Innovation Management Blog

Types of innovation and why knowing them is important

Types Of Innovation

When you're working with innovation management, one of the things you have to know quite clearly is what innovation will look like. There are several factors to consider and yes, this is one of those posts that will be part of a series or maybe even a PDF you can download.

And in this part, we're going to look at the types of innovation you should expect to deliver.

And while the subject is quite straightforward, the decision you make in terms of what type of innovations you are working with when you begin your journey with innovation management will need some consideration and there is also every chance it will change, possibly in the first few months and certainly within the first three years.

And a lot of people have a lot of views on this so it can be quite confusing. And while our recommendation is very much to focus on what feels right for you and your organisation, there is also no harm in creating layers and mixing and matching. What is best for you now will be based on the whole of your innovation efforts today and the information you are tracking and the information use use to determine what an outcome is.

And this list isn't complete, but it does show the types of innovation from one very detailed end to a more simplified version. You can add to all of the lists and you can also, as you'll see, rename them for your own needs. But these represent the basis for most others.

Types of innovation

In Geoffrey Moore's book, Dealing with Darwin: How Great Companies Innovate at Every Phase of Their Evolution, innovation types are created by the way the customers categorise what it is they are buying. In this way, Moore defines innovation types as:

  • Disruptive
  • Application
  • Product
  • Platform
  • Line-extension
  • Enhancement
  • Marketing
  • Experiential
  • Value-engineering
  • Integration
  • Process
  • Value-migration
  • Organic
  • Acquisition

Deloitte Digital or to be more precise, Doblin, classify innovation types in three categories: configuration, offering and experience. Each category has it's own innovation types:

Configuration

  • Profit model
  • Network
  • Structure
  • Process

Offering

  • Product performance
  • Product system

Experience

  • Service
  • Channel
  • Brand
  • Customer engagement

The Oslo Manual for measuring innovation defines four types of innovation:

  • Product innovation
  • Process innovation
  • Marketing innovation
  • Organisational innovation

But then you have types of innovation, that to most of us, define what you should expect to get out of your innovation efforts. This list comes from McKinsey and is called the the three horizons of growth:

  • Incremental innovation
  • Radical innovation
  • Transformational innovation

If you search the internet, you'll find that the McKinsey definition is quite popular as it's also a timeline of sorts, as incremental is quicker to implement than transformational. It's also called a lot of things by a lot of people from what we do, what we could do and what we should be doing to cannibalisation, market creation and competitor disruption.

But like I mentioned earlier, if you look at the lists above, you'll ultimately find the type of innovations you should be working towards. You might and should just call it something slightly different.

Summary

In short, there is no absolute right or wrong way when defining the types of innovation that you and your organisation should work towards. But you must define them.

We tend to think that product or profit based innovation can be classified over time and also how disruptive or not it is. We've also found that the best way to look at this is as something that you, as an innovation team, are also continuously developing, so if you begin by defining your types of innovation by the Oslo Manual but then decide later that the three horizons of growth fits better, change it and share why.

The part that we think is vital is that you track the types of innovation you have in your pipeline and also those innovation challenges that you are planning. It's easy to start thinking about something disruptive or transformational because it's where you'll get the most recognition and reward, but if it was easy then everyone would be doing it.

If you focus on the big ticket ideas and innovations, all those opportunities that you could be implementing in your core business (incremental innovations) will be lost or missed and it's those small improvements that will ultimately pay for your innovation program and engage your employees.

Links

Doblin - Ten types of innovation

The three horizons of growth

Oslo Manual - Defining innovation

Header photo credit: Andrew Ripley

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