“Innovation” is probably the most sought out word of the decade. We all understand that to stand out in this competitive business world, a company needs to constantly search ways to innovate. However, it seems to be an impossible task for businesses to always come up with innovative ideas and stay on the top of the innovation game.
To the minds of many, genius innovation is exclusive to those genius brains as they can always find a way to make an entirely insane invention. For we the mortals, it seems that our path to innovation has been blocked by those genius who are always one step ahead of us.
But is that the case? Is innovation such an abstract concept that only the selected few can bring innovation into their organizations? Larry Keeley and his colleagues at Doblin (now part of Deloitte), broke the façade of innovation in their co-authored book Ten Types of Innovation: The Discipline of Building Breakthroughs. In this book, the authors provided the Ten Types of Innovation Framework, a practical tool that offered guidance to aspiring innovators in searching for opportunities for innovation.
An Overview of Ten Types of Innovation
The exhibit below is a demonstration of the Ten Types of Innovation.
Among these ten innovation types, the ones on the left sides are categorized as “backstage” innovation, meaning that they are more internally focused and are distant from customers. The ones on the right sides are “Onstage” innovation, which are more apparent and obvious to end users. The authors also further grouped these ten types of innovation into three main area: configuration (focused on the innermost working of an enterprise and its business system), offering (focused on the enterprise’s core product or service ), and experience (focused on more customer-facing element).
For top innovators, they tend to infuse more than one innovation types in their business, create tons of value with their top-notch innovative ideas. For the rest of this article, we will take a look at each of these types of innovation and how these innovation types can potentially be applied to your business.
Profit model
The first and the most obvious innovation type is profit model, which is all about finding an innovative way to convert firm’s offerings and value into money. Usually a typical firm only has one profit model. Coming up a brand new profit model can help a company immensely and build up competitive advantages.
Example for price model innovation: Gillette started to sell replaceable blades aside from traditional razors in 1921.
Network
The network innovation involves firms partnering with other organizations to take advantage of processes, technologies, offerings, channels and brands. Through network innovation, companies can capitalize on its strengths while harnessing the capabilities and assets of others.
Example for Network innovation: Toy manufacturers partner with Disney for their character licenses which allow them to produce toys that are popular in the market.
Structure
The structure innovation involves the firm fining unique ways to improve organizational structure and help attract talent or foster a level of performance that competitors can’t match. It can be providing incentive systems to encourage employees to work toward a common goal, or standardizing assets to reduce operating costs/complexity.
Example for Structure innovation: Southwest Airlines has a U-form organizational structure that achieve control through the hierarchy and functional groupings.
Process
The process innovation involves coming up with a superior method doing your work that cannot be easily replicated by the competitors. Coming up with process innovation can help a company develop competitive edge in producing specific product.
Example for Process innovation: Henry Ford invented the assembly line system in 1913 that made it superior to any other car manufacturers.
Product Performance
The product performance innovation involves developing better features and functionalities that surpass other products in the market. It can also be nothing more than a feature that substantially improves usability.
Example for Product Performance innovation: The new intel CPUs have superior specs than the CPUs of the previous generation.
Product System
Product System innovation is about making individual products and services connect or bundle together to create a robust and scalable system. Through integrating different products within one system, companies can create valuable connections between other wise distinct and disparate offerings.
Example for Product System innovation: Apple developed IOS system that integrated iPhone, iPad, and Mac users within a product system.
Service
Service innovation is about making product easier to try, use, and enjoy. Through fixing problems and smoothing rough patches in the customer journey, companies can provide the best possible service to the customers.
Example for Service innovation: Zappos is known for its friendly customer service and company culture.
Channel
Channel innovation involves connecting your company’s offering with your customers and users. It is about ensuring that users can buy what they want with minimal friction and costs and maximum delight. Channel innovations can be opening flagship stores, pop-up stores, or sticking with selling directly to the customers.
Example for Channel innovation: Aside from being a DTC brand, Nespresso also opened up physical stores allowing customers to buy their product offline.
Brand
Brand innovation help to ensure that customers and users recognize, remember, and prefer your offering to those of competitors or substitutes. It’s about distilling a promise that attracts buyers and conveys a distinct identity.
Example for Brand Innovation: Dove’s real beauty campaign associated its brand with promoting natural beauty of women.
Customer Engagement
Customer Engagement innovations are all about understanding the deep-seated aspirations of customers and users and using those insights to develop meaningful connections between them and your company. It’s about providing broad avenues for exploration and help people find ways to make parts of their lives more memorable, fulfilling, and delightful.
Example for Customer Engagement: IKEA used AR technologies and allows customers to put and move furniture in a virtual space, made the shopping experience fun and enjoyable.
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