Innovation is not just about having a great idea or a creative mind. It is also about choosing the right type of innovation for the right type of problem. There are four basic types of innovation: basic research, sustaining innovation, breakthrough innovation, and disruptive innovation. Each one has its own characteristics, goals, methods, and challenges.
In this article, you will learn:
- The four types of innovation and how they differ from each other
- How to identify what kind of problem you are trying to solve and what kind of innovation you need
- How to apply the best practices and strategies for each type of innovation
- How to avoid the common pitfalls and challenges of innovation
By the end of this article, you will have a clear framework and a powerful toolkit to solve any problem with the right type of innovation. Ready to get started? Let’s dive in!
The Four Types of Innovation: What They Are and Why They Matter
Innovation is not a one-size-fits-all solution. Different types of problems require different types of innovation. According to Greg Satell, the author of Mapping Innovation, there are four basic types of innovation:
- Basic Research: This is the type of innovation that seeks to discover new knowledge and understand the underlying principles of nature. It is often driven by curiosity and scientific inquiry, without a clear application in mind. Examples of basic research include Einstein’s theory of relativity, and Watson and Crick’s discovery of DNA.
- Sustaining Innovation: This is the type of innovation that seeks to improve existing products or services usually for the existing market or customers, by making them faster, cheaper, or better. It is often driven by customer feedback and market competition. Some examples of sustaining innovation are:
- New products and services that improve existing ones, such as better cameras, increased battery life, larger screens and enhanced processing power for smartphones.
- New distribution channels that reach more customers or markets, such as online platforms, delivery services, or subscription models.
- New support and production technologies that increase efficiency or quality, such as automation, artificial intelligence, or biotechnology.
- Geographical expansions that tap into new regions or countries, such as entering emerging markets or developing countries.
- Eco-friendly solutions that reduce environmental impact or increase social responsibility, such as biofuel made from coffee waste or solar power.
- Breakthrough Innovation: This is the type of innovation that seeks to create new products or services that address unmet needs or create new markets. It is often driven by visionary entrepreneurs and creative thinkers, who challenge the status quo and disrupt existing industries. Some examples of breakthrough innovation are:
- Tesla and other electric vehicles that challenged the automotive industry by offering a cleaner, smarter, and more efficient alternative to conventional cars with new technology and a new business model.
- Microsoft and its Office 365 suite that changed the software industry by shifting from a product-based to a subscription-based business model with existing technology.
- Disruptive Innovation: This is the type of innovation that seeks to transform existing products or services by making them more accessible, affordable, or convenient. It is often driven by new entrants and outsiders, who target low-end or niche markets and eventually overtake incumbents. Some examples of disruptive innovations are:
- Netflix and other streaming services that disrupted the entertainment industry by offering a cheaper, more convenient, and personalized alternative to cable TV and DVD rentals.
- Online education that disrupted the education industry by providing flexible, affordable, and personalized learning opportunities for students of all ages and backgrounds.
These four types of innovation are not mutually exclusive or sequential. They can coexist and complement each other in different ways. However, they have different characteristics, goals, methods, and challenges. Therefore, it is important to understand them well and choose the right one for your problem.
How to Choose the Right Type of Innovation for Your Problem: A Simple Matrix
The first step to choosing the right type of innovation for your problem is to understand what kind of problem you are trying to solve. Satell suggests using the following matrix to classify your problem:
| BREAKTHROUGH INNOVATION (Problem space well-defined) (Domain not well-defined) | SUSTAINING INNOVATION (Problem space well-defined) (Domain well-defined) |
| BASIC RESEARCH (Problem space not well-defined) (Domain not well-defined) | DISRUPTIVE INNOVATION (Problem space not well-defined) (Domain well-defined) |
The matrix has two dimensions: domain definition and problem definition. Domain definition refers to how well you understand the field or industry you are operating in. Problem definition refers to how well you understand the specific challenge you are facing.
Depending on where your problem falls on the matrix, you can choose the most appropriate type of innovation:
- Basic Research: If your problem is in a poorly defined problem space and poorly defined domain, you need basic research to explore new possibilities and generate new knowledge. This type of innovation requires a lot of experimentation, collaboration, and serendipity.
- Sustaining Innovation: If your problem is in a well-defined problem space and well-defined domain, you need sustaining innovation to optimize your existing solutions and stay ahead of the competition. This type of innovation requires a lot of customer feedback, data analysis, and incremental improvement.
- Breakthrough Innovation: If your problem is in a well-defined problem space but poorly defined domain, you need breakthrough innovation to create new solutions that address unmet needs or create new markets. This type of innovation often requires exploration of adjacent, unconventional or diverse skill domains.
- Disruptive Innovation: If your problem is in a poorly defined problem space but well-defined domain, you need disruptive innovation to transform existing solutions by making them more accessible, affordable, or convenient. When the basis of competition changes due to factors like technological advancements or shifts in the market, companies may face a situation where they become increasingly proficient in providing things that people are gradually becoming less interested in. In such cases, simply improving or introducing new products may not be sufficient to address the problem. Instead, companies need to focus on innovating their business model. This means that companies should consider rethinking their fundamental approach to how they create, deliver, and capture value in the market. They need to explore new ways of conducting business, such as identifying new customer segments, exploring alternative distribution channels, or adopting different pricing strategies. By adapting their business model to align with the changing landscape, companies can increase their chances of remaining competitive and meeting evolving customer demands.
The matrix is not a rigid or definitive tool, but a helpful guide to orient yourself and choose the right type of innovation for your problem. You may find that your problem shifts from one quadrant to another over time, or that you need to combine different types of innovation to achieve your goals. The key is to be flexible and adaptable, and to use the matrix as a starting point, not an end point.
How to Apply the Best Practices and Strategies for Each Type of Innovation
Once you have identified the type of innovation you need for your problem, you can apply some best practices and strategies to increase your chances of success. Here are some tips for each type of innovation:
- Basic Research: For basic research, you need to foster a culture of curiosity and exploration, where you are open to new ideas and willing to take risks. You also need to collaborate with other researchers and experts from different fields and disciplines, to cross-pollinate your knowledge and insights. You also need to be patient and persistent, as basic research can take a long time and have uncertain outcomes.
- Sustaining Innovation: For sustaining innovation, you need to listen to your customers and understand their needs, preferences, and pain points. You also need to analyze your data and metrics, to measure your performance and identify areas for improvement. You also need to constantly test and iterate your solutions, to make them faster, cheaper, or better. Design thinking methods can be extremely valuable when both the problem to be solved and the required skills are well understood.
- Breakthrough Innovation: For breakthrough innovation, you need to have a clear vision and a bold ambition, where you aim to create something new and valuable that no one else has done before. You also need to have a creative mindset and a divergent thinking style, where you generate many ideas and explore different possibilities. You also need to have a lean approach and a prototyping mentality, where you validate your assumptions and learn from your failures.
- Disruptive Innovation: For disruptive innovation, you need to identify an underserved or overlooked market segment, where you can offer a simpler or cheaper alternative to existing solutions. You also need to have a customer-centric approach and an empathetic understanding of your target audience, where you deliver what they want and need. You also need to have an agile mindset and a flexible strategy, where you adapt to changing conditions and overcome challenges.
How to Avoid the Common Pitfalls and Challenges of Innovation
Innovation is not easy or straightforward. It comes with many pitfalls and challenges that can derail your efforts or hinder your progress. Here are some common ones that you should be aware of and avoid:
- The Not-Invented-Here Syndrome: This is the tendency to reject or ignore ideas that come from outside your own group or organization. This can limit your perspective and prevent you from learning from others or leveraging existing solutions.
- The Sunk Cost Fallacy: This is the tendency to continue investing in a project or idea that is not working or delivering results, because of the time or money already spent on it. This can lead to wasting resources and missing opportunities.
- The Confirmation Bias: This is the tendency to seek or interpret information that confirms your existing beliefs or assumptions, while ignoring or dismissing information that contradicts them. This can lead to making poor decisions or overlooking flaws in your solutions.
- The Fear of Failure: This is the tendency to avoid taking risks or trying new things, because of the possibility of making mistakes or facing criticism. This can lead to missing out on learning opportunities or settling for mediocrity.
To avoid these pitfalls and challenges, you need to cultivate a growth mindset and a learning attitude, where you embrace uncertainty and feedback, and see failure as an opportunity to improve. You also need to be humble and curious, where you acknowledge your limitations and seek help from others when needed.
Conclusion: How to Solve Any Problem with the Right Type of Innovation
Innovation is not a magic bullet or a silver bullet. It is a process that requires careful planning, execution, and evaluation. It also requires choosing the right type of innovation for the right type of problem.
In this article, we have learned:
- The four types of innovation: basic research, sustaining innovation, breakthrough innovation, and disruptive innovation
- How to identify what kind of problem you are trying to solve and what kind of innovation you need
- How to apply the best practices and strategies for each type of innovation
- How to avoid the common pitfalls and challenges of innovation
By following these steps, you will be able to solve any problem with the right type of innovation. You will also be able to create something new and valuable for your customers, your industry, or the world.
