Innovation vs Commodity

Innovations add value to an organization. They reinforce the mission or the value proposition of a product. They’re centered on use cases.

Commodities are not the focus of the organization. (They might be another organization’s innovation.) They can support innovation as an incidental consideration.

Distinguishing the two matters because any effort developing a commodity is waste. You should buy, acquire, or reuse third-party solutions for commodity needs - through open source software, external products and services, or (as a last resort) contracted development.

For an organization, the requirements of a commodity are known. For an innovation, there might be a hypothesis being tested or an idea being refined. Crafting innovations is a main focus of an engineering group.

Innovation vs. Commodity is related to the concept of optimizing vs. satisficing.