Innovation is a result that creates business value. Specifically? It can be an incremental improvement to a pre-existing product or process, a breakthrough creation of a new model or service, or an efficiency improvement or a cost reduction. It is a key component of attaining a competitive edge.

High-level and simplistically, innovation can be viewed as a three-step process:

1. Discover, create, develop an idea.

You might think of creative people as those who think outside the box, but wild and crazy ideas are actually not all that helpful. It takes a lot of mental energy to sort through an overload of information; mental energy that could be better utilized elsewhere. Instead of discrete brainstorming, start innovating with strategic thinking. Stay inside the box. Being focused from the start will ensure that the end result of your innovation process is relevant to and aligned with your intended objectives and business needs. To start: target an area of opportunity. Where is there most potential?

2. Refine an idea into something useful.

The paradox of innovation is that to avoid failure on a grand scale (your business unit or organization), you must fail over and over as part of the journey. Innovation, by definition, is something new that doesn’t come with rules, experience, or best practices. You must embrace the uncertainty and the ambiguity. Maintain confidence that it will all work out in the end at the same time that you build your perseverance to recover from wrong turns and setbacks.

3. Create profits, increase efficiency, or reduce costs.

If you expect both failure and success, you can manage the innovation process with poise. Take on short projects that result in quick wins and quick losses. Learn from them to inform longer-term initiatives. All the while, manage your resources judiciously; you must be willing to let go of existing paradigms to accept new ones. Balance pursuing the ideal with embracing risk and failure in order to ultimately succeed.