Innovation Insights: How to Define an Innovation?
Sep 30, 2024
An innovation management system has five key components. This includes the Innovation Strategyā€‹, Front End of Innovationā€‹, Project Portfolio Management, Innovation Development, and Innovation Launch.ā€‹
The definition of innovation applies to all components of the innovation management system.
There are many ways to define innovation to ensure everyone is on the same page when dealing with it. Using Innovation in the Value Offering is a proven and practical definition of innovation amongst Club members.
Furthermore, although many different types of innovations are included in the value offering, innovation should always be evaluated from an external perspective.
What is an Innovation?
Innovation has three components and one specificity, it must:
- First, offer novelty to the value offering, such as a distinctive new look or new features.
- Secondly, the novelty must be visible to the customer, which means that they must be able to perceive and appreciate the novelty of the innovation.
- Finally, it must create value for the customer. Here, the question is not to know if it brings small, medium, or very high value. It isn’t about the level of value as long as it brings value to the customer and that the value is different than the current offering.
As the perception of novelty is fleeting, an innovation is only considered new for a specific number of years. This is mainly related to the duration that the innovation will be measured.
Therefore, an innovation can take several forms: a line extension, a new product, a new platform, a new process, an innovation in the customer experience, a business model innovation, and so on.
Application Examples of Innovation from Pelican
Pelican, a member of the Innovation Leaders Club, is a world leader in designing and manufacturing kayaks, paddle boards, and pedal boats. They have based their value proposition on democratizing the kayak by offering attractive, affordable and easy-to-use products. A lot of their success rests in their effective manufacturing process, an obviously very well-kept secret.
Example #1
In order to sustain growth and access to a new market segment without cannibalizing their current sales, Pelican developed a new product line: the Fishing Kayak.
Referring to the stated definition, is this an innovation?
Yes, because it has a new look and new features, which are visibly recognizable by customers (retailers and consumers), and it creates value through its new multi functionalities.
Example #2
Pelican developed a new material to improve its manufacturing speed to produce kayaks,
without changing their prices.
Referring to the definition, is this also an innovation?
No, because while there is novelty in the process and it creates value internally for Pelican by increasing its margins, nothing changes from the customer’s perspective as there are no new functions, and the value of the product remains the same.
As a reminder, for the market to consider it an innovation, it has to be visible externally. In Pelican’s case, if they wanted their new material to be recognized as an innovation, they would’ve needed to communicate to their customers that they were now using a new.
Image Sources: Innovation Leaders Club, Pelican
The Innovation Leaders Club is a private, elite club aiming at establishing productive interpersonal exchanges centered on sharing knowledge, experience, and best practices, about topics previously chosen by participants.
We have developed a 60-page visual guidebook on how to develop an innovation strategy. It is a fully illustrated step-by-step guide to building the foundation of an innovation system.
