I spent the day at London Business School’s Global Leadership Summit which, this year, focused on the topic of Innovation, which is one of those things that is universally desired but which most people (including many so-called “experts”) struggle to define or, ineed explain. Today, the audience was asked to vote on the best definition of innovation from a list of four. The Economist’s “Fresh thinking that creates value” was the winner, with 58% of the vote. Later in the day, Vince Cable offered his own definition: “Knowledge [and] ideas being turned into commercial application”.

I like to think of myself as knowing a thing or two about innovation. My stock in trade is enacting innovation through the application of technology and I’m occasionally asked to speak on the topic for organisations or companies who are struggling to innovate. When I do so, I like to define the term up front, using the dictionary definition: make changes in something established, esp. by introducing new methods, ideas or products.

People often focus on the creative side of innovation but, to me, that’s the easy part. Ideas are two-a-penny. Implementing them is the difficult part. For me, change is a very important aspect of the definition of innovation, because it points us towards what I consider to be the most common reason behind a failure to innovate: resistance to change.

Change is difficult. As organisations grow and mature, as systems and processes evolve over time, as people settle into a routine and become comfortable with what they’re doing, they become resistant to change. When I talk about how companies can become more innovative, I probably spend over half the time talking about how to overcome resistance to, and fear of, change.

In order to innovate, you must embrace change. Yet today, I barely heard the word “change” mentioned at all. One notable exception was Masahiko Yamada, the President of Fujitsu’s Technical Computing Solutions Unit, who asked the audience “When you wake up in the morning, are you changing the world or just getting through the day? Or just making money?” before going on to point out that “the best innovators’ primary motivation isn’t money. They just want to change the world.”

Some of the other key points I took away from the day were:

• Innovation is “discontinuous and stochastic, not linear and probabilistic.” – George W Buckley (Chairman & CEO, 3M. It’s worth noting that 3M is a business school case study in innovation – it’s part of their DNA. They’ve also been allowing their engineers to spend up to 15% of their time on personal projects since 1948, long before Google’s founders were even born!)
• Nick Hughes, who developed the M-Pesa mobile payments system while working for Vodafone, said that telcos were reluctant to step over the boundary into mobile financial services.
• Nick also stated that companies fear cannibalisation of their existing markets and revenue streams. My personal opinion is that it’s better to self-cannibalise than stand still while a competitor eats your lunch!
• 3M’s Buckley isn’t a fan of bringing in outside consultants to help drive innovation. He’s also reluctant to outsource because “things always go wrong at boundaries”.
• “The public sector accounts for 60% of all venture capital investment in the UK” – Vince Cable
• “Most entrepreneurs will say the best thing the govt can do is get out of the way. I’m not sure they’re right.” Michael Hayman (StartUp Britain)
• Philip Rutnam (Director General for Business and Skills at the Department for Business, Innovation & Skills) pointed out that, if designed properly, regulation can support innovation and cited Ofcom’s statutory duty to support competition as an example.
• Innovation is about new ideas but most new ideas are bad ideas. Challenge is how to cope with high failure rates. Instead of running 100 experiments and picking the winner Cisco let the market do the experiments and bought the winners. – Professor Phanish Puranam (LBS)
• “Some companies forget that their reason to exist is their customers.” – Antonio Horta-Osorio (the new CEO of Lloyds Banking Group)
• “Big companies, small companies must innovate … otherwise you become complacent and you die.” – Antonio Horta-Osorio
• Innovation is not about technology for its own sake. – Masahiko Yamada
• There are more transistors on the planet than grains of rice. – Stephen Leonard (Chief Executive, IBM UK and Ireland)
• We’re at an inflection point in the adoption of mobile devices and the explosion of Internet access from 2bn to 5bn people – Matt Brittin (Managing Director, UK and Ireland Operations, Google UK)
• Companies need to get comfortable with the fact that not every innovation will succeed. Google Wave is an example of unsuccessful innovation. Companies are more likely to die from too little innovation than too much. – Matt Brittin
• “I will bet that, within five years, a major multi-national corporation will base itself in Singapore.” – Sir Martin Sorrell (Chief Executive, WPP)
• Forget about ppl interacting via the ‘Net. Think about the millions of devices that can interact via the ‘Net. – Stephen Leonard
• WPP buys $1bn worth of advertising from Google annually. – Sir Martin Sorrell
• Different brands within the same company may compete with one another but it’s about the overall market share. – Sir Martin Sorrell, talking about competition within WPP.
• Two thirds of the companies on Fast Company’s 2009 list of the Most Innovative Companies weren’t on the 2010 list. – Professor Nader Tavassaloni quoting Gary Hamel.
• In a vote on the role of the CEO, 80% of the audience voted that the CEO is key to driving innovation but by providing top level support rather than being a source of innovation.
• Social innovation is fresh thinking that creates social value. Social enterprise creates social value by applying commercial principles.
• The first digitisation in history was the replacement of gas lighting with electric lightbulbs. – Shai Agassi (Founder & CEO, Better Place)
• Three years after the launch of Kindle, sales of digitised books exceeded sales of physical books on Amazon. – Shai Agassi
• Shai Agassi believes that the advent of cars powered by electricity alone represents the “digitisation” of cars and that we could end up treating cars in a manner similar to how we currently treat mobile phones (i.e. a low up-front cost for the device itself, then we pay for usage).