“When people hear ‘Innovation’ they think of shiny new objects. So, we don’t really use that word anymore. Now we talk about growth.”
My friend, a VP of Innovation Growth at a large media and entertainment company summed up the state of “innovation” pretty well with that comment.
“Innovation” has become a meaningless buzzword and, after decades of failed investments and initiatives, corporate executives have grown tired of its theatrics and empty promises.
I don’t blame them one bit.
But swapping out one word for another simply because it has less baggage is not the answer.
It’s like putting a Rolls Royce hood ornament on a Kia and trying to sell it for $80,000. It just doesn’t work.
Let’s get back to (buzzword) basics.
Here’s a break down of Growth, Innovation, and the latest addition to the buzzword pantheon, Transformation.
- Buzzword-iness: 🙄
- What it is: Improving some measure of a business’ success, usually by increasing the top line (revenue) or bottom line (profit)
- Why it is important: Growth is how you stay in business, especially in competitive markets
- When to do it: Always
- Buzzword-iness: 🙄 🙄 🙄
- What it is: Something different that creates value, a key driver of growth
- Why it is important: Innovation is how to stay competitive, either by copying competitors or improving internal processes (“different” is relative to your company’s status quo), or by creating or doing something new.
- When to do it: Always and ideally before you are confronted with a burning platform because that is when the resources required for successful innovation (time, money, people, and patience) are in the shortest supply.
- Buzzword-iness: 🙄 🙄
- What it is: Profound or radical change that dramatically reorients the purposes, processes, structures, and practices or an organization.
- Often confused with:
- Turnaround: Positive and sustained reversal of negative conditions while maintaining or only incrementally changing the organization’s purpose, processes, structures, and practices
- Digital Transformation: Use of digital technology to solve problems usually requiring the transformation of processes from non-digital or manual to digital
- Why it is important: Transformation is how the organization stays in viable for the long-term (e.g. decades or centuries)
- When to do it: Transformation is required when it becomes clear that the organization’s current business model (i.e. how it creates, captures, and delivers value) will eventually cease to generate value due to fundamental shifts in the market, technology, customer preferences and behaviors, and/or competitive forces
- Often confused with:
The Basic Bottom-line
Growth is required for organizations to stay viable. There are a variety of ways to achieve growth including, but not limited to, selling existing offerings to new customers, selling new things to existing customers, and reducing costs.
Innovation is one of the ways that organizations can grow and is most effective when it is used strategically and consistently.
Transformation is required when the likelihood of long-term growth diminishes and the only way to remain a viable entity is to radically and fundamentally change the nature of the organization.
Now that we’ve got the right hood ornaments (definitions) on the right cars (words), I hope that my friend can keep working on innovation and avoids operational efficiency efforts. After all, as a VP of Growth, both could reasonably fall under her mandate.
🙄 (1 eye roll): Relates to an essential topic but is probably overused and/or used in a way that is so ambiguous as to elicit sighs, knowing glances, or eye rolls.
🙄 🙄 (2 eye rolls): Appears with greater frequency in the business press and consultant presentations; lots of senior executives and consultants use the term but no one can quickly or concisely define it or explain why it’s important.
🙄 🙄 🙄 (3 eye rolls): Inescapable and meaningless but has been used for so long that we’re stuck with it; lots of people use the term, everyone has their own definition, most can explain why it’s important, few have successfully done it.