27 Innovation Terms That Everyone Should Know

Industry terms can be extremely helpful in conveying complex information quickly and easily.

The creation of industry terms comes about through a variety of means. Sometimes they are created by an individual or group looking to convey a complex process or activity. Other times, they are born out of necessity, as certain terms become more commonly used.

Industry terms can help create a common understanding between many stakeholders. They provide a shared terminology that allows for effective communication and efficient exchanges of information. This is especially important in innovation, where various roles, teams, and departments exist.

Over the years, we have collected terms that apply to the field of innovation. We believe it’s essential for everyone, from entrepreneurs to corporate executives, to be familiar with these terms and how they are used.

Here is a starter list of 27 innovation terms. The terms below may have multiple definitions because they can be used in different contexts.

Note: If you have an innovation acronym you think should be added, post them in the comments below.

If you are interested in learning more about the innovation terms and applying them to your own projects, an innovation agency like Techtrend Group can be a great resource.

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Bauhaus

1. The Bauhaus was a school in Germany that taught a style of art and design that emphasized simplicity and functionality. The goal was to create designs that were both beautiful and practical. The Bauhaus style is still popular today and has been influential in the fields of architecture, art, and design.

BHAG

1. A BHAG, or Big Hairy Audacious Goal, is a goal that is so ambitious and challenging that it may seem impossible. The goal inspires people to push themselves to their limits and achieve something extraordinary. A BHAG is a way to focus the mind and galvanize the team around a common purpose.
2. A goal that is audacious and challenging, inspiring people to reach for the stars. A BHAG is something that can focus the mind and rally the troops around a common cause. It is a way to motivate people to achieve something unique.
3. A visionary goal that is both strategic and emotionally compelling. It serves as the focal point of effort and a catalyst enabling teams to achieve industry-changing innovations. A well-constructed BHAG defines the end aim in a strategic story while not defining the “how”.

Brainstorm

1. Brainstorming is a creative process of generating, developing, and communicating new ideas. It involves coming up with new solutions to problems, thinking outside the box, and simply generating as many ideas as possible.
2. A method used in ideation is where a team generates ideas to solve a clearly defined problem. They produce many ideas in controlled conditions and a free-thinking environment to find potential solutions.

Breakthrough Innovation

1. An innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market-leading firms, products, and alliances.

Chief Innovation Officer

1. A Chief Innovation Officer is a senior executive responsible for driving innovation within an organization. They oversee all aspects of the innovation process, from ideation to commercialization, and ensure that the organization remains competitive and stays on the cutting edge of technology and industry trends.
2. The CIO is a senior executive responsible for leading and directing all aspects of an organization’s innovation initiatives. They create an environment where innovation can thrive and ensure that the organization remains competitive and stays ahead of the curve in terms of technology and industry trends.
3. The most senior executive/leader in an organization with responsibility and sponsorship for innovation. This role oversees the innovation culture, innovation framework, and sponsorship of innovation efforts occurring across the organization.

Creativity

1. Creativity is the ability to come up with new ideas and solutions. It involves using your imagination to come up with original ideas. Creativity is essential for problem-solving.
2. The natural human ability to generate or recognize ideas, alternatives, or possibilities that may be useful in solving problems, communicating with others, and entertaining ourselves and others.

Design Thinking

1. Design thinking is a creative problem-solving process that helps you develop innovative ideas. It involves looking at problems from a different perspective and using brainstorming techniques to generate various workable solutions. Once you have a few ideas, you can evaluate them and select the best one. Design thinking is often used in the design process but can also apply to other areas, such as business, education, and government.
2. A process used in ideation for creative problem-solving where the focus is pulling together what’s desirable from a human point of view with what is technologically workable and economically viable.

Disruption

1. Disruption is a term used in business and economics to describe innovating new products or services that challenges the status quo. Disruptive businesses are often those that offer something different and better than what is currently available, and they often succeed by appealing to a new or underserved market.

Disruptive Shock

1. A Disruptive Shock is an event or occurrence that causes a drastic change in the way things are done. It can be something as simple as a new technology or invention that comes along and upends the status quo, or it can be a major change in the political, environmental, or economic landscape. Whatever it is, disruptive shocks have the potential to completely change the game and disrupt existing industries and markets.
2. A sudden upsetting or surprising event or experience that stops something from continuing as usual.

Ethnographic Innovation

1. Ethnographic innovation uses ethnography to understand how people use products and services and then use that understanding to create new products and services that meet their needs. It is a way of understanding the user experience and designing for it. Ethnography provides insights into how people think, feel, and behave, which can create better products and experiences.
2. Observing people in their cultural setting, with the goal of producing a narrative account of that culture, against a theoretical backdrop. This then becomes the inspiration for the problem statement used in ideation.

Exponential Innovation

1. An exponential innovation grows at an increasingly fast pace. It may start off small, but it eventually explodes in popularity and disrupts the status quo. Exponential innovations are often characterized by rapid growth and high innovation intensity.
2. In each period, an innovation doubles in capability or performance. Or perhaps on the flip side, it halves in cost in each period. It is typically a technology at the point where its price performance makes it possible to solve today’s business problems in ways that were not previously possible.

Focus Group

1. A focus group is a moderated discussion with a few people who represent a larger population. The goal is to gain insights into people’s thoughts and feelings about a product or service. The results of a focus group can be used to make decisions about how to improve or redesign a product or service.
2. A small, but demographically similar group of people takes part in guided discussions about a new product to determine the reactions from a larger population.

Incremental Innovation

1. Incremental innovation is the introduction of minor changes to an existing product or service to improve it. These changes can be as simple as making a minor change to the design or function of a product or adding a new feature or capability. Incremental innovations can help businesses stay competitive and keep up with changing market demands.

Idea

1. An idea is a plan or suggestion of something that can be done to improve a situation. An idea can be big or small, and it can come from anyone. With innovation, ideas are the starting point for creating something new.
2. A concept developed by your mind of what is desirable or ought to be.

Idea Ranking

1. Idea ranking is sorting and organizing ideas according to their potential value. The highest-ranking ideas are those that are most likely to have a positive impact on the organization. Idea ranking can prioritize initiatives and decide about which ideas to pursue.
2. Using a defined criterion to result in a ranked list of top ideas is usually performed at the end of an ideation effort. This shortlist defines what will be considered an innovation.

Ideation

1. Ideation is generating and developing new ideas. It can involve coming up with new solutions to problems, brainstorming new product ideas, or simply thinking outside the box to come up with novel ideas.
2. The creative process of generating, developing, and communicating new ideas, where an idea is a basic element of thought that can be visual, concrete, or abstract. Used by individuals, organizations, or groups. You can use a variety of tools and methods. See brainstorming and design thinking.

Ingenuity

1. Ingenuity is the ability to take what is available and make something new and better from it. It is about being resourceful and finding solutions to problems creatively.
2. The ability to solve intractable problems, often in original, clever, and inventive ways.

Innovation

1. Innovation is taking an idea and turning it into a reality. It can be something as simple as coming up with a new way to do things or as complex as creating a new product or service. Innovation is about finding new ways to solve problems.
2. An idea made real; introduce something new; alternative methods. It results from a multi-stage process whereby organizations transform ideas into improved products, services, or processes in order to advance, compete, and differentiate themselves successfully in their marketplace.

Innovation Culture

1. An organizational culture that values and supports innovation, so that people can make innovation happen.
2. An innovation culture is one that encourages creativity and new ideas. Employees in an innovation culture can experiment and take risks, knowing that their ideas will be supported. This type of culture is necessary for organizations that want to stay competitive and continue to grow.

Innovation Framework

1. An innovation framework is a guide for how to foster innovation in an organization. It includes steps for creating a culture of innovation, encouraging creativity and new ideas, and supporting employees who take risks. The framework also provides tools and resources for implementing innovation initiatives.

Innovation Rate

1. The Innovation Rate is the frequency at which a company or individual introduces new products or services. This can be measured in terms of the number of new offerings introduced in a given period, or the percentage of total sales that come from new products or services.
2. A measure that shows how innovative a company is in terms of new or improved products, services, or processes. Measures the portion of the revenue with new/improved products or services compared to the total revenue. Innovation Rate = (Gross Revenue-Earned of New Products or Services) / (Gross Revenue—Earned)

Inspiration

1. Inspiration is a feeling of excitement and enthusiasm that comes from seeing or experiencing something new and exciting. It is the motivation to pursue new ideas and create change. Inspiration can be sparked by something as simple as an invention or as complex as a new scientific discovery. It is the spark that ignites the flame of innovation.
2. Being mentally stimulated to do or feel something creatively. It can come visually, audibly, tactically, taste, and/or smell.

Killer Innovation

Lightbulb

1. A lightbulb is a metaphor for an idea because it is often small but can make a big impact. It can be easily dismissed, but if given a chance, it can shine brightly and illuminate the way. Ideas are like lightbulbs in that they are often underestimated but can potentially create a lot of change.
2. An overused metaphor to represent the spark of an idea.

Plus It

1. Plus It refers to the ability to create something new and better from what is available. This can be done through ingenuity and resourcefulness by finding solutions to problems creatively. Plus It is about making the most of what you have and turning it into something amazing.
2. A technique developed by Walt Disney to iterate on ideas without harsh criticism. It starts with finding what is good about an idea and building on it to make it even better.

Problem Statement

1. A problem statement concisely describes a problem that needs to be solved. It can provide clarity and focus and can help to make sure that all stakeholders agree. It can also evaluate potential solutions and determine which one is best suited for solving the problem.
2. A statement that defines the issue or opportunity to be addressed, including the who, what, where, when, why, and how.
3. A concise statement, not stating a solution but specific enough to be solvable in the time frame and with resources and competencies. It can structure the statement to solve a problem, remove a barrier, or improve an experience.

70/20/10 Funding Model

1. The 70/20/10 funding model is a way to allocate resources that encourages creativity and innovation. 70% of the funds are earmarked for basic needs and infrastructure, 20% are for developmental needs, and 10% are for exploratory and experimental projects. This allows for stability and security while also providing room for growth and experimentation. It is a way to ensure that both short-term and long-term goals are met.
2. A target funding structure where 70% of research and development funding is focused on new and improving core products and services. 20% towards adjacent (new products to existing customers, or existing products to new customers) and then 10% towards new areas (new products to new customers).

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