What constitutes an innovation? Among entrepreneurs, the definition varies, from something that disrupts an entire industry or way of doing business to something as simple as tweaking a product feature or step in a process. In the end, it is difficult to create a culture of innovation when expectations vary so widely.

To help determine how a company can create an innovation culture, I spoke with Doug Hall, founder of Eureka! Ranch International, an organization that works with companies and entrepreneurs to develop innovation mindsets. Hall was also the host of Backyard Inventors and held the position of Master Marketing Inventor at Procter & Gamble.

With 40 years experience helping companies develop internal capabilities to innovate, Hall has a very clear idea about what it takes to develop an innovative culture.

1. Alignment

In order to develop successful innovations, organizations must be aligned when it comes to the definition of an innovation. Without it, you have many people striving for goals that cannot be measured with any level of consistency.  

"We define an idea as an innovation if it is meaningfully unique," says Hall. "We measure it by asking customers how likely they are to purchase (meaningfulness) and how new and different (unique) they perceive the idea to be."

By embracing the idea that an innovation must be Meaningful Unique and engaging in a rigorous process that measures this, organizations can then ground their processes and outcomes in factual evidence.

2. Failure is Fundamental

To be unique, an innovation has to have never been done before. By nature, truly unique ideas are incredibly difficult to derive, because they require individuals seeped in organizational paradigms and rituals to ignore constraints and history.  

More important, truly unique ideas are often constrained by a fear of failing or looking silly, since they require individuals to think way outside the box. An innovative culture must be willing to look at and consider every idea, even the really bad or strange ones. In fact, many new ideas are simply derivatives of really bad ones.

3. No Math, No Innovation  

Everyone is capable of being creative and delivering on unique ideas, but where most fail during the innovation process is in determining the commercial viability of an idea. 

Most ideas fail because there is no market for them, so the first viability consideration is determining meaningfulness, or willingness of customers to actually buy it. You can easily do this by conducting in-person tests and surveys to validate your idea quickly.

Next, you need to determine if you can actually produce the idea at a price that the market is willing to pay. This requires more research, and while it is probably the step that is most disliked in the process, it is critical before launching ahead in the expensive process of takign it to market.

"Doing the math on sales, savings, profits, costs, etc. turns your idea into a business opportunity," says Hall.

4. No Patent, No Innovation

While this is a high bar to set, Hall says, "The highest standard of Meaningful Uniqueness is an innovation that is patentability. Ideas that are patentable generate pride and passion and are, by definition, non-obvious to someone with ordinary skill in the area."

5. Passion

Lastly, for an innovation to be successful, you have to be passionate about it. "Innovation equals change, and working through change requires massive investment of energy," Hall says. "The only way you can sustain the energy required to commercialize a meaningfully unique idea is if you really love it."