The Many Faces of Innovation

In my recent post Charting a Course for Corporate Success, I outlined three, broad categories of innovation:

• Disruptive, Breakthrough Innovations.
• Sustaining, High-Value Change.
• Everyday Creativity and Emergent Innovation.

When it comes to leading businesses, it is important that we don’t just come up with new things; we need to innovate in ways that create value for our customers. As research by Robert Wolcott and Mohanbir Sawhney demonstrates, there are many different ways that business can innovate to achieve this outcome. They came up with twelve dimensions of innovation that we can consider:

Offerings: These are new products and services that are valued by the customer, like the iPhone.

Platform: A platform is a set of common components, assembly methods, or technologies that are building blocks that can be leveraged with a portfolio of products or services, allowing you to create a set of derivative offerings faster and easier than building them all from scratch.

Solutions: This involves creating a customized, integrated combination of products, services, and information to solve a customer’s problem. This can be an end-to-end solution that simplifies and reduces the logistics of something like procurement and delivery, for example.

Customers: The identification of new customer segments or unmet needs.

Customer Experience: This involves any and all things that a customer feels, hears, sees, and experiences in dealing with your company.

Value Capture: Innovation that discovers untapped revenue streams or expands the ability to capture value from interactions with customers.

Process: This type of innovation concentrates on the internal business activities and improving the efficiency of those processes.

Organization: This is a redesign of organizational structure and a company’s activities, possibly redesigning roles, responsibilities, and incentives of different business units and individuals.

Supply Chain: This involves re-sequencing activities and agents in the sourcing and delivery of goods and services.

Presence: This type of innovation focuses on the creation of new distribution channels or new ways of leveraging existing channels.

Networking: Innovation that concentrates on how products and services are connected to customers and how to improve and use those connections to create competitive advantage.

Brand: Brands communicates a promise to customers, and innovation in this realm involves extending the brand in some way.