The PeopleAlchemist Edit: change & transformation, business & lifestyle experimentation for TheWomanAlchemist
Creativity and Innovation in business is a topic that has many different components and dimensions. Beyond the abstract concept, Innovation is a multidisciplinary field with several models, theories, and frameworks.
The idea, however, that an organisation is either innovative or not is misleading. This viewpoint fails to capture the fact that organisations can pursue different types of Innovation and that there isn’t just a single way to innovate.
Types of Innovation
DISRUPTIVE AND SUSTAINING INNOVATION
Clayton Christensen was the first to introduce the concept of Disruptive Innovation in 1995, which refers to an idea, product or service that creates a new value network either by disrupting an existing market or creating an entirely new market.
At the beginning of the life cycle of Innovation, Disruptive Innovation generally provides a lower performance.
On the other hand, when talking about Sustaining Innovation, it talks about the type of innovations that exists in the current market and improves and grow the existing ones.
RADICAL AND INCREMENTAL INNOVATION
Both types of Innovation mentioned can be either radical or incremental.
Radical Innovation occurs when a new technology completely disrupts the existing business and creates a new business model. Only about 10% of innovations are so-called radical.
Incremental Innovation, instead, refers to a series of minor, gradual built improvements to existing products, processes or methods. The majority of innovations are incremental.
These types of Innovation can be “mixed and matched.”
- Radically disruptive – new technology and a new business model. Has no clear competitors.
- Radically sustaining – Improvement of a product or process in an existing market providing unique value.
- Incrementally disruptive – incremental improvement in technology leading to dramatic disruption.
- Incrementally maintaining – Small and cumulative changes in a current product, technology or service.
There are many theories and models for Innovation; however, they can all be grouped into six distinctive categories: creator, solution builder, leverager, expander, defender, and fast follower.
- A Creator model feeds into the popular notion of highly innovative companies: disruptive of their markets, led by visionaries and focused on big-ticket items.
- On the other hand, the Solution builder type of model is inspired by the market for its Innovation, looking to address its customer base priorities and issues.
- The Leverager type model creates an advanced business model to capitalise on it and become the industry leader.
- The Expander type of model uses instead of core capabilities in innovative ways to overtake adjacent markets and drive growth.
- The Defender type model innovates more defensively to protect their competitive advantage, usually in more mature markets. However, with technology advancing so rapidly and taking over many industries, this model is becoming riskier. The key to success is monitoring the landscape for potentially disruptive innovations and defending against them using partnerships and acquisitions.
- The Fast Follower type of model optimises its capabilities across all dimensions to respond to quickly—and often improve—competitive innovations.
Creativity and Innovation in small businesses
Choosing the suitable innovation model for a company is all about context, especially industry context.
A company’s particular context is also critical when choosing the best innovation model. This is even more important for small businesses.
Some useful questions to ponder on:
- How important is Innovation to your business strategy and its competitive position?
- Is Innovation in your company a growth engine or a defensive tool?
- How important is your brand, and what is the current strength of your brand equity?
- Do you have innovation-related capabilities, and how strong are they?
- How much can you invest?
- How quickly does your sector change?
- Which model should you choose? And why?
- Do you have processes and structures already aligned with such a model, or would adoption of the model require major changes?
- Would the model give you a competitive advantage?
Creativity and innovation are essential, especially the ability and power to pivot. We talked about before how when everything around you changes; change is the only way forward.
When choosing a model, it does help to look at your competition and what they are doing or doing badly and the investment required.
Moving to a new model or reorganising capabilities within your company are the critical and challenging parts of transforming a company’s innovation capability.
The innovation models mentioned above all have defined design principles and governance. However, everything needs to link to the company’s organisational structure and culture, tools and processes for idea generation, commercialisation, key metrics and measures.
And this is where small businesses may encounter the most difficulties.
The Unlock Ignite Transform Framework
After the initial growth spurt and having officially moved into SME status but still not big enough to have a separate function/team just looking at innovation is the crucial time to create and implement a cultural environment that fosters creativity, innovation and the power to pivot, whilst business leaders need to nurture their own capacity for creativity and innovation and lead.
The next step is to unlock the team/s creative potential and engagement and generate new ideas or solutions ready to be validated and pilot/pivot. And then apply and implement powerful creative problem-solving techniques to the business and create and optimise a sustainable creative environment with an easy process for strategic innovation.
This will protect your organisation from being disrupted or left behind in a rapidly evolving business climate.
I’m currently putting together an online course that will show small business owners/leaders a step by step how-to apply the above in practice with The Unlock Ignite Transform Framework, which provides:
- A constant strategic innovation system
- Actionable steps you can take in your business right now
- Bitesize lessons for “just-in-time” learning that you can go back and use as and when you need it. And only what you need
- Templates and exercises you can use straight away
- Implementation roadmap
Enquiries and bookings open.