The four arts of innovation

Invention, reinvention, reimagination and re-engineering are four different crafts wearing one word. Most of the frustration around innovation comes from practising one of them while being judged by the rules of another.

Innovation may be the hardest working word in business. We apply it to a new app, a new flavour of crisp, a smarter way of routing a lorry and the creation of an entirely new market, as though they were the same activity at different volumes. They are not. They are separate crafts, with different temperaments, different timescales and wildly different tolerances for being wrong.

Advising founders one week and long established businesses the next, I have come to think there are four arts hiding inside the single word. Invention. Reinvention. Reimagination. Re-engineering. Most of the frustration I see around innovation comes from someone practising one of them while being measured by the rules of another. What follows is a view from ten thousand feet rather than a manual. The point is the shape, not the mechanics.

The appetite is not the problem. Boston Consulting Group’s annual innovation study of over 1,000 senior executives found that 83 per cent rank innovation among their top three priorities, while just 3 per cent consider their organisation ready to deliver on it. Enthusiasm is abundant. Readiness is rare. And in this country the UK Innovation Survey 2025 found 34 per cent of UK businesses were innovation active in 2022 to 2024, down from 36 per cent in the previous period. We are talking about it more and doing it slightly less. Part of the reason, I suspect, is that we have not agreed what we are talking about.

One

Invention: the blank page

This is the one everybody pictures. A founder, an unreasonable conviction and nothing whatsoever to defend.

Its great advantage is the absence of legacy. No committee to satisfy, no revenue line to protect, no system that breaks if you change your mind on a Tuesday. Its great disadvantage is the absence of everything else, most of all a brand that persuades a stranger to take the call.

What I notice about the inventors who make it through is that they are not chasing novelty for its own sake. They are solving a single, stubborn, unglamorous problem that everyone else decided was simply the way things are. James Dyson spent years and thousands of prototypes on a vacuum cleaner that did not lose suction, which is less a visionary statement than a refusal to accept an irritation.

Failure is not a side effect of invention, it is the raw material.

The arithmetic is the thing to understand here. A nine in ten failure rate inside an early stage venture is an ordinary cost of business. Applied to an established operation it would be a scandal. We will come back to that difference.

Two

Reinvention: turning on the thing you built

The second art is the hardest of the four, because it asks you to attack something you built, that works, and that is still paying the wages.

Every successful business eventually arrives at that fork. The model that made you is ageing, while remaining profitable enough that nobody wants to be the one who breaks it. Reinvention is the decision to break it anyway, on your own terms, before the market takes the timing out of your hands.

Disney is the cleanest illustration. Through the 2010s it earned handsome money licensing its content to other people’s platforms. In launching Disney+ in 2019 it pulled that content back and accepted the loss of a high margin income stream in order to own the customer relationship. That is not a product decision. It is a decision to demolish a working revenue line in daylight. Microsoft did a version of the same thing from 2014, moving its centre of gravity to cloud while the licensing business was still healthy.

The part most often missed is knowing what must not change. A business can replace nearly every plank of itself and remain recognisably itself, provided the purpose and the character underneath stay put. Reinvention is not reinvention if the company that emerges no longer means anything. It is just a new company wearing an old name.

Three

Reimagination: the same job, a new era

The third art is the quietest and, I would argue, the most available to the rest of us. Reimagination does not invent a new need or demolish an old model. It takes something already being done, more or less adequately, and asks what it would look like if we designed it today. The customer problem is unchanged. The solution is unrecognisable.

Starbucks did not improve the coffee bean. Howard Schultz reimagined what a coffee shop was for and sold the space between work and home, with the drink as the entry ticket. Banking is going through the same thing now, not because anyone invented a new reason to move money, but because a generation raised with a phone found the branch model faintly absurd.

What I like about this art is that the innovation rarely sits in the product. It sits in the channel, the business model, the way the thing is paid for. Those are the places established businesses look last, trained as they are to believe innovation means adding features to a specification.

A warning comes attached. This is where innovation theatre thrives, because it is easy to change the surface of something and call it a rethink. The honest test is whether the customer’s difficulty has reduced, or merely been redistributed onto them.

Four

Re-engineering: changing the engine while it runs

The fourth art gets the least applause and creates an enormous amount of the value. Re-engineering is innovation applied to operations at scale, rebuilding how a large organisation actually works: the flows, the systems, who does what and when. It is unglamorous, and when it goes well nobody writes about it, because the evidence of success is that everything now happens more quietly.

Ocado is my favourite example, because it crosses two of these arts at once. Having built extraordinary warehouse automation to run its own grocery business, it turned that capability into a product and licensed it to supermarket groups worldwide. What began as a re-engineering programme ended as a new business model, which is what happens when operational excellence is treated as intellectual property rather than housekeeping. Rolls-Royce did something comparable decades earlier, selling engine availability by the hour rather than engines.

In practice

Knowing which art you are practising

Here is where most organisations come unstuck. The four arts are not a ladder and not alternatives. Large businesses need to run at least three at once, which is possible only if they stop applying one set of rules to all of them.

The people who run your operation are trained to eliminate waste, and they are very good at it. To that mindset an unproven idea with no guaranteed return looks exactly like waste, and it will be killed efficiently, long before it has had the chance to be interesting. Asking a re-engineering programme to be disruptive fails in the opposite direction, destabilising something that needed steadiness.

So the first question is not how do we innovate, but which of these four are we actually doing, and who here is suited to it. Getting that right compounds. BCG’s twenty year analysis of its innovation rankings found the top innovators outperformed the broader market by 2.4 percentage points a year on average, with a small group appearing on the list ten times or more. Innovation done properly is not a burst. It is a habit.

A personal note

What I actually believe

A personal word to finish. Nearly fifty years in this market, having started as a young technician in the Lloyd's Underwriting Room, I have ended up with one conviction that sits underneath all four of these arts.

Every business runs on two forces. The first is what you are objectively worth. Whether the thing works. Whether the promise survives contact with a bad week. That is merit, and it is earned in the engine room rather than the brochure. The second is how people feel about you. Whether they trust you, whether they would put their own name alongside yours, whether they see something of themselves in what you stand for. That is esteem, and it cannot be bought, announced or rebranded into existence.

The two multiply rather than add. Fine operations with no human connection leave you admirable and entirely replaceable. Deep affection with nothing solid underneath is a lovely story that collapses the first time it is tested. Esteem is the fragile one. Decades to build, and capable of vanishing inside a single bad cycle, usually without warning, because what looked like loyalty was often only inertia.

So whichever art you are practising, ask what it is doing to those two forces.

Is this making us genuinely better, or merely busier? Is it deepening the connection with the people we serve, or decorating it?

Most of us will never invent the next category. All of us can ask whether the people we serve would miss us if we stopped. That question is free, and it is where all four of these arts begin.

Mark 'Hux' Huxley is the founder of Huxley Advisory, with nearly 50 years' service to the insurance industry. He mentors and advises businesses across brand, proposition, purpose, leadership and operations. He was the 2023/24 Master at the Worshipful Company of Entrepreneurs and the current Chair of the Financial Services Group of Livery Companies.