Innovation is often seen as having a serendipitous origin or even synonym to creativity. Flynn et al. (2003) have commented that there exists a lot of inaccurate assumptions and misinterpretations of the exact meaning of the term “innovation”. At its most fundamental level, the term is derived from the Latin word innovare, meaning “to make something new” and has arguably become an effective tool to renew organisations’ output and, according to Flynn et al. (2003), an organisations’ ability to grow depends upon their ability to generate new ideas and to exploit them effectively for their long-term benefit. As this is the case, attention has been given to establishing and managing the process of exploiting these ideas and the transformation into innovations. However, Flynn et al. (2003) argues that the process of generating these ideas has received less emphasis and has been created on an “ad hoc” basis. Generating and maintaining the creative climate needed for generating ideas that can be transformed into innovations is much harder than adapting the creativity of someone else (Kanter, 2006). Indeed, there is a bias towards innovations being externally imported into the organisation, rather than internally generated (Flynn et al., 2003). The fact that important innovations often arise from outside an industry and its established giants, and pressure to find the next big thing quick, is well known phenomenon (Kanter, 2006).
Ideas, that may or may not lead to innovations, come about as a reaction or as a proactive action to exploit new opportunities and might originate from a recombination of old ideas (Flynn et al., 2003). This all entitles that an innovative idea can be conceived in many ways by a broad spectrum of sources. According to Drucker (1985) these sources can originate from: (1) serendipity, (2) incongruities, (3) process needs, (4) market shifts, (5) demographic changes, (6) perception, and (7) new knowledge. In contrast to previous mentioned scholars, he believes that there’s no paradox in managing a process that is dependent on creativity, inspiration and serendipity. He believes that innovation is the purposeful implementation of a systematic management discipline. Central to this discipline is where to look for innovation and how to identify it. Innovation can take many forms (i.e. types) depending on the nature of the change it conceives. Classifications include radical, incremental, architectural and disruptive innovation. Incremental innovations are about the improvement and optimisation of existing products and services (Flynn et al., 2003). Radical innovation, on the other hand, involves completely new products and service categories. Architectural innovation involves reconfigurations of the components that constitute the product (i.e. reconfiguring the system, inside the same product or service). According to Geoff Mulgan (2006) much of what we now consider normal in social life began as radical innovation through a progression from the margins to the mainstream. This move from the margins to the mainstream includes many recent examples of successful social innovations such as Wikipedia, microcredit and the fair trade movement. Disruptive innovation was introduced by Clayton M. Christensen, first as the term disruptive technology and is a process of how products and services root in markets and displace established competitors (2002). Another interesting distinction is one between social innovation and business innovation (Mulgan, 2006). Social innovation is defined as “innovative activities and services that are motivated by the goal of meeting a social need and that are predominantly diffused through organizations whose primary purposes are social.” (Mulgan, 2006:146). He indicates that the rise of cognitive behavioural therapy, which was proposed by Aaron Beck in the 1960s, is a good example of a socially innovative activity. Business innovation is however, according to Mulgan, “motivated by profit maximization and diffused through organizations that are primary motivated by profit maximization.”
Innovation is born through an idea of a need that isn’t being met, coupled with an idea of how it could be met (Mulgan, 2006). Some needs are obvious, whilst others are sometimes less obvious or not recognized. For the latter type, it takes initiatives and movements to name and describe them. Needs tend to come into focus in many ways and some of the best innovators identify needs which haven’t been adequately met by any entity yet. To him, empathy is the starting point and personal motivation plays a critical role. Many of the most effective ways of fostering innovation start with the recognition that people are competent interpreters of their own lives and therefore also are competent solvers of their own problems.