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Though it has been reduced to a buzzword used to sell products, “innovation" is a real concept with a real definition. Understanding that definition is vital not only to demystifying the concept, but in actually creating innovation.
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The Difference Is in the Details
Innovation is broadly defined as “the act of introducing something new." With so much room for interpretation, the real meaning is in the details.
There are two types of innovation: incremental and breakthrough. From an organizational perspective, they are equally important, as one fuels the other. Each, however, requires a distinct strategy and set of resources.
The best-run enterprises are always searching for ways to reduce inefficiency, lower costs, and improve quality within their existing systems, services, and products. This perpetual-improvement mindset fosters incremental innovation.
The power of incremental innovation lies in the aggregation of performance improvements over time. However, there’s more to it than straightforward, continuous improvement.
Ultimately, a process-driven approach to continual improvement (such as Six Sigma) is just the foundation on which we build genuine innovation. As we progress, our incremental steps become greater, the gap between new products and their predecessors becomes wider, and we’re able to decide between staying the course or introducing something truly radical.
Breakthrough innovation has the power to transform an entire business or market sector. Breakthroughs create unrealized value that could not have been conceived through existing models, patterns, and processes. Often, large-scale changes of behavior are necessary for the breakthrough to gain adoption and diffusion.
At its heart, breakthrough innovation is all about disruption. If you want a breakthrough, something needs to break.
While incremental innovation is focused on improving core and existing elements within the enterprise, breakthrough innovation takes place across the boundaries of what is known (and sometimes considered acceptable practice). It is the introduction of change into inherently stable systems.
The problem is that most business systems are designed to eliminate the kind of deviation that makes breakthrough innovation so desired — and so difficult to attain.
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Building Toward a Breakthrough
Usually, incremental innovation is not a particularly risky endeavor. Breakthrough innovation, however, requires a company to accommodate levels of risk it might never take on otherwise.
But when you’re up against cutthroat competition that can replicate and supersede any of your firm’s technological advances, unleashing a breakthrough can be a matter of survival.
Here are some guidelines for pursuing breakthrough innovation:
1. Foster innovation across the entire enterprise.
A breakthrough can come from anyone, anywhere, at any given time. Firms that treat innovation as the exclusive domain of a privileged group are dooming themselves to fail. Everyone should seek to transform the way they approach their work.
A parallel misconception is that innovation happens only within the realm of products and services. Breakthroughs within business models and systems can yield tremendous competitive advantages as well.
Empower everyone on your team to think of themselves as sources of innovation.
2. Develop the skills necessary for innovative thinking.
To paraphrase a quote often attributed to Albert Einstein, we can’t solve our problems with the same level of thinking we used to create them.
If you want to create something new, you need a new set of skills and knowledge. Adopt a language for innovation (I recommend design thinking) and train your team to use it. Create opportunities for everyone to apply this language.
Be sure to communicate the positive impact this language has on your business with your team; you’ll help embed it within your organizational culture in a real and meaningful way.
3. Tap customer experience for new ideas.
Your customers are another tremendous source of potential innovation. Don’t just pay them lip service by having them fill out a satisfaction survey. That’s wasting an opportunity.
Take the time to get to know your customer base. Listen to their experiences. Their needs, questions, and pain points are the grounds for your next possible breakthrough.
Develop a deep and empathetic understanding of your customer. By engaging him in the innovation process, you’ll also bolster loyalty to your brand.
4. Take risks and keep an eye on the future.
If your company focuses exclusively on performance improvement, you’ll trim away your excess capacity. While this may have a positive impact on your short-term bottom line, it will diminish your long-term capacity for breakthrough innovation.
To create the conditions for a breakthrough to happen, your company must take on a high level of both risk and failure. Don’t be afraid of either.
Find a way to invest your time, energy, and resources in future-oriented efforts that build off the strength of your improvement efforts.
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Finding the Balance
Innovation is cyclical. Incremental victories set the stage for a breakthrough, which then changes everything. Once you’ve reached a new equilibrium, you begin innovating incrementally again.
Everyone celebrates the breakthroughs — for obvious reasons. A breakthrough is a dramatic shift in how the world works. But without the incremental improvements, the experimentation that leads to a breakthrough isn’t possible.
Strike the balance between incremental and breakthrough innovation. Your company will reap the rewards, both big and small.
- Albert Einstein: http://en.wikiquote.org/wiki/Talk:Albert_Einstein#Unsourced_and_dubious.2Foverly_modern_sources
- Innovation: http://www.thefreedictionary.com/innovation
- Photo of Einstein by Ferdinand Schmutzer [Public domain], via Wikimedia Commons
- Design Thinking: http://www.fastcompany.com/919258/design-thinking-what