Innovation vs. Invention

To understand innovation, you first have to distinguish it from invention; too many people confuse them, according to Linda Sanford, an IBM senior vice president. “Invention is just the starting point,” one of the participants noted. A company’s portfolio of patents reveals its smarts as an inventor. IBM, for example, remains formidable in this regard, racking up record numbers of patents for the last decade. But patents aren’t enough. Their technology has to find its way into products.

Not all innovations are created equal. many people cite only of “hits” like the Blackberry or Starbucks coffee shops when talking about innovation. “But some companies don’t play that game,” he said. “They play a percentage game of incremental innovation, like Toyota. And some companies aren’t really innovators at all. They play a loss-avoidance game. Think about the airlines.”

But even in a hidebound business like air travel, firms can innovate. . Southwest has used a series of incremental advances — like abandoning assigned seats and the hub-and-spoke routes and flying only Boeing 737s—to grow and remain profitable while competitors have been hobbled first by recession and now by high fuel prices.

Tom Kelley, general manager of IDEO, a design and innovation consultancy, parsed the problem differently. He argued that many firms strive to deliver hits and incremental innovations—or at least they should. “Customers demand the incremental stuff, so you’re compelled do it,” he explained. “Meanwhile, you have to do the leaps yourself. Breakthroughs are important but not urgent.”