What is the purpose of innovation?

innovation on purpose

This question may be similar to the question “what is innovation?“, but it isn’t.

Why innovate?

Before answering, lets consider what innovation is. Two weeks ago I argued that because innovation means different things to different groups, that you should come up with your own definition of what innovation is.

For me, innovation is ideas transformed into value. I don’t get into whether it’s radical, incremental, disruptive or any other buzzword you can come up with because it makes it more complex for those who are not in the know.

With that said, if innovation is ideas transformed into value, then the purpose of innovation is to create value. Too simple? Maybe it is. But again, I think keeping things as simple as possible is key.

With that in mind, we can then start by defining value. Again, value means different things to different people. And here, is where it gets interesting because we are talking about an organizations value proposition. And, when we talk about innovation, we are talking about a different value proposition than that of what currently exists. This is when change really happens because you are changing the value proposition. Not the technology, not the branding, but everything that supports your value proposition.

So, coming full circle. What you need to do is define a set of criteria of how you will define that new value that you will create.

Using Zappos as an example, I doubt Tony Hsieh drew up a strategic plan on how to differentiate Zappos from others. My guess is he thought about how Zappos could create a different kind of value putting customer service at is center, and therefore enriched its value proposition by focusing on delivering exceptional customer service.

See what I mean? Less vague and more focused. Of course, I’m assuming. But, it doesn’t mean the same thing as these vague and copycat statements:

The purpose of innovation is…

  • “not simply to build something new, but to win new customers, new markets, or new products.”
  • “to solve a customer problem.”
  • “to be different but also better.”
  • “to make the world a better place.”
  • “to be relevant.”

These are all good and well but what is missing there is the all-powerful and concrete “HOW”. And, because it is very difficult to be concrete, this is where most efforts die. It is easier to copy the other guy instead of thinking for yourself.

If this makes your head spin, you are not alone. Hopefully I’ve helped you think about innovation differently.

Point: Ultimately, just like your business strategy, your innovation strategy needs to be focused. It can’t be all things to all people. It must be able to stand on its own.

Now, I would love to know what you think. What is the purpose of innovation? I look forward to your thoughts…

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Also published on Medium.

  • Jorge,

    I think you are right that innovation is, at it’s core, about creating value, but I also think it goes much further than that. In a very real sense, innovation is the ONLY thing that creates value.

    I wrote about this a few years ago: http://www.digitaltonto.com/2009/why-we-need-innovation/

    One of the things that I found curious while I was living in the former Soviet block was that they had built up an entire intellectual structure around the “contradictions” of capitalism. I didn’t have the first idea what they meant, so I looked into it further.

    It turns out that Marx was an intense student of Adam Smith and David Ricardo and he found that a piece of their argument didn’t make sense. If everything tended toward equilibrium, there would be no chance for profits, so capitalists would have no recouse but to exploit workers.

    Later, Schumpeter pointed out that as long as there is continual innovation (i.e. creative destruction) then there would always be economic value created.

    Of course, this wasn’t until the 1940’s and once they had starved half of Ukraine fo their idea it was pretty hard to walk it back.

    The rest is history…

    – Greg

    • Hi Greg,

      Great point! I remember reading your post at some point in the past 🙂 I fully agree with you that innovation is the only thing that creates value, no argument there. I just think that when talking to the “lay-person” we have to be extremely explicit. Of course, this is and will always be the challenge.

      I’ve even gone as far as to argue and simplify innovation = change. Then people hear that word “change” and it’s like a cue for them to close their ears and turn away. They are not really eager to transform themselves. As you know, there is no easy way…

      Thanks for the insight reminder…



  • seventhman

    I’m hoping that someone can come up with a clear definition of what innovation really is. But I like the brevity of yours – ‘ideas transformed into value’ and I couldn’t agree less. I think that we need to make a world of difference this time… for real. Thanks for reminding us!

    • Thanks! Come up with your own, just remember that it’s about creating a new kind of value.



  • Hi Jorge – innovation should be linked to business purpose – you need innovation to survive and thrive. Without it your business will shrink and die. Kevin

  • VictorBV

    I think it’s difficult to distinguish the purpose, it might be different in different situations. For example, I’m from Russia, and our government stepped the way of innovative development as the only way to change the economy. But still it might not be the goal of creating innovations in more developed countries.
    Also, there will be an event for innovative development in Moscow this October: https://www.facebook.com/OpenInnovations2012 I thought you may be interested in it.

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