Ten Types of Innovation

The Discipline of Building Breakthroughs

Larry Keeley, Helen Walters, Ryan Pikkel, Brian Quinn

• Publisher: Wiley
• Year: 2013
• ISBN:
  9781118571392
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Innovation principles to bring about meaningful and sustainable growth in your organization

Using a list of more than 2, 000 successful innovations, including Cirque du Soleil, early IBM mainframes, the Ford Model-T, and many more, the authors applied a proprietary algorithm and determined ten meaningful groupings—the Ten Types of Innovation—that provided insight into innovation. The Ten Types of Innovation explores these insights to diagnose patterns of innovation within industries, to identify innovation opportunities, and to evaluate how firms are performing against competitors. The framework has proven to be one of the most enduring and useful ways to start thinking about transformation.

• Details how you can use these innovation principles to bring about meaningful—and sustainable—growth within your organization
• Author Larry Keeley is a world renowned speaker, innovation consultant, and president and co-founder of Doblin, the innovation practice of Monitor Group; BusinessWeek named Keeley one of seven Innovation Gurus who are changing the field

The Ten Types of Innovation concept has influenced thousands of executives and companies around the world since its discovery in 1998. The Ten Types of Innovation is the first book explaining how to implement it.

Part One
Innovation: A New Discipline Is Leaving the Lab

Now and then a new science emerges that radically changes how a field is conducted. This is precisely what is occurring now in the modern practice of innovation. But beware: myths are abundant and are exceptionally hard to eradicate.

Chapter 1
Rethink Innovation: Eradicate Lore, Substitute Logic

When it comes time to innovate, even executives who deeply appreciate the discipline that modern management science has produced in finance, marketing, or logistics seem willing to tolerate all sorts of nonsense.

Too often, innovation is reduced to a series of brainstorming sessions, where facilitators proclaim things like, “Hey, there’s no such thing as a bad idea!” (Actually, there really is such a thing as an indisputably bad idea.) Or innovation may be separated from the rest of the enterprise in a special lab or unit, a thin effort to quarantine the crazies. There, we feel like it’s only proper to crank up the creativity. We put people in a room, festoon the tables with toys, Nerf balls and guns, Post-it Notes, markers, and fun foods—all because innovation is supposed to be playful. Our use of sticky notes and black Sharpie markers has become almost fetishistic,¹ one of the many rituals in our collective cult of innovation.

Here’s the problem—evidence shows that such techniques do not actually lead to better outcomes. A number of years ago, we researched innovation efforts in industries such as manufacturing and services. A full 95% of these efforts failed. A glance around at the state of contemporary innovation suggests we’ve gotten a little better, but still do plenty of things that are more grounded in hope or habit than evidence. This is unacceptable. We are overdue for a revolution in the way innovation is diagnosed, developed, fostered, de-risked, launched, and amplified.

Our ambition is to make innovation a systematic approach, moving the field from a mysterious art to more of a disciplined science. The Ten Types of Innovation is part of the foundation of that ambition. We know we are not working on anything as fundamental as the Human Genome Project nor as empirically proven as the periodic table (though we were inspired by the latter). The last thing we are trying to do is to shroud innovation with a different cloak. We use scientific analogies throughout this book to help illustrate our ambition rather than mirror our claims.

Nonetheless, our work over the decades has shown us that using the Ten Types of Innovation demonstrably increases your innovation hit rates. It will help you generate innovations that earn disproportionate returns and that are more difficult for competitors to copy. Sure, it’s not foolproof. Innovation depends on many factors we couldn’t possibly account for in one book (or actually any book). We can’t promise that you won’t run into problems and we can’t guarantee success (and anyone who does so is a huckster and a charlatan). But we are convinced that by thinking about innovation in a more systemic way, you improve your chances of building breakthroughs.

If you’re reading this book, you probably agree that the world needs more innovation now than ever before. We are going through one of the most intense periods of change our small blue planet has ever seen. During such times, the ability to innovate—to evolve, adapt, and improve—is indispensable. Indeed, in the midst of commercial globalization, shifting cultural and social norms, and increasing scarcity of natural resources, our continued success as a species may depend on it.

For enterprises, this means that companies must innovate in order to survive and thrive. Nothing lasts forever, and many companies that make a splash with one innovation fail to follow up on their success. As Jack Welch, the former CEO of General Electric, famously commented in December 1997, “I take absolutely no comfort in where we are today.”² Meaning that if you aren’t moving faster than the rest of the marketplace, you’re already dead; you just haven’t stopped breathing yet.

Even companies with dominant positions can find themselves overtaken by firms playing by different rules. Once-mighty Kodak enjoyed a storied history before declaring bankruptcy in 2012. What’s sobering is that its executives were not, as conventional wisdom would have it, blindsided by the emergence of digital technology. Indeed, they were primary pioneers of the digital photography field. But, as is so often the case, these “new” areas were small and easily dismissed—while sales of photo and cinema film paid all the bills.

This relentless imperative for more effective innovation is our reason for existence. This imperative has driven us over the last 30 years to study what works—to analyze innovation successes and look for patterns in their inputs and precursors. It has called for us to demystify our work as innovators and document, as plainly as possible, our practices and their outcomes. It has demanded that we establish a nuanced and precise taxonomy for innovation in all its forms and permutations. We share all of this so that we can all speak a more common and useful language. Our goal here is to codify and clarify what, in our experience, makes innovation work instead of fail.

Defining Innovation

Through overuse, misuse, hype, and enthusiasm, the word innovation has essentially lost its meaning. We often confuse the outcome and the process, and we describe everything in breathless terms, whether it is a modest product extension or a market-creating breakthrough. The definitions we show here help establish a nuanced understanding of what innovators actually do.

1. 1 Innovation Is not Invention
   Innovation may involve invention, but it requires many other things as well—including a deep understanding of whether customers need or desire that invention, how you can work with other partners to deliver it, and how it will pay for itself over time.
2. 2 Innovations Have to Earn Their Keep
   Simply put: innovations have to return value to you or your enterprise if you want to have the privilege of making another one some day. We like to define viability with two criteria: the innovation must be able to sustain itself and return its weighted cost of capital.
3. 3 Very Little Is Truly New in Innovation
   Biologist Francesco Redi established the maxim: “Every living thing comes from a living thing.” Too often, we fail to appreciate that most innovations are based on previous advances. Innovations don’t have to be new to the world—only to a market or industry.³
4. 4 Think Beyond Products
   Innovations should be about more than products. They can encompass new ways of doing business and making money, new systems of products and services, and even new interactions and ...