Principles of Innovation
6 min readDec 27, 2022
- The principle of the Pareto 80/20 rule: This principle states that approximately 80% of the effects come from 20% of the causes. This principle can be expressed using the equation: P(A) = .8 x P(B), where P(A) is the probability of the desired outcome occurring, and P(B) is the probability of the cause occurring.
- The principle of the critical mass: This principle states that a certain level of adoption or usage is required for a product or service to become successful. This principle can be expressed using the equation: C = N / S, where C is the critical mass, N is the number of users or adopters, and S is the number of units required for the product or service to be successful.
- The principle of the diffusion of innovation: This principle states that the adoption of an innovation follows a specific pattern over time. This principle can be expressed using the equation: A = I x C x V, where A is the adoption rate, I is the innovation’s relative advantage, C is the complexity of the innovation, and V is the observability of the innovation.
- The principle of the learning curve: This principle states that the more a task is performed, the less time and resources are required to perform it. This principle can be expressed using the equation: C = A x B^D, where C is the cost of the task, A is the base cost of the task, B is the learning rate, and D is the cumulative number of units produced.
- The principle of the value proposition: This principle states that the value of a product or service is equal to the perceived benefits minus the perceived costs. This principle can be expressed using the equation: V = B — C, where V is the value of the product or service, B is the perceived benefits, and C is the perceived costs.
- The principle of the net present value: This principle states that the value of a future stream of cash flows is equal to the present value of those cash flows, discounted for the time value of money. This principle can be expressed using the equation: NPV = ∑CF / (1 + r)^t, where NPV is the net present value, CF is the cash flow, r is the discount rate, and t is the number of periods.
- The principle of the return on investment: This principle states that the return on investment is equal to the net profit divided by the total investment. This principle can be expressed using the equation: ROI = (P — I) / I, where ROI is the return on investment, P is the net profit, and I is the total investment.
- The principle of the innovation quotient: This principle states that the innovation quotient is equal to the number of new products or services developed divided by the number of products or services in the market. This principle can be expressed using the equation: IQ = N / M, where IQ is the innovation quotient, N is the number of new products or services, and M is the number of products or services in the market.
- The principle of the customer lifetime value: This principle states that the customer lifetime value is equal to the customer’s expected value to the organization over their lifetime as a customer. This principle can be expressed using the equation: CLV = (ARPU x Gross Margin) / (1 + d)^t, where CLV is the customer lifetime value, ARPU is the average revenue per user, Gross Margin is the percentage of revenue that is profit, d is the discount rate, and t is the number of periods.
- The principle of the technology adoption lifecycle: This principle states that the adoption of a technology follows a specific pattern over time. This principle can be expressed using the equation: A = f(I) x g(M), where A is the adoption rate, I is the innovation’s relative advantage, and M is the compatibility of the innovation with the existing system.
- The principle of the innovation diffusion curve: This principle states that the adoption of an innovation follows a bell-shaped curve over time. This principle can be expressed using the equation: A = I + C + V, where A is the adoption rate, I is the innovation’s relative advantage, C is the complexity of the innovation, and V is the observability of the innovation.
- The principle of the innovation S-curve: This principle states that the growth of an innovation follows an S-shaped curve over time. This principle can be expressed using the equation: G = K x (1 — e^(-rt)), where G is the growth rate, K is the carrying capacity, r is the intrinsic rate of increase, and t is the time.
- The principle of the innovation radar: This principle states that the potential impact of an innovation can be measured using a radar chart that plots the innovation’s potential impact on a scale from low to high. This principle can be expressed using the equation: I = f(x,y), where I is the potential impact of the innovation, and x and y are the dimensions of the radar chart.
- The principle of the innovation maturity model: This principle states that the maturity of an innovation can be measured using a model that assesses the innovation’s readiness, adoption, and impact. This principle can be expressed using the equation: M = f(R,A,I), where M is the maturity of the innovation, R is the readiness of the innovation, A is the adoption of the innovation, and I is the impact of the innovation.
- The principle of the innovation readiness index: This principle states that the readiness of an organization to innovate can be measured using an index that assesses the organization’s ability to generate, evaluate, and implement new ideas. This principle can be expressed using the equation: I = f(G,E,I), where I is the innovation readiness index, G is the organization’s ability to generate new ideas, E is the organization’s ability to evaluate new ideas, and I is the organization’s ability to implement new ideas.
- The principle of the innovation performance index: This principle states that the performance of an innovation can be measured using an index that assesses the innovation’s impact on the organization’s outcomes. This principle can be expressed using the equation: P = f(O,I), where P is the innovation performance index, O is the organization’s outcomes, and I is the innovation’s impact on those outcomes.
- The principle of the innovation maturity matrix: This principle states that the maturity of an innovation can be measured using a matrix that assesses the innovation’s readiness and impact. This principle can be expressed using the equation: M = f(R,I), where M is the maturity of the innovation, R is the readiness of the innovation, and I is the impact of the innovation.
- The principle of the innovation adoption rate: This principle states that the adoption of an innovation follows a specific pattern over time. This principle can be expressed using the equation: A = K x (1 — e^(-rt)), where A is the adoption rate, K is the maximum adoption rate, r is the intrinsic rate of adoption, and t is the time.
- The principle of the innovation diffusion curve: This principle states that the adoption of an innovation follows a bell-shaped curve over time. This principle can be expressed using the equation: A = I + C + V, where A is the adoption rate, I is the innovation’s relative advantage, C is the complexity of the innovation, and V is the observability of the innovation.
- The principle of the innovation S-curve: This principle states that the growth of an innovation follows an S-shaped curve over time. This principle can be expressed using the equation: G = K x (1 — e^(-rt)), where G is the growth rate, K is the carrying capacity, r is the intrinsic rate of increase, and t is the time.
