Ten types of innovations

Innovate beyond products

You will learn how to innovate beyond products with 10 types of innovations.

Have you thought of starting innovation as an organization-wide initiative? Or have you thought of some ideas and were confused about how to proceed further? You are not alone. There are many questions that are unanswered on innovation. Some are –

  1. What to innovate? Or where to start the innovation journey?
  2. How to innovate?
  3. How to determine if the ideas we are trying would work in the marketplace?
  4. How to innovate and try ideas faster?
  5. What if a competitor copies my idea? And more…

Whenever I have spoken with people about innovation and intellectual property (IP) there has been a lot of misconception. Innovation mostly was perceived as Product innovation only. Similarly, IP too had been considered only as some tangible product-based property – especially for Patents. Many times, people confuse Patents and Trademarks too. We will discuss IP in some other articles.

Product variant innovation!

When you go to a grocery store, have you observed that you are spoiled for choices? Not just that the Product variant & line extension that you see from one brand is easy to copy in such a market. How do you differentiate in such a market? By out-innovating your competitor? Right? No that is a wrong answer.

Innovation - line extension. Common sighting in a retail store
Innovation – line extension

You know what? The idea of “out-innovating the competitor with easier innovation of line extension” resulted in the image below. Remember this is a representative picture. This is from just one retailer, imagine if this retailer keeps “only selected brands”!

Are you doomed? Are you scared that this red ocean will gulp you someday?

No. Instead of answering this question upfront, let me help you think differently. How does a retailer make money? By selling product to a shopper? Right? Sorry, wrong again!

They make money with different approaches – selling the aisle, by selling the data they collect from transactions and customers. Etc Etc Etc.

Think – what was and is the business of a retailer? Is it “Service” of selling products at the retail store alone?

Feature enhancement innovation

Let’s look at another example. The mobile industry. Since the beginning of the 21st century, we have seen immense developments in mobile technology. Now, we keep on seeing faster innovation and improved everything – be it data speed, screen resolution, or processor performance.

Innovation - feature enhancement. A common type in electronic items
Innovation – feature enhancement

The question is – how much is too much? Success over time demands something beyond features and functions.

Let me tell you a brief story of Ice harvesting. Believe it or not, one time it was a flourishing industry. The ecosystem included – ice houses (an analogy warehouse) and ice delivery (transport logistics).

The quality (read features) boosted were – “… I procured a cake twenty inches thick and could read legal notices through it from a newspaper placed on the other side…”

What happened to that industry? Well, entered home appliance “refrigerator”. Yes, the same product you open daily to take out your milk or food. One time it was a luxury and the death nail to the ice harvesting industry.

The question to ask is – how long can you rely on the product features alone? How long can you improve on the product performance alone?

Let me go back to the question – how do retailers make money? By selling you (a shopper) products? That is just one part of the business – as stated earlier.

So, you would ask, how can I be more organized and create such opportunities of generating additional revenue? This is where innovation and a systematic approach to innovation are important.

Do not worry, there are methods and approaches to innovate faster as well as safeguard yourself from copycats.

How can you innovate faster?

Well, that requires a systematic approach. We would discuss it some other time. Let us come back to the point of – innovation beyond the product.

Now when you have understood that product innovation is not enough. Let me introduce you to an interesting concept – ten types of innovations. It was pioneered by Doblin Group, acquired by Deloitte. I have been using it in my training and advisory engagements since 2013.

Without a further ado let me talk about ten types of innovations – mind you these innovations are beyond product innovation alone.

Ten Types of Innovation

There are different classifications of innovation such as incremental, radical, and semi-radical. From a perspective of innovation management and fitting the innovation in strategic planning classification of innovation in incremental, radical is fine. But that definition mostly limits thinking in the product domain of a company.

Let me give you an example – if you are a dairy brand you would try to make incremental upgrades to your dairy products and have a portfolio for a radically different product plan for the long term.

It is like looking for gold by digging in the same place.

Some define innovations such as product and process innovation. The process innovation bit is different for say a dairy product company. They would do it for production or operations processes. Right? Yes, correct, in most of the cases.

Let me help you shift your thought process – what if the dairy product company starts taking orders online and delivering directly to the customer? Or if the company starts producing bread?

You know what? These are some of the examples of different types of innovations from the ten types of innovations.

Ten types of innovations are classified under four subcategories, namely finance (2 types of innovations Business model and Network), processes (2 types of innovations Enabling Processes and Core Processes), offering (3 types of innovations Product Performance, Product System and Services) and delivery (3 types of innovations Channel, Brand and Customer Experience). Here is a brief about each.

Ten types of Innovations - innovate beyond products
Ten types of Innovations – innovate beyond products
  1. Business model (Profit model) – How a company makes money Example PayTM (a new way to pay), Uber (Taxi booking)
  2. Network – Enterprise’s structure Example Ather Energy (Electric Vehicles company getting into charging station partnerships), Zara (Affordable fashion – manufacturing, distribution)
  3. Enabling Processes – Enabling processes of the organization Example Assembly line production, FabIndia (Partnering with local craftsmen)
  4. Core Processes – Proprietary processes that add value Example Shriram Finance Corporation (Loans for truck purchase)
  5. Product performance – Feature, performance, functionality Example Intel or mobile processors
  6. Product system – Extended system that surrounds an offering Example Google suite / MS Office
  7. Service – How company services customers Example Lenskart (Eyeglasses company in India)
  8. Channel – How you deliver offering to customer Example LendingKart (P2P lending)
  9. Brand – How benefits of the offering are communicated Example Fevicol (Brand Communication innovation)
  10. Customer experience – How customer experience is created Example BookMyShow

According to the researches if a company does more than 5 or 6 types of these innovations the organization will be more successful than its competitors/peers.

Now tell me, are you going to consider innovation about the product alone? Do you want to know more about these types of innovations? Do you want to learn how these innovations can be systematically achieved? And yes, do you want to learn different innovation methods? Reach out to me for help.

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