Innovation

Origin

An Upward Trajectory

Innovation is at the top of everyone’s agenda these days. Yet despite its modern-age popularity, the term “innovate” dates back to 1548, when it first appeared in print. It is derived from the Latin noun innovatus, meaning renewal or change, which is the past participle of innovare — “to renew, restore.”

The concept is ancient — stone-age inventions such as the club, controlled fire, bow and arrow accelerated the evolution of early humans. The Bronze Age added the wheel, the plow, soap and rope. The industrial age ushered in the steam engine, light bulb and loom. Austrian economist Joseph Schumpeter defined invention in 1939 as an expression of intellectual creativity undertaken without considering its possible economic impact; innovations were inventions designed to bring positive change to a business model or target market.

Until the early 1970s, the word “invention” was more popular than “innovation.” Google’s Ngram Viewer, a database of text scans of books written between 1800 and 2000, reveals that the use of the word “innovation” passed “invention” in 1973. The first book to register on everyone’s innovation Richter scale was Peter Drucker’s 1985 Innovation and Entrepreneurship, which formalized the constantly searching for innovative product ideas and building a business around them.

By 1999, the zenith of dotcom mania, a McKinsey survey found that 95% of executives wanted to lead the innovation pack — with zero wishing to remain followers. That was up from a world in which only 37% wanted category leadership and 37% were content to follow in 1991. The bubble may have burst, but the impact of innovation proved unassailable.

Etymology

The Semantics of Survival

Merriam-Webster defines innovation as: 1. a new idea, device, or method; 2. the act or process of introducing new ideas, devices, or methods. The crucial part of Merriam-Webster’s definition is the word “new.”

The 1990s saw another sea-change shift in executive attitudes toward innovation. Increased global competition, read China, the internet, and the 95% failure rate of the more than 30,000 consumer products launched each year helped change many minds about the importance of innovation. A McKinsey survey showed just how much the “C” suite pivoted on the challenge of becoming a “category innovation leader.” By 1999, no one wanted to be a follower, and 95% wanted to lead the innovation pack.

Transformative conversations about modern innovation arose from bestselling books published during that period, including the 1996 release of James Utterback’s Mastering the Dynamics of Innovation and Harvard Professor Clayton Christensen’s 1997 The Innovator’s Dilemma, which helped popularize the concept of “disruptive innovation.” Christensen’s book challenged companies to predict consumer needs and adopt new technologies and business models to address emerging market requirements.

Chief Aspect

A Pocketful of Innovation

The year 1996 was an auspicious one. In the midst of the dotcom boom, a figure who had been synonymous with the personal computer revolution of the 1980s, Steven P. Jobs, returned to the company he co-founded. But all was not well in Cupertino, Calif. A succession of CEOs — John Sculley, Michael Spindler and Gil Amelio — had left Apple Computer in shambles. The company was almost bankrupt, but Apple was rescued from the brink of bankruptcy thanks to a $150 million loan from none other than Bill Gates and Microsoft.

In what became a master class in innovation, Jobs launched a “Think Different” advertising campaign in 1997. Thinking differently, or orthogonal thinking, is what organizations need to get good at to foster innovation. Despite a briskly selling line of colorful iMac computers, the road back to profitability for Apple was a long and arduous one.

Apple was back on the ropes five years after Jobs’ return. In fiscal 2001, Apple’s revenues were down $2.6 billion, or 34%, compared to the $8 billion in fiscal year 2000. On May 15, 2001, Jobs gave journalists, including Walt Mossberg of The Wall Street Journal, a tour of one of Apple’s first retail stores at the Tysons Corner Center shopping mall in McLean, Virginia. When that store opened on May 19, 2001, together with another one at the Glendale Galleria in Glendale, Calif., a crowd of 500 people had formed a line to enter the store. Today, Apple operates 530 stores in 27 countries, including 271 U.S. stores, with an average revenue of $48.5 million per store — generating nearly $25 billion in annual store sales, about 10% of its total revenues.

Apple unquestionably is the most stellar example of what innovation can contribute to the bottom line. In a little over two decades, Apple went from teetering on the precipice of bankruptcy to the world’s most valuable corporation — the first company ever to be valued at $1 trillion in 2018, and today worth more than $4.5 trillion. The company personifies Jobs’ tenets: “Innovation distinguishes between a leader and a follower.” An uncanny assessment, particularly given those 1990s McKinsey studies.

“Innovation distinguishes between a leader and a follower.”

Key Drivers

Four Forces Fueling the Engine

Innovation does not arise from a vacuum. Four converging forces have made relentless reinvention the only viable strategy for organizations operating in a Time Compression world.

The Osmosis Problem

Innovation Osmosis

The Wall Street Journal captured the paradox precisely on May 23, 2012: “Innovation is like teenage sex, everyone is talking about it, but few are doing it. Many organizations, particularly larger enterprises, suffer from hardened arteries. They need a giant enema to allow innovation to flow out freely.”

As Forbes and Wipro discovered in surveying 300 CEOs and C-level executives, studying best practices is the primary way executives today introduce innovation into their organizations. That has resulted in thousands of books, hundreds of conferences and countless innovation consultants. Unfortunately, spurring action is the biggest challenge — the transfer of innovation molecules through a semipermeable corporate membrane.

It’s not easy to bring about a culture of innovation. Follow these four core principles to help bring about change:

Challenge orthodoxies. Clogged arteries keep blood from flowing to the heart and brain. So does an “If it ain’t broke, fix it?” mentality. Creating innovative products or services requires an unfettered flow of ideas, free from old, calcified thinking. Identify unmet needs. How do customers interact with current market solutions? What challenges do they encounter? This “pain point” analysis is one of the quickest ways to bring about innovation. Leverage resources. Large organizations can easily leverage existing resources, including corporate libraries and customer research, to brainstorm ideas. Ride trend waves. Trends are undoubtedly the best platforms for innovation because change equals disruption. Adapt innovative solutions to address pain points raised by the Unwired and Time Compression Ubertrends.

“The successful companies of tomorrow will address the changing customer values of today.”

Cultural Manifestations

Innovation Through the Ages

From the Gutenberg press to generative AI, innovation has always accelerated its own velocity — each breakthrough compressing the timeline to the next.

Empirical Evidence

Case Studies in Relentless Innovation

Innovation case studies demonstrate that when practiced relentlessly, and with attention to detail, innovation virtually guarantees financial success. The key is actually putting innovative ideas into practice.

Asymmetric Aspect

Inspiring Transformation

Forward Implications

The Kinetic Flywheel

TL;DR — The reason innovation is on a tear is that life changes are taking place at warp speed. The converging forces of the eight Ubertrends described in this book will make society spin like a kinetic flywheel, rendering the future even more unrecognizable than it already is.

• 01 AI as the Innovation Accelerator. Machine learning will bring innovations to market a minimum of four times faster than before — collapsing product cycles and requiring constant reinvention. AI, combined with internet connectivity, startups, and venture financing, has become the centrifugal force propelling the innovation cycle into an entirely new orbit.
• 02 The Startup Siege Intensifies. With startups attacking every conceivable pain point and global venture funding hitting $469 billion in 2025, every industry faces its Tesla moment. Organizations that fail to innovate will simply be acquired, disrupted, or rendered obsolete — joining the ever-lengthening Or Else wall.
• 03 The Innovation Officer Imperative. More than 8,000 LinkedIn members carried “innovation” in their title as of 2022, up from 700 Chief Innovation Officers in 2010. But without an execution culture — real resources, real authority, real psychological safety to fail — titles remain decoration. The next generation of CINOs will need to be builders, not just brand managers.
• 04 Innovation Democratizes. From Maker Faires to hackathons, brainwriting to the Business Model Canvas, the tools of innovation are becoming universally accessible. Amazon spent $13 billion to acquire Whole Foods; any organization can leverage customer journey mapping and design thinking to uncover pain points and build relentlessly around solving them.
• 05 The Ubertrend Convergence. The Digital Lifestyle, Time Compression, Unwired, Fountain of Youth, Generation X-tasy, Voyeurgasm, Casual Living, and WAF Ubertrends are all spinning faster. Organizations that learn to ride trend waves — innovating at the intersection of multiple Ubertrends — will be rewarded. Those who ignore them will be replaced by the 567 new startups entering the arena every single day.

Cross-References

Connected Ubertrends