TYPES OF INNOVATION
Innovation has many faces. The wheel, the hammer, the first personal computer or the smartphone are just some of them. And not all kinds of innovation are technical.
Why should we differentiate types of innovation?
To differentiate the types of innovation helps us to reduce the issues complexitiy. There are well-established methods and procedures to create success in each type of innovation. It has stood the test of time to distinguish following types:
Technology Innovation
Touchscreens, continuously variable automatic transmissions and OLEDs are classical Technology Innovations. New solutions with technology at their core but not independent products that stand on their own. They are new because they where not known before or have never been used in this context before.
The new found solution is clearly technical, for example a new material. Or a new approach has been used to create the innovation, like in a new way of manufacturing. Either way, technology innovations clearly need to be invented one way or the other.
Product Innovation
Cleaning robots, coffee machines with capsules or self-driving cars are product innovations. Product innovations consist of feature, known or previously unknown, combined into a new product. The combination is not necessarily patented. In many cases it is not even a physical product.
Life insurances or online platforms are products as well. In the end, a product is just a bunch of functionalities, packaged into a convincing design. It is more and more an integrative part of a specific business model.
Service Innovation and Process Innovation
Self checkouts and mobile payment are Service Innovations. Additive manufacturing processes and digital insurance contracts are Process Innovations. Both do have complex tasks with numerous interactions.
And they both have a common destination: to generate satisfied customers. Be they internal customers (Process Innovation) or external customers (Service Innovation). The providers strive for simple and reliable procedures to obtain satisfied customers.
Business Model Innovation
Rentable toys, adfinanced music streaming, the transportation of passengers by private drivers and crowdfunding platforms are innovative Business Models. Business Models connect addedvalues for the customer and sustainable earnings for the provider.
Understanding the business model aspect means, to understand the entrepreneurial and economic perspective of a company. Business Model Innovation therefore are the broadest innovations. They may contain several or even all types of innovations.
Don’t we restrict the range for innovations by such decisions?
Commitment means limitation. It is important to choose and focus on a specific type of innovation. To build a solid common foundation for the innovation team and their management. Our two-day innovation workshop „Finding fields of innovation” helps you to get clarity before long-ranging desicions are taken.