Types of innovation? π‘ π€
We tend to create concepts that define different states of the same thing. With innovation, weβve been no different. Itβs essential to classify the type of innovation based on the degree of novelty to understand where we are and where we want to go.
π The degree of novelty? Yes, look:
1οΈβ£ When a company continuously improves existing products, processes, or services, and they donβt essentially change the nature of the product or service, we call it ππ‘ππ₯ππ ππ‘π§ππ ππ‘π‘π’π©ππ§ππ’π‘. βLetβs improve this smartphoneβs battery!β
2οΈβ£ When novel and unique products or services are introduced that can be entirely different from whatβs currently on the market, but they are sold to a segment where the company already has influence, we refer to it as π₯ππππππ ππ‘π‘π’π©ππ§ππ’π‘ π’π₯πππ‘π§ππ π§π’ π§ππ π£π₯π’ππ¨ππ§ π’π₯ ππππππ₯ππ‘π§πππ§ππ’π‘. βApple introduced the iPhone in 2007 and showcased a radically different design, interface, and functionality. It integrated an iPod, phone, and internet browsing device into one product.β
3οΈβ£ When new business models or market segments are created from existing processes or technology, or from continuous improvements, we talk about π₯ππππππ ππ‘π‘π’π©ππ§ππ’π‘ π’π₯πππ‘π§ππ π§π’ π§ππ π ππ₯πππ§ π’π₯ ππ«π£ππ₯ππ ππ‘π§ππ. βCompanies like Uber and Airbnb leveraged smartphones to create platforms that directly connected providers and consumers, eliminating intermediaries and creating an entirely new market.β
4οΈβ£ Lastly, we have πππ¦π₯π¨π£π§ππ©π ππ‘π‘π’π©ππ§ππ’π‘. It refers to new products, processes, or services that initially cater to a small or less demanding segment but eventually displace established solutions and dominate the market. They carry a new business model and use new competencies and technology, disrupting the industryβs logic. βCompanies like Xiaomi and Huawei began offering high-quality smartphones at a much more affordable price. Not only were they cheaper, but they also offered features that rivaled their more expensive competitors. Initially, these phones were popular in underserved market segments, and over time, the quality and capabilities of these phones improved to gain ground not just in emerging markets but also in more established markets.β
The diversity in types of innovation provides companies with tools tailored to different contexts and goals. While disruptive innovation can redefine markets, incremental and radical ones ensure sustainable improvements and differentiation. In the end, success lies in balancing these approaches, adjusting the risk to maintain a healthy innovation portfolio, thus creating a lasting product development ecosystem.
