10 Types of Innovation for Sustainable Success

The word "innovation" is used a lot these days, but what does it really mean?

While the dictionary tells us it’s “a new method, idea, product, etc.”, that doesn't help much when we try to define what makes something truly innovative

This article provides a structured framework on how to categorise innovations, inspired by Doblin's 10 types of innovations. This framework, known for its simplicity and universal applicability, will help anyone get a clear sense of how to think about and evaluate innovation.

What is the framework?

Doblin’s Ten Types of Innovation is a well-established framework designed to assist organisations in spotting new opportunities and nurturing viable innovations. Created by the innovation firm Doblin, now a part of Deloitte, it aims to offer a structured approach to innovation by categorising it into three fundamental groups: configuration, offering, and experience.

• Configuration refers to the inner workings and behind-the-scenes mechanisms of an organisation or a product.

• Offering encompasses the external aspects such as how products are packaged and sold.

• Experience delves into the manner in which customers interact with the product or service.

Below you can see the 3 groups are broken down into 10 innovations.

To develop the framework they studied over 2000 successful innovations and found common innovation characteristics.

Doblin then broke down a companies’ innovation into two categories:

• Simple Innovation: This involves utilising one or two of the ten types of innovation. While this approach is easier to manage, it generally offers limited potential for long-term success.

• Sophisticated Innovation: A more complex strategy that integrates several of the ten types of innovation in a complementary manner. Despite being challenging to implement, it tends to afford a substantial competitive advantage over time.

As a start-up, you will most likely begin with simple innovation, but once your company scales and the market matures, venturing into sophisticated innovation becomes increasingly important.

Below you can see the performance of simple and sophisticated innovations in comparison to the S&P 500.

How can you apply this framework?

As a business leader, it is critical to apply Doblin's Ten Types of Innovation framework to gain a clear understanding of your business's current innovation status.

Start the process by carrying out a detailed assessment of your products, services, or market strategies against each of the ten types highlighted in the framework, which might involve critically evaluating your business model, internal processes, or customer engagement strategies to pinpoint both strengths and areas that require improvement.

Once you have a clear picture, the next step is to come up with a plan to foster innovation in the identified areas, grounding your strategies in the insights derived from the framework's detailed analysis.

What are the ten types of innovation?

Now let’s dive into the ten innovation areas:

Configuration

These types of innovation focus on an enterprise's innermost workings and business system.

Profit model
How you make money.

Innovative profit models find new ways to convert a firm’s offerings and other sources of value into revenue. Great models reflect a deep understanding of what customers and users want and where new revenue or pricing opportunities might lie.

For example, how Netflix turned the video rental industry on its head by implementing a subscription model.

Network
How you connect with others to create value.

Through network innovations, businesses can utilise the assets of other corporations, including processes, technologies, and offerings. These collaborations can vary in duration and assist in risk-sharing when launching new initiatives and ventures.

For example, how Target works with renowned external designers to differentiate itself

Structure
How you organise and align your talent and assets.

Structure innovations are centred on the distinctive arrangement of a firm's resources, be it physical, human, or intangible, to foster value. Optimally, these innovations not only foster highly productive work settings but also attract high-calibre talent.

For example, how Whole Foods has built a robust feedback system for internal teams

Process
How you use signature or superior methods to do your work.

Process innovations refer to the essential tasks and operations that generate a company's primary offerings. These innovations, typically central to a business's core competency, may include patented strategies that build long-term advantages, sometimes persisting for decades.

For example, how Zara’s “fast fashion“ strategy moves its clothing from sketch to shelf in record time

Offering

These types of innovation are focused on an enterprise's core product or service, or a collection of its products and services.

Product performance
How you develop distinguishing features and functionality.

Product performance innovations focus on enhancing a product's value, features, and quality, either through the creation of brand-new offerings or substantial updates to existing lines. While important, it represents only a fraction of the broader Ten Types of Innovation framework. This type is often the most vulnerable to competitive copying, rendering long-term advantages gained through product performance innovations rather rare.

For example, how OXO Good Grips cost a premium but its “universal design” has a loyal following

Product system
How you create complementary products and services.

Product system innovations focus on the manner in which individual offerings can interlink or bundle to form systems that are both robust and capable of scaling. Promoted through elements such as integration, interoperability, and modularity, these innovations bridge gaps between distinct offerings, creating value. The objective is to craft ecosystems of products that work together.

For example, how Nike+ parlayed shoes, sensors, apps and devices into a sport lifestyle suite

Experience

These types of innovation are focused on more customer-facing elements of an enterprise and its business system.

Service
How you support and amplify the value of your offerings.

Service innovations focus on improving the usability, efficiency, and perceived worth of a product. By making a product more accessible, enjoyable, and highlighting unnoticed functionalities, these innovations strive to rectify issues and create a smoother customer journey. When implemented correctly, they can transform unremarkable products into experiences that captivate customers, encouraging them to return time and time again.

For example, how “Deliver WOW through service” is Zappos’ #1 internal core value

Channel
How you deliver your offerings to customers and users.

Channel innovations involve all the strategies used to connect your company’s products and services with end-users and customers. Even with the rising dominance of e-commerce, conventional methods including physical stores continue to play a crucial role, notably in establishing immersive experiences. Expert innovators explore a variety of approaches to reach their customers, striving to facilitate purchases that are convenient, affordable, and immensely satisfying.

For example, how Nespresso locks in customers with its useful members only club

Brand
How you represent your offerings and business.

Brand innovations aim to ensure that your offerings stand out and are preferred compared to competitors or substitutes in the minds of customers. Generally, these innovations stem from strategies that span across several touch-points, including advertising and interaction at various levels of service and channel environments. Moreover, the coordinated conduct of employees and business associates is integral. Successful brand innovations can transform commonplace commodities into valued products, bestowing your offerings and your business with meaning, purpose, and value.

For example, how Virgin extends its brand into sectors ranging from soft drinks to space travel

Customer engagement
How you foster compelling interactions.

Customer engagement innovations are all about understanding the aspirations of customers and users and using those insights to develop meaningful connections between them and your company. Great customer engagement innovations provide broad avenues for exploration and help people find ways to make parts of their lives more memorable.

For example, how Wii’s experience draws more from the interactions in the room than on-screen

Doblin's 10 Types of Innovation framework categorises innovation into three core groups - configuration, offering, and experience - to support businesses in identifying and leveraging new opportunities. By encouraging a transition from simple to more sophisticated innovation strategies, the framework guides startups and established firms alike towards sustainable growth and a robust market presence.

Utilising this well-rounded guide can facilitate a deep understanding of your business’s current standing and pave the way for a future marked with heightened innovation and success.

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