Different Kinds of Innovation

Here’s another bit of content from my client presentation about innovation earlier this week. Yesterday I gave you my simple definition of innovation. After the definition, I talked about three different kinds of innovation. I think it’s important that we recognize innovation is not a singular activity. As long as we keep it broad like that (“We need to do more innovation around here!”), no one’s going to take action on it. So for this group I talked about three different types of innovation: product, strategy, and management.

Product Innovation
I think this comes to mind first when many people think of innovation. We think of Apple products, electric cars, and Dyson vacuums. We think of cool products that break new ground, that leap ahead of the competition, or change the game. This is definitely innovation, and you can do it with services too (are you listening, associations?). It’s changing these products and services in ways that leap ahead of customer expectations—giving them value they didn’t even realize they needed, until you showed it to them.

Strategy Innovation
Beyond products, organizations can also innovate their strategies. This is a bigger change, obviously. But it’s a similar kind of work. You have to dig deep into your system and change things radically enough to unlock that new value. Kim and Mauborgne’s Blue Ocean Strategy is about strategy innovation. The examples they give are excellent—Cirque du Soleil, Nintendo’s Wii, and Southwest Airlines. These companies all made significant changes to their strategies so they ended up in a “blue ocean” where there were essentially no competitors (even though they were in competitive industries).

Management Innovation
The third type is my favorite (which should not be a surprise, given the fact that Humanize is a book about management innovation). This is not about creating new products or making bold strategic moves. It is about innovating the part of our organizational life that has been devoid of innovation for decades (even centuries): management and leadership. Management is a system. We made choices in building our current management systems, and just like our strategies and products, we’ve locked value away that can now only be accessed with significant and deep change. So let’s get to it! Let’s devote some our innovation resources to making deeper changes to our processes, structures, and cultures. There is a LOT of value out there that we could be realizing.