The single most important business “skill" to possess during and following a recession like the one we're in -- indeed, possibly the most important business skill of all time -- is making innovation work.

Whereas innovation used to be considered “hot," it is now often a matter of business life and death. There is also a growing body of thought and research suggesting that the ability to systematically innovate may be the only truly sustainable competitive advantage in a globalized economy.

The reasons are not hard to understand. Conventional structures are breaking down, and conventional strategic approaches to growing market share are losing relevance in today's economic reality. On top of that, globalization seems to be increasing competition, or supply, more than it is increasing demand. The conventional protections of regional markets are breaking down, exposing firms to a more competitive environment than ever.

There are examples galore, but consider Dell and H-P, beating themselves bloody battling for market share in a business that has commodity stamped all over it. Now, compare them to Apple, which has made innovative design the sine qua non of its business strategy. Witness the recent fanfare that accompanied the announcement of the new iPad.

“Wait," you say, “how can we compare companies serving the enterprise IT market with one selling online videos and phones?" That's exactly the point. Apple has migrated away from a battle with multiple competitors over an existing market and, through a systematic focus on innovation, positioned itself in largely (or wholly) new markets that it has virtually to itself.

In the excellent book Blue Ocean Strategy, authors W. Chan Kim and Renée Mauborgne suggest a rethinking of strategic planning away from increasingly expensive and non-productive struggles for markets in “red oceans," the markets currently in existence, and toward a strategy of creating “blue ocean" opportunities -- markets where there are no competitors.

Blue Ocean Strategy put innovation out front as a strategy and challenged the business community to rethink how it approaches global competition. As Kim and Mauborgne point out, the whole language of strategic planning has been about overcoming defined competition for a relatively finite market in a defined market space, while “innovation" traditionally hasn't been considered a strategy at all.

The core of the strategic sea change that Kim and Mauborgne propose is what they call “value innovation," innovating in a way that fundamentally changes the value proposition to create new, relatively uncontested markets as part of a systematic, conscious strategy.

But while it is clear when you consider an Apple or a Southwest Airlines or a Starbucks in retrospect, building in that kind of innovative thinking into your organization for future planning is more of a challenge. Adding a “Chief Innovation Officer" may help the Fortune 1000, but we all face this challenge, whether we are CEOs, CMOs or entrepreneurs.

So, how do you create and sustain innovation? Here are some ideas:

Build up your tolerance for failure. By its very nature, innovation implies risk. And by its very nature, risk implies failure. The bigger the odds, the more common the failure. If your organization can't handle failure, then the spirit of innovation will be undermined. Google's innovation strategy is to “morph" failed projects, rather than terminate them. The project may have failed, but there is almost always some kernel of value that can be reseeded somewhere else.

Break a rule. Look at what is most sacrosanct about the way things are done -- have always been done -- and see what it looks like to turn that rule on its head. In the disruption, you may well find that opportunity for value innovation.

Or, take one of the sacrosanct rules and make it yours. Can customer service be construed as “innovation?" Hoteliers universally will tell you that they live and die by their “hospitality," the quality of the customer's experience. Yet Starwood Hotels & Resorts was able to separate itself from the pack by creating brands that match customers, rather than trying to match customers to their brands. Delivering top-notch service is easier, and brand identification is stronger. Value innovation in its purest form.

Find innovation everywhere. Everyone knows Wal-Mart's story by heart, how its innovation in IT delivered a cost advantage that it translated into the most basic of value innovations: lower prices. It also points out the importance to looking for innovation everywhere. What was the last innovation you got out of finance? Sales? Everyone has to be in the process.

Look to the edges of your organization. That can mean the outlying offices. Often your employees there will be confronting the “real world" in a way that the main office, bound up in the status quo, really can't. It can also mean looking for innovative ideas from your new employees. Often someone with three months on the job understands enough about how the organization works to have some insight into what the organization is supposed to be doing, yet still has the ability to take a clear-eyed look at how well it does it.

You are the real “CIO." If you hire someone with the title of Chief Innovation Officer, make sure they plan to work themselves out of their job. Innovation has to be built into the fabric of the organization. It's not about marketing or about finance or product development. It's about trying to unravel decades of corporate culture that works against grassroots innovation. Ultimately, however, that cultural change has to come from the top. Innovate in the process of driving that cultural change--then dismantle your “office of innovation."