What does innovation mean?
What is needed to innovate?
Why to innovate?
Innovation can be defined as the implementation of something new that adds value to others.
Stealing Peter Drucker’s words:
“Innovation is the specific function of entrepreneurship, whether in an existing business, a public service institution, or a new venture started by a lone individual in the family kitchen. It is the means by which the entrepreneur either creates new wealth-producing resources or endows existing resources with enhanced potential for creating wealth”. [cit]
This sounds great, and pretty exhaustive.
However, when I think of innovation, what springs to my mind is also the concept of “creativity”. How can creativity not be an intrinsic part of the creation of something breakthrough?
Based on this assumption, I delved deeper into the subject to gain a better understanding of what this relationship could look like. What did I discover upon resurfacing? A network full of different and closely related concepts – not only confirming my assumption but also enriching it with so much more.
The role of Creativity
According to Stanford University, innovation cannot happen without creativity: “Only with creative ideas one can truly innovate and implement solutions that work.”
In fact, creativity is typically centered around original thought and knowledge, which unleashes the potential to generate new ideas. Innovation is then used to turn a creative idea into a novel, viable solution.
In this way, innovation can be seen as applied creativity.
Let’s explore in greater detail how creativity and innovation are interconnected.
Just as innovation can be classified as disruptive or incremental, creativity can also be categorized as deliberate or spontaneous.
To better explain what these buzzwords* mean, let’s have a look at the following table.
*No junk stuff here. These concepts derive the from Christensen’s Disruptive Innovation Theory (that I studied after my manager kindly gave me some material) and the contents of the Lead with Innovation course I took this month on LinkedIn Learning.
Disruptive Innovation
Disruptive innovation refers to the creation of something game-changing and entirely different, capable of capturing the zeitgeist of (new**) customers’ needs and building a new market.
Disruptive innovation arises from unplanned, spontaneous initiatives that emerge within the organization, typically occurring during the early phases of a company’s product life or when the competitive landscape is changing. Therefore, it’s crucial to ensure that employees are empowered to surface and elevate new ideas. That’s why such innovations can only be fostered in separate, dedicated business units where it is possible to adopt an emergent strategy.
The isolated units set up to encourage creativity and pursue new, radical ideas within a company can be referred to as “skunk works”.
When dealing with disruption, these units are represented by “moon-shots”.
Here, groundbreaking ideas are implemented with a high degree of autonomy, without necessarily needing to address existing problems. There are no brakes for high-risk solutions, no boundaries for high-impact projects, and no set near-term expectation of profitability.
Moon-shots are then “highly ambitious projects, never-before-tried, bleeding-edge to the max and with the potential of changing the world over a relatively short period of time seen from a historical perspective” [cit].
Examples of disruptive innovations? Think about the impact of the wheal (yes, that one), or of the Internet. They both irreversibely changed the rules and established new paradigms.
As well as McDonald, which through its standardized assembly-line process and emphasis on speed revolutionized the way people perceive and consume fast food, or Netflix, which with its streaming model reshaped entirely the world of entertainment and shook up the video rental industry and television broadcasting.
And many others, such as Amazon Kindle rewriting the rules of book retail, Uber Taxi changing urban transportation, and Apple iPhone trouncing flip phones.
**Actually, according to Christensen’s theory, the target of disruptive innovation can be either existing over-served customers at low-end of market (low-end disruption) or new customers, historically lacking money or skills to buy and use the product (new-market disruption).
Incremental Innovation
On the other hand, incremental innovation represents the sustained evolution of a single key attribute in an existing product or process that customers are willing to keep paying for.
In this way, by improving performances or making better use of competitive advantages, companies can scale and move towards the incremental S-curve graph.
Incremental innovation is then intentional and driven by circumstances and market forces. The approach requires a deliberate strategy, i.e., conscious and thoughtful organized actions generated from rigorous analysis and implemented “top-down”.
For this reason, sustained improvements are embedded in already-existing business units where a deliberate strategy is visible to all employees. They need to act appropriately and consistently in skunk works teams in order to scale up current resources in a new, creative way to address a defined target problem and meet set deadlines. This is what a “roof-shots” project looks like: a sprint along the S-curve of incremental innovation.
Hence, “while moon-shots are extraordinary visionary stuff, and disruptive to the fullest, with a 10X leap forward if successful – roof-shots , on the other hand, is the methodical and relentless process of continuously improving 1.3–2X, quarter after quarter, year after year” [cit].
Examples of incremental innovations? According to the Keeley’s “Ten Types of Innovation” framework, they can focus on configuration, offering or experience. Without going into too much detail, here some examples for each category: Gillette, which starting with a single blade, has added different features and more blades to better meet customer needs; Lego, which turned toys into video games and theme parks; and Google Gmail, which over time has added new features to provide smooth, user-friendly operations without annoying flash ads and interface improvements for a better user experience.
And with that, the second column of the table (hopefully!) becomes clear: there are 2 ways of innovating***.
What about the first column? When I discovered that also creativity can be separated into 2 traits, I couldn’t help but find this link.
Disruptive innovation : Incremental innovation = Spontaneous creativity : Deliberate creativity
*** These are the top 2; innovation can be also defined as radical, architectural, frugal…
Spontaneous Creativity
Spontaneous creativity is the most common way to think about creativity. This is the creativity of perfect timing and luck magnetism, where knowledge relies on the inspiration for a “Eureka!” moment (cognitive), and the creativity of the unconscious, in which ideas arrive when we least expect them only thanks to a mindful connection with the our “self” (emotional).
This is how the most ambitious, exploratory, and ground-breaking ideas come up and drive disruptive innovation.
Deliberate Creativity
When talking about incremental innovation, instead, it’s deliberate creativity that comes into play. This is the creativity of planning and expertise (cognitive) and the creativity of both an open mind and an open heart, that catches ideas when having a mindful connection with the “outer” (emotional).
Hence, thanks to an intentional effort and active listening to the outside surrounding us, it is possible to come up with original, smart and winning ideas and obtain incremental improvements.
Interestingly, creativity serves only as a necessary prerequisite for innovation. In mathematical terms: it is a necessary but not sufficient condition for innovation.
Why? Because ideas are useless, per se. To thrive, they need to be shared, and to grow, they need to be tested.
Only in this way they can evolve into innovative solutions.
So, what else do we need to innovate?
Long-story-short: a Lean approach.
LEAN APPROACH
Lean is all about making action to translate ideas into tangible and valuable solutions. Without action, even the most astonishing and creative ideas remain just ideas.
What does action mean when in the context of a Lean strategy?
Here are the key concepts that I can summarize**** :
How is action embedded in here? Let’s see:
- Customer-obsession
Innovative solutions are products or services that people will use or benefit from. Those “people” must be the obsession (not those “products or services”). Get to know who they are, what they want, what is their job-to-be-done, what they know they need, and even what they don’t know they need yet: the list of things to discover about customers is potentially infinite. Defining the target audience is the very first step in uncovering a solution, and this can’t be achieved by merely sketching them on paper, but by meeting, observing, and actively listening to them. - Experiment, experiment, experiment
Crafting the solution by relying on an never-ending design thinking process, making assumptions without external validation, and implementing additional features without receiving feedback on the existing ones is a fatal error when innovating.
Every single aspect of an idea must be tested. How? “Going to Gemba”, in Japanese terms, which translates to conducting experiments with real customers in the real world and by collecting all necessary information to improve or adjust each aspect. - Iteration
The process of analysing the results of tests and translating them into more valuable modifications of the idea’s aspects cannot end with the first positive or first negative feedback.
Iteration is at the core of Lean approach, whose motto is: “fail fast, learn faster”.
**** There is really a lot of stuff related to Lean. Actually, I’m thinking about writing a separate article on this later on. The concepts I highlighted here derive from:
– the Lean startup method I applied within the 3-month incubator experience I had with the startup I co-founded in 2022;
– the Lean Bootcamp that my company organized for new Interns;
– the Strategyzer framework I was introduced to within my team.
Here’s how everything covered up to now can be schematized:
So, I’ve answered half of the questions that opened this article:
What does innovation mean? | What is needed to innovate? | Why to innovate?
– ”Wait, but they are 3! So this means one question and a half of another?”
– “Exactly. In addition to explaining “why we innovate”, I’m still missing one, fundamental, component of the innovative process.”
– “Which one?”
– “The next article will tell!”
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