Source : Henderson, Clark (1990). Architectural innovation
Business innovation is the process of a company introducing new methodologies, workflows, services, products, and ideas. Like Information Technology, which calls for using technology in various ways to create a more agile and efficient organization.
Business innovation should be able to help the company accomplish this across all departments. The new changes should be able to help a firm achieve all its core aims and push it to the next level.
Innovation in every business starts with potential ideas, which are narrowed down in brainstorming sessions, after which the management decides the business viability, feasibility, and desirability of the top ideas.
Business innovation should attract more customers, improve on existing services and products or solve a problem.
For this post, we will break down business innovation into dimensions, that is, technology and market. This leaves us with the following types of innovation;
Incremental innovation is among the most common types of innovation due to its low risks. Although it may seem to take time, over time, the results are impressive. Incremental innovation utilizes the already existing technology such as designs and features to increase the value of customers.
Almost all firms use this type of innovation at some point in their business life.This is the light that adding or removing features from products and services can significantly improve the client’s experience.
Gillette has improved its client’s base by adding multiple features to its razors. For instance, after developing the shaving razor, they realized that they needed something long lasting and introduced battery-powered Gillette. The latter has a rubber hand to give the user a grip, and a sense of control. Through the simple features they have added, customers are enjoying their products more than ever before.
This is one of the most interesting innovation type. It is also referred to as stealth innovation; it involves introducing new technology or products to your market. Disruptive innovation began a long time ago and had been advancing over the years. For example in the historical world, democracy disrupted monarchy, and email services disrupted the postal service.
Disruptive innovation is carried out by small firms which introduce products/technologies with major providers in the market. In most cases, the products are inferior, costly and not as effective as other services from the market.
As the new companies venture into the market, they target the neglected group of the incumbent’s consumers. The latter may be a group that cannot afford their services or whose needs are overlooked at the expense of others.
With time, the company is able to improve its services and penetrate into the most valued market of the incumbents. However, it is always too late for the incumbents to compete with the firm at this point; the incumbent’s clients embrace the services of the new firm and its low prices, disrupting the prices in the market.
Disrupters take long before it replaces the incumbent. The main rules of stealth innovation are to play with odds and not directly attack the incumbent.
Architectural Innovation involves taking skills, lessons, technology from an existing model and using it in a new market. As long as this new market is receptive, this is a very good method of attracting a new market. The risk involved in this technology is very low because the technology involved has been proven before and is only being introduced. It only requires a lot of tweaking to match the needs of the new market.
In 1966, NASA’s Ames Research Center tried to improve the safety of the aircraft’s cushions. They managed to create a new foam type that reacts to the pressure applied to it, but magically goes back to its natural foam. It was originally marketed as sports equipment and medical equipment table pads, before having success selling as popular big mattresses.
The “slow spring back foam” is commonly known as memory foam under architectural innovation.
The first thing that comes to many people’s minds once they think about innovation is a radical innovation. It leads to the introduction of new products in the market or swallowing of new markets. One general example is the introduction of the airplane. It was not the first mode of transport before, however, through improvement of the initial mode of transport to enhance air transport. It is, therefore, revolutionary for its ability. Air conditional is another example or radical innovation, in some countries temperatures are high; hence the need for a cooler. Other examples that have changed the way of living include electricity and internet.
Final thoughts on the types of innovation
Business without progress is bound to fail at some point. It is important that a business stays innovative to stay relevant. There are multiple types of innovations, the most effective ones being;
- Incremental innovation.
- Disrupted innovation
- Radical innovation
- Architectural innovation
All the above innovations are effective when implemented correctly. Research on the method that works for your business. Also, research on the right materials to read the concepts of the type of innovation you choose to reduce the risks involved. Note that many cases where theories have failed have been as a result of a wrong source of information.
Some of the theories like disruptive innovation were discovered 20 years ago. Over the decades, improvements have been made to make them more effective. Unfortunately, many pieces of research continue to judge the model without considering the improvements that have been made over the years.
PS: There is no bad or good type of innovation; when done under the right conditions; correctly. They are all life-changing. Every time you try an innovation strategy, you are one step ahead in the business.