Most innovation isn't in a company's products. It's in the company itself. Here's how to foster it. ManagementSpeak: Where are we with the project?Translation: Now that you have done all the work, it's time for me to take the credit.Because this week's contributor asked to remain anonymous, I guess I'll have to grab the credit for his good work.Innovation is one of those widely admired characteristics that's also widely misunderstood.The admiration is deserved. According to an I-sure-wish-I-could-track-it-down-so-I-wouldn't-have-to-rely-on-my-memory essay published in The Economist more than a decade ago, quite literally all economic growth throughout history has been the result of technological innovation.I'm in favor, but the vote is hardly unanimous. George Will, for example, takes the other side of the debate, asserting, "Most improvements make matters worse because most new ideas are regrettable ..." If you agree with Mr. Will on this point you might as well skip the rest of this column.For everyone else:Innovation is widely misunderstood. The preponderance of what's written on the subject focuses on a company's products, the usual point being that companies that fail to innovate end up selling either low-margin commodities or not selling products that have become obsolete as their competitors take advantage of their complacency.All of which is on target. (Except, of course, for companies that sell products to customers who want actual commodities. When I buy lentils, for example, I don't want innovation. Just beans.)It also leaves a lot of opportunity on the table, because every product every company sells depends on a whole lot of work that is, while less visible, every bit as essential to the company's success.Which is to say, most businesses have a lot of moving parts, and every one is a potential opportunity to do things better ... a potential target for innovation. The question is how to encourage employees to find the opportunities, and, even more important, how not to discourage them once they have.Jon Lee wrote to suggest this subject and provided a number of worthwhile thoughts on how to encourage new ideas no matter what you're responsible for managing. Here they are, interspersed with my own, with no attempt to untangle the two:New ideas are sketches, not blueprints: Evaluate them based on their promise and potential ... and for heaven's sake, their value ... not on whether they have every detail nailed down, and certainly not on what they might end up costing.No time, no innovation: The men and women who report to you have full-time jobs already ... a point already explored in "Epiphany Half Life," (KJR, 9\/7\/2010, so I won't re-explore it here).Proofs of concept aren't: Proofs, that is. By all means, test new ideas cheaply before investing in them heavily. Just don't rely too heavily on the results. Proofs of concept should be called "disproofs of concept" because that's what they're for. If a proof of concept doesn't work, the full-tilt boogey almost certainly won't work either. If it does ... proofs of concept take on the simple stuff, which limits your confidence to what's simple.Don't confuse poor execution with invalid concepts: One of the best ways to kill an idea is to point out that it's already been tried ("How to kill an idea," KJR, 8\/7\/2000). If it didn't work, it might have been a good idea badly executed. Keep in mind that in the early days of rocketry, NASA had a lot of blow-ups on the launch pad. Concluding that rockets can't get off the ground would have been a false inference.Avoid the AND Gate of Death: Organizations with approval chains use AND logic. It kills even highly promising ideas, because a single "No" is all that's required. The solution: Bypass the approval chain until it's too late. Then replace the chain with an approval meeting, to replace the AND Gate of Death with a consensus check.Give the proposer a chance at it: But don't insist. Sometimes, the proposer loves the idea and wants to run with it. Other times they're just doing you a favor by suggesting a way to solve a problem.Finally, remember the political dimension.Niccolo Machiavelli famously stated, "... there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new."For your average business improvement, "enemy" is too histrionic a term. Even "politics" overdramatizes the role relationship-building plays in plowing your company's social field to allow new ideas to germinate.Agricultural metaphors and excessive drama notwithstanding, businesses are communities, and innovations do disrupt the social fabric.Anticipate the resistance, and plan accordingly.Bob Lewis is author of Keep the Joint Running: A Manifesto for 21st Century Information Technology, Bare Bones Change Management: What you shouldn't not do, and six other books on business, information technology, and where they intersect. He is president of IT Catalysts, Inc., a consultancy specializing in these and related areas.