Tuesday, August 15, 2006
Innovation: What is it?
It is uncanny how many people talk about innovation and about being innovative, but when asked, fails to give an adequate definition of what it is. Here are two useful definitions of innovation that will give you a flavour of what innovation is all about.
Definitions of Innovation
The OECD provides a useful definition in the Oslo Manual published in 2005. The definition reads:
The first thing to note about this definition is that is uses the word product to define a good or service. In most books, papers and texts, innovation techniques associated with products, as in goods, are perfectly applicable to services as well. By way of example, services can be prototyped just like physical prototypes of products (goods); 24 hour online banking can be
prototyped by producing visual images of the screens that the customer will be exposed to and by producing beta versions for test. Insurance providers can produce prototypes by preparing a makeshift office and sets of working documents and operate the sale and delivery of the service in a test facility.
The second thing to note in this definition is the types of activities that are considered innovative such as a new or significantly improved product, or process, or a new marketing method or a new organisational method in business practices, workplace organisation or external relations. This definition actually provides a very useful classification for types of innovations and can also help innovators organise their innovative activities. The best innovators generally innovate in all of these areas thereby producing the greatest and most rewarding changes to their organisation. We will deal with classification of innovations in other areas of our NSC Publishing Body of Knowledge.
The Product Development and Management Association (PDMA) provide another useful definition; it is:
This definition, while meaning much the same thing as the OECD definition, introduces the concept of the idea in innovation. It is important to note that all great innovations start with an idea. Generation, development and implementation of new ideas in your organisation are, in essence, innovation. Idea generation and idea management in general, also known as the fuzzy front end, is poorly managed in companies and other organisations. If there is one single message to be taken from this definition, it is this: it is absolutely essential to effectively master the art of idea management to be successful at innovation. Many studies have shown this to be true; the reader is directed to the works of Prof. Robert Cooper[3] and Koen[4].
If an organisation is attempting to introduce an innovation strategy and process in their organisation, the first step is to get an understanding of the term innovation and what is involved in being innovative. These definitions clearly define the areas within which an organisation must learn methods and tools for managing them and within which they must become highly active.
[1] OSLO MANUAL: GUIDELINES FOR COLLECTING AND INTERPRETING INNOVATION DATA, OECD/EUROPEAN COMMUNITIES, 2005, ISBN 92-64-01308-3.
[2] Belliveau, Griffin, Somermeyer, 2004, The PDMA Toolbook for New Product Development, Vol. 2, Wiley.
[3] Cooper R.G., 2001, Winning At New Products, Perseus Publishing.
[4] Koen P.A., Ajamian G.M., 2002, Fuzzy front End: Effective Methods, Tools and Techniques, in Belliveau, Griffin, Somermeyer, 2002, The PDMA Toolbook for New Product Development, Vol. 1, Wiley.
Definitions of Innovation
The OECD provides a useful definition in the Oslo Manual published in 2005. The definition reads:
An innovation is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations.[1]
The first thing to note about this definition is that is uses the word product to define a good or service. In most books, papers and texts, innovation techniques associated with products, as in goods, are perfectly applicable to services as well. By way of example, services can be prototyped just like physical prototypes of products (goods); 24 hour online banking can be
prototyped by producing visual images of the screens that the customer will be exposed to and by producing beta versions for test. Insurance providers can produce prototypes by preparing a makeshift office and sets of working documents and operate the sale and delivery of the service in a test facility.
The second thing to note in this definition is the types of activities that are considered innovative such as a new or significantly improved product, or process, or a new marketing method or a new organisational method in business practices, workplace organisation or external relations. This definition actually provides a very useful classification for types of innovations and can also help innovators organise their innovative activities. The best innovators generally innovate in all of these areas thereby producing the greatest and most rewarding changes to their organisation. We will deal with classification of innovations in other areas of our NSC Publishing Body of Knowledge.
The Product Development and Management Association (PDMA) provide another useful definition; it is:
Innovation: A new idea, method, or device. The act of creating a new product or service. The act includes invention as well as the work required to bring an idea or concept into final form.[2]
This definition, while meaning much the same thing as the OECD definition, introduces the concept of the idea in innovation. It is important to note that all great innovations start with an idea. Generation, development and implementation of new ideas in your organisation are, in essence, innovation. Idea generation and idea management in general, also known as the fuzzy front end, is poorly managed in companies and other organisations. If there is one single message to be taken from this definition, it is this: it is absolutely essential to effectively master the art of idea management to be successful at innovation. Many studies have shown this to be true; the reader is directed to the works of Prof. Robert Cooper[3] and Koen[4].
If an organisation is attempting to introduce an innovation strategy and process in their organisation, the first step is to get an understanding of the term innovation and what is involved in being innovative. These definitions clearly define the areas within which an organisation must learn methods and tools for managing them and within which they must become highly active.
[1] OSLO MANUAL: GUIDELINES FOR COLLECTING AND INTERPRETING INNOVATION DATA, OECD/EUROPEAN COMMUNITIES, 2005, ISBN 92-64-01308-3.
[2] Belliveau, Griffin, Somermeyer, 2004, The PDMA Toolbook for New Product Development, Vol. 2, Wiley.
[3] Cooper R.G., 2001, Winning At New Products, Perseus Publishing.
[4] Koen P.A., Ajamian G.M., 2002, Fuzzy front End: Effective Methods, Tools and Techniques, in Belliveau, Griffin, Somermeyer, 2002, The PDMA Toolbook for New Product Development, Vol. 1, Wiley.
