Seeing that we get visitors from both Innovation experts and Innovation novices, we decided to give a helping hand to the latter and make an innovation glossary with a comprehensive list of innovation terms, definitions, and simple explanations.
Being a beginner is nothing to be ashamed of and here you will have a shortcut to some of the most important innovation terms.
We’ve thereby included both terms that are known throughout the innovation community and more official consulting terminology.
With more than 100 innovation-related terms and definitions, this is the most extensive innovation glossary you will find anywhere.
Adding all of these innovation definitions and jargon in one place made this innovation terms dictionary absolutely huge, so if you’re looking for a specific phrase/term, use the Table of Contents or the searchbar below 👍
✅ Related keywords: iterative development, development sprints
A model of innovation used frequently in the tech sector for software development where the cost of prototyping is low. As the agile model allows for fast changes and many iterations of the product, it is used primarily to get a product to market as quickly as possible.
✅ Related keywords: balance of exploration and exploitation
The ability of a firm to change their business smoothly in preparation for the future, all the while supporting their current operations. Ambidexterity is difficult to achieve, because the skills and structure needed to maintain current business operations and prepare for the future are different. This is because preparation for the future through innovation is usually more organic, while maintaining the current business strategy is more mechanistic.
✅ Related keywords: non-tangible model, mathematical models
A mathematical model that can easily be experimented with. One downside of analytical prototypes is that they can only demonstrate behaviour that is part of a model, and behaviour is often unpredictable. Analytical prototyping is often used in software engineering.
✅ Related keywords: reconfiguration, new combination of components
To change the way that components of a product or service are configured together, but not the components themselves. An example of an architectural innovation is the networked computer system.
✅ Related keywords: market-creating innovation, create uncontested market space, value curves
Innovation that creates a new market, by creating and capturing demand that did not previously exist. Companies that use a blue ocean strategy will start their operations without competitors, a massive competitive advantage. This strategy is optimal for companies without the same level of technical capability as the best competitors in their category. An example of a successful blue ocean strategy is the Nintendo Wii, which captured a new market for video games. Nintendo did not have the capacity to compete with Sony and Microsoft on a technical level at the time, so they found a new market instead.
✅ Related keywords: strategy, value creation
As the value driver of all business, the business model incorporates everything that the business does to capture value. From the revenue model to the customer base to the marketing strategy, the business model should be organized to accomplish the goals of the organization, and align directly with their strategy.
✅ Related keywords: strategic changes, new ways of value creation
The type of innovation that is most likely to deliver competitive advantage to a firm, business model innovation is the simultaneous improvement of the product offering and the operational model of the firm and often means a strategic shift. If a company innovates its business model, this means they will look for a new way to create value for their stakeholders. A famous example of business model innovation is when Rolls Royce shifted their turbine aircraft engine sales model to a rental model, thereby retaining ownership and remaining responsible for the repair of the engines. This made the Rolls Royce service more affordable, allowing them to service low-cost airlines.
✅ Related keywords: internal development, internal process, open innovation
Innovation that stays within the confines of the company. Closed innovation may stay within the departments responsible for innovation, or extend throughout the company. It is the opposite of open innovation.
✅ Related keywords: customer co-creation, customer-focused innovation, collaborative development
A form of innovation that involves the creator and the customer collaborating together to make the ideal offering for the customer. A successful example of co-creation is the Starbucks Ideas Platform, where customers can submit suggestions for products that Starbucks may then turn into a product.
✅ Related keywords: core competencies, threshold competencies, capabilities
The ways in which a company utilizes its resources. An example of an innovation competency is Apple designing its own operating system, hardware, software, and services. A threshold competency is a baseline competency a company needs to compete in its industry, such as the ability to transform a technology patent into a product. A core competency is a defining process by which a company distinguishes itself from the competition. An example of a core competency is the ability of NASA to integrate open innovation into its operational model.
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