Innovation vs. Improvement

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Distinguishing Between Innovation and Improvement The organization must be capable of change. Indeed, it must be capable of initiating change, that is, innovation. Innovation involves doing new and different things. Improvement involves doing a little bit better what is already being done. Many organizations confuse innovation with improvement. Improvement, while extremely important, is not the same thing as innovation. Many executives believe they are doing a good job of managing change when in reality all they are doing is improving what exists. Producing and managing innovation is much more difficult than improvement. When an organization innovates it moves scarce and expensive resources from areas of low productivity and non-results to opportunities for new achievement and profitable growth. Drucker clarified the interconnection between continuity and change. He advocated visualizing an organization rotating around three distinct axes: the traditional, the transitional and the transformational. All three dimensions simultaneously call for different degrees of emphasis in the allocation of resources for improved business performance. The traditional business concentrates on the commitments required in extending what is already being done well. The transitional focuses on improving what is already being done. In the transformational business, the focus must be on the identification of new directions and with the commitments necessary to design a new and different business. Producing and managing innovation centers on the transitional and transformational axes. The most brutal conflicts occur when attempting to move the organization into a transformational state.