I am currently busy with an overview of the different types of innovation which organisations can generate. It is based on a very insightful article I found in the MIT Sloan Management Review (Sawhney, Wolcott & Arroniz, 2011). In the previous article I discussed 6 of the 12 given types of innovation and in this delivery I want to address the remaining 6. Just to recap, the six types of innovation that were already covered are: Offerings, Platforms, Solutions, Customers, Customer Experience, and Value Capture.
12 Different ways to innovate
Continuing with the other types of innovation: 7. Processes, are the configurations of business activities used to conduct internal operations. To innovate along this dimension, a company can redesign its processes for greater efficiency, higher quality or faster cycle time. 8. Organisation, is the way in which a company structures itself, its partnerships and its employee roles and responsibilities. Organisational innovation often involves rethinking the scope of the organisation’s activities as well as redefining the roles, responsibilities and incentives of different business units and individuals. 9. Supply Chain. A supply chain is the sequence of activities and agents that moves goods, services and information from source to delivery of products and services. To innovate in this dimension, a company can streamline the flow of information through the supply chain, change its structure or enhance the collaboration of its participants. 10. Presence. Points of presence are the channels of distribution that a company employs to take offerings to market and the places where its offerings can be bought or used by customers. Innovation in this dimension involves creating new points of presence or using existing ones in creative ways. 11. Networking. A company and its products and services are connected to customers through a network that can sometimes become part of the organisation’s competitive advantage. Innovations in this dimension consist of enhancements to the network that increase the value of the company’s offerings. 12. Brand, are the symbols, words or marks through which a company communicates a promise to customers. To innovate in this dimension, the company leverages or extends its brand in creative ways.
The different types of innovation which organisations can generate have now been laid out, and, as my study promotor always say, “Yes, and so what”? The “so what” is a framework the authors developed – based on their research – called the “innovation radar”. This tool presents and relates all of the dimensions through which a business can look for opportunities to innovate. Thus, a business can use the tool as a map to construct a strategic approach to innovation. Specifically, the radar could help a business determine how its current innovation strategy stacks up against its competitors. Let me explain with an example they share in the article. Titan Industries Ltd. entered the Indian market with stylish quartz wristwatches in the 1980s. Initially, Titan was locked out of the market because the traditional watch retailing channels were controlled by a competitor. But the company took a fresh look at the industry and asked itself the following fundamental question: Must watches be sold at watch stores? This speaks to the dimension of “Presence” – as explained above in no. 10. In answering that, Titan found that target customers also shopped at jewellery, appliance and consumer electronics stores. So the company pioneered the concept of selling watches through freestanding kiosks placed within other retail stores. For service and repair, Titan established a nationwide aftersales network through which customers could get their watches fixed. Such innovations have enabled Titan to become an industry leader.
Which of the different dimensions of innovation can provide your business with new innovation opportunities and boost your competitive advantage? Next time I want to unpack some of these dimensions in more detail. I conclude with a quote from John Maynard Keynes: “The difficulty lies not so much in developing new ideas as in escaping from old ones”.
Sawhney, M., Wolcott, R.C. and Arroniz, I., 2011. The 12 different ways for companies to innovate. Sloan Management Review, 47(3), pp.28-34.