ASK A FUTURIST: WHAT TYPES OF INNOVATION ARE THERE?

There are many different types of innovation that organizations can pursue to help them stay competitive and meet changing customer needs. Here are 10 major categories:

1. Product Innovation – The term refers to changes in the products or services a company offers. It can involve improving existing offerings or introducing completely new ones. An example is when Apple introduced the iPhone and essentially created the smartphone category.

2. Process Innovation – This type of innovation focuses on improving production processes, distribution methods, or business processes. For example, McDonald’s innovated its drive-thru processes to serve customers quicker.

3. Position Innovation – Encompasses changing the context in which products or services are introduced. For instance, when Nintendo launched the Wii gaming console, it was positioned as a more inclusive, family-friendly system.

4. Paradigm Innovation – Speaks to shifting the perspectives, beliefs, and underlying rules companies use to solve problems. An example is online eyewear retailer Warby Parker’s paradigm shift around buying glasses.

5. Structural Innovation – This type of innovation changes organizational structures or how resources are allocated. For example, many companies have moved to more agile frameworks to enable faster innovation.

6. Value Capture Innovations – These innovations focus on capturing more value, typically through pricing or reducing costs in the supply chain. Examples include companies introducing subscription pricing models.

7. Production Innovation – Refers to new or improved production processes or automation to boost efficiency. For instance, Tesla’s advances in battery production and design.

8. Experiential Innovation – Involves innovating the customer experience that surrounds products and services. Apple Stores providing friendly expertise is an example.

9. Marketing Innovation – This type of innovation results in new marketing approaches. A classic example is how guerrilla marketing emerged to provide unconventional, low-cost marketing campaigns.

10. Business Model Innovation – A very profound innovation that spans reinventing the way a company operates to capture value. Netflix moving from DVD rentals to streaming video represents business model innovation.

As we can see, organizations can pursue innovation in many different areas from products to business models and everything in between. Understanding these innovation types allows companies to take a systematic approach that balances revolutionary shifts with incremental improvements.