Types Of Innovation

By Martin Gilliard

There are many different types of innovation with the two most popular types amongst innovation specialists usually being incremental innovation and radical innovation.

Incremental Innovation

To start with let's consider incremental innovation...

Incremental innovation exploits existing products, processes or technologies by improving on what currently existed.

Incremental innovation is all about doing what you have to do in order to keep a product up to date... enhancing products so as to be more effective or improving operability, reducing costs, improving quality, etc. By making incremental improvements to your product that keep your customers engaged.

types of innovation

(Photo Credit: Jer Thorp)

Radical Innovation

Radical innovation uproots existing markets by providing something completely new to the world.

Radical innovations are fundamental changes to a product, service or activities. Something entirely new or a significant transformation of what existed prior to the innovation.

Radical innovations can also sometimes be referred to as breakthrough or discontinuous innovations.


Business Model Innovation

A business model is what the business follows in order to operate. The decisions and processes that it uses to earn revenue. The costs it incurs and the risks that it manages.

Therefore business model innovation is the redesign of this model. Changing it hopefully for the better, i.e. to improve revenue, increase productivity, reduce costs, reduce risks, etc.

Business model innovation is a unique one as you can keep with your same product or service, markets and technologies. The innovation directly effects the internal processes that the end customer doesn't see. This has an added advantage in that it makes it incredibly difficult for your competitors to copy.

(Business Model Image - Credit: Rachel Smith)


Sustaining or Performance-improving Innovations

Sustaining or performance improving innovations replace older products with newer, more up-to-date versions. They don't tend to create new employment opportunities as they simply act as substitutions to what was there prior. Customers purchase the new product instead of the old. Many successful incumbent companies are strong at producing sustaining innovations. 



Product, Process and Service Innovations

When most people think of innovations they think of product innovations but to mass produce an innovative product at a price that the market will accept a process innovation needs to be first created.

Process innovations can also occur to simply reduce the number of steps in an existing process so as to reduce the overall cost of running a process and consequently reduce the cost of the end product.

One particular example of a process innovation is supply chain innovation which if done well can often assist you in gaining competitive advantage.

There are also service innovations. Often good service leads to increased sales and some companies have based the majority of their business model on ensuring that the service they provide to their customers is one of the most innovative.


There is no doubt that innovation is a primary source of change, growth and competitive advantage and there is a constant demand for innovation; the public as a whole always want newer, better, faster and more efficient products and services.

When companies create such innovations and the public subsequently starts using them then the revenue of the company often increases and they start to meet the performance goals that they defined for themselves.

Innovation is quite a broad field though and there are many different types of innovation. In this page I'd like to give a little more clarity to these many different types.

Harvard professor Clayton Christensen introduced some alternative innovation types that have many similarities to radical and incremental innovations, namely disruptive innovations and sustaining innovations.


Innovation Strategies

Then of course you get many different types of innovation related to a specific product category or group. For example when you go into your local electronics department store you can often get overwhelmed with all of the latest audio visual innovation offerings designed to increase our home entertainment pleasure.


References

Clayton M,  Bever, Derek van (2014) The Capitalist's Dilemma, Harvard Business Review, Vol. 92 Issue 6, p60-68

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