Close observation of innovative organizations ranging from 3M to Cirque du Soleil sheds light on common principles and philosophies that have spurred their groundbreaking development. To maintain a leading edge, companies must first dispense with a series of myths that have arisen around the topic of innovation. Contrary to popular belief, innovation is taking place in developing countries, and the most successful companies are followers rather than pioneers. Innovative companies know when to kill projects and learn how to exploit the sources of innovation more comprehensively and more efficiently, leveraging technology and ideas coming from universities, suppliers, competitors, users, other industries or customer segments, and employees. The most successful companies foster an innovation-oriented culture, are customer-oriented, and become masters of execution. In sum, innovation is a complex process that requires discipline and methodology. © 2013 Wiley Periodicals, Inc.