Guy Kawasaki offers a few pointers:
Jump to the next curve. Too many companies duke it out on the same curve. If they were daisy wheel printer companies, they think innovation means adding Helvetica in 24 points. Instead, they should invent laser printing. True innovation happens when a company jumps to the next curve–or better still, invents the next curve, so set your goals high.
Think digital, act analog. Thinking digital means that companies should use all the digital tools at its disposal–computers, web sites, instruments, whatever–to create great products. But companies should act analog–that is, they must remember that the purpose of innovation is not cool products and cool technologies but happy people. Happy people is a decidedly analog goal.