Defining Innovation as Creative Destruction
James05
ENES663_BasicInnovationTypes.pptxWhat are Some Basic Types of Innovations?
Product Innovation
New innovative products are the result of a new product development (NPD) process
Product innovations can be new core products, or additions to product lines or families
Process Innovation
Process innovations improve interrelated activities that combine to produce a value-added result for customers
Examples include Just-in-Time inventories, Total Quality Management, Lean Manufacturing, Supply Chain Management, and Enterprise Resource Planning
Service Innovation
Service innovations involve a high level of interaction with customers of health care, banking, government, or education
Examples of service innovations are found in banks’ mobile app and mobile service offerings to their customers, or in Amazon’s regional warehouses for quick and efficient delivery
Position Innovation
Position innovations are market-oriented and involve targeting a new innovative offering with a convincing story about its need, value, or cost leadership
How Do Innovations Emerge?
Innovations can be classified in three basic ways according to the level of impact they have and the pace by which they emerge:
Incremental
Radical
Disruptive
Seeing Innovations as Incremental
They make incremental improvement to an existing product or service
They do the same thing that the company does, but do it better
Incremental innovations add value (usually small or modest) to a customer experience
Incremental Innovation Examples
Image Sources: en.wikipedia.org
Seeing Innovations as Radical
Radical or “breakthrough” innovations create entirely new trajectories of products or services
Often, a technology breakthrough or scientific discovery will trigger a radical innovation
Radical Innovation Examples
Image Source: engadget.com
Image Source: gaagan.biz
Image Source: http://www.quantumdiaries.org/2011/06/14/make-no-little-plans-2/
Seeing Innovations as Disruptive
A disruptive innovation triggers the creation of a completely new market based on customer perceptions that it works ‘good enough’ and provides satisfactory value
Eventually the new innovation disrupts existing markets and displaces the incumbent product or service
Disruptive Innovation Examples
Image Source: freshtechweb.com
Image Source: samsung.com
Image Source: commons.wikimedia.org
Other Innovation Vocabulary
Frugal Innovation (bottom of the pyramid)
Management Innovation (TQM, Lean mfg.)
User-Led Innovation (lead users innovate)
Market-Pull Innovation (market needs)
Technology-Push Innovation (R&D driven)
Takeaway
Having an ability to recognize the various types of innovation, and how they are labeled, will increase your understanding of the innovation landscape, where innovation fits in, and the presence of innovations in the everyday world around us
