Among the many buzzwords permeating today’s business acumen, lies the all encompassing, magnificent, and mysterious “innovation.” Like so many buzzwords, the overuse of “innovation” has led to some confusion about what it really means. For example, earlier this week I saw an ad for a financial services company trying to recruit new agents by presenting themselves as an innovative company. However, I struggle to find any major financial institution today that has the capacity for real innovation, let alone the mobility to navigate the regulatory minefield. This is due in large part to the limitations placed on the financial system, resulting from the “innovative” tools and products that brought the global financial system to a screeching halt.
So what is innovation and how do we know it when we see it?
Let me start by stating what innovation is not. Innovation is not a product. However, innovation can emerge from a product being utilized for purposes it was not designed for. Products are only participants of innovation. Making this distinction helps to reframe the conversation, freeing up innovation from the confines of Silicon Valley, Research Triangle Park, and various other technology hubs around the world.
Innovation is the byproduct of evolution
As organizations evaluate their present day situation, many are looking for solutions to meet new client demands, outside competition, and the general uncertainty about our current economic situation. However, most organizations are looking to the past for solutions to current issues, and, not surprisingly, they are coming up empty handed, frustrated, and generally uneasy about the options available to them.
Innovation is in the application, not the creation
Let’s take a quick inventory of today’s “innovation paradigm.” If I were to ask you to name the first innovative company that comes to mind I can almost certainly guess your answer would be either Apple, Google, Facebook, or Twitter. With that in mind, what is it that makes these companies innovative? Is it their products or their services? Or, is it the application of their products and services? Consumers determine whether a product, service, or idea is innovative by the way they apply those products, services, and ideas. Innovation is in the application, not the creation.
Many organizations are limited by the confines of their industry paradigm. In a recent conversation with a non-profit executive he shared his concern about the stigma associated with his organization because other organizations providing similar services have generated a negative perception among a significant percentage of their target demographic. The solution here, and for many organizations trapped by conceptual boundaries, is to become innovators in their own domain. In order to do so, organizations must take the following action: