Glossary of Terms

3D printing

is an inexpensive way to make a prototype. Today 3D printing, or additive processing for manufacturing, has become a standard.

Ansoff Matrix

is a strategic planning tool that organizations use to plan and analyze strategies for growth. Each strategy for growth carries a different level of potential risk.

Balanced Innovation Portfolio

Leaders who want an innovative company must ensure a balanced innovation portfolio; a combination of core, adjacent, and transformative innovation initiatives. Generally, 70% of innovation investments are in core innovations, 20% in adjacent innovations, and only 10% in disruptive innovations. In terms of value creation potential, however, the ratios are inverted:  core innovation efforts typically contribute 10% of the long-term cumulative return on innovation investment, adjacent initiatives contribute 20%, and transformational projects yield a huge 70%. 

BPMN (Business Process Modeling Notation)

is a graphical method of representing business processes within a business process diagram. ​BPMN diagrams help the whole team see the flow of the process.

Business Innovation

Executing an idea that addresses a specific challenge or opportunity and achieves value for both the company and its stakeholders.

Business Model Innovation

is probably the most challenging of the innovation types as it will likely present an organization with major requirements for change. Often, the very capabilities or processes that have been optimized to make a company successful and profitable will become the targets for transformation.

Business Process

is a sequence of steps progressing toward a business goal. This sequence of steps can be clearly depicted using a flowchart and may also be referred to a business method.

Circular Economy

is based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems.

Closed World Principle

is the notion that the best and fastest way to innovate is to look at resources close at hand.

Cognitive Fixedness

is a state of mind in which you think of an object or situation in one specific way, to the exclusion of any alternative.


can foster innovation when they represent a motivating challenge and focus efforts on a more narrowly defined path.

Cow Path Theory

is a theory that many organizations have processes they have been following for years and may not notice that these old processes may no longer be efficient or effective. 

Customer Value

The formula for customer value can be written as: (Total Customer Benefits - Total Customer Costs) = Customer Value, or (B - C = CV)

Cyclical Thinking

is not merely recycling. It's designing products to be easily disassembled in combination with designing new take-back systems and infrastructure that make it easier and less expensive for companies to collect the materials they'll use in one generation of products in order to manufacture the next generation of products. This regenerative approach to design has taken many forms over the last several decades as we move towards establishing a circular economy.

Design thinking

is one of several approaches to innovation and is a process for creative problem-solving. Design thinking has a human-centered core. It encourages organizations to focus on the people they are creating for, which leads to better products, services, and internal processes. The design thinking framework helps inspire creative thinking and strategies that lead designers to create user-friendly products that help solve a particular problem.

Disruptive Innovation

is the launch of a new business model, concept, product, or service that creates a new market segment and value drivers.

Environmental Sustainability

is about acting in a way that ensures future generations have the natural resources available to live an equal, if not better, way of life as current generations. Many innovations today are focused on solving environmental issues. The Sustainable Development Goals (SDGs) of the Organization for Economic Cooperation aenvironmental sustainabilitynd Development (OECD) are broad and ambitious, calling on all countries – be they upper, middle, or low income – to make tangible improvements to the lives of their citizens. The ‌goals ‌encompass social, environmental, and economic aspects (OECD, 2021).

Function Follows Form Principle

is a way to overcome some of the drawbacks of traditional research-led or design-based innovation. You begin with an abstract, conceptual solution and then work back to the problem that it solves.

Functional Fixedness

You see objects, components, and things around you, and you can’t imagine them doing different functions than what they’re designed to do.

Incremental Innovation

is the concept of growing or improving a company by making a succession of small-scale improvements to existing products, services, processes, and tools.


Creating something new that serves people's needs or wants.

Innovation Ambition Matrix

as featured in the Harvard Business Review (May 2012), is a classic model that helps companies decide how to fund different growth initiatives.

Innovation Labs

focus on business growth. They can either be internal to a company that has the resources and the team available to run their own internal programs, or they can be external such as a consulting firm that supports the innovation process of other businesses. Innovation labs are strategic and goal-focused and are used as tools to address specific company innovation requirements.

Innovation Process

should be systematic and predictable. The first step of the process is doing market research, the second step is solution generation,  the third step is business case development (figure out how to monetize the innovation), the fourth step is to scale up (get it ready to be launched),  and the last step is to launch the innovation in the marketplace.

Innovation strategy

is about mapping an organization’s mission, vision, and value proposition for defined customer markets. It sets boundaries to innovation performance expectations by simplifying and structuring the innovation work to achieve the best possible outcome.

Innovative Culture

is a work environment that fosters and rewards employee creativity instead of focusing on deadlines and revenue.

Intellectual Property

is any product of the human intellect that the law protects from unauthorized use by others.

Management Processes

The processes that plan, organize, coordinate and control all the functions of the business.


are measures of quantitative assessment commonly used for assessing, comparing, and tracking performance or production.

Open innovation

is a business management model for innovation that promotes collaboration with people and organizations outside the company.

Operational Processes

The processes that constitute the core business of the organization and create the primary value stream.

Opportunity Costs

are the potential benefits a business misses out on when choosing one alternative over another.

Organizational Structure

is a way or method by which organizational activities are divided, organized and coordinated.

Organizational Structures

From small businesses to large organizations like global megacorporations, companies across the globe generally rely on four different types of organizational structures in the mechanistic model: Functional, Divisional, Matrix, and Hybrid.

Process innovation

can include changes in the equipment and technology used in manufacturing (including the software used in product design and development), improvement in the tools, techniques, and software solutions used to help in supply chain and delivery system, changes in the tools used to sell and maintain your good, as well as methods used for accounting and customer service.

Product innovation

can come in three different forms. 1) The development of a new product, such as the Fitbit or Amazon’s Kindle. 2) An improvement of the performance of the existing product, such as an increase in the digital camera resolution of the iPhone 11. 3) A new feature to an existing product, such as power windows to a car.


is a mini design of the actual product. It can be a sketch, a low-quality, or a high-quality copy depicting what the real product will look like. It is important for companies to prototype fast and often in order to produce innovations at the right times--when customers demand them and before competitors beat them to market.


are all about understanding customers’ lifestyles, values, beliefs, and optimizing marketing to demonstrate to customers how the company can fulfill these psychographic variables by providing the benefits sought thus providing customers value.

Radical Innovation

is the creation of a whole new product.

Relational Fixedness

This type of fixedness makes it very hard to imagine two objects having a relationship that wasn’t there before.

SCAMPER Technique

is based very simply on the idea that what is new is actually a modification of existing old things around us.

Service Innovation

changes the way customers are served to create value for customers and revenue for the company. 

Service Innovations

ensure and enhance the utility, performance, and apparent value of an offering.  Some offerings are purely service, such as getting a haircut, hiring someone to paint your house, or taking an Uber to your friend's place. These are services you may utilize throughout your lifetime. Other service innovations may be combined with product offerings, such as purchasing groceries (products) and having them delivered to your home (service), or buying a new television (product), and purchasing the warranty (service).

Shape of Ideation

If we graphed this ideation process we would see a graph that at first has many ideas, but after a short period of time the group feels they have exhausted all the good ideas, and the ideas stall.  What happens next, someone offers a different, silly, or absurd idea, then more ideas come from that idea and the tide has turned.  The best ideas often come after this turn in the graph.

Social Innovation

refers to a response to a social or environmental problem, which, once adopted, results in better solutions than existing approaches. Social innovations have a transformative impact and improve organizations, communities, regions, or systems.

Structural Fixedness

This makes it really hard to imagine objects having a different structure than what we’re used to.

Supporting Processes

The processes that support the core processes. They help the business create an environment where the core processes can work better. Examples include accounting and technical support.


is the capacity to endure in a relatively ongoing way. 

Sustainable Innovation

means that companies seek out ways in which to sustain continuous innovation/improvement for company growth, competitive advantage, and increased market share, etc.

Systematic Inventive Thinking

SIT is a thinking methodology where creativity takes centre stage. It contains five thinking patterns that humans have used for thousands of years. It directly contradicts the principle of ‘thinking outside the box’ and uses ‘thinking inside the box’ as a guiding principle in order to prove that creativity is not the prerogative of only a few.

Technological Innovation

focuses specifically on technology and how to embody it successfully in many types of innovations such as products, services, processes, profit models, channels, and customer service engagement innovations.

Triple Bottom Line

is often used to refer to the concept that businesses need to not only be concerned with making a profit but also be concerned about the manner in which they do so.  The three parts of the Triple Bottom Line include considering the impact that business operations and innovation have on societal, environmental, and financial well-being; in other words, people, planet, and profit (respectively).



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Leading Innovation, 1st Edition Copyright © 2022 by Kerri Shields is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.

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