In the Star Wars epic, Luke Skywalker was repeatedly warned by his Jedi Masters not to stray down the path to the dark side of the Force. He was instructed to only use his powers for good, not for selfish gain.

The power of Innovation has a lot in common with the Force; on the side of good it can save lives (antibiotics), transform cultures (the Internet) and even change the course of history (the Declaration of Independence). Over on the dark side, innovative minds can conjure up the atom bomb, credit default swaps and sub prime loans.

One of the benevolent hallmarks of Innovation is that it creates ideas, goods, and services that provide added value to the consumer. Qualities that makes those things “faster,” “better,” “cheaper,” “Longer-lasting,” “less expensive,” and “more comfortable.”

Today’s challenging economic climate is pushing companies to, in the words of Apple, “think different.” To stay competitive (or survive), most companies are looking at ways to maximize the value of their goods and services to attract consumers. In other words, they are bending over backwards to offer customers MORE bang for their precious buck.

However, companies on dark side are finding nefarious ways to do the exact opposite. Instead of engaging in value-adding creative thinking, they spend their time and resources plotting and scheming ways to profit by actually subtracting value! In other words, by finding ways to charge customers for things that used to be FREE, or the same amount for diminished value.

Leading the way down this slippery slope to customer alienation is the airline industry. They seem to have perfected the art of offering low fares to attract customers… and then nickel and dime them to death for things that used to be free. Check that bag…$15 please! Your kid wants a soda…$3, and that seat cushion that can be used as a flotation device should the plane need to ditch in the Hudson River… hummm $$$.

No Federal bailouts for these Bozos to restructure.

The word “Innovation” has earned the dubious distinction of  being one of the most overused and misunderstood concepts in business. Today’s tumultuous economic climate has sent companies across the globe scrambling to decipher the secrets of Innovation and to find ways to quickly download it throughout their organizations. Innovation fever is everywhere.

In the corporate gold rush to innovate, it appears that few, if anyone (including no doubt the vast majority of CEOs and senior managers) are pausing long enough to comprehend what the word “Innovation” actually means? A common misperception is that it simply refers to the process of turning a new idea into a successful commercial outcome.

So, what exactly is “Innovation”?

Unfortunately, there is no simple, one-size-fits-all definition that clearly explains it. In fact, most traditional definitions of the word are shockingly vague. How vague? Take the Merriam-Webster dictionary, it defines “Innovation” simply as: “The introduction of something new; a new idea, method, or device.”

New idea = Innovation?

Clearly that definition is inadequate. There are millions of new ideas, methods and devices introduced each year… yet the marketplace deems only a small fraction of them “innovative.” In fact, the majority of new ideas end up forgotten, ignored or discarded.

If we keep searching, better definitions begin to arise. For instance, Wikipedia’s dictionary adds another dimension to the concept by stating that Innovation is: “The creation of new ideas or things; Forward looking; ahead of current thinking.”

New idea + Ahead of current thinking = Innovation?

While that sounds…well, more futuristic, on closer inspection it too falls short. Haven’t we had “forward looking” ideas about flying cars, 2-way video telephones and establishing colonies on the moon since the 1964-65 World’s Fair? So we must add “doable/viable” to the equation. In the business world, that usually translates to “commercially viable.”

New idea + Ahead of current thinking + Doable/ Viable = Innovation?

Here we begin to see a more concrete description emerging. However, for an idea to be considered truly Innovative it must possess qualities that go beyond “new” (novelty), “ahead of current thinking” (vision) and viability (doable). There is a fourth essential quality that helps catapult one new idea, product, service, or process above all others in its class. A quality that infuses it with that game-changing competitive edge we call “Innovation.”

Australia’s leading innovation guru, Roger La Salle, helps provide an important insight into this fourth mysterious quality when he defines “Innovation” as…”Change that adds VALUE.”

The added value La Salle is referring to are those special attributes or benefits that make a new product, service or process: “faster,” “smarter,” “simpler,” “easier-to-use,” “more convenient,” “more powerful,” “longer-lasting,” “safer,” “better tasting,” “more comfortable,” “sleeker design,” “more efficient,” “more affordable,” “more satisfying,” “more exciting,” etc., etc. Added value is the quality that makes something unique and highly desirable.

New idea + Ahead of current thinking + Doable/ Viable + Adds greater value = Innovation!

If we put all these essential pieces together to create a simple, well-rounded definition to explain what Innovation is all about, it might sound something like this:

“Innovation: A compelling new idea that’s marketable and provides greater value than anything currently in its class/category.”

Once we gain a clearer understanding about what the word Innovation really implies, it doesn’t sound so mysterious, does it? In fact, when we get passed all the media hype and confusion, the Innovation process is really about the practical application of inspired creative thinking to create something better. A simple winning formula for success. Pass this understanding along to your CEO. Hey, you never know!