What comes to mind when you think about innovation? Is it that new groundbreaking product or service? Is it that new idea that will change the world, something like when Apple launched its first iPhone or even longer ago when the first computer was developed? Is it that new fully autonomous vehicle or that new service like Uber and Airbnb? It could be that one of these previously mentioned products or services was the first thing that occurred in your head when you thought about innovation, but these products and services are not all that innovation is. Of course, these products and services are the groundbreaking ideas that you think about when you are asked the question what it is that comes to mind when you think about innovation, but innovation is more than groundbreaking ideas.
When people have to come up with new innovations, they often make the mistake of thinking about new technologies or products, but innovations can be found in more areas than technology. Innovation can be applied in all fields and all organizations. However, there are also examples that are often not thought of when asked about innovation, an example of this is the creation of a new financial model, this can be as innovative as the development of a new smartphone. To provide a better image of where innovation can be applied, we have created four specific segments. These segments consist of finance, products, process and market.
Definition of innovation
“Innovation is the process of realizing new products, processes, propositions, or business models to create added value for customers and/or employees”
The most important part of this definition is that the new idea should add value for customers and/or employees. When it doesn’t add value it is just an idea, but when it adds value it transforms into an innovation. In order to create this value, it is important to include the end users from the start of the innovation process. The innovations are made for the end users and including them from the start of the process will ensure satisfaction.
For the organization, innovation is an investment that should provide added value. However, investment is first needed before a return is received. It is important to realize that innovation processes should be performed properly and if this is the case that innovation is able to provide a large amount of value for your organization. Furthermore, depending on the type of innovation this also means that the duration of the innovation process can be long before a return on investment is received.
Three types of renewal
To provide more insight into the definition of innovation, we separate three types of innovation within the domain of renewal.
Invention describes organizations that perform their own research and development, with the aim to produce new inventions. Innovation doesn’t necessarily take shape as a big invention, but it can be. The main aim is, however, to introduce something new into your organization that is not new to the world, but new to the organization or your customers. Improvements are projects that enhance the products, services, and/or processes of your organization.
In order to better explain the different types of innovation, we introduce an example company called Innovationlands. Innovationlands is a relatively new theme park located in Rotterdam, the Netherlands and has been open for three years. The company will introduce all three types of innovations, to provide a better understanding of the different concepts. An Improvement for Innovationlands would be to change the maintenance processes by outsourcing these processes to a maintenance company. An example of Innovation would be to introduce a new waiting line system that provides tickets containing a specific time at which customers can enter the attraction. An Invention would be to introduce a new rollercoaster that travels underwater through a transparent slide/tube. This rollercoaster design, including the transparent slide, will provide the customers with the opportunity to see the fish, the underwater world and to experience roller coasters in a new way.
Three horizons model
The three types of renewal model provide a stepping stone to the three horizons model. The three horizons model consists of the following three horizons: incremental innovation, new innovation and disruptive innovation. The ranges of the different horizons are based on the level of technology & solution newness and market & customer newness. There is an overlap between the two models, the incremental innovations can be seen as the improvements described in the three types of renewal model, the new innovations can be described as the innovations, and the disruptive innovation can be seen as inventions.
Incremental innovation can be explained as activities that are well known to the organization and are aligned with your current business. New innovations are innovations that are new to the organization, so new to us and uses something that is existing in the world and applies it to the organization. Disruptive innovations are innovations that are new to the industry. This category introduces entirely new elements and can also be explained as radical innovations.
What can innovation do for your company?
Both these models provide insight into the definition of innovation, it provides an opportunity to position your company and provides a better understanding of what innovation is. But what can innovation do for your company? Innovation provides your company with the opportunity to remain competitive in the market, to decrease costs, increase revenue and provide opportunities in new markets.
We hope that this article has provided you with a good understanding of what innovation is. If you want to know more about how you can apply innovation to your company, try reading the other articles on the website of Creatieve Koppen.
Are you interested in innovation and what it can do for your company? Follow our articles and contact us so we can help you take that next step towards continuously successful innovations.
