Innovation glossary

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Agile

Instead of focusing on trying to document all requirements upfront and delivering the complete software solution at the end of the project (as in waterfall), agile premiers working software over comprehensive documentation. This is done by delivering software in small batches often at the end of weekly or biweekly "sprints". There are different agile methodologies, e.g., Scrum and XP (Extreme Programming). See the Agile Manifesto for a description of the agile mindset.

Blue Ocean Strategy

Blue ocean strategy (W. Chan Kim and Renée Mauborgne) is the simultaneous pursuit of differentiation and low cost that creates new demand in a large uncontested market space, referred to as a blue ocean. The aim is to avoid copying or outdoing the competition in a highly competitive market, referred to as a red ocean. Instead the focus should be on finding new uncontested market space, and to dominate that space for as long as possible, through the continued creation of blue oceans.

Business Model and Business Model Canvas

A business model describes how a company or organisation creates, delivers and captures value. The Business Model Canvas is a tool that allows you to create, visualise and challenge your current and future business models. There are many variations of the Business Model Canvas, for example the Lean Canvas by Ash Maurya and the Javelin Board as used by Lean Startup Machine. At Lean Ventures, we like to create our own unique mashups to better address the challenges of some of our clients.

Creativity

Creativity is the stimulating use of one's imagination to take on a challenge in an effort to create something new that is of value to the creator. As such, creativity is different from innovation in that creative ideas must not be new to the world. It is enough if they are new to the creator.

Design Thinking

Design thinking is about creating new and innovative avenues for growth that are grounded in business viability, market desirability and technical feasibility. The video shows IBMs take on Design Thinking and how they combine it with Agile.

“Design thinking is a human-centered approach to innovation that draws from the designer's toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Tim Brown, President and CEO of IDEO

Disruptive Innovation

Disruptive innovation is a term coined by Clayton Christensen, Professor at Harvard Business School. Disruptive innovation occurs when a product or service starts out as a relatively simple product or service, initially aimed at the low end of the market, but that eventually moves up market, gradually displacing the incumbent market leader. In this 8 min video Christensen explains this popular but often misused term.

Entrepreneur

An entrepreneur is someone who takes an idea to market and is prepared to assume the risks of doing so. Entrepreneurship is about doing, and is equally applicable in for-profit as it is in non-for-profit ventures.

Ideation

Ideation is the structured process to generate a lot of ideas, preferably in a relatively short time frame. There are many different ideation techniques, e.g., brainstorming and empathy maps. There are also several idea management software solutions available to support the ideation process, e.g. i2i WIDE, Brightidea and Hype.

"If you want to have good ideas you must have many ideas. Most of them will be wrong, and what you have to learn is which ones to throw away. "

-- Linus Carl Pauling, chemist, biochemist, peace activist and Nobel Prize Winner

However, it's all too easy to end up with too many ideas and too little action. Ideas in themselves are not worth anything. Only when you put them into action to create new customer value, are you actually innovating.

Innovation

An innovation occurs when a product or service is introduced in the market that previously did not exist and that the market deem valuable, i.e. innovation = new customer value.

Innovator

An innovator is an inventor who has had one or more of his/her inventions successfully introduced in the market. Often inventors don't wish to be entrepreneurs. In fact, a recent study by the Stockholm Innovator's Circle, showed that two-thirds of it's members didn't want to be entrepreneurs.

Inventor

An inventor is someone who comes up with new ideas and concepts that may or may not lead to innovations. The light bulb is a great example of a great invention. However, only when the electrical wiring and infrastructure required to light the bulb was in place, did the system present new value to the market. That's why counting the number of patents that have been filed often is a misleading measure of innovation in a particular market.

Intrapreneur

Intrapreneur is a term coined by Gifford Pinchot. An intrapreneur is an employee who take the initiative to innovate within the organisation that hired them. For intrapreneurship to take hold, senior management must provide the right environment to enable and leverage the creativity and drive of these employees.

Jobs-To-Be-Done (JTBD)

Customers don't buy products, they "hire" them to do a job. Instead of asking what products customers want to buy, the focus of the JTBD approach is to understand the root problems that the customer wants to address and using that insight as a powerful basis for innovation. JTBD stands in stark contrast to the more traditional approach of segmenting the market by demographics. Only a JTBD analysis can shine light on the underlying reasons for a purchase, or how the need for a solution differs according to circumstance.

Lean Startup

Lean Startup is a term coined by Eric Ries. Lean Startup is the combination of Customer Development (Steve Blank) and Agile Software Development. It's an experiments and data-driven method to in/validate your most risky assumptions regarding your business model. The goal is to use the minimum amount of resources possible to quickly learn what the market wants. The opposite of Lean Startup is to spend huge resources on long development cycles that in the end produces a perfectly engineered product that nobody wants. Andy Cars describes Lean Startup in more detail in his article Vad är Lean Startup? (in Swedish).

Open Innovation

Open innovation means to invite people from outside the organisation to collaborate in exploring and building new customer value. Rather than clinging to the notorious "not invented here" mindset, open innovation's mantra is "proudly found elsewhere". P&Gs Connect + Develop, which started in 2001 and has reshaped the way P&G innovates, is a great example of a successful open innovation program.

Outcome Driven Innovation (ODI)

Outcome Driven Innovation is an innovation process developed by Tony Ulwick, CEO and founder of Strategyn. ODI is based on the jobs-to-be-done (JTBD) framework, which originally was developed by Strategyn. Here is Tony Ulwick briefly explaining in a 1,2 min video ODI and JTBD.

Preto- vs. prototyping

Pretotyping is a term coined by Alberto Savoia, while working as Engineering Director at Google. Pretotyping helps to answer the question "should we build it", while prototyping helps to answer the question "can we build it". Put differently, pretotyping is about making sure you are building the right "it" before your build "it" right.

Startup Accelerator

A startup accelerator is a time-based program (usually 3-4 months) consisting of intensive mentoring and coaching, culminating in a Demo Day when the startups pitch to investors. The aim of the program is to provide startups with the best possible conditions for succeeding in bringing their ideas and business models to the market. Read more about startup accelerators in our white paper "Best Practices Designing and Running Startup Accelerators".

Value Proposition

A value proposition communicates why the customer should buy a product, or use a service from the company, rather than choosing a competing product or service. Great value propositions are brief, crystal clear and thoroughly convincing. Sadly, most value propositions are overly complicated and fuzzy. If customers don't understand why they should buy from you, having the greatest product on the planet, will not help.