Innovation Confusion

At the recent E2.0 Forum, I described a particular dynamic I’ve found: there is no set definition of innovation. It’s a concept where everyone has an intuitive sense of what innovation is, but would have a hard time formalizing a definition. Much like the way U.S. Supreme Court Justice Potter Stewart described pornography:

I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description [“hard-core pornography”] and perhaps I could never succeed in intelligibly doing so. But I know it when I see it.

Sure there are dictionary definitions. Merriam Webster defines innovation as: “the introduction of something new.” But that’s really not satisfying. Just because something is new, is it really an innovation? If everything new is an innovation, nothing is.

On the flipside, in popular culture and the business press there is a common view that innovation is all-disruption, all-the-time. Radical technologies and overthrowing incumbents with new business models are the primary definition of innovation. Makes for great articles, but has the effect of excluding many other types of innovation.

Not satisfied with either approach, I wanted to develop a good working definition of innovation. Care must be taken to keep the definition narrow enough to be valuable, while leaving enough margin in the definition to handle various forms of innovation.

Definition of Innovation

Innovation: A change in a product offering, service, business model or operations which meaningfully improves the experience of a large number of stakeholders

Each part of the definition reflects a specific aspect of innovation, described more fully below.

Change: Rather than use the word “new”, I prefer “change”. The word new has connotations of Greenfield development. A change reflects that there was a way people were doing something before, and now there’s a different way. It also allows for an existing practice or technology in another sector to be applied to your sector. The practice or technology may not be new per se, but its application to a different vertical is a change.

Product offering, service, business model or operations: These areas widen the scope of innovation beyond the popular culture sense of it. Innovation can relate to a product offering, be it a brand new product built on a radical technology, or a new feature. Service changes can certainly be innovations. Business model innovations are a favorite, and are powerful types of innovations. Operational innovations can be quite valuable, such as WalMart’s work to improve its fleet efficiency by 25%.

Meaningfully improves the experience: If a company redesigns its packaging, that’s a change. It’s new. But does it meaningfully improve the experience of consuming or using the product? Likely, no. There are many types of changes that can be made, but the question of whether it’s an innovation rests on how significantly it improves the experience. This aspect of the definition raises the bar to avoid classifying too-small changes as innovations. What is meaningful is contextual on a per innovation basis.

Large number of stakeholders: This qualifier separates invention from innovation. By that, I mean that creativity that results in an invention may not actually be an innovation. If an invention satisfies just one person’s interests – likely the inventor – then it really hasn’t crossed the threshold into innovation. The diagram below illustrates the concept:

Not all inventions are innovations, nor are all innovations inventions. But for an invention to be more than something new and creative, it should have broader impact. The term “stakeholders” acknowledges that the beneficiaries of an innovation can vary widely – consumers, shareholders, employees and any subset thereof.

What do you think? Fit your definition of innovation? Feel free to add your thoughts.

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Hutch Carpenter is the Vice President of Product at Spigit. Spigit integrates social collaboration tools into a SaaS enterprise idea management platform used by global Fortune 2000 firms to drive innovation.