What is innovation?

As responses for the current GRIT report are closing today, I started completing the survey. Then I had a thought. The report is about measuring innovation, which we all agree is a good thing. But what kind of good thing is it? What, in fact, is innovation?

I believe the market research industry has four levels of innovation. each building on the last. Many companies manage the first couple of levels, but it is rarer to reach the third or fourth. Which level have you (or your suppliers) achieved?

Level 1 is the most fundamental association with the word: doing something new. The nova part of innovation is Latin for new, and this is absolutely at the heart of the process. New could mean something completely original, something borrowed from another category that hasn't been done in yours, or perhaps something learned from a scientific discovery that has not been applied yet.

The problem is that doing something new for its own sake does not necessarily achieve much, although it can be motivating for your employees if they are bored of doing the same old stuff.

Level 2 is achieved when your novelty finds an application. This is the in part of in-novation: bringing the new idea into a process, an existing body of work, or a company. There are lots of new research methods to be found in science (the history of psychology research has hundreds), and there are lots of new technologies available – but they are not all useful. Level 2 occurs when you are disciplined about choosing from the new ideas, identifying what client problem they can solve and methodically refining them until they succeed.

If you've achieved Level 2 you have innovated. But innovate is a verb and innovation is a noun. The -tion part comes with Level 3, when you transform that one-off event into a permanent process and function in your business. (taking another grammatical tack: the -tive of the adjective innovative indicates that this is an ongoing attribute of your business, not just something you did once).

Level 3 is when you possess the skills, business processes and commitment to keep discovering new things. It could be an innovation team, or Google's 20% time that is carved out from every employee's week, or various other forms.

These levels can apply to any business in any category. Many client-side organisations have innovation divisions that are consistently at Level 3. Most technology companies do.

But Level 4 is specific to industries like market research. Unlike most companies, our outputs in the insight world are not meant to be optimized, repeatable, reliable objects. High quality does not (only) mean precision and consistency. We are meant to come up with something different every time, unique to the client, the project and the situation. Level 4 is achieved when your innovations are not just new in form or method, but deliver new insights that have not been uncovered by old techniques.

It's not about confirming or checking what you already know: that can be useful, but it is not innovation. It's not about measuring this quarter's trend on a tracker. It is about generating new ways to see consumers and their behaviour, which traditional methods have no access to.

A side note: Underpinning all of this are Level 0 innovations, the basic science research that our industry's new methods are built on. Often that is left to universities and trade associations, but some agencies participate in it too.

As an example, I looked at the history of Irrational Agency's System 3 innovation (an approach for understanding consumer narratives) through this framework.

Level 0 is the basic psychology and neuroscience research it derives from, developed through the last 10-15 years (by academic researchers and our own team). Our Level 1 innovation was creating a new methodology to map and measure respondent narratives by stimulating their imagination. At this point, it was of limited value to clients. We had to do the Level 2 innovation to link it to their business questions and extract the data in a form that could answer them. At that point we had a couple of 'visionary' clients who were willing to work with us to have the conversations that shaped those outputs – our eternal gratitude to them!

Something interesting happened at this point. Our work split into two strands. On the one hand, we had to invest in refining the product to make it slicker and the delivery process more repeatable. Arguably, that is no longer innovation, but optimisation.

On the other, we continued innovating by turning the System 3 tool into the foundation of an ongoing process of gathering new insights into intangible topics like trust, value and sustainability. That's our Level 3 innovation.

And we know from clients who have recently worked with us that it achieves Level 4 too: they are now using this tool deliberately to go beyond the 'same old' insights from existing methods.

Can you look at your own products or services through this lens, or those of the agencies who supply you? What level do you think you are at? Or do you have a different framework for thinking about innovation?

Back to where we started: today is the last day for completing the GRIT survey – so when you're doing so, perhaps you'll consider this framework, the suppliers you know and what level they reach. I'd love to hear your comments.