Breaking Down Innovation & Invention

A friend recently asked me if I had a Lexicon & Taxonomy for Innovation and Invention. While I do, I realized I’ve never written it down. Here’s my first stab; using the Customer, Business, Organization, and Technology (CBTO) mental model. What do you think?


  • Innovation – The introduction of something new or novel that meets the needs and desires of the customer, and aligns with the goals and objectives of the business and organization, through the use of technology.
  • Invention – The creation of a new product, service, device, or process that addresses a customer need and adds value to the business, using creative and innovative thinking and technology.
  • Creativity – The ability to generate new and original ideas that can solve customer problems and create value for the business and organization.
  • Novelty – The quality of being new and unusual, from the perspective of the customer and the business.
  • Originality – The quality of being created or produced independently, rather than being copied or imitated, in order to meet customer needs and achieve business and organizational goals.


  • Incremental Innovation – A small change or improvement to an existing product, service, process, or device that benefits the customer and helps the business and organization stay competitive.
  • Radical Innovation – A significant change or a completely new invention that creates a new market or significantly disrupts an existing one, meeting a previously unmet customer need and offering new value to the business and organization.
  • Disruptive Innovation – An innovation that disrupts an existing market or industry by introducing a product or service that is significantly cheaper or better than existing ones, meeting a customer need in a novel way, and offering new value to the business and organization.
  • Sustaining Innovation – An innovation that helps a company maintain its competitive advantage by improving an existing product or service, meeting evolving customer needs, and maintaining value for the business and organization.
  • Open Innovation – An approach to innovation that involves actively seeking out ideas and technology from external sources, such as customers, suppliers, or academic institutions, in order to meet customer needs and achieve business and organizational goals.
  • Customer Innovation – Innovation that is driven by the needs and desires of the end-customer (user), rather than by the manufacturer or provider of a product or service, in order to meet customer needs and create value for the business and organization.

This lexicon and taxonomy of innovation and invention provide a mental model for understanding and categorizing different types of innovative ideas and approaches. However, simply having innovative ideas is not enough – it’s important to also have a plan (with tenets) and mechanisms for executing on those ideas to turn them into tangible products, services, or processes. Without proper execution, innovative ideas can remain just that – ideas – and be nothing more than mental masturbation.


  1. Chuck L says:

    CBTO is where ‘Customer’ is synonymous with ‘product’. Reading thru the Lexicon and Taxonomy, mentally replacing ‘customer’ with ‘product’ seems to hold up, except (maybe?) Customer Innovation.
    Purely a nit, but arranging them in the lifecycle of the process may make it easier to keep them in the front of one’s mind?

    As an aside, this almost made miss working. Almost.

    1. Daudi says:

      This is living 🙂

  2. Daudi says:

    I like this Tig, and perhaps we need lexicon for Instigation/Instigator as well, something NASA likes to phrase as PI (principal investigator).

    1. Chuck L says:

      Not a bad thot! PI is used across some other govt affiliated (defense contractors, etc). That paradigm is a bit different from this taxonomy, although there are mostly similarities (I was in charge of R&D for a organization w/i a Fortune 500 company; served as a PI a couple of times)

      Development of a disruptive technology with the hope (plan?) of becoming a competitive advantage that addresses a perceived problem a customer may have.

  3. Daudi says:

    There is an element that needs to be incorporated and/or emphasized about how the company employees/team are an important “customer” in the business model. We are best able to address the external customer needs when we are engaged, empowered, and invested as a team.

    1. tig says:

      First, in any situation, it’s a good thing to decide who the customer is. For example, whenever I run a staff meeting, I view my staff as my customers (in the way I plan and run the meeting).

      Another example: IMO an internal, services org, such as “Finance” should view their primary customer as the company’s employees. External customers are still customers, but secondary.

      This is how I would incorporate this.

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