Innovation is about creating value from novelty. How that value is created, and what the novel element might be, are not fixed: this means that innovation can take many forms and types, from innovative products to new services, business models or approaches.
What is defined as innovation within a particular organisation will vary according to the sector and industry in which it operates. It may also be determined by the organisational structure and culture, as well as its strategic business objectives. For this reason, it's often useful to review which types of innovation your organisation is targeting, if only to check that you are not missing other opportunities.
You may be using a common form of innovation – but are there others you should use? There are various frameworks for thinking about innovation types – below, you’ll find all you need to know about the most popular two.
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One way to look at innovation is to categorise it based on two axes: the newness of the technology it uses, and the impact it has on its market. This creates an innovation matrix that features four innovation types.
Architectural innovation involves taking a product, service or process that has already been developed and used elsewhere and introducing it in a new way or to a new market. Because it has already been developed and has successful business use elsewhere, the risk and resource requirements are both relatively low.
One such example is memory foam: first developed by NASA for crash protection and seat cushioning, and now used in mattresses and other products.
Also known as stealth innovation, this concept was first introduced by Harvard Business School professor, Clayton Christensen. Here, smaller companies build up to challenge larger incumbents, who often focus just on certain segments of their customer base, ignoring the needs of others. By targeting these ignored segments with more suitable products – and often at lower prices – smaller companies can gain a foothold in the market, gradually developing to appeal to the incumbent’s main customer base.
This is the approach that Netflix took, initially targeting only customers who didn’t care about needing to watch the latest releases. From there, the brand moved upstream, keeping hold of its initial competitive advantages, but building up their service to appeal to the mainstream.
Incremental innovation is the most common form of innovation: making incremental improvements to existing products, services and processes, tweaking them to better appeal to customer needs or gain greater mass appeal.
An example of routine innovation is televisions. Those who want a simple 50-inch LED TV will be able to find one for just a few hundred pounds. However, for those who are more serious about viewing quality, a 50-inch OLED TV might be a better choice.
Now, more than ever, businesses can’t afford to have obstacles to innovation. Find out how to overcome some of the most common blockers in our 2020 Innovation Blockers Report.
Incremental innovations may not always make a huge impact, but they can be an easy sell, as they are based on something that is already familiar. However, some customers may want something basic rather than a premium product – and relying solely on incremental innovation may not be wise in case the market shifts completely.
Radical innovation is high risk, but can also be very high reward – when done right. It involves the use of both a new business model and a revolutionary new idea or technology to completely transform a market – or an economy – and potentially even create a brand new industry.
In 2012, for example, longstanding farming equipment firm John Deere began to equip its tractors with sensors, having spotted the potential of big data. By connecting their farming equipment with software, farmers were able to track and monitor the yield of their crops, filling an unmet need within the farming industry and revolutionising the sector.
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Innovation consultants Doblin created the Ten Types of Innovation framework to help organisations review and structure their innovation efforts. As they explain, the framework "can be a diagnostic tool to assess how you're approaching innovation internally, it can help you analyse your competitive environment, and it can reveal gaps and potential opportunities for doing something different and upending the market."
Doblin’s ten types of innovation have been split into three categories. These move from those that are the most distant from customers to those that are the most customer-focused. These categories are:
Configuration types of innovation focus on how your organisation actually works.
Experience types concentrate on the customer-facing elements of your organisation.
Looking to adopt alternative innovation types to the ones you currently use? Then you’ll need a solid innovation management system. Find out more about what Solverboard has to offer.