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What is innovation, and how can it give you a competitive edge?

[Originally published: Wednesday, December 1, 2010; Edited and re-released May, 2013]

Contrary to popular belief, innovation doesn’t always require a big-big or new-new idea. Smart, small and simple innovations are often very powerful. Here’s why.

Successful innovations happen on purpose. Revolutionary innovations are rare. Most of us innovate a little bit at a time. That’s why we must develop an ongoing innovation process to systematically identify, test and implement new ideas.

Innovation requires practice and determination. Simply doing something the “right way” when you had previously done it incorrectly isn’t an innovation. That’s catching up.

Innovation is about doing the right things right.

Sounds like something you’ve heard me quote before: Peter Drucker’s key insight to effective leadership applies to effective innovation. First find right things to do, then do them in the right way.

All of which requires a constant process of innovation.

Consider the purpose of innovation. It’s not only about creating a better mousetrap. Simply inventing the next generation product or service is interesting; but not the same as innovation. True innovation changes behavior, too. Especially, our customer’s behavior. It alters how we achieve our desired outcomes.

How do you start? Try these three steps:

  1. Identify opportunities. Regularly review what you did well – or not so well – in selling, marketing, managing, and so on. Beyond the gaps gaps which can be filled with new tools or tweaked procedures, consider if you’re even doing the right type of activity. Has the customer’s behavior or desires changed in such a way that more won’t be better. Evaluate how customers act, live, think differently than last month or last year. More importantly, consider how you can help them change that behavior, too. 
  2. Keep it simple. Don’t redesign everything. Most innovations target little changes in behavior, leveraging your strengths. Few rewrite everything. Small innovations are especially important if they are to be implemented by stakeholders or customers. People can accept or try small changes but often resist major redesigns that require greater risk and uncertainty. Simple innovations are also easier and less costly to test, evaluate and refine.
  3. Measure outcomes. Innovation shouldn’t change your company’s mission but it should impact its outcomes. As you implement new ideas, measure how behavior has changed – in expected and unexpected ways. Then tweak the innovative process to take advantage of the results. Innovation doesn’t stop when change happens: it keeps going by expanding upon the change.

Innovation is at its best when it creates a new set of opportunities in a marketplace. When companies fundamentally change how someone consumes a product or service, or introduce entirely different ways for paying for them, consumer behavior will react to institutionalize the change. When leaders seek to alter a core behavior of their organization, and growth occurs, positive outcomes will make the innovation self-supporting. 

Innovations come in all shapes and sizes. And while it  involves hard work, it’s also a lot of fun. Companies that build innovation into their operations can energize their people and excite their customers. Companies whose brands become synonymous with innovation demonstrate the power of innovation to inspire markets and encourage competitors. The true power of innovation comes to companies who consistently and purposefully change others behavior – to the delight of all.