It's always fun to ask people to define innovation, particularly people who say they want more of it. Many definitions begin with "Um, well, er..." The definition that follows seldom stands up to even the mildest prodding (the same thing happens with the phrase "system of systems" by the way).
Here's the thing: innovation is different than invention. It's not the same as creativity. And please, let's not equate innovation with simply "thinking outside the box."
Real innovation may involve an invention or two. It certainly requires creativity. And yes, thinking outside the box helps. But innovation is more than the sum of those parts. Inventing, creating and thinking unusual thoughts are cool as far as they go, but they're not innovating. Innovation involves delivering, fielding and/or actually implementing new things. It's not about having ideas. It's about taking making stuff happen.
Steve Martin famously defined comedy as "the art of making people laugh without making them puke." In a similar vein, I'd like to suggest that innovation is the art of introducing something new without making people puke.
Successful innovation requires a connection to actual users and adopters. It involves bringing a new product or process to the field and seeing it implemented/purchased/used. The customer base doesn't have to be enormous, but it has to exist.
You can invent something that never gets to a market and it's still an invention. You can have a creative idea that you keep to yourself and it's still creative. But you can't keep a new thing to yourself and call it an innovation. You've got to introduce it to the world.
Keep that in mind the next time someone asks you what innovation means. Keep that in mind the next time someone says they want more innovation.
And remember, the key is to not make people puke.