What is Innovation?
Innovation on ASQTV™
Innovation is defined as the ways in with an organization updates, changes, and improves its internal processes, manufacturing techniques, and management methods. Innovations must meet certain criteria to be successful, including meeting customer needs, satisfying expense and return on investment requirements, improving employee satisfaction, and product quality. Innovations help introduce new concepts, knowledge, products, services, and processes into organizations and the outside marketplace.
Innovative products are those that replace or build on current offerings; they provide new features or other advantages that allow users to operate more efficiently and/or less expensively. Classic examples include the electric light bulb, the iPod, and GPS navigation systems. These products introduced radically new options for customers that quickly became widely demanded and even standard.
Process innovation is finding better ways to do the job that you have to do. Compared with product innovation, there may not be an ingenious new idea that needs to be built, tested, funded, marketed, launched, and serviced. In some cases, the product is a commodity with a long product life cycle. While the product itself may change very little if at all, innovation is still important for competitiveness and long-term success. Therefore, the processes related to manufacturing and delivering the product are where changes can continue to offer greater value to customers and stakeholders.
Milk used to be delivered door-to-door, in an era when someone was usually at home and could store it properly. Today, the context is very different. There may be security barriers that prevent a delivery person from reaching the door, and there is likely to be no one at the residence to receive the perishable product. Providing alternative means of supply chain and milk delivery, such as making it available in grocery stores, allows customers to pick up the milk at their convenience.
Business Model Innovation
While innovative new products and services—along with new manufacturing and delivery processes—are frequently used to improve organizational performance, the entire business model may become outdated and ineffective, requiring a dramatic change. (An example is the increasing use of home health care with visiting nurses, instead of hospitalization.) The need for business model innovation is often driven by the increasing need for agility in business structure, and this is in turn driven by the increasing speed of change in the market.
Innovation Vs. Improvement
Innovation adds value, and it is probable that a successful innovative solution will be the one that improves the process and/or its output. But innovation and improvement are often referred to in tandem, as in "our innovation and improvement program" or "the continuous improvement and innovation team."
Not all improvements are innovations, while most innovations are improvements. However, there are some innovations that are not improvements. The relationship looks like the figure below.
Innovation vs. Improvement Diagram
Breakthrough Vs. Incremental Innovation
It's often popular to distinguish between breakthrough innovations and incremental innovations. An example of breakthrough innovation is Bell Labs’ invention of the transistor. An example of incremental innovation is Apple developing a new iPhone model.
Some people tend to dismiss incremental innovations and and put much greater value on breakthrough innovations. However, both types of innovation are valuable to organizations.
RCA laboratories invented the liquid crystal display (LCD) panels that today are responsible for the decline of the cathode ray tube (CRT) business. However, by continuing to incrementally adapt and innovate the LCD panels and associated processes, organizations such as Samsung have reaped great financial benefits—despite not being the original inventor. An organization can benefit greatly when it is adept at both breakthrough and incremental innovation.
Much of what quality technology is applied to can broadly be characterized as incremental innovation. Increasing the yield of a process by reducing the defects or achieving better control of a process are typical examples of incremental innovations. However, innovations that may not be technologically significant enough to warrant much attention may still be extremely important economically. Making the first lightbulb was a technological breakthrough. Making and fine-tuning (with design of experiments and statistical process control) a machine that can produce 3,000 lightbulbs an hour is not; it is an incremental innovation. Yet both types of innovation demonstrate benefits to organizations and customers.
Innovation Case Studies
The following case studies illustrate the important role innovation plays for organizations in staying competitive and achieving long-term success.
To read more case studies, please visit the ASQ's Quality Resources.
Fresh Perspective (Quality Progress)
The Corning Journey to Performance Excellence: Innovation Spanning Three Centuries
Inculcating Innovation (PDF)
A Systematic Approach for Making Innovation a Core Competency (PDF)
What’s Your Story?
Adapted from The Executive Guide to Innovation: Turning Good Ideas into Great Results, ASQ Quality Press, and “The Future of Quality Technology: From a Manufacturing to a Knowledge Economy & From Defects to Innovations,” (Quality Engineering).