"Why Iteration is not Innovation"

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Iteration ≠ Innovation. Why that matters, and what to know

When we talk about digital product development, terms like ‘iteration’ and ‘innovation’ are often thrown around. But what do they really mean? And how do they influence the way we approach product strategy? And perhaps most importantly, why does it matter that iteration ≠ innovation?

Iteration ≠ innovation, the directors cut

If you’re interested in the nitty gritty of these differences, why they matter, and what you can take away from them, check out our full webinar below:

If you’re more interested in the highlights, keep reading below:

Iteration: The Foundation, Not the Ceiling

If you think back to math class, we learned about concepts that are necessary but not sufficient for specific outcomes. Iteration is a perfect example of something in business that’s necessary, but not sufficient on its own. Iteration is essential for refining a product and improving upon existing concepts. But to envision something entirely different or to solve bigger, more profound challenges, iteration alone falls short.

Consider the difference between making incremental changes to a product (like releasing a software patch or an improved version of an existing tool) versus pioneering an entirely new approach or creating a product that opens up new markets.

No matter what, on a long enough time horizon, some problems will become to big to solve with iteration alone. You’ll have to innovate to solve that particular dilemma (or someone else will, and disrupt you).

Time Horizon: Short-term vs. Long-term

A fundamental difference between iteration and innovation lies in their time horizons. Iteration is all about the ‘now’. It’s a short-term strategy, mainly focused on the immediate next step (perhaps the next sprint or product release).

On the other hand, innovation is a long game. It’s not about refining what you have but rethinking what’s possible. For a software company, this could mean revisiting the foundational problem the software seeks to solve or even identifying new problems and markets.

Focus: Features vs. Core Problems

Iteration tends to be feature-focused. It’s about enhancing the existing product, making tweaks here and there based on user feedback or changing requirements. It’s about knowing your product’s current strengths and weaknesses and addressing them.

In contrast, innovation starts from the ground up, focusing on the core problem. Sometimes, it’s about identifying and solving problems that clients or users might not even be aware of yet.

Scale: Addition vs. Multiplication

When we iterate, we add. We make incremental value additions, hoping that over time these little changes add up to a more substantial cumulative effect. It’s a step-by-step improvement.

Innovation, however, is like a force multiplier. It has the potential to bring about transformative change, altering business trajectories or even industries. While innovation might require patience, the eventual payoff can be groundbreaking.

To that point, though, the payoff or impact horizon is drastically different. With iteration, you’re looking for ROI payback in the near future. For innovation, you may have to invest greater time, energy and money for something that could take a while to prove out. The impact horizon is farther in the future, and you may be willing to invest in more testing, ideation, etc. in order to get to that greater reward down the line.

Skillset: Execution vs. Vision

Iteration is deeply rooted in execution. It’s about taking what you know – the product, the client, the user – and enhancing it. It requires a high level of precision, making sure every micro-problem is addressed sequentially and effectively.

Innovation, however, is vision-centric. It’s about seeing the bigger picture, understanding larger market trends, and coming up with novel solutions. This doesn’t downplay the importance of execution in innovation. Without efficient execution, even the grandest of ideas might fail to take off. But the primary skillset in innovation is vision. Just like math class earlier, execution is necessary for both iteration and innovation, but it’s not sufficient. Vision is also necessary, but not sufficient on its own. But vision + execution = necessary and sufficient for innovation.

The Team: Experts vs. Fresh Eyes

Iterative processes benefit from team members who have a deep understanding of the product, offering expertise and familiarity. They know the ins and outs, making them best suited to bring about incremental changes.

On the other hand, innovative endeavors often require a fresh perspective. New team members, even those from outside the software or product domain, can offer invaluable insights. Sticking too close to what we know can sometimes blind us to the realm of possibilities.

You need both! They’re just different

All that being said, though, we want to underline that iteration is a mission-critical function of any healthy or thriving business. We do an absolute boatload of it here at ENO8, and we cannot recommend its importance highly enough. BUT, it’s not enough on its own. To get ahead (or stay ahead) in business eventually requires innovation. Some problems are too big, too important, too complex, too… everything, to solve through iteration alone. While iteration refines, innovation redefines. The key is to balance both, ensuring consistent growth while remaining open to transformative shifts. At ENO8, we pride ourselves on mastering this balance, driving change while always seeking the next big leap forward.


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Jeff Francis

Jeff Francis is a veteran entrepreneur and founder of Dallas-based digital product studio ENO8. Jeff founded ENO8 to empower companies of all sizes to design, develop and deliver innovative, impactful digital products. With more than 18 years working with early-stage startups, Jeff has a passion for creating and growing new businesses from the ground up, and has honed a unique ability to assist companies with aligning their technology product initiatives with real business outcomes.

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