Creativity and innovation are not the same activity. Creativity creates new possibilities, while innovation requires testing, implementation and actual value. Companies often support idea generation but pay less attention to testing and introducing those ideas. The key is therefore to connect room for experimentation with a clear process for selection, funding and evaluation of results.

Companies often use the words creativity and innovation as synonyms, but Britt Andreatta distinguishes between them. Creativity produces new ideas and new ways of looking at a problem. Innovation occurs only when one of those ideas becomes a usable solution that creates value. An organization can therefore be full of creative people and still have a very weak ability to innovate.

According to research cited by the author, 84 percent of leaders consider their organization’s future success dependent on innovation, and high-performing organizations are much more likely to build an innovation culture across functions. The problem is that many companies create space for collecting ideas but do not have an equally precise system for validating what happens next.

Andreatta distinguishes three main types of innovation. Product innovation changes the product or service. Process innovation changes how the organization works and can bring greater efficiency or lower costs. Business-model innovation changes the very way value is created and is usually the most organizationally demanding.

There are also two different paths. Incremental innovation improves existing solutions in small steps and carries less risk. Breakthrough innovation can open an entirely new way of working or offering value, but involves greater uncertainty. According to data cited in the article, the large majority of innovation effort goes into incremental changes. A company can therefore repeatedly claim that it is looking for a breakthrough while its budget, people evaluation and tolerance of risk mainly support safe improvements.

One of the biggest barriers is fear. If an employee expects criticism or career consequences for a failed experiment, it is rational to propose only solutions with a high probability of acceptance. Psychological safety therefore is not a secondary cultural issue. It directly influences the range of ideas that reach the discussion at all.

This does not mean uncontrolled experimentation. The author recommends a clear innovation process: from idea generation through prototyping and testing to a decision on further funding. An experiment should have a hypothesis, limited resources and a defined point at which the organization decides whether to continue.

The source of innovation also does not have to lie only inside the company. Customers, partners, universities and external experts can all matter. More diverse inputs expand the range of possible solutions.

For management, the key change is in the metric. The number of ideas collected does not show whether a company is innovative. More important is the ability to test ideas quickly, fund strong projects and extract useful learning from unsuccessful attempts.

KEY TERMS

• Creativity: The ability to generate new ideas and perspectives.
• Innovation: Turning an idea into a solution that creates practical or economic value.
• Incremental innovation: Smaller improvements to existing products, processes or services.
• Breakthrough innovation: A more substantial change with greater uncertainty that can fundamentally alter an offering or business model.