Find out everything you need to know about innovation – The innovation process, types of innovation, and approaches to innovation.
This approach to innovation that looks at innovation through the lens of 10 dimensions, was invented at Doblin, around 1997.
Doblin is a global innovation agency, founded in 1981 by Jay Doblin and Larry Keeley. According to Doblin’s website, the agency is approaching innovation based on people and multidisciplinarity. On the website, you can always see the evolution of the agency, including the 1997 moment when the 10 types of innovation approach was developed.
After testing and various improvements, in 2013 Larry Kelley, one of the Doblin co-founders publishes the book – Ten Types of Innovation: The Discipline of Building Breakthroughs.
The 10 types of innovation theory is the result of almost 40 years of studies and research on over 2000 successful companies, such as Amazon, IBM, and Ford. The people at Doblin aimed to identify patterns in companies which have successfully innovated in the past, as well as the reasons for these types of initiatives to fail.
The research results of over 40 years of research are presented in the book. There, the authors start by mentioning that innovation and innovations aren’t only based on bright ideas and creativity but discipline. Then, the authors offer examples for each type of innovation and key moments that happened throughout the years inside these innovative ecosystems.
The 10 types of innovation identified by Doblin fit in three categories.
This section contains all the elements that are at the base of the business – the foundation of it. These are:
Profit Model Innovation deals with how your organization makes money – to innovate, think about where your revenue is coming from, and what you can do to generate more. Model profit innovation takes place when a company finds new ways to develop, deliver, and most importantly, captures value. For this, you must analyze your customers’ needs and find new ways to monetize based on their unsolved needs.
Profit Model Innovation Example – Netflix – For the way in which it managed to radically transform the movie rental business, at first, into a DVD-delivery one and only then, into the streaming industry.
Network Innovation looks the way in which your company deals with the relationship with the stakeholders and how you approach the strategies behind the partnerships. Take a look at your supply chain – is there room for improvement?
Network Innovation is a form of open innovation, an approach to innovation which „uses internal and external flows of information to accelerate internal innovation and to extend the market for the external use of innovation.” In other words, open innovation is the result of the sharing of knowledge and expertise between multiple companies.
To innovate at a structural level you must look at the tasks and processes which stand at the base of the organization – from IT to payroll and others – you must think what is necessary, what isn’t and what needs improvement (by investing in new technologies, for example) and what can be outsourced.
An example of structure innovation comes from Google, with its 20% Project, where employees can work, for 20% of their time, on personal projects that can also benefit the company.
Process Innovation is when the processes inside the company are improved for their efficiency either to reduce production time or to reduce certain costs.
McDonald’s is one of the most famous process innovation examples. First of all, they have the kitchen process that made the company famous. It is what is going on in the kitchen, some sort of „efficiency ballet” as the movie The Founder shows us.
Secondly, McDonald’s is still innovating at process level to this day. Close to Los Angeles is a call center which takes drive-through orders from several restaurants across different USA states. This innovation helps them save a few seconds for every order.
This category is about what the company can offer the clients, in terms of products, services, experience and value.
For Product Performance Innovation, take a look at how can your products and their performance be improved. From all aspects – their look, their efficiency etc.
Product performance innovation focuses on the value and the features and quality of the products. This is done by developing new products or by improving products that already exist. In an interesting way, this is connected with process innovation, another approach to innovation that we wrote about in this article.
An example of product performance innovation is Gorilla Glass, made by Corning, which is the result of 160 years of testing and improvement.
Similar to Product Performance Innovation, Product System Innovation is about the company’s offer – what can you do to improve it? More precisely, along the main products, what other complementary offers can you add to them to satisfy the customers’ needs better, which will bring you profit?
A Product System Innovation example is Nike+, a kit and an app that brings together multiple Nike products and offers, such as Nike+ Run Club or Nike+ Training Club.
This category is focused on the user – on his or her experience when interacting with your products, services and all other aspects of the company.
Service Innovation deals with the relationship between your customer and the company – How do you behave with them? How does your relationship look like? How can you improve it? How do you bring in more value? On the other side, it deals with the „relation” between the customers and your product, especially the improvement of the product in terms of usability.
Zappos, a company which sells clothing and footwear, prides itself with the client service, saying it delivers a WOW experience, even has the tagline – „To Live and Deliver WOW”. It is about the very personal relationship they manage to form with the customers via phone customer support.
This is about all the channels where your customers and potential customers can find out about your company and its offering, as well as the way in which your company communicates and maintains that relationship.
A really interesting example of channel innovation that we encountered is from the New York Public Library which created the Insta Novels – a very efficient way to connect with a new generation of readers, offering them the right content on the right platform.
Brand innovation is about your company’s brand – it makes sure that the potential customers place your brand before those of the competition. For a strong brand strategy, you must take into consideration your company’s values, the positioning, benefits and many other elements that we covered in the article about the Go-To-Market Strategy.
A great example of Brand Innovation is Virgin Media, a giant which until this day has extended its brand all the way to the industry of soda with Virgin Cola or the tourism industry with Virgin Holidays.
Customer Engagement Innovation deals with what your customers think about your product or service and how you can interact with them in a more efficient way. Customer Engagement Innovation is done by identifying the needs of the consumers.
A great Customer Engagement Innovation example is Apple. Whenever Apple launches new products it manages to keep a solid loyal customer base.
Being such a broad concept, innovation can’t just be limited to a small number of terms and factors. No, there are a multitude of approaches, paradigms and definitions of innovations and these 10 types of innovations are forming one of those approaches.
Indeed, some are focused more on the innovative mindset and culture, for example the case for social innovation, others are focused on processes, you can look at product and process innovation or open innovation. At the same time, many approaches are similar or are related in one way or another. Look, for example at the relationship between network innovation, mentioned in this article and open innovation.
The 10 types of innovation approach is a comprehensive approach, covering a lot of aspects – from tangible pones, such as products, to more conceptual ones, such as customer relationship.
Now that you know the 10 Types of Innovation, you must also understand where they belong in your business. You don’t have to struggle to innovate on all levels but you must develop critical thinking when it comes to analyzing your business and its needs.
For example, brand innovation or channel innovation or even customer engagement innovation, there are types of innovation that all companies should take into consideration. Same as for products and services, you don’t have to follow fads. Everything needs to be done rationally after solid analysis and research.
Want to become a master innovator? Read our other articles on innovation:
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