Regardless of what kind of business you are in there are numerous different types of innovation that can give you a clear competitive advantage and make you more successful. The most common types of sustaining innovation are:
Application Innovation: This is when you find a new use for an existing product, tapping into a new base of customers and potential.
Product Innovation: Creates a difference with an existing product line and existing market, usually through features.
Enhancement: This is usually a small change to create a difference between other offerings. (For example, offering in a different color or size).
Line Extension: Takes an existing line and makes a change to set it apart and create differentiation. Line extensions are one of the most common types for companies in a mature market.
Experiential: In markets where most offerings are the same you can create a difference through the experience. For instance with airlines, you can create a difference by creating a better user experience if most airlines have the same expectation . Several airlines have focused on creating a more friendly experience, better lounges, a better business class, in-flight entertainment, food, etc. The experience applies to almost every kind of business. This includes customer service and sales innovations that affect the customer experience.
Marketing Innovation: You can create difference by the way you connect with your customers and the tools you use to reach them. Absolutely everything affects your customers perception of you, down to the font and pictures on your website. If two companies have similar offerings but one has superior marketing with more beautiful pictures and a more professional looking website, they will be perceived as being a superior product and given increased price permission.
Value Engineering: Innovation that helps decrease the cost of parts and labor, giving you a price advantage or increasing margins.
Process Innovation: Streamlining of the workflow to reduce cost and be quicker to market.
They key to accessing the potential of all these different types of innovation is:
Having a platform for ideas
There needs to be a place where every internal employee can share their ideas to improve the company. It’s important this includes everyone since the people at the middle and bottom are the closest to the field of action and know the challenges and solutions they face better than executive management. They are also in most instances closer to the customer and know their needs and frustrations.
Having a bunch of great ideas is helpful but there must be a process for deciding which have the greatest ROI. Voting metrics and bi-monthly metrics can be used here.
Those tasked with implementing ideas should provide regular updates and there should be follow-up after the innovation has been fully adopted to evaluate how it has gone.
When we created the Collective Innovation Idea Management System it was to solve all of these problems and allow full internal or external engagement. It’s very important for management to reward participation in some way as this sets a culture that encourages active involvement and lets your employees know how important their continued engagement is to you. Recognize those whose ideas go on to become popular products or significant cost savings.
Innovation isn’t a destination but a continuous journey with companies succeeding or failing based on their ability to adapt through innovation in process, sales, marketing, product, engineering and experiential types of innovation. Look at a company like Hilton for instance. For Hilton to survive they must constantly be developing a better hotel (product), a more unique and personalized experience (experiential), better dynamic pricing (sales), new revenue per location forecasts (sales), more effective marketing, decreased costs from suppliers (process) – it’s a constant flow that should not stop with just focusing on the product. In many industries the product is so commoditized that the only way to stay competitive is through things like engineering, process, sales and marketing. The goal for these companies is lowering costs, finding new sales opportunities and creating better marketing channels.