“To Innovate is to Live; To follow Tradition is to Die!” This is the ultimate commandment for businesses everywhere.
Innovation has become so commonplace that it is generally tough to recollect what the word really means anymore. Depending on whom you are listening to, the standards for “Innovation” may appear improbably tall (“let’s be the next Google!”), or despicably low (“let’s install swings in our office!”).
There are several ways an organization can innovate; In this article, we split up into three main categories: Product, Process, and Business Model.
By taking note of your customer and business needs, you will have the idea of the type of innovation you should implement to achieve your business goals. And knowing the type of innovation you should focus on at a certain point in time when it’s most critical will make you a more tactical and efficient innovator.
Product innovation is the first thing that comes to mind whenever people hear the word innovation. It mostly involves the creation of new or improved versions of products.
Innovation in new products requires making something that solves a problem in a new and exciting way that the customers will appreciate and love.
Factors that motivate product innovation are usually changes in customer needs and requirements, advancements in technology or outdated product design.
Product Innovations are physically visible to the customers and usually comes in different forms ;
i) — Development of an entirely new product such as Nike’s Pro Hijab A Sportswear that was created to serve the hijab-wearing athletes who had been ignored by the athletic industry or forced to use inadequate products. Nike worked with Muslim athletes to get the best design that locked in moisture whilst staying secure and comfortable around the neck.
ii) — Improvements to performance of existing products -such as the improvement on the digital camera features of the iPhone 7.
iii) — Adding a new feature to an existing product -such as what Coca-Cola did, adding new flavors to its brand extensions like the Cherry Coke, Coke with Lime and more recently Coca-Cola Life.
Process innovation is probably the least enticing form of innovation. Process in business is the total combination of the facilities, skills, and technologies used in the production, delivery, and support of a product or provision of a service. There are several ways a business process can be improved.
Unlike product innovation that is most visible to the consumers, process innovation is usually only seen and appreciated internally as it tends to reduce costs and time of production more often than causing an increase in revenue. Amongst the three main categories of innovation, process innovation is the one with the lowest risk.
Process innovation may include;
i) Modification in the equipment and technology used in manufacturing (this also includes the software used in product design and development).
ii) Improvement in the tools, techniques, and software solutions used in the supply chain and delivery system.
iii) Transformations in the tools used to sell and maintain your products and services.
iv) Improved methods used for accounting, marketing, employee engagement, and even customer service.
Examples of companies succeeding with process innovation are;
ZARA — they changed their processes to accommodate fast fashion, directed by customers and enabled by a short manufacturing leash.
AMAZON changing the way shopper’s shop, with only a click of a mouse, removing the need to establish thousands of storefronts all around the globe and increasing business productivity in the process.
Related Post: Misconceptions about Innovation You Should Avoid
BUSINESS MODEL INNOVATION
A business model is a simplified representation of how a business makes money. Business Model Innovation is probably the most challenging of the innovation types as it will likely present an organization with major requirements for change.
Business model innovation is usually radical, transformative and risky.
Prominent companies that have used the Business Model Innovation successfully are Airbnb, Uber, Amazon, Spotify, etc. They are great examples of fast-moving companies that have been able to disrupt major industry markets (hotel, sales, taxi, music) by changing their industry’s traditional business model.
Although many might assume that only start-ups are capable of massive business model innovation. The advantage start-ups have is their ability to iterate and adapt their model as they are already in the process of creating an initial business model design. Nonetheless, there are also several large, well-established organizations that have learned to take advantage of their larger customer base and greater resources to challenge their existing business model and “disrupt” themselves.
The type of innovation that’s most relevant for any organization at a selected time is discovered when the organization begins to ask themselves certain important and transformational questions like:
1. How can we meet our customer’s need more efficiently and effectively?
2. How can we make our services and products affordable for our larger client segments?
3. Are our products user-friendly?
4. What issues are customers facing with our delivery and products?
This will help to research answers that will point to what type of innovation may be most appropriate for your business innovation efforts.
Looking for programs to help your company facilitate innovation within your company? We are running a series of workshops to help companies drive innovation within their teams and organizations, visit here for our workshop on innovation for strategy teams and companies.