In an earlier post we covered how we define innovation and in another we covered the dangers of getting too caught up in all the disruptive innovation buzz. It’s easy to get overwhelmed by all the different types of innovation, so we’d like to offer a framework to help make things easier. There are a couple of ways we find useful to categorize different types of innovation. We like to look at the types of ideas, the source of ideas, participants in the innovation process, and the focus of innovation.
Types of Ideas
Ideas fall on a scale that looks like this:
Depending on the type of innovation, the scale will be balanced differently.
Where do ideas come from?
Ideas can come from two sources – internal and external. Internally sourced ideas come from employees within an organization. Externally sourced ideas can come from customers, suppliers or subject matter experts. It’s easier to get value from internally sourced ideas because employees are naturally vested in helping to improve the organization they work at. However, there are notable examples of companies sourcing ideas externally as well.
Who is included in the innovation process?
Microsoft has a small innovation team that works on researching new ideas. Google also uses small teams, but also embraces innovation across the entire organization. Both have pros and cons and different use cases. Who is included will have cultural implications. Ultimately, for a widespread culture of innovation, you’ll likely need to be as inclusive as possible. Which may dictate different processes to manage organization-wide innovation and small team, incubated innovation at the same time.
How long is the innovation process intended to last?
Sometimes innovation needs to occur within a specific timeframe. Continuous innovation isn’t time constrained and allows an organization to seek ideas all the time. A great example of this is Toyota, who implements ideas from employees throughout the year. Read more in this post if you’re wondering about how to balance innovation challenges and continuous innovation.
What do you want to innovate?
There are as many things you can innovate as there are products, services, processes and business models you can think of. For example, in this structure, they list 10 different types but the only distinguishing feature between each “type” is the the subject of innovation.
Types of Innovation
At SoapBox, when we talk with customers about types of innovation, we look at the all of these dimensions, the type of ideas, where ideas come from, participants, duration of innovation and the subject of innovation altogether. This dictates the right tools and approaches and whether SoapBox will be a good fit or not.
Using some of these dimensions, here’s a breakdown of a few of the most common types of innovation that we see:
Incremental innovation focuses on smaller process or product improvement ideas. These ideas are more common and easier to implement, and the aggregate value through a combination of cost savings and revenue generation. Typically they are sourced internally when referring to process improvement ideas. Sometimes there are instances where ideas are sourced externally from customers for product improvement ideas. These systems are generally a core part of the business and last a long time. Kaizen and SixSigma are very similar to incremental innovation.
Here’s an example of how you can use the dimensions we talked about earlier to categorize incremental innovation:
The most distinguishing feature of Open Innovation is that it is sourced externally by the community or by customers. Many companies use open innovation to create new products but also to help improve their existing products. Typically open innovation programs that are time-bound where the community can submit their idea within a certain period of time. There are ongoing Open Innovations programs, like P&G’s Open Innovation Program where individuals can partner with P&G to bring their idea to life.
Frugal innovation focuses on ideas that make a greater impact with fewer resources, usually around removing parts of complex machinery so that a lower-budget version can be sold to developing countries. The size and impact of an idea in frugal innovation can range but the essential premise is to cut out non-essential parts of more complex products to sell into developing companies. Frugal Innovation, the book, has a great overview and examples of frugal innovation. One example of a result from frugal innovation is Lifestraw, a straw that can make contaminated water drinkable.
Disruptive innovation involves ideas that that could transform society. Examples of this include the Internet and electricity that have changed the way we operate in society. It’s hard to say who or how long it lasts because disruptive innovation has such a large impact on society. Generally they are resource intensive particularly in research and development standpoint and it’s often the type of innovation most people think about when they hear the word innovation. Radical innovation, breakthrough innovation, and transformative innovation are other terms that describe the same type of innovation. Read more in this blog post.
However you decide to build your innovation program, think about the different dimensions to categorize your innovation and whether you have more than one type of innovation you’re building a program around. Here are some questions to help you get started:
- Do I want big ideas or small ideas?
- Who is going to share their ideas? My employees or customers?
- What should the ideas be about?
- How long do I want to run an innovation program for?
Depending on your answers, you’ll need different tools and processes to successfully support your program.