Question

Using real examples, compare and contrast different types of strategic innovation.

Answer 1

Here are things and points to consider in types of innovation and examples are.There are different types of strategies in types of innovation as below

Types of Innovation

It is remarkable how many people are under the false assumption that companies are either innovative or not.   This is a very polarizing and simplistic perspective that does not take into account the different types of innovations that companies can and do pursue.

For this post, let’s break down innovation into two dimensions: Technology and Market, which gives us the following 4 types of innovation:

Incremental Innovation   Incremental Innovation is the most common form of innovation. It utilizes your existing technology and increases value to the customer (features, design changes, etc.) within your existing market. Almost all companies engage in incremental innovation in one form or another.

              Examples include adding new features to existing products or services or even removing features (value through simplification).   Even small updates to user experience can add value, for example below is an older version of Constant Contact’s email schedule page:

               There is nothing majorly wrong with this page, however it is easy to see that the page title is “Schedule”, yet there are no schedule settings anywhere to be seen. In fact, in this version, you have to click on the yellow schedule button on the upper right-hand corner to actually pop up the schedule settings. In addition, there is a huge empty space on the right side of the page that does not contribute much value to the user.

            This makes it easier for the user to see which campaign they are working on. Actual schedule settings have replaced the awfully huge empty space on the right-hand side, which makes it possible for the big yellow “Schedule” button to actually schedule.   Also, larger sized form fields have been introduced to allow easy clicking on those elements.

       All these changes, which may seem as just updates, are actually small incremental changes focused on adding more value to an existing product.   They will prove to be incrementally innovative if customers have a better experience with the product and are able to schedule email campaigns much easier.

Disruptive Innovation     Disruptive innovation, also known as stealth innovation, involves applying new technology or processes to your company’s current market.   It is stealthy in nature since newer tech will often be inferior to existing market technology.  

           This newer technology is often more expensive, has fewer features, is harder to use, and is not as aesthetically pleasing.   It is only after a few iterations that the newer tech surpasses the old and disrupts all existing companies. By then, it might be too late for the established companies to quickly compete with the newer technology.

           There are quite a few examples of disruptive innovation, one of the more prominent being Apple’s iPhone disruption of the mobile phone market.   Prior to the iPhone, most popular phones relied on buttons, keypads or scroll wheels for user input.   The iPhone was the result of a technological movement that was years in making, mostly iterated by Palm Treo phones and personal digital assistants (PDAs).

          Frequently you will find that it is not the first mover who ends up disrupting the existing market. In order to disrupt the mobile phone market, Apple had to cobble together an amazing touch screen that had a simple to use interface, and provide users access to a large assortment of built-in and third-party mobile applications.

Architectural Innovation         Architectural innovation is simply taking the lessons, skills and overall technology and applying them within a different market.   This innovation is amazing at increasing new customers as long as the new market is receptive.   Most of the time, the risk involved in architectural innovation is low due to the reliance and reintroduction of proven technology.   Though most of the time it requires tweaking to match the requirements of the new market.

          In 1966, NASA’s Ames Research Center attempted to improve the safety of aircraft cushions. They succeeded by creating a new type of foam, which reacts to the pressure applied to it, yet magically forms back to its original shape.    Originally it was commercially marketed as medical equipment table pads and sports equipment, before having larger success as use in mattresses.   This “slow spring back foam” technology falls under architectural innovation. It is commonly known as memory foam.

Radical innovation       it is what we think of mostly when considering innovation.   It gives birth to new industries (or swallows existing ones) and involves creating revolutionary technology. The airplane, for example, was not the first mode of transportation, but it is revolutionary as it allowed commercialized air travel to develop and prosper.

          The four different types of innovation mentioned here – Incremental, Disruptive, Architectural and Radical – help illustrate the various ways that companies can innovate. There are more ways to innovate than these four.   The important thing is to find the type(s) that suit your company and turn those into success.

The 3 Types of Innovation: Product, Process, & Business Model

Innovation has become such a buzzword it can be hard to remember what it actually means. Depending on who you talk to, the bar for “innovation” might seem incredibly high (“Let’s be the next Netflix!”), or far too low (“Let’s hang up some hammocks in our office!”). There are several different ways a company can innovate; in this article, they are broken down into three general categories: product, process, and business model. By narrowing your focus on a specific type of innovation, you can be a more effective and strategic innovator.

    Product Innovation   When people think of innovation, often, they’re thinking of product innovation. Product innovation can come in three different forms. 1) The development of a new product, such as the Fitbit or Amazon’s Kindle. 2) An improvement of the performance of the existing product, such as an increase in the digital camera resolution of the iPhone7. 3) A new feature to an existing product, such as power windows to a car.

        Drivers of product innovation might be technological advancements, changes in customer requirements, or outdated product design. Product innovation is generally visible to the customer and should result in a greater demand for a product.

         Process innovation is probably the least sexy form of innovation. Process is the combination of facilities, skills, and technologies used to produce, deliver, and support a product or provide a service. Within these broad categories, there are countless ways process can improve.

          Process innovation can include changes in the equipment and technology used in manufacturing (including the software used in product design and development), improvement in the tools, techniques, and software solutions used to help in supply chain and delivery system, changes in the tools used to sell and maintain your good, as well as methods used for accounting and customer service.

        While product innovation is often visible to your customers, a change in process is typically only seen and valued internally. Speaking generally, changes in process reduce costs of production more often than they drive an increase in revenue. Of the three types of innovation, process is typically the lowest-risk.

Examples: 1   One of the most famous and groundbreaking examples of process innovation is Henry Ford’s invention of the world’s first moving assembly line. This process change not only simplified vehicle assembly but shortened the time necessary to produce a single vehicle from 12 hours to 90 minutes.

                 2   Recently, Differential built a mobile sales dashboard for Grupo Bimbo. The baking company has 65 manufacturing plants and 2.5 million sales centers located in 22 countries, across 3 continents. As a result, the executive team members travel a lot, meeting with their direct reports around the world. Having a mobile sales dashboard gives the team quick access to the sales information and other KPI’s for each country, channel, and brand, cutting out guesswork in sales decisions, and reducing meeting time.

       Business model innovation does not necessarily imply changes in the product or even in the production process, but in the way as it is brought to the market. Decision Innovation writes:

         “Business model innovation is probably the most challenging of the innovation types as it will likely present an organization with major requirements for change. Often, the very capabilities or processes that have been optimized to make a company successful and profitable will become the targets for transformation. In some cases, these changes can threaten elements of the company identity and come into conflict with brand expectations or promises.

         Whereas both product and process innovation can be incremental and moderate, business model innovation is almost always radical, risky, and transformative. When talking about business model innovation, without a doubt, names like AirBnB, Uber, or Spotify will come up. These are perfect examples of fast-moving companies that were able to disrupt age-old markets (hotel taxi, music) by tweaking or inverting their industry’s traditional business model.

      Because of these powerhouses, many might assume only startups are capable of massive business model innovation. Startups have a big advantage due to their ability to iterate and adapt their model as they are in the process of creating an initial business model design; however, there are several large, well-established organizations that have leaned into their advantages of a larger customer base and greater resources to challenge their existing business model and “disrupt” themselves.

Examples: 1   IBM has managed changes in customer offers from mainframes to personal computers to technology services.

                   2   Amazon found a new channel to the customer through technology by eliminating the traditional retail distribution channel and developing direct relationships.

                Instead of generic innovation goals, try to hone in your focus on a specific type of innovation. Once you’ve done this, you can begin asking more helpful questions, such as “How might this product’s ease of use improve?,” or ”Where in our hiring process are we spending the most time?” Answering these questions through interviews and research will you point you in a clearer (though still sometimes risky) direction for your business’ innovation efforts.