Are you being inventive or innovative? What is the difference?
November 3, 2014
I was at a management meeting of a financial services firm the other day and we were discussing innovation. I was talking about looking at new market segments and also new payment modes when the CEO stopped me and asked, “How is this innovative? These are already in the marketplace? Maybe not for financial services, but certainly in the logistics space.” Silence. And a few heads nodding. This reminded me of another conversation I had not long prior to this meeting where I was having lunch with a training consultant (with an NBS MBA, no less!) who also uttered a similar question with respect to my suggestions on innovative ways he could get to market. Although my experiences are anecdotal, it does seem that, after all these years of using the term “innovation” many people don’t really know what exactly that means! In this article, I hope to lay down the concept of innovation once and for all, and to distinguish between it and “invention”.
From the two conversations, and the various non-verbal head-nodding, it is plain to see that people are confused between innovation and invention. The two terms seem to be interchangeable; they seem to mean the same thing. While an invention is certainly an innovation, an innovation isn’t necessarily an invention. Invention, which seems to be the popular notion of innovation, is the process of developing and offering something brand new to the market. For inventions to be inventions, there must not have existed any semblance of the article before it. By contrast, an innovation is something new that is brought to the market. It can be an invention, of course, but it can also be something that has been done for decades in one industry and then ported to another one and made good. For example, is a watch an invention or an innovation? By all intents and purposes, it is an innovation because there existed for centuries before it, the clock, which had the purpose of telling time. Hence the clock is the invention; the watch, an innovation. Obviously we could start splitting hairs and say that in the fashion industry, the watch is an invention. But it is difficult to say that it was a totally brand new concept when the clock (water, pendulum, sundial) had been around long before watches and had been used to do just what watches do – to tell the time.
But does it matter? So what if an item was an invention or an innovation? Patents can equally protect both. Well, the difference really is in the mindset. By embracing innovation as something new, and not something inventive, we can start sourcing for innovations from a myriad different places. You could go to your competitors and see what they are doing and then improve from there. You could look at different sectors and then port their best practices to your organisation. You could see how different companies use different business models and see if you can adapt that to your operations. You could look at different regions and see if you could offer your expertise to meet an unmet demand there. These are all sources of innovation for you and your company.
So, in summary, I would like to say that the way you had defined innovation might have limited your ability to do just that. Perhaps it is time to embrace a larger definition of innovation, one that brings newness to society and which has market potential. To round up our discussion, here are some aspects of innovation you can take right away:
customer experience innovation
business model innovation
value chain innovation
Perhaps the key question right now is not what innovation is, but when are you starting? The answer is, of course, right now; although if you wanted to wait, we will be expounding each of these 7 aspects of innovation over the next few articles.
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