It's a buzz word in marketing.

In strategy, there are 2 types of innovation

Incremental and Disruptive

Both types give organizations increased power over territory.

People are the blood of an organization. Ethics and people determine culture which determines goals.

Innovation is the strategic foothold for keeping an organization alive as it travels into the future.

EDIT: I want to add that all organizations (even non-business) need innovation. Civilizations, Empires, Protests, Support groups, Religious groups, etc... This is due to environments constantly changing. This is what Strategic Planners help with.