A Brief Glossary Of Innovation Terms

While the word “innovation” was derived from the Latin word “innovationem,” its prevalence in day-to-day use did not become commonplace until the 1940’s (coinciding with advances in technology developed for WWII).

As a noun, “innovation” is defined as “the introduction of something new.” (source) As a verb, “innovate” is defined as “to introduce as or as if new.” (source) Though, the reality is that innovation means progress.

To help you understand some of the terms, phrases, and jargon related to innovation, here’s a quick primer with a few phrases, terms, and related definitions:

Architectural Innovation

A change in how multiple parts of a system interact. An example would be adding a drivetrain (chain, gears, etc.) to a bicycle, replacing pedals that were connected directly to a wheel.

Breakthrough Innovation

A positive development that creates or significantly expands an opportunity to an existing and/or new market, or how customers interact with the organization.

Closed Innovation

When an organization relies solely on the knowledge and know-how of company employees and resources.

Component/Modular Innovation

A change in a single part of a larger system. An example of a component innovation is upgrading the pedal on a bicycle.

Core Innovation

An incremental innovation that relates to the primary products, services, or processes of the organization.

Disruptive Innovation

“Describes a process by which a product or service initially takes root in simple applications at the bottom of a market—typically by being less expensive and more accessible—and then relentlessly moves upmarket, eventually displacing established competitors.” Learn more at the Christensen Institute.

Incremental Innovation

A small improvement or upgrade to an existing product, service, process, or method. The vast majority of product enhancements are incremental innovations.

Process Innovation

The implementation of a new or significantly improved production or delivery method.

Product Innovation

The implementation of a new or significantly improved product or feature on an existing product.

Open Innovation

Defined as “purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively.” (Henry Chesbrough, 2003) Put differently, open innovation takes place when an organization looks beyond the confines of its employees and offices and embraces the knowledge and resources of non-company employees.

Service Innovation

The implementation of a new or significantly improved process or method.

There are numerous other terms related to innovation (e.g.; business model canvas, design thinking, lean methodology, agile, minimum viable product, pipeline, etc.), but that’s a post for another day.

-Adam