Over the years, innovation has remained at the forefront of their concerns. This is to be expected, given how the mainstream and trade presses are awash with stories of new technologies threatening to disrupt businesses, industries, and even entire countries. We continue to hear tales of nimble and agile startups upending venerable institutions who failed to remain on the cutting edge. Part of the problem is that innovation is such a catch-all term that it makes it very difficult to pin down precisely what it means.
The reality is that the term can be applied to everything from business models to new processes. This guide will help to demystify just what innovation can be, enabling you to innovate more effectively.
It will also look at the various types of innovation that exist, and how to utilise them to the benefit of your organisation. In other words, organisations need to spend considerably more to achieve the same outputs. Despite this, jumping off the carousel has even worse consequences. Indeed, at a macroeconomic level, policy-makers and economists have long bemoaned the poor state of productivity growth in much of the Western world.
Cambridge University researchers attribute this mostly to the uneven distribution of innovation across the economy. These are both inaccurate assumptions, as is the idea that innovation is the lone work of a generation-defining genius. Instead, the following projects have managed to capture the sheer variety of exactly what can be considered innovation:.
One of the most common ways of looking at innovation is via the Innovation Matrix, which is included below. The Innovation Matrix classifies innovations according to both the technology it uses and the market it operates in. Therefore, it allows us to conceive of four distinct forms of innovation:.
Consider the app Uber. Ride-sharing, geolocation and freelance workers were nothing new. A slightly less glamorous example but a pertinent one nonetheless: desktop vacuum cleaners.
A common household staple, but repurposed for the world of work, desktop vacuum cleaners typify the concept of adapting a classic product for modern needs. Smartphones are a standout example of radical innovation. Whether used for communicating, travelling or shopping online, it is undeniable that smartphones are essential to our day-to-day lives — a defining characteristic of radical innovation.
The overwhelming majority of innovations are incremental in nature. Incremental innovation is when a series of small and seemingly insignificant improvements culminates in large-scale organisational change. Take Gilette, for instance. Another fantastic example of incremental innovation is Amazon. To say that Amazon is a global juggernaut is a staggering understatement, and they have achieved this by steadily perfecting their service offering.
This ranges from introducing next-day delivery to continually experimenting with their web interface, resulting in daily optimisation of the user-experience. This can be achieved by either creating a new market or by entering an existing market and changing how consumers interact with it. They nonetheless offer value in an alternative way to a subset of the market for whom that feature is highly important. This bridgehead is then used to rapidly scale and disrupt the whole market.
The business landscape is evolving in unprecedented ways as a direct result of emerging technologies. However, these new technologies often require large capital investments and take a long time to develop — typically over 30 years. Traditional approaches to innovation are no longer fit for purpose. New approaches are being conceptualized and carried out by startups and corporates alike.
Businesses across all industries are starting to realize the scale and opportunity presented by disruptive technologies, and many are claiming the rewards of being early adopters. Whether a business is in the initial stage of exploring innovation or has already gained some experience from it, new opportunities exist across the entire growth cycle.
By classifying innovation into four distinct categories, companies can assess the opportunities that exist and how different approaches can enable them to create and capture value. Incremental Innovation is the continuous improvement of existing products or services to provide more value to an existing market.
It focuses on reducing defects and incrementally improving performance with features like product line expansions, cost reductions, and next-generation products. This type of innovation occurs in the short-term and has low technological advancement and low market impact. Examples: Next-generation 3 series for BMW, Gillette Architectural Innovation is the modification of existing solutions for an entirely new market.
Architectural innovation refers to changing the overall design of a product by putting existing components together in new ways. This innovation occurs in the short to medium term. Examples: Sony Walkman, desktop photocopiers Disruptive Innovation is when new technologies and products are created to serve an existing market.
This type of innovation is enabled by new technology that provides a more efficient and accessible alternative to what already exists in the market. Instructions Answer the following questions and then press 'Submit' to get your score. Question 1 Innovation is defined as: a the commercialization of a new product or process. Plus receive relevant career tips and grad school advice. Subscribe By providing us with your email, you agree to the terms of our Privacy Policy and Terms of Service. Return to Blog Homepage.
What is Innovation? The 3 Key Types of Innovation Product Innovation Product innovation includes the development of a new product or the improvement of an existing one. Download Our Free Guide to Introducing Innovation into Your Organization Learn why innovation matters and the steps you can take to make a meaningful impact on your current company.
DOWNLOAD NOW Process Innovation Unlike product innovation, which is concerned with improving the product or service itself, process innovation is concerned with improving the processes involved in creating, delivering, and supporting a product or service.
Some examples of process innovation include: Upgrading equipment and technology to become more efficient. Making the supply chain more predictable and systematic. Modifying business processes and workflows to reduce redundancies.
Business Model Innovation Business model innovation is a broader and more complex term than product or process innovation. Blue Ocean Strategy The blue ocean strategy —based on the popular book —can be used to identify the ways in which an organization can innovate, differentiate from the competition, and improve overall performance.
Open Innovation Open innovation is a strategy that allows you to align your innovation efforts with the wants, needs, and ideas of those that make up your company and your overall market. Lean Innovation Another common approach is lean innovation , a process that makes use of design thinking to solve problems using customer feedback while minimizing waste in the development cycle.
Excelling in Innovation No matter what aspect of your organization you choose to innovate upon or the strategy you choose to use, a key component of the process will include the free flow of creative problem solving and new ideas.
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