Innovation is ‘hot’; it has a prominent position in many strategies and within many core values of organisations. These days, many organisations therefore regard innovation as the way of distinguishing themselves from their competition. The result of this is that many conventions, a considerable amount of research and numerous publications address the topic of innovation.

However, the word innovation is an umbrella concept and its proper interpretation is absolutely necessary in order to address this subject in a focussed manner, otherwise it will continue to be an umbrella concept. It is for this reason that we have adopted the following definition of innovation: Innovation is the development of new and practical ideas, combined with successful implementation (Von Stamm, 2003).

Innovation can be divided into a number of categories, namely:

  1. Product innovation: development, improvement and marketing of new services and products
  2. Service innovation: changes to the way in which services and products are sold (for example via online channels)
  3. Process innovation: changes to the way in which products are produced and services are delivered (for example more efficiently, more flexible and/or more customer-focused)
  4. Business model innovation: the (re-)configuration of an organisation or part of an organisation (issues can relate to the areas of chain integration, (out)sourcing, mergers and acquisitions as well fundamentally changing the structure, the processes and the way of competing in a business sector)
  5. A combination of the above

For each type of innovation the outcome must be innovative, it must be implemented successfully (otherwise it just remains an idea) and it must have demonstrable added value for the organisation and preferably, in our opinion, for the customer. Because innovation ensures a competitive edge it is vital that organisations develop and launch new products quickly and successfully (Tidd, Bessant & Pavitt, 1997).


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