See Ideo General Manager Tom Kelley expound the famous design firm's methods.

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As Kelley puts it, good design makes lives better, but genuine innovation does more. New inventions arrive every day, but new innovations are rare.

An electric dog washer is Kelley's example of an invention. "No one in the universe will buy it, so I would argue that that would not be an innovation," he says. "Innovation is a new idea that has economic value or can improve a lot of society."

Good design has a part in both invention and innovation, he adds. As such, it's often in the background. If it's really good, you don't notice it. Certain well-designed products just "hit the sweet spot" and make you feel good.

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