The Center for Creative Leadership highlights the following 5 principles that form the essence of innovation. They describe principles as:

the fundamental, timeless laws that underlie the methods and techniques used for innovation. While principles are timeless, specific methods will be used and adapted over time as the situation demands.

There are five principles that give life to the process of innovation:

1. Innovation starts when people convert problems to ideas. New ideas are born through questions, problems and obstacles. The process of innovation is indebted to the trouble that comes about when we are surrounded by that which is not solved, not smooth and not simple. Therefore, in order for the innovation process to flourish, it needs a climate that encourages inquiry and welcomes problems.
2. Innovation needs a system. All organizations have innovation systems. Some are formal, designed by the leadership, and some are informal, taking place outside established channels. Informal channels are untidy and inefficient, yet innovation is always associated with them.
3. Passion is the fuel, and pain is the hidden ingredient. Ideas do not propel themselves; passion makes them go. Passion, in addition to talent and skill, is a valuable company asset. Passion is what transforms other resources into profits, but it never shows up on a balance sheet. Unfortunately, there seems to be some universal law that says when pursuing a passion or following a dream, pain is part of the process. Innovation leaders need to take the pain with the passion and learn to manage both effectively.
4. Co-locating drives effective exchange. Co-location refers to physical proximity between people. It is a key for building the trust that is essential to the innovation process. It also increases the possibility for greater exchange of information, cross-fertilization of ideas, stimulation of creative thinking in one another and critique of ideas during their formative stage.
5. Differences should be leveraged. The differences that normally divide people — such as language, culture, race, gender and thinking and problem solving styles — can be a boon to innovation. When differences are used constructively and people move beyond fear, suspicion, mistrust and prejudice, differences can be leveraged to enhance and sustain the innovation process.