Innovation – What it is, and is NOT

By Don Smith

“You keep using that word, I do not think it means what you think it means.”

Inigo Montoya’s famous line from The Princess Bride instinctively pops into my head (sometimes muttered under my breath) when I read yet another article on the thin, worn topic of “innovation”. In its often misunderstood overuse, the word has become diluted (even polluted) to the point of becoming ineffectual in portraying any clear and distinct meaning; perhaps in similar fashion to the misuse of the word “quality” in the last 50 years. First of all, innovation is not coterminous with invention and should never be used interchangeably. Secondly, innovation is not rooted in technology. And lastly, the pursuit of innovation is not in and of itself innovation. This severe dilution of the term creates confusion and hinders us from actually achieving real and reliable innovation.

In the early 70’s Peter Drucker wrote, “Above all, innovation is not invention.” Apparently the terms were being confused back then as well. Drucker then gives us an important clue about what innovation really is in the very next sentence saying, “Innovation is a term of economics rather than technology.” It’s probably obvious, but what he means is that innovation occurs because of the economic choices made by a society when they adopt some form of invention. This definition is backed up in the book The Medici Effect, where Frans Johansson says, “Innovations must not only be valuable, they must also be put to use by others in society. …It has to be ‘sold’ to others in the world, whether those people are peers who review scientific evidence, customers who buy new products, or readers of articles or books.” This definition also comes from a body of research on creativity and innovation done by Teresa Amabile, the Edsel Bryant Ford Professor of Business Administration at Harvard Business School.

To illustrate the difference, let’s consider one of the most renowned and prolific inventors of all time. Thomas Edison had 1084 patents; only two others in history have received more. Yet only 31 of those patents resulted in products which were widely adopted commercially. In other words, only 31 of his inventions were truly innovative. I’m not saying the other 1053 inventions weren’t clever or cool in some way. It’s simply that the majority of them were never found to be useful enough by society to be innovative. Innovation is proven when social adoption occurs and the invention is significantly adopted or utilized.

Drucker made a secondary point that needs to be understood as well. He said, “Nontechnological innovations – social or economic innovations – are at least as important as the technological ones.” Technology is not the only platform of invention and innovation. There are as many non-technical inventions as there are technological, if not more. We are constantly coming up with new methods about how we can do things and ways of thinking or perceiving the world. For instance, it can be innovative to simply reconfigure the revenue model by offering free or “freescription” products or services, where basic services are free of charge to the bulk of customers and premium services paid for by a few, which actually funds the business model. Many innovative connector platforms such as Lyft, Uber, and Airbnb are disrupting legacy services. Recent examples of social innovation are the Open Source movement, social media, Open University, Fair Trade, Microfinance, and companies forming for the “social good” (i.e. B Corporations). I recently learned of a for-profit company based in the Seattle area that funds projects in third world countries with no intention of making any profit. This is intentional and allows them to circumvent the governmental oversight imposed on contemporary non-profits and NGOs; not to mention the costs of graft and corruption often associated with international aid. While this cannot yet be confirmed as an innovative approach, when other organizations move to adopt, it may become so.

Another source of innovation is repurposing old technology for value creation in a new context. One recent example of an old technology applied in a new way is the flywheel, which was originally used to help maintain the consistency of the rotational speed of a shaft. This technology was ingeniously repurposed to maintain the consistency of electrical flow in the generation of electricity using wind and solar power generators because those sources do not produce consistently (i.e. wind dies, sun fades). As an old mainframe guy, I’m very keen to point out the concept of centralized computing, which came and went in the 20^th century, has now returned in what is commonly known as Cloud Computing. Old technologies and concepts may have many new and innovative applications, if we can distance ourselves from the bonds of conventional utilization.

An issue of “The Economist” a couple of years ago focused on the debate about the perceived decline of real innovation in recent years. Whether or not the perceived decline is real, it begs the questions of why and what can be done to mitigate the perception. Could it be the pressure to innovate is itself killing innovation? One possible validation of this notion is the often seen phenomena that according to the measure of our intense desire for something, is the measure to which it eludes us. A more rational aspect points to a temptation to label something as innovative when, indeed, it hasn’t reached the level of adoption required for true innovation. While some invention may be massively clever and endearing to its small circle of fans, the bulk of the world remains indifferent. This shouldn’t, but often is, mislabeled as innovation. We lack innovation because most organizations don’t truly know what it is.

Why is the distinction between invention and innovation so critical? I would like to suggest that innovation is the desired outcome, while invention is one of the elements or prerequisites. On the path to innovation we must invent.  The process of invention begs failure, which increases learning and knowledge and is the investment in potential future innovation. Yet many organizations are failure averse. We need prolific invention from all possible sources, technological as well as non-technological. But invention alone isn’t enough.

While invention is the precursor to innovation, another critical ingredient is required. The value proposed in said invention must also be adopted by customers. I often wonder how many truly useful inventions never materialized because their value proposition was never effectively communicated to potential beneficiaries. The sad truth is, most inventors are really good at developing very useful inventions, but lack the skills to effectively communicate the value proposition. Therefore, an additional precursor to innovation is effectively and successfully marketing inventions. Inventors come up with really interesting and clever ideas. However, it’s the innovators who take a clever invention and effectively communicate the value proposition, which then drives significant adoption (i.e. lots of customers). I would like to suggest that the true measure of innovation is the rate of social adoption of some value proposition (social or technological) and thereby creating significant new demand.

Just like the challenges of the “fire swamp” in The Princess Bride, the journey to innovation is anything but easy. Nevertheless, we make the work possible when we have clarity about what innovation truly is, and is not.

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This article originally appeared on FutureSmith Blog and has been republished with permission.