I believe that Business Innovation is all about innovating processes.
Obviously product innovation is a given, but think of a product as in two parts - physical incarnation and process delivery - and there I think the process component is more important: The processes that the product generates internally and what processes it takes the customer through.
If this holds true, then all innovation has to be process focused. Processes must be allowed to be changed, not an easy task if organisational hierarchies and transactional enterprise systems cements it all. With a culture of rigidity all around how can one expect to think freely when it comes to innovate processes for the customer? Process innovation starts at home.
In any case: How much is product innovation, how much is process innovation? How much of a product is process?
Let's pick some of the most valuable companies in the world and see if the success is about physical product or process innovation...
Of the top ten you have six financial institutions and three oil companies - all delivering physical products that have not seen much innovation, perhaps not since the creditcard was invented. All their products and innovation is about process - distribution and services.
Add some of the ones that have arrived lately among the highly valued corporations, i.e. those who must have innovated a lot - Walmart, eBay, Google, Amazon, Dell...
Any doubt there? Distribution process efficiency, new distribution channels, logistics, user driven sales, lots of direct user process baked in. The physical products, not much different from before. Then the expected question; with the success, do they still innovate processes or have they glued them to the floor? I'm afraid that they might have applied some glue.
Let's look at another which on first sight seems to be all about physical product, Apple, who makes one great physical product after another, no doubt.
They have chosen to deliver both hardware and software unclogging the support channel - just imagine how much support at MS is about disparate hardware drivers! - and unclogging the user experience. For me a holistic process focus - their process on how and what to deliver, but perhaps even more, the process that their customers experience.
Plugging in my iPhone the first time into my MacBook Pro is uncanny, zip zap click click and I'm registered and all mail settings, all bookmarks have been cloned. A process I could only love, and for Apple, a process-as-a-product that eliminates much of the usual support and delivery process needs.
When I'm in London with the kids the Apple store on Regent street is always the first "sight" we do. Again, a holistic view on the whole distribution process - gives me a "whole" experience and makes their distribution process rather efficient.
In other words, I would suggest that process is where the focus should be and that:
Process Innovation requires flexibility so you can experiment. You need to be able to prototype any idea.To aid and abet such innovation you need a flexible system to run your processes.
Process Innovation means that you have to know your customer's processes intimately. Same applies to your own processes, all of them. Both requires a culture where processes are not a given but something dynamic.
Process Innovation requires that you can build processes from strategic ideas and not only from tactical needs.
Process Innovation requires provocation to start rethinking of any or all processes.
But you would be much better off with a process oriented "tool" beyond the mere operational; a process modeller for real life use that provokes process thinking, that is flexible enough to accommodate tests and trials and that is sturdy enough to put new processes into life.
Funny enough, same requirements as for a system that runs BRPs...