Both terms are applicable to the process of change implementation. The problem is that they tend to get used inappropriately as interchangeable terms, in much the same way that idea and concept are used interchangeably. In both cases, this stems from a degree of overlap between the terms. When it comes to implementing change, they need to be separated.
Innovation is primarily about bringing something new into an organization, but it is not necessarily something new to the world. Organizations are like microcosms. The organizational structure represents the boundaries of the organizational world. When someone has an innovation, it is specific to that particular microcosm, which means that it could very well have been in the larger macrocosm of the outside world for some time.
In many cases, an innovation is simply a new way of using an existing technology to further the ends of the organization. After all, how much technology really sees full utilization within an organization? In most cases, only a small sliver of the capacity of a given piece of technology is put to use. Excel, for example, is a piece of software that can do some amazing things, but the average user only employs a handful of functions.
Where innovation leaves off is in implementation. Innovations are ideas about how things could be done, rather than how they will be done. Whether or not those innovations ever progress to the level of implementing change in the organization is frequently out of the hands of the innovator. This is where transformation differs from innovation.
Implicit in the meaning of transformation, as it is used in implementing change situations, is the follow through of implementation. Transformation certainly begins with a new idea or innovation, but it also entails that concrete steps are taken to ensure that innovation is adopted by the organization. For example, it may occur to someone in HR that social media could be used to enhance the organization's morale or streamline teambuilding. Until some concrete steps are taken to actually get the employees involved with the social media, it is not transformation, merely innovation.
For more information, please see the website: Implementing Change
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