In a previous article, we discussed Why Creative Companies Can’t Innovate, and we explored the reasons behind the failure of the innovation process in different companies working within the creative sector. One of the reasons behind this failure is the limited understanding of innovation. Most companies tend to innovate is one direction rather than thinking of innovation as holistic approach inside the organizational structure. This limited vision reduces the opportunity for success in the innovation process, lowers the return of investment, and reduces the competitive position in the market.
While innovation can source creativity from either internal or external sources using the Open Innovation Model, the innovation can be implemented onto projects using different types, these types are known as Doblin’s “10 Types of Innovation”. In 1998, Doblin Development LLC. developed a model that shows companies multiple types of innovative methods which can be utilized inside the organization. These types were discussed in their book; Ten Types of Innovation. After years of research, Doblin says that any organization can achieve success in innovation if it focuses on at least four types of the ten highlighted in the model.
Doblin’s 10 Types of Innovation
Doblin’s 10 Types of Innovation model categorizes the innovation opportunities into three sections; Configuration, Offering, and Experience. Each of these categories include related types of innovation as following:
The configuration types are related to the organization or business configuration such as the profit model used in the business, the structure of the business and the process. The configuration is considered the backend of the innovation process, it is related to the core of the business. Three types are listed in this section as following:
1- Profit Model
This type of innovation involves how the company profits from its products and services. Exploring innovative profit models can improve the company’s competency position. This model is based on analyzing the market and these analytics lead to the exploration of new product and services. For example, Dell innovated a business model based on this type by collecting money from the consumer before the computer was assembled and shipped, this contributed to achieving a positive working capital of eight days. Apple Music store provided an innovative profits model through offering music tracks and movies online for purchase or rent.
This model tends to join forces and connect with others in order to reach more innovative solutions. In the Open innovation model, the company builds partnership or contributes with new partners to reach successful products and services. A good example would be Lego partners with its consumer through Lego Ideas website. In this online platform, consumers submit new Lego set ideas, the winning submission may turn to real products with possible profit sharing.
This type focuses on the company’s internal assets and resources including human resources in a creative way in order to create value. For example, this model may involve creating new business units that focus on specific tasks such as research and analytics. Starbucks aims to deliver exceptional consumer experience through hiring part-time educated and professional employees.
This type is related to the process of innovation, which focuses in all the innovative factors related to the actual process inside the company and how one can improve it in order to create a market value. This type includes implementing chain supply and logistics processes. Walmart continued to grow its profit through the usage of real-time inventory management systems. Also, they implemented aggressive volume/price/delivery contracts with its merchandise providers, which allowed store management to respond quickly to buyer behaviors. Another example is the Connect+Develop strategy implemented by P&G to accelerate innovation inside the company.
The Offering category focuses on the product performance and system as described below:
5- Product Performance
This type of innovation is related to the design of the product or offering. This includes the product’s basic features and functions and how to build an innovative product or service that can achieve success in the competing market. This type of innovation works closely with the design process as the core focus of the designer is to develop innovative product ideas and turn these ideas into a successful final product. One of the examples of this type of innovation is the VW Beetle car in both the old and new shapes. VW stormed the market with this innovative product after analyzing multiple factors, which lead to a successful innovative product that remains for years as one of the unique automotive designs.
6- Product System
As an extension for the product performance, the product system involves the related ecosystem of the product such as complementary products and services. For example Nike extended its product base to include apps and devices that become part of the sport lifestyle.
This category is closely related to the consumer. Unlike the configuration categories, this is front-end innovation which connects with the final product branding and consumer experience. Four type of innovation involve this category as following:
Service innovation centers on how to provide a value for the consumer through the related services of the offering. The innovation related to the consumer experience and service can be seen in international airlines such as the Singapore Airlines. The company tends to provide extraordinary experience for its consumers to make them feel they are not flying at all.
The channel type of innovation is related to the how the product or service will be delivered to the end consumer. This can include new approaches to deliver the product to the consumer. For example, Nespresso locks its customers with its members only club. Martha Stewart deeply understood her consumer and was able to develop small home living products that are frequently used by the target consumers such as stores, magazines, TV Shows…etc.
This type of innovation involves the reputation and perception of the final product or service. Building a brand value contributes to a better competency position in the market while building empathy between the consumer and the product. Lego was able to present its products as a leading manufacturer of bricks toy making through developing new sets and understanding the consumer preferred movies and characters. This all helped contribute to building an empathic relation between its products and the consumer.
10- Customer Engagement
This type of innovation centers on how to build an engaging experience between the consumer and the product. This innovation type tends to research the methods and creative ideas to extend the consumer experience. For example, the Wii devices expanded consumer interaction with the product from the screen to the physical environment around the player.
The Doblin’s 10 types of innovation tends to extend a companies’ perception of the innovation process by widening the definition of innovation beyond the product and technology. Implementing related types of innovation inside the company increases the chances of success in building an innovative product and/or services. While many companies fail to innovate due to the focus on one type rather than the others, successful models produce examples by using multiple innovation types in their business model such as Apple Music. Products such as iPod, iTunes, and Apple Music Store is guided by one business model, which implements eight types of innovations; profit model, networking, process, product performance, product system, channel, brand, and customer experience.