Navigating in the complex field of innovation and making sense of the large number of different innovation terms and definitions can sometimes be a challenge.
Because there are tons of different innovation-related words and descriptions to remember, we've decided to gather some of the most common ones in one place, this glossary, to explain what each of them really means.
The 70-20-10 rule (created by then Google CEO Eric Schmidt), is a rule for allocating resources between the core (70%), the adjacent (20%) and the transformational (10%) innovation. It's considered to be a good starting for resource allocation.The 70-20-10 rule is closely related to The Three Horizons of Growth model.
Adjacent innovation is a form of innovation in an innovation portfolio arranged along the Three Horizons of Growth. Adjacent innovation refers to leveraging the core business and value proposition of an organization in a new market space.
ADKAR is a change management framework that focuses on how change happens on an individual level. It describes the different stages to take into account in the change process, for example such as activating employees to participate in ideation.
Agile (adj.) refers to the ability to make quick iterations as well as to move and adapt to changes fast. It emphasizes the importance of frequent reassessment and testing. See also: Agile Methodology.
Ambidextrous organizations are organizations with structurally different teams for existing and emerging businesses, both of which are linked to the existing management hierarchy.
Architectural innovation is an innovation where the core components of the product remain the same but the relationship between these components changes. This type of innovation entails the overall design, system or the way components interact.
Brainstorming is a technique for coming up with new ideas or creative solutions to a specific problem or around a specific theme. This group creativity technique is often used to break out of traditional thinking patterns.
Breakthrough innovation is a type of innovation that creates new markets. It usually refers to revolutionary change in firms, markets and industries, which provide substantially higher customer benefits relative to current products in the industry.
The Build-Measure-Learn Feedback Loop is the main component of the Lean Startup Model for building and testing new ideas. The ideology behind the loop is to launch a new idea or concept to the market as quickly as possible to gain experience and gather feedback for further improvement.
A business case is a detailed assessment of a perceived opportunity or problem, its costs, risks, benefits, and organization's capabilities to solve that problem. The purpose of a business case is to decide whether the project is worth proceeding with.
The Business Model Canvas is a tool by Strategyzer that can be used for describing, designing, challenging, and pivoting your business model.
Business model innovation is about analyzing and and confronting your current business model to find new business opportunities. It refers to the ability to find new revenue streams and maintain competitive advantage either by improving an existing business model or by looking for new ways to provide value.
A Chief Innovation Officer (CIO) is a person responsible for managing change and innovation processes in an organization. Some of the main responsibilities of a CIO are building and communicating innovation strategy, delivering and analyzing innovation results, nurturing innovation culture and managing portfolio.
Collaboration refers to working together with internal or external partners to solve a problem or to achieve a common goal.
Collaborative strategy process involves employees in strategy work. This can include defining or clarifying the mission and vision of the organization as well as other actions that advance the company strategy.
Commercialization is a component of product innovation process that converts ideas and prototypes into viable products.
Continuous improvement refers to making an ongoing effort to enhance processes, products or services. It is often used to describe incremental changes made in order to improve operational efficiency, reduce costs or increase the know-how within an organization.
Core innovation refers to small, incremental improvements to existing products or services that are the main sources of revenue, and is something companies do daily.
Crossing the Chasm is a book written by Geoffrey A. Moore which explores and extends the diffusion of innovations, and is closely related to the technology adoption life-cycle. Moore's main argument is that because of very different expectations of early adopters and early majority, there's a chasm between these two that is relatively difficult to cross.
Crowdsourcing means gathering information and new ideas with the help of external networks, typically via online channels.
See: Innovation Culture
Design thinking is an outcome-focused methodology that is used for creating better solutions for customers. Design thinking applies actionable design principles to the innovation strategy and ways of working.
The diffusion of innovations is a process by which an innovation is communicated through certain channels over time among the members of a social system. It attempts to identify what aspects influence the adoption rate of an innovation.
Disruptive innovation refers to a new technology that completely changes the way the industry or market functions, creating a new value proposition in an uncontested market space.
An emerging business or industry consist of a group of organizations that have a new idea or concept, often centered around new technology, that's in its early stages of development. In the beginning, there's naturally less competition in emerging businesses compared to the existing ones.
End-user is a person who ultimately uses a product or service. For example in software business, there's often a difference between the customer and the end user. The end user is the employee who uses the product whereas the customer is the one who makes the decisions to purchase the software.
Evaluation of ideas refers to a systematic assessment process to learn about the quality and timeliness of an idea. Evaluation is often done by using pre-defined criteria after which the idea is prioritized based on how well it meets them.
Existing business or industry is a known entity that consists of established organizations. The market has been existing for a while and has clear incumbents competing for market share.
An experiment is a practical measure, set of measures or tests to investigate a phenomenon or causal inference between variables by directly manipulating subjects’ values on the independent variable and measuring changes in the values on the dependent variable.
A facilitator is a person or a group of people who enable others to perform certain tasks or processes better and easier.
Feedback refers to information or experience regarding a product or service that is used for making improvements. For many, feedback is an important driver in a decision-making or product development process.
First-mover advantage is the competitive advantage gained by a first entrant in a market or segment. First-mover advantage is often achieved through advanced technology or the control of scarce resources and applies only to disruptive innovations.
Growth mindset or growth mentality is possessed by those who spend time and effort on constant personal and professional improvement. The core ideology behind growth mindset is that success requires constant effort and is done by developing your skills. Intelligence or talent aren't seen as fixed traits but rather as results of hard work.
Hackathon is an event in which a group of people meet to work on solutions to the challenges the organizer or they themselves face.
Herzberg's Two Factor Theory (also known as Herzberg's motivation-hygiene theory and dual-factor theory) is a theory to explain job motivation. According to the theory, there are two factors in a workplace that causes motivation, and a separate set of factors that causes dissatisfaction at work.
Idea is a new suggestion or solution to an existing problem or perceived opportunity.
Ideas can be divided into different idea categories based on predefined criteria.
Idea challenge or idea campaign is a focused form of innovation to raise a desire, concern or area of improvement with the hopes of finding creative solutions.
Idea generation refers to a process where individuals or teams of employees and other stakeholders create new ideas.
Idea's life-cycle refers to the journey of an idea from the initial thought to a refined concept. This process consist of four stages; ideation, development, prototyping and idea validation.
Idea management is a structured process of gathering, developing, and implementing promising new ideas for the purposes of innovation.
Idea management software (see also: innovation management software) is a tool/ platform for managing the new ideas. Idea management software helps with generating, developing and evaluating new ideas as well as prioritizing them.
Idea/innovation pipeline, or, idea/innovation funnel, is a process for managing, refining and implementing new ideas and concepts. It is a structured innovation model which illustrates the life cycle on an idea or innovation.
Ideate (verb) refers to the process of forming new ideas.
Ideation (noun) refers to the formation of new ideas and concepts.
Ideator is the person who creates a new idea.
Incremental innovation refers to a series of small, gradually built improvements to existing products, processes or methods to maintain competitive position over time.
Innovation is the introduction of something new (Merriam-Webster dictionary). It often includes the development and implementation of a new idea, design, method, product or service.
Innovation culture is essentially an organizational culture that really values and supports innovation, so that people can actually make innovation happen. In practice, it's the engine that drives the organization to constantly get better, move forward, and innovate.
See: Idea pipeline
Innovation management refers to handling of all the activities needed to innovate, such as creating ideas, developing, prioritizing and implementing them, as well as putting them into practice.
Innovation management software is a platform that can be used for managing the life cycle of new ideas. An innovation management software helps generating, developing and executing new ideas as well as prioritizing them.
Innovation metric is a measurement that describes either the quality or quantity of the innovation. Innovation metrics can measure either the inputs or outputs of the innovation process.
Innovation process is a systematic and structured approach for generating, prioritizing, evaluating and validating new ideas, as well as putting them into practice.
Innovator's Dilemma is Clayton Christensen’s concept that was introduced in his book that bears the same name. The dilemma describes the phenomenon of new technologies causing established firms to fail in innovation due to certain incentive traps guiding decision-making.
Input metrics are used to measure innovation investments, such as money, time or talent devoted to a specific activity related to innovation management.
Intellectual property (IPR) refers to that knowledge or creative ideas that have commercial value and are protectable under copyright, patent, trademark, or trade secret laws from imitation, infringement, and dilution.
It includes brand names, discoveries, formulas, inventions, knowledge, registered designs, software, and works of artistic, literary, or musical nature. (Business Dictionary)
Invention is a new product or concept that usually originates from a process of inventing.
Iteration of ideas, designs and concepts is an ongoing process of refining and improving them to achieve a desired quality and outcome.
Jobs-To-Be-Done is a theory and a methodology by Strategyn, that focuses on outcome-driven innovation. The fundamental idea behind the theory is that people buy products and services to get jobs done, and while different products and services come and go, the underlying job-to-be-done stays the same.
Lean Startup is a methodology for developing businesses ideas and products. It aims to discover if a proposed business model is viable, and shorten product development cycles by adopting a combination of business-hypothesis-driven experimentation, iteration, and validated learning.
Market pull is an an organizational orientation that emphasizes the ability to learn and respond to what potential customers want and are willing to pay for. (See also: Technology Push)
Marketing innovation refers to an existing product that is used to a whole new purpose and provides a different value proposition for a new customer segment.
Minimum Viable Product (MVP) is the version of a new product a team uses to collect the maximum amount of validated learning about customers with the least effort. It’s a basic version with the smallest number of capabilities that will deliver enough value to potential paying customers for them to be able to give you feedback.
Modular innovation (or component innovation) refers to innovations where either one or several components of a product system changes, the overall design staying the same.
Need Seeker is a term that refers to organizations with an approach that focuses on engaging new customers and being the first to market.
Open Collaboration refers to the collaboration and contribution of multiple ideators that openly share their new ideas with others.
Open Innovation means combining and using internal and external ideas together to advance the development of new technologies. external ideas are used together with the internal ones. Open innovation stresses the importance of relationships between the firm and its outside partners.
Open Innovation 2.0 means that innovation happens in ecosystems or networks that go far beyond traditional organizational boundaries. It's a more open version of open innovation as it widens the scope.
Output metrics measure the results your innovation investments have yielded. Typical output metrics are for example ROI of innovation activities and revenue growth from new products.
Patent is a granted right to the owner of an invention to exclude others from producing or selling their invention for a limited period of time.
The Phase-gate (also known as Stage-gate and the waterfall) model is a product innovation process that is divided into different stages and gates. Each idea goes through a predefined set of gates in their development.
The Play-to-Win Strategy Canvas (created by Matthew E. May) is a framework that can be used when making strategic choices. The Strategy Canvas helps determining and validating what needs to be true for these strategic choices to actually be good.
Innovation portfolio management integrates strategy and execution. It refers to the process of making decisions about investments and how different assets are allocated.
Process flow is a chart or a diagram that illustrates and describes the different phases in an innovation process to solve a specific problem.
Process innovation refers to the implementation of a new or significantly improved production or delivery method (including significant changes in techniques, equipment and/or software).
Product innovation refers to the development and implementation of a new or significantly improved product.
Prototype is the first version of a product or technology that is being tested and from which later versions will be developed.
Qualitative innovation metrics refer to metrics that provide a deeper knowledge of the quality of the innovations or innovation related activities made.
Quantitative innovation metrics, as the name indicates, are metrics that can be quantified.
Research & Development refers to the series of activities an organization does for improving its existing products and ways of working.
Radical innovation happens when a new technology completely disrupts existing business or economy and creates a new business model.
Reverse innovation refers to innovations that are first seen and used in emerging markets and only after that introduced to the developed markets.
Social innovations are new ideas or innovation strategies that are designed to meet different social needs, such as health or education.
See: Phase Gate.
Strategic thinking is a planning process that applies innovation, strategic planning and operational planning to develop business strategies that have a greater chance to succeed (Bia.ca).
Strategy alignment refers to the processes and activities is the process that link an organization's structure and resources with its strategic objectives.
Sustaining innovation refers to the type of innovation that exists in the current market and instead of creating new value networks, it rather improves and grows the existing ones.
Technology innovation means generating new ideas based on technology, capability or knowledge to produce a new tech solution into a viable entity.
Technology push is an organizational orientation that exploits already existing machinery, distribution channels and other resources. The majority of the large, established, push-oriented organizations have their own dedicated innovation units that focus on launching new products and solutions. (See also: Market Pull)
The Technology Adoption Life Cycle is (first introduced by Geoffrey Moore in his book Crossing the Chasm), is a theory that explains why companies with disruptive products and technology often have difficulties with succeeding in the mainstream market.
Doblin's Ten Types of Innovation is a framework that provides a way to identify new opportunities beyond products and develop viable innovations. The book Ten Types of Innovation: The Discipline of Building Breakthroughs is the culmination of thirty years of analysis and research.
The Three Horizons of Growth (created by McKinsey & Company), is a model for portfolio management that helps organizations to structure their initiatives and find an appropriate balance between short- and long-term projects in their portfolio.
Transformational innovation is rare and powerful. It transforms the way organizations do business and offers completely new value for many generations. Only 10% of innovations are transformational.
Innovation has several different use cases which all have one thing in common: the ambition of gathering extensive creative input from stakeholders and funneling that towards concrete actions to drive businesses forward.
Validating ideas is one of the first steps towards creating innovations. The purpose of idea validation is to verify that the idea will actually survive in the market by recognizing and testing the most important assumptions related to the idea.
Value creation is one of the innovation management success factors, and refers to the ability for an organization to create as much value for the customer as possible. This is done by bringing new worth for the customers and other stakeholders who are investing in or buying their products and services.
Value innovation (created by W. Chan Kim and Renée Mauborgne) is a process in which an organization improves, eliminates or changes some of the elements in a product or service to differentiate from competitors by creating a new uncontested market space while also decreasing its costs.
Voice of the customer refers to a comprehensive set of customer needs and wants, or opinions and ideas, that are collected and organized to guide the business in the right direction.
Now that you know what all of these innovation terms mean, you can start bringing them to life.
The best way to do so, is simply by making more innovation happen!