in business building

The Innovation Equation

I am currently knee deep in a project with a division of a mega-company in which I am trying to bring innovation to reality. The opportunity for value creation is enormous and ideas for improvement are a dime a dozen. Ideas and new thinking is NOT what’s most valued, it is something completely different that needs to be emphasized:


“We struggle to get something over the finish line”; my customer executive

Ideas finding in innovation

Based on my experience, the majority of people tend to regard innovation and innovative companies as good in coming up with break through ideas. This element of finding ideas is certainly not trivial.

90% of startups fail because they fail to build something that people want

Finding the idea in which the innovation lies is tricky for many firms and should not be underestimated. The innovation idea is not one dimensional but must fit all three criteria:

  1. It must be something people really want and pay for. This is very hard to define up front without testing it with customers and most ideas will be rejected early on.
  2. It must be something that drives big enough business impact for the company leadership and shareholders to care. For most enterprises this automatically cuts out 99% of the ideas.
  3. It must be feasible, i.e. it the organization must be able to create the idea with the resources available. Today this seems like the least of the three challenges, however it does not simply imply building it, it includes distributing it, selling it and driving adoption, etc.

While finding the right idea is most definitely hard there is another equally challenging element: Actually getting the innovation realized, i.e. the execution piece.

Execution in innovation

Good execution in innovation is greatly underappreciated To understand the importance of good execution I would like to break it down.

Definition of Execution in innovation

Definition: By “Execution”, I mean: The ability to make progress towards reaping the value of the innovation.

Execution of innovation, i.e. making progress towards realizing the innovation, is filled with challenges. This is a topic in and of itself and I want to cover it in a separate blog post.

The Innovation Equation

Reflecting on the two elements requred for successful innovation, Sam Yen, SAP’s previous Chief Design Officer, coins innovation beautifully:

Innovation = Creativity * Execution

Innovation is about finding the right problem to solve, then solving it in the right way. It cannot just be about the good idea, but without the right idea it won’t be something that brings value to customers and the business.

I find that the innovation equation is important to consider and discuss as you embark on the innovation journey. While you cannot leave any of the parts out of the equation, you may find that one of the elements require more focus than the other.


Innovation is hard. Very hard! The innovation equation is a way to frame innovation success.

As you consider how to innovate in your enterprise, I recommend you consider the Innovation Equation and which part of the equation you need to emphasize.