconception. His team of talented workers assisted him all hours of the day and night. They had the skills to take his ideas and, through the process of innovation, bring them to reality. His laboratory at Menlo Park was referred to as an “invention factory.”


Innovation is much more than just new-product development—it can go beyond technological advances and may be applied to operational improvements and service strategies as well.

Innovation is linked to performance and growth through improvements in efficiency, productivity, quality, competitive positioning, and market share. It typically adds value by changing old organizational forms and practices. Organizations that do not innovate effectively may be destroyed by those who do.

Innovation does not just happen—it is a team effort. Most successful innovation occurs at the boundaries of organizations and industries, where the problems and needs of users and the potential of technologies can be linked together in a creative and collaborative process that challenges both. To take the first step on the journey of reshaping your culture to be more innovative, you must understand what innovation is.

Labcast - Be sure to attend Michael Stanleigh’s Lab Manager Academy webinar “How Innovative Is Your Organization?” on Wednesday, August 7 (or afterward at www.labmanager.com/igniteinnovation, to watch the archived video).

For more information about the ideas in this article, please contact Michael at mstanleigh@bia.ca.

Categories: Business Management

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Published: July 1, 2013

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