Innovation's vague definition is undermining corporate strategy, says professor
Jeff DeGraff, a University of Michigan professor, argues that companies fail at innovation because the term is used to describe many distinct activities, from adopting technology to transforming business models. This ambiguity leads to scattered resources and conflicting expectations. He suggests asking what the innovation is compared with, rather than whether it is innovative.
DeGraff's critique centers on the term "innovation" being applied to vastly different activities, from technology adoption to business model transformation, creating false consensus in executive discussions. His experience spans decades, including early work at Domino's Pizza during its 1980s expansion, giving him direct exposure to how corporate language shapes strategy.
The professor proposes evaluating innovation relative to an organization's existing norms rather than against absolute standards. He also highlights a fundamental tension: genuinely novel ideas lack historical data for traditional ROI modeling, as demonstrated by generative AI's rapid evolution since late 2022, making evidence-based decision-making inherently difficult for breakthrough initiatives.
This argument could reshape how corporations allocate resources toward new initiatives, potentially affecting employees whose jobs depend on innovation budgets. If companies adopt clearer innovation language, they may pursue more focused strategies, possibly accelerating genuine breakthroughs while reducing wasteful spending on misaligned projects. Consumers could see faster development of meaningful products, though the shift might also slow speculative ventures. The framework's impact ultimately depends on whether leadership embraces such conceptual clarity in practice.