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What is Innovation?

posted Oct 19, 2012, 5:00 PM by Manish Abraham   [ updated Oct 19, 2012, 5:14 PM ]
 Being master students it is really important we understand what is innovation. We often use the words "creativity" and "innovation" interchangeably but we should not. Creativity is about coming up with ideas while innovation is about "bringing ideas to life." While individuals may display creativity, innovation occurs in the organizational context only, by bringing creative ideas to life.

Innovation is linked to performance and growth through improvements in efficiency, productivity, quality, competitive positioning and market share. It typically adds value by changing old organizational forms and practices. Organizations that do not innovate effectively may be destroyed by those who do.

A 2007 Booz Allen study illustrated that the one key characteristic of successful innovators is that they had a rigorous process for managing innovation including "a disciplined, stage-by-stage approval process combined with regular measurements of every critical factor, from time and money the success of new products and services in the market."

Innovation by businesses is achieved in many ways; through formal research and development for "breakthrough innovations" as well as through less formal on-the-job modifications of practice-such as through exchange, personal experience and by many other routes. Regardless, innovations do not just happen-they are a team effort. Most successful innovation occurs at the boundaries of organizations and industries where the problems and needs of users and the potential of technologies are linked together in a creative and collaborative process that challenges both.