#1 -- Innovation's function is sustained resource leverage -- generating more value, or yield, from the same resources or the same yield from fewer resources. And its primary form is offerings.
- Value is determined fully by "customers" by virtue of response to a new offering; and
- The standard of excellence is high leverage and broad scale.
What are "offerings"? Examples are:
- Disposable diapers
- Seeing-eye guide dogs
- Community colleges
Innovation's function and form fits:
#2 -- Innovation's basic structural unit is a customer-facing hypothesis.
In the way that a cell represents the basic structural unit of all organisms, a customer-facing hypothesis for leverage represents the basic structural unit for producing innovation's function.
As with science and invention, an innovation hypothesis:
The key point of departure is the direct function, or purpose, of the new connection:
- aims for progress,
- is based on existing knowledge, and
- is categorized as discerning “paradigmatic imagination” --"the ability to see possible … connections before one is able to prove them in any way" 
Innovation's customer-facing hypotheses interact throughout the work of generating resource leverage -- from an anchoring hypothesis for new customer value to every directly associated idea about how to develop and deliver the proposed value to customers.
#3 -- A powerful innovation hypothesis integrates particulars of purpose, knowledge, and cognitive processing.
a. Purpose particulars center around intuitive familiarity with resource leverage, which features sensitivity to, and sensibility about, creating and delivering new customer utility. Successful practitioners "see" opportunities for leverage and have an “action bias"; however, their sensitivity to, and sensibility about, resource leverage not only drives them to address opportunities, it supports them in doing so effectively.
b. Knowledge particulars include depth and multiple thematic strands. Knowledge is not necessarily elite. It is pertinent to resource leverage. Thematic strands include:
-- domain knowledge – technical and operations
-- knowledge of customers
-- general human, social, and market dynamics
-- “anything and everything” -- in connection with other fundamental strands.
c. Cognitive processing particulars support discernment.
-- "Invention is discernment, choice." "To create consists precisely in not making useless combinations and in making those which are useful and which are only a small minority."
Thematic conditions for discerning paradigmatic imagination include:
- developed internal conditions for creativity (e.g., openness, flexibility, comfort with complexity, and intrinsic motivation);
- developed skills of critical and creative thinking;
- external conditions for creativity that foster reciprocity with internal conditions and skills, including organizational and cultural systems.
-- Paradigmatic imagination encompasses particular types of creative processing for new connections, which can be viewed as a repertoire (e.g., diagnostic reasoning; perception of systems; lateral and divergent thinking, including associational thinking; use of metaphors, analogies, symbols; tapping intuition and hunches; and more).
#4 -- A values match between practitioner(s) and customers is fundamental.
The practitioner's passion, or drive, is fundamental to the imagination and perseverance that bringing a new offering to fruition demands.
However, no matter how passionate a practitioner is about the offering, if customers don't find value in it, there is no innovation; there is no resource leverage. There has to be a values match, or connection.
The practitioner and customer values do not need to be the same, as long as the offering that addresses customer values is driven toward fruition by a practitioner's value(s). (For example, a practitioner could be driven by the prospect of wealth.)
For example -- An actual offering viewed through the lens of the principles:
The Prison Entrepreneurship Program (PEP) provides the offering of entrepreneurship educational programming for inmates. Graduates of the full programming receive the program's commitment of support and resources for life.
The nonprofit organization, founded in 2004, has expanded to recruitment at the 60+ prisons within the Texas Department of Criminal Justice. The organization works in close partnership with the state system.
The resources to be made more productive by way of this offering are the human resource prisoners and the state financial resources associated with corrections.
Entrepreneurship-based programming that equips inmates with legitimate business skills is a way to tap “into America’s most overlooked talent pool: influential convicted felons.”
In particular, the offering can "incite measurable change" through:
- uniting community CEOs and investors with participating inmates, through shared entrepreneurial passion;
- locating participants within a context of peer support while they remain inmates;
- providing graduates with a lifetime commitment of support and resources.
In addition to prisoners' change, the program can provide the value of meaning to business executive participants, including their own potential self-transformation, which will support sustained commitment and participation.
Sample knowledge connected within the above hypotheses draws upon the strands of customer and domain knowledge (corrections and entrepreneurship), with understanding of human and social dynamics incorporated throughout:
- "Many inmates come to prison as seasoned entrepreneurs who happened to run illegitimate businesses."
- Some prisoners share essential traits with business executives. They represent "(s)ome of the hungriest entrepreneurs in the country."
- The status quo environment of "(p)rison makes ‘personal change’ difficult."
- "Prison isn’t just an economic drain, but a human one as well."
- "Studies show that former inmates are most vulnerable and impressionable within the first 72 hours following release.”
- Prisoners' families often are the most dubious about prisoners’ potential to change, but also are the most hopeful and a potential source of catalyzing support.
Observation of Corrections System -- "Expecting prison to be a place filled with wild, caged animals, (the PEP founder) was cut to the core to find prisoners who were deeply human—passionate, moldable men thirsty for change. (The PEP founder) immediately recognized their ROI potential. What if she equipped these men with legitimate business skills?"
 See Jerome S. Bruner, Actual Minds, Possible Worlds, (Harvard University Press, 1986), p 13. The paradigmatic (logico-scientific) mode of cognitive processing and paradigmatic imagination contrast with the narrative mode of cognitive processing and “narrative imagination” ("gripping drama").
 An alternate view of hypotheses for resource leverage suffusing the work, or perhaps a broader view: Suffusion may be a matter of encompassing both the ends and means of innovation. That is, in addition to the direct end of generating resource leverage (anchored by a customer-facing hypothesis for new value and the set of associated operational hypotheses), the means are suffused by a "resourcefulness" that finds ways to make something happen.
 Jerome S. Bruner, On Knowing, Essays for the Left Hand, (Belknap Press of Harvard University Press: Cambridge, 1962), p 20