Time also contributes to innovation, says Mosey: Google attributes its driverless car to its 20 percent time. Cal Newport supports the idea of blocked creative time that supports “mental detours”. He uses a “Maker’s Schedule” to focus on one project, blocking out time and distractions and focusing on processes – how the work will get done; how time should be used — rather than goals.

Innovation is held up as the saviour for recession-blighted business, yet how many business executives have considered precisely what it means?

Innovation in business “is delivering something novel that provides a benefit for the organisation”, says Dr Simon Mosey, Professor in Enterprise & Innovation at Nottingham University Business School. Or “finding something that people want that they did not have,” as the Technology Strategy Board’s David Bott puts it.

Innovation authority Clay Christensen’s “disruptive innovation” is as likely to come out of refinements to existing products or services as from a ‘eureka’ moment.

The value, he adds, is in being able to differentiate between “low end disruption”, which results in a growth business, but not a new market (think discount department stores) – and the “new market” disruptors such as Southwest Airlines, which create a new growth market.

How do small businesses do this? To ‘systematize’ creative thinking is surely to kill it? “You can formalize some things but there are deeper things we do as an organisation to encourage learning. Culture is an output,” says Mosey. To encourage learning means creating a workplace where people feel confident and valued, says Sir Ken Robinson.

Organising for innovation

The ‘not invented here’ mentality is a barrier to creating an innovative culture, as the likelihood of novel ideas from people, especially long serving employees, then decreases over time. So either move people around a lot or get ‘outsiders’ in, says Mosey – sometimes just from another department, as at W L Gore. Novelty is relative, and a diverse team will be able to determine if a new idea is truly worth pursuing.

Another way of encouraging innovation is to reward it. Despite acknowledging its importance, innovation still remains outside the usual objectives employees are set. Rolls Royce introduced innovation into annual reviews so it becomes an input, but one-off rewards, recognition and acknowledgement, time off – or even just the freedom to pick their next project – will send the signal that innovation is valued and rewarded.

Stanford professor Robert Sutton argues that companies should also reward ‘failure’ – or rather, action. The only sin, says Sutton, is inaction: “Companies should demote transfer, and even fire those who spend day after day talking about and planning what they are going to do, but never do anything.”

Creative cultures also tend to have the infrastructure to support collaboration – be that technologically (via wikis or other sharing tools online) or physically, with office spaces that support innovation and learning. These don’t have to be costly re-fits: Imperial College created a portable ‘igloo’ that simulates the pressured environment of emergency surgery – but fits into the boot of a car.

Companies can also make their investment in innovation more transparent in annual reports.

Building teams

There’s some debate as to whether it’s a good idea to create innovation teams or not. Mosey’s not a fan of ‘radical innovation’ cliques, and believes innovative ability is often a question of training and confidence building. “People want to be involved. We like the socialization, we are intellectually driven, we like winning,” adds David Bott.

Tom Kelly has drawn up 10 broad types for innovative teams, with each playing a role in the creative process. But when it comes to executing an idea, Rob Goffee and Gareth Jones believe there are some stand-out “clevers” – talented individuals who will always go the extra mile and who may ‘lead’ from the bottom, making innovation happen locally they allowing it to trickle up or sideways into the rest of the business.

Even so, the inherently disruptive nature of innovation means that at some point, companies may need to put together project teams. Ongoing operations and complex innovation initiatives can co-exist in the same company, but “there must be some purposeful separation of the two and then careful management of the interactions between them,” say Vijay Govindarajan and Chris Trimble in “The Other Side of Innovation”. They advocate customized teams working to discrete schedules and goals, such as Timberland’s “Invention Factory”.

Managing innovators, too, takes preparation. “You have to be entirely flexible because your diary is apt to change from day to day. Creatives can make mountains of molehills, so cultivate the ability to listen, process, then respond,” says Lucy Unger, director of Europe and Russia for design firm Fitch. “And don’t start with a blank sheet of paper”.

Practise what Mosey calls “bounded creativity”. This means balancing goal setting with experimentation: it’s possible (likely, in fact) that a product destined for one market may end up in another during the process. This can be difficult to build a system around, even in corporate venturing situations.

Team leaders should be flexible and allow for momentum dips mid-project, says Unger — it’s important to recognise this and “sit on the throne of agony”, says Sally Hogshead. “Sometimes you have to feel it’s out of control: will the technology work? Will people buy? Crisis can generate focus and a sense of urgency,” according to author Charles Leadbeater.

Gathering ideas

One of the great myths of innovation is that ideas spontaneously appear above someone’s head like a lightbulb.

Creativity tends to be a result of evolutionary thinking – iTunes was not the first place to offer downloadable music, but a ‘fast follower’ that refined a number of influences to create a better model. Innovators tend to make associations where there were none – Facebook’s IT team reconfigured a vending machine to ‘sell’ its team ordinary parts and accessories, reworking the payment system to take employee ID cars so the product could be billed to the necessary department.

This means collecting ideas from all over the place and allowing for “a lot of really bad crap,” says Kevin Kelly. Consultancy?What If! has conducted brainstorming meetings where no-one is allowed to reject an idea outright, instead having to build on it in some way. Sutton, Saj-nicole Joni and Damon Bayer advocate of dissent and rebellion as ways of generating ideas and encourage leaders to stimulate disagreements in their book, “The Right Fight”.

Looking outside the business helps engineer this unlikely collision of ideas – and is a hallmark of disruptive innovators. According to Christensen, creative executives share five traits: “associating, questioning, observing, experimenting, and networking. We found that innovative entrepreneurs (who are also CEOs) spend 50 percent more time on these discovery activities than do CEOs with no track record for innovation,” he writes.

TED founder Chris Anderson believes the Web is powering a wave of “crowd-accelerated” innovation, with crowdsourcing used formally (most famously at Procter & Gamble) and informally (via social networks) to gather opinions and source ideas. Some companies – Wow! Stuff toymaker is one – crowdsource inventions, others ‘co-create’ via informal partnerships, or, at Innocentive, through open innovation R&D challenges. Here again, ‘bounded creativity’ applies: an open suggestion box within the company or externally can quickly become unmanageable.

Companies can also generate “nodes of interest” within – and beyond – the company, says Bott: “Giving it to the coolest kids in the crowd will make you cool by association.”

People are often more creative if they don’t have a direct interest in the problem they’re trying to solve, according to Jeffrey Leitner, whose Insight Labs brings together disinterested parties to solve some of the world’s problems.

Customer needs will inevitably lead innovation. “Think about what your customers are really buying,” says Bott. “Are they buying engines in the air (as at Rolls Royce) or an attitude of mind? Listen and extrapolate what they might want from you in five years’ time.”

But don’t rely solely on the wisdom of crowds, warns expert Stuart Cross. “Faced with a radically new proposition, people are poor predictors of their own future behaviour.”

And don’t discount the value of old-fashioned brainstorming – a process that should allow free thinking, but within a structured environment. Dean Rieck suggests managers set a time limit, distribute an agenda and set some behavioural ground-rules and ensure you follow up with actions.