Stewart McKie

27 February 2006
www.innomate.biz

Innovation Types

There are many different views on how to classify innovation. Innomation believes
that there are four types of innovation: Practice, Process, Product and Business
Model. These types are defined by the answer to three questions.

There are many ways of classifying innovation. For example, it’s usually agreed
that classifying innovation by objective results in two types: Sustaining and
Disruptive. Sustaining innovation builds on or leverages what is already in
place, whereas disruptive innovation undermines or creates a discontinuity from
what is already in place. Classifying innovation by impact results in two types:
Operational and Strategic. Operational innovation usually having immediate
tactical impact on individuals or teams and strategic innovation having deep and
long term impact on whole business units or even whole organizations.

Innomation believes that there are four types of innovation: Practice, Process,
Product and Business Model. These types are characterized by the answers to
three questions

• what is being innovated?

• who is being impacted?
• what is causing the innovation to get done?

A practice innovation changes the way that a specific task is done. It impacts
individuals or individuals within specific job roles. A process innovation changes the
way things are done but within a clearly defined business process context (e.g. supply
chain management). It impacts individuals operating in specific process roles up to
everyone involved in the process. A product/service (an intangible product) innovation
changes the way that a product works/service is delivered. It may impact a wide range
of both internal (i.e. employee) and external (i.e. customers/resellers/suppliers) product/
service stakeholders. A business model innovation changes the way that a business unit
or organization works. It impacts everyone in, and associated with, the business.
Business model innovation is done by introducing a new or changed strategy. Product/
service innovation is often done by leveraging the availability of new technology or
distribution channels (e.g. the Internet). Process innovation is done by redefining and
reengineering the process and practice innovation is done by introducing new tools or
techniques to improve the practice. In many cases it is innomation (innovation
automation) technology that determines what is doing the innovation. For example
practice could be innovated when a paper-based activity is done electronically; process
could be innovated when an enterprise resource planning (ERP) system is installed;
products could be innovated through the introduction of collaborative design tools.

Copyright Stewart McKie, 2005. For permission to re-use/quote contact sm@tripos.biz