To answer the question of what is innovation, I’ll compare it to a Center of Excellence; compare innovation to creativity; compare it to Research, and present four stories along the way about the innovation process of a local pizza restaurant.

Innovation vs Center of Excellence

A Center of Excellence (CoE) is a dedicated group of people with a repertoire of tools, templates, and best practices. Because of their knowledge of what has worked well in the past, they are experts in providing tools and recommendations for what should work well in the future. A CoE consolidates expertise and then makes it available across the organization.

A CoE will typically favor:

  • Codifying what worked well previously over transforming new ways of working
  • Repeating what was done in the past over doing something different in the future
  • Maintaining consistency throughout the organization over encouraging experimentation

Consider how the owner of a locally owned pizza restaurant might set up her own CoE. She might consolidate all of her recipes into one recipe book, create a training guide to summarize the best practices for making pizza her way, and then train her three shift managers to be experts in her pizza-making technique. The three members of her CoE would then share that knowledge with all of the pizza restaurant’s employees. As a result, her customers would always enjoy pizza that’s made the same, delicious way no matter which employee made the pizza.

Because a CoE focuses on consolidating existing information, repeating what worked previously, and encouraging consistency, it is beneficial for maintaining, but is very different from innovation.

Innovation vs Creativity 

Creativity is the ability and skill in coming up with new ideas. It doesn’t matter that some of the ideas may be impractical, or that some of the ideas may be remarkable. Creativity is simply the ability to generate new ideas, whether or not those ideas are turned into reality.

Consider how the owner of the locally owned pizza restaurant might use creativity. Suppose she comes up with a new idea to put bacon bits into the crust of her pizzas. She believes that her customers will love it and buy more of her pizzas because the only thing better than bacon on a pizza is bacon in a pizza. This is creativity, i.e., coming up with a big, new idea that sounds promising. At this point, there are many things she doesn’t know:

  • How much bacon should she put in the crust?
  • Does she cook the bacon before putting it in the pizza dough? If so, how much?
  • How does she balance the flavor profile of the bacon in the pizza with the other toppings?

It would require more than simple creativity to answer these questions and make her idea a reality.

Because creativity results in ideas but doesn’t produce any knowledge on how to follow through on the ideas, it is very different from innovation.

Innovation vs Research

While many people associate research with large pharmaceutical or technology companies, research can be critical for any company.

The owner of the locally owned pizza restaurant might want to put bacon in her pizza crusts, but what is the best way to do this? Through research, experimentation, and trial-and-error, over several weeks she makes more and more discoveries that lead to the knowledge on the best way to do this:

  • The bacon pieces should be 3/16 of an inch in size.
  • The bacon pieces should be marinated in beer, garlic, basil, and white peppercorns for 2 hours.
  • The bacon pieces should be baked at 250 degrees for 3 minutes before putting them in the pizza dough.

Because research results in the knowledge of how to do something but doesn’t result in business outcomes, it is very different from innovation.

Layers to Innovation

Slide1

The output of creativity is ideas. The output of research is knowledge. The output of innovation is better products, improved service delivery, and hopefully increased profit. Hence, innovation includes generating new ideas, acquiring knowledge, and then executing on the ideas and knowledge in a way that improves the company’s bottom line and the lives of its customers. Thus, both Creativity and Research must be included when considering Innovation.

Slide1 1

The locally owned pizza restaurant owner created the idea for bacon-in-the-crust pizza, she is now equipped with the knowledge on how to do it, but she needs to convert that knowledge into better pizzas for her customers and more profit for her pizza restaurant. She agrees with a local butcher that she will buy all of her bacon from that butcher, and in return, the butcher will cure her bacon in a special way for added flavor. She has a welder modify one of her baking pans so that it will better distribute the fat of the bacon while it’s baking in the oven. She also hires a local marketing company to create a small marketing campaign to advertise her new product. She puts all of the pieces together and starts serving pizzas to her customers that they love, increasing the monthly profit of her restaurant.

Because she was able to come up with a new idea, acquire the knowledge required to act on the idea, and execute on the knowledge to deliver positive business outcomes, she demonstrated Innovation.

The Formula for Innovation

Equation 01
(Creativity + Knowledge) x Execution = Innovation

It is important to note that Creativity and Knowledge together are multiplied by Execution – not added to Execution because if Execution is 0, then the result of Innovation is also 0.

The Innovation Formula is deciding where you need to go, figuring out how to get there, and then actually getting there. This is perhaps best summarized by the hockey legend Wayne Gretzky: “I skate to where the puck is going, not where it has been.”