What is Your Innovation Equation?

What is your innovation equation?Have you ever wondered why with all of the people trying to innovate, more innovation isn’t created?

I’ll give you a hint…

Often, something gets lost in the translation between what people think their customers want and what their real desires are.

Part of the reason so many people fail to innovate is that they fail to recognize that ideas and innovation are not the same thing. Ideas are easy, innovation is hard. For ideas to translate into innovation they must be based on unique insights that unlock new customer value.

In their book The Other Side of Innovation, Chris Trimble and Vijay Govindarajan assert that:

Innovation = Idea + Execution

Successful innovation is based on how effective firms are at execution, and that ideas aren’t as important as execution. But the equation could be better because many companies are good at generating ideas and at executing their ideas, but are still bad at innovation. The problem is not that companies don’t know how to execute, but that they often fail to identify a unique insight that unlocks sufficient new customer value to displace existing solutions.

So let’s modify the equation to be:

Innovation = Insight x Execution

The equation improves by multiplying the two elements instead of adding them because if the insight is not unique or does not unlock new customer value, then even the best execution doesn’t equal innovation.

But even this modified equation doesn’t go far enough. Instead it should be something more like this:

Innovation = Value Creation x Friction Reduction x Value Translation

Value Creation occurs when an organization identifies a unique customer insight that unlocks new customer value, creates a number of good ideas, selects the best of these, and overcomes the inherent hurdles in realizing the potential of the best idea.

Friction Reduction occurs when you make it easier for customers to do business with you, when you make it easier for customers to unlock the key value in a solution, and when you make it easier for people to share this value with others.

Value Translation is the effective communication of the new customer value and the friction reduction, either by explaining the incremental value of a minor innovation or educating the customer on the extreme value created by a disruptive innovation. But helping the customer understand the new value created by the new solution is not enough. Value translation also requires the effective communication to the customer of the ease of transitioning from their existing solution (even if it is the do nothing solution).

Here is an example of poor value translation from Apple that I like to use, and used recently in Staging an Innovation Party:

“Our most advanced technology in a magical and revolutionary device at an unbelievable price.”

Meanwhile, the billboard at the beginning of this article is an example of excellent value translation.


To make a successful innovation translation, you must learn to successfully make the translations between insight and idea, idea and execution, execution and launch, and ending with successfully translating the value for customers of all the hard work that came before.

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Braden KelleyBraden Kelley is a popular innovation speaker, embeds innovation across the organization with innovation training, and builds B2B pull marketing strategies that drive increased revenue, visibility and inbound sales leads. He is currently advising an early-stage fashion startup making jewelry for your hair and is the author of Stoking Your Innovation Bonfire from John Wiley & Sons. He tweets from @innovate.

Braden Kelley

Braden Kelley is a Design Thinking, Innovation and Transformation Consultant, a popular innovation speaker and workshop leader, and helps companies use Human-Centered Change™ to beat the 70% change failure rate. He is the author of Charting Change from Palgrave Macmillan and Stoking Your Innovation Bonfire from John Wiley & Sons. Braden has been advising companies since 1996, while living and working in England, Germany, and the United States. Braden earned his MBA from top-rated London Business School. Follow him on Twitter and Linkedin.




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  1. Sekhar on September 1, 2012 at 7:36 am

    Your third equation reduces innovation to a sure winner analysis (purchase barriers and purchase motivators). If that is the case you may as well equate Innovation to Value creation + Value capture. But then, it is the definition of business. I agree with your definition that Innovation = insight * execution. Regards. Sekhar

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