Nearly everyone will tell you that to be successful in business, you need to be innovative. But what does being innovative really mean? Ask a dozen entrepreneurs, and you’ll get a dozen different answers.

“Innovation: It’s something everyone is in favor of, everyone likes the idea of, yet no one really understands it,” according to Wharton legal studies and business ethics professor Kevin Werbach, who moderated a panel on the topic at a Wharton Economic Summit.

The problem is, there’s a lot of wrong ways to be innovative. “Changing for the sake of change is not innovation,” writes Daniel Newman in HuffPost. “Creating a new product that no one needs is not innovation. Creating a product that does something no one is ready to do is not an innovation. Innovation starts with answering the call do something better, smarter, or faster to solve a real need or problem for your customer community.”

Here are some well-known examples of being innovative the wrong way:

  1. You misread the market. Look at Betamax vs. VHS. Betamax was in some ways technically superior, but VHS tapes were not only cheaper, they could hold an entire movie. Sony assumed that people would be using a VCR primarily to record television programs off the air, and that a one-hour tape would be sufficient.
  2. You’re way ahead of the market. How many electronic devices and software have been invented that died, only to have similar versions come along a few years later that were successful?
  3. You’re too innovative with your own product line. The “Osborne Effect” was blamed (mistakenly, according to some) for Osborne Computers going out of business by pre-announcing its second version before it was ready, leading to potential customers holding off on purchases.

It’s a delicate balance between developing new products and supporting your existing product line, which is why it’s so important to figure out ahead of time what “being innovative” means to your business, rather than simply striking out wildly in all directions.

Part of it is the distinction between “innovation” and “invention,” writes Lisa Kay Solomon, Professor of Design Strategy at the California College of the Arts, in Quora. “Both have to do with creating something novel out of great ideas,” she explains. “Invention is the first boat ever pushed out to sea: it creates something new, fills an important need, and may be revolutionary. It is often the first of its kind. But, does it create meaningful value that someone can realize in an accessible way?  A fabulous new discovery in a lab may be a wonderful invention, but if it doesn’t create value in the market, it’s not innovation.”

Successful innovation requires three elements, Solomon writes:

  1. The ability to see new potential opportunities through the eyes of a real user
  2. The ability to create new value for users, and refine the idea quickly to hone in how to maximize that value and minimize unwanted friction
  3. The ability to make something that can sustainably scale once it gets tractions in the market

Obviously, innovation needs to start out with an idea. But what’s also needed is the process required to turn that idea into a product, writes Chris Kalaboukis in ThinkFuture. What does that process need to include?

  • a review process where the idea is debated and refined
  • an approval process where the idea is reviewed and budget to move the idea forward is allocated
  • a place or space within the organization (or via vendors) to develop that idea into a saleable or implemented product or service
  • support within the organization to promote and market that product and service to the targeted market
  • support for its ongoing development and enhancement

Without that process, innovation can’t happen, and calling your company “innovative” could actually disillusion your employees, Kalaboukis warns. “You aren’t really fooling anyone,” he writes. “If you do not have a real innovation flow, as defined in the classic sense, then your people will figure it out. Maybe not immediately, but they will. When that happens, be prepared for your innovation pipeline to dry up.”

What are some suggestions for how to make your company’s innovative process more successful? Scott Kirsner has some ideas in the Harvard Business Review:

  • Invite business units to participate, either by laying out targets or problem areas for the innovation or R&D group to explore, or supplying funding, so they are invested in the process and have some control over the innovation group
  • In fact, consider having innovation groups within each business unit, rather than a single innovation group that touches base with business units occasionally
  • If you continue to have an innovation group, rotate members of the business unit through it
  • When an idea moves from the innovation group to becoming a product, have a smooth transition rather than simply a handoff
  • Set and pay attention to business milestones for the new product

The result could be something much better than just a buzzword—true innovation that delivers on target.


Simplicity 2.0 is where we examine the intricate and transitory world of technology—through a Laserfiche lens. By keeping an eye on larger trends, we aim to make software that’s relevant to modern day workers, rather than build technology for technology’s sake.

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