1. Do your homework
Instead of wild brainstorming, start by getting a handle on what's really happening in the world. Go shopping. Watch how customers interact with products in everyday settings like their homes, cars or offices. That's what Motorola did to recapture its market share in mobile phones. Many people prefer flip phones, but clamshells can be bulky when folded up. So Motorola focused on making a very slim phone with a sleek look. Designers, engineers and manufacturing experts struggled to make all the technology - chips, antennas, screens and keypads - as thin as possible. But the effort paid off. The Razr became the world's most popular phone because the product was exactly what consumers wanted. Similarly, when Goodyear decided to revitalise its Eagle high-performance tyre brand, managers actually got away from their offices and became passengers with people who really, really like to drive. The team developed a visceral sense that drivers were looking for a tyre that was smooth on straightaways and seriously responsive in corners. These simple insights led to the development of the Eagle ResponsEdge, one of the first commercial tyres to use carbon fibre and one of the most successful launches in Goodyear's 108-year history.

2. Aim for excitement
Simple innovations aren't understated. They have to be tangibly more effective than anything already on the market. Otherwise, they're just line extensions. Though it hasn't even flown yet, Boeing's new 787 Dreamliner is a huge success, with more than 400 orders, thanks to the aircraft's striking interior design and promised 20% improvement in fuel economy. Jets are an extreme example, but similar rules apply to consumer products. When people see your concept or prototype, you don't want them to yawn or furrow their brows. You want them to say, "Wow!" or "Finally!" or to ask if they can take it home. If you see signs of real excitement, you may have a simple innovation on your hands. For instance, when the Bugaboo Frog hit the streets seven years ago, it was obviously like no other baby stroller on the market. With its big wheels, bright colours, lightweight aluminium frame, flexible seating system and eye-popping £400 price tag, it shouts to expectant parents that the Bugaboo is the ultimate strolling machine. While Bugaboo won't disclose sales figures, the stroller's near ubiquity in big US cities is evidence that it's taken a huge market share and become the player to beat in baby buggies.

3. Whittle, shape, iterate, repeat
Instead of rushing to identify a breakthrough, simple innovators treat product development as an iterative process that's very different from the rigid 'spec, freeze and implement' approach used by most companies. Patience is essential. When a feature or concept resonates with the people you're talking to, dig deeper to understand why. Then apply that insight to other parts of the experience. Pixar is a master of this approach. When Pixar teams make a film, they focus on turning a simple story idea into something really compelling. They use storyboards, models and quick animation sequences to define the general arc of a story. They review prototypes as teams and critique them, sometimes heatedly. Every motion picture company does this to some extent, of course, but at Pixar it's an obsession that has paid off: by taking the time to nurture strong storytelling and high-quality animation, Pixar is seven for seven at delivering hit films - a success rate virtually unparalleled in any industry. Not surprisingly, Steve Jobs has taken a similar approach in the development of Apple's recent string of blockbuster hits. Once the original iPod started to take shape, Jobs scrutinised prototypes on a daily basis, pushing the design team to make the interaction cleaner, faster and more intuitive. That level of creative engagement and sense of authorship was obvious in the final product, standing in stark contrast to the typical feature-laden, spec-based approach favoured by Apple's competitors.

4. Get real
Memos and presentation slides aren't fertile grounds for shaping product ideas, yet that's where managers spend most of their time during the specification and development process. Instead, whenever possible, just start building. Making actual things forces you to refine pre-existing ideas - and it suggests new ones. With prototypes in hand, you can have substantial discussions with internal teams, friends and consumers to discover what works and what doesn't. Concentrate on finding product attributes that resonate with people. James Dyson, the creator of the eponymous vacuum cleaner, is such a zealous prototype enthusiast that he's said to have created 5,127 versions of the Dyson vacuum in five years. That paid off with an extremely simple and successful innovation: a vacuum that vacuums better. In Web 2.0 land, software company 37 Signals developed simple and extremely popular Web applications, like Basecamp and Backpack, through dogged devotion to prototyping or, as the company terms it, getting real. In their book, Getting Real, 37 Signals say, "Getting real is about skipping all the stuff that represents real (charts, graphs, boxes, arrows, schematics, wireframes etc.) and actually building the real thing."

5. Don't fail the innovations catalogue test
To avoid creating a gizmo, ask yourself, "Would this be a natural fit in the innovations catalogue?" If the answer is yes, you're probably creating something with limited innovative value. The Segway HT is the ultimate gizmo. It's a piece of engineering genius, to be sure, but the brilliance of its gyroscopic motor blinded many savvy investors to the machine's obvious flaws. Who would ever replace a car with a Segway? It's not enclosed and can't travel long distances. It can't go faster than 12.8 miles per hour and has no real cargo capacity. Plus, you look dorky riding one. The Segway is a flawed idea, but it perfectly embodies the kind of cleverness that companies love to fund. Just ask Nokia. In 2003, when the company reigned as the undisputed king of cell phones, management placed big bets on radical departures like the N-Gage. Part mobile phone and part game console, the original N-Gage was too big to fit in most pockets and became infamous for a design quirk that required people to talk to its side. Like so many 'convergent gadgets', the N-Gage would have failed the innovations catalogue test. It was slick, but it just wasn't very useful. It was a bad gaming device and a poor phone crammed with irrelevant features.