Dave, I agree that that definition of innovation (which is from John Kao) is “new age-y.” I used it in my session as one of several definitions out there, which I compared and contrasted (and criticized, lightly), in the build up to giving Forrester’s definition, which is:
 
Business innovation = Transforming a business process, market offering, or business model to boost value and impact for the enterprise, customers, or partners
To parse this a bit:
– The subject of the transformation can be a business process, a market offering, and/or a business model
– To qualify as business innovation, it has to deliver business value, and have measurable impact
– The beneficiary of this value can be the enterprise (typically via its employees), its customers, or its business partners.
Pretty concrete and non-squishy definition, I think.