Innovation enables companies to differentiate, establish competitive advantage, and drive revenue growth, so it isn’t surprising that nearly every executive wants his or her company to be innovative. When I ask executives how they are driving innovation, people often tell me about their tactics to encourage employees to be more creative such as:

• Conduct brainstorming sessions
• Encourage employees to devote time each week to pursue “pet” ideas
• Reward risk-taking
• Drive fear out of the workplace

All of these activities have value but, in my experience, the primary ingredient for innovation success that most companies are missing is focus. Without focus on a known unmet customer need, creativity is of limited value.

Most people confuse innovation with creativity. This isn’t a problem unless you are an entrepreneur, or a new product development professional, or someone whose livelihood depends on the success of new products and services (everyone in business), in which case, confusing innovation with creativity will almost certainly cause failure.

There are many types of innovation — operational, business model, new product, etc. — and numerous definitions, but I like this one because it captures the essential elements of new product and service innovation as it is executed by the most innovative companies: “Innovation is the process of finding unmet customer needs and then generating solution ideas that address them.”

Innovation can be a predictable and repeatable business process when it starts with finding the customers’ unmet needs and then generating solution concepts to address them. In medicine as in business, a good diagnosis is required before an effective treatment plan can be developed.

First steps

Accordingly, the basic building blocks for innovation are a solid knowledge about:

• Your customers’ needs
• Your company’s capabilities

Creativity is the mental process of making connections between what customers want (their unmet needs) and what your company can deliver. It takes creativity to come up with an idea about how your company can effectively address an unmet customer need. If you don’t have a full understanding of either your customers’ needs or your company’s capabilities, then your creativity will be impaired.

Creativity tools, left brain/right brain training, open innovation, etc., is not going to significantly improve innovation in such a case because the problem is not a lack of creativity; it’s a lack of knowledge about the customers’ unmet needs.

Most companies don’t lack creativity or ideas, they lack focus. They lack clarity about where the market is underserved. It turns out that the best creativity trigger is a well-defined customer need. This is why companies that excel at understanding their customers’ needs also excel at innovation. Given that you’re in business to serve customers, isn’t it worth doing whatever it takes to understand their needs?