What is innovation and how can companies encourage it?

There are two reasons that companies innovate:
1. - They are leaders, they choose to innovate because they want to maintain their status as leaders.
2. - They are forced to innovate. These companies innovate because if they don't they will be forced out of their market.

Many companies don't understand what innovation is so they struggle to develop a program or system that encourages it. There are several definitions of innovation, the one that is the most accurate to business is: Innovation - is an idea that is driven to the profitability of return on investment.

Most companies mistake innovation for inventions. An invention is simply an idea. Most companies generate numerous great ideas every single day, but these ideas have very short lives. Innovation actually begins once the idea is born. Companies who wish to innovate must learn how to measure innovation.

If you can't measure it, you can't manage it. This is the disconnect for most companies, they can't figure out how to measure innovation. Before any real attempt to develop a company that encourages innovation, they must first figure out how they will measure innovation.

So the question of the day is: how can companies effectively measure innovation?