Types of innovation
What Hewlett Packard did to slide-rules and mechanical adding machines manufacturers in the early 1970s, and what Henry Ford did in the 1900s to buggy manufacturers, also disrupted huge and well-established industries.
What is so interesting about these examples, is that quite often the first disruptor doesn’t necessarily become the dominant player. The honour of building the first hand-held calculator belongs to Texas Instruments (1967) and several other vehicle manufacturers (notably Benz) used combustion engines before Ford came to dominate the market.
It the development of new technologies (solid-sate integrated circuits and the internal combustion engine) made these innovations possible, and the rest was history!!
The only difference between now and then is the pace at which new technological advances happens! Moore’s law can be applied to all technological advances – and it stipulates that the rate at which technology advances are exponential, rather than linear.
Moore’s law is the observation that the number of transistors in a dense integrated circuit (IC) doubles about every two years.
Gordon Moore, the co-founder of Fairchild Semiconductor and CEO and co-founder of Intel
The use of new technologies enables radical innovations that tends to disrupt the status quo.
Clayton M. Christensen wrote The Innovators Dilemma in 1997, and he was most probably the first to coin the term “disruptive innovation”.
Many of the examples cited in the book are very “industrial” and not at all what we see as disruptive innovation as the “latest internet do-da”, today. What is however very important for us about Christensen work is that he identified three types of innovation:
- Disruptive innovation (Christensen also later called this Empowering Innovation)
- Sustaining innovation, and
- Efficiency innovation
These three innovation types and associated innovation response greatly influenced the thinking (and approaches used) in ADapT and VeriSMTM.
All three the above innovation types can be transformational in nature, but it’s more likely that Disruptive and Sustaining innovation would fit our definition of Digital Transformation.
Although the VeriSM Digital Transformation Model succinctly summarises the differences between digitisation and digital transformation, and puts these two approaches in context with the three types of innovation Christensen identified, we have since seen that the analogy is an over-simplification. Digital Transformation simply just don’t fit into a box!
What makes the VeriSM DT Model, helpfull though is that it defines the three board areas of focus for innovation that we will also use in ADapT, namely (we will also use the VeriSM names for each innovation type):
- Operational innovation: Automate existing processes to gain efficiencies and scale.
- Customer focused innovation: Transform the customer experience of existing products and services, by leveraging the advances of new technologies, and
- Future focused innovation: Out-innovate the competition to create the next version of what your industry, its products and services looks like!
The distinction between these types of innovation is key – you will later see that an entirely different set of rules applies to each and different methods and tools are used in each case!
NOTE:
When a new startup comes up with a new idea that turns an industry on its head it is Disruptive or incumbents but not for the startup, for them its an exciting new opportunity that Empowers them to do something new. Strange how perspective can change how you see something ultimately. If you are the startup, your new idea is Empowering Innovation and for everyone that you effective its Disruptive Innovation – yet its exactly the same innovation!