So much has been written about innovation in recent times that it seems like nothing more than the latest management fad. This is probably because much of what is written in the mainstream and business press fails to be specific about what is meant by innovation, applying the term indiscriminately to anything that is new.
But to actually harness the potential of innovation, companies need to understand that innovation is a discipline, and one that - while integrative - still has specific and robust elements that can be embedded within organizations and practiced routinely.
So what is meant by innovation?
Innovation isn't just about coming out with a new product, yet companies routinely try to innovate by doing just that. Hot new products are often swiftly copied by competitors. To create a breakthrough, potentially disruptive and sustainable innovation, companies should look to incorporate more forms of innovation than just around the core features of an offering.
How can they do this? By using what Monitor calls the 10 Types of Innovation™ (refer graphic: '10 Types of Innovation™'), a proprietary framework that helps broaden the drivers of value of a particular innovation along a much bigger spectrum than just what the thing "does". Breakthrough innovations almost always include multiple Types of innovation: at least 3 - 4.
What definition is actually useful and practical in business? How does the '10 Types of InnovationTM' apply in Indian examples? To find answers to such questions, Business Today and Monitor Group jointly interviewed key leaders at <7> innovative organizations to study the reasons behind the success of their innovations. Each of the <7> organizations in this special Business Today/Monitor Group innovation study, exhibited 4 or more of the 10 Types of Innovations. They each illustrate how true breakthroughs are usually a set of innovative elements that work together as a holistic system and reinforce the defensibility of the new offering.
We believe Innovation is about creating and capturing value through non-traditional approaches. It isn't only for rapidly changing, technology companies either: the traditional brick and mortar companies included in our study-from agri-commodities to print media-have each realized market success and impact in their industries from innovation.
The value creation for an organization through a particular Type of innovation depends on the quantum of effort in each Type, and is often inversely correlated to how common that Type of innovation is within the industry context. Hence, it becomes essential to be aware of the patterns of innovation within your industry, and where your efforts may yield a disproportionate benefit.
In some cases, innovation around product or other areas may have become de facto table stakes within a given industry (think of consumer electronics, for example). To differentiate, a company has to seek additional innovation opportunities across the 10 Types to complement the new technology it can bring to consumers.
The required investment to out-innovate competitors when a given Type is heavily used by an industry may be far greater than looking at lesser used Types - so for consumer electronics companies, looking to innovate around Product System, Channel, or Networking may yield much more impact in the market, for comparatively less cost in terms of innovation effort.
Monitor's point of view is that to be called an innovation, a new product or service offering must be proven by success in the market-place. This keeps us disciplined and introduces a way to measure the innovation efforts of a company that resonates across senior management, employees, the street and other stake-holders.
To this end, we selected a small number of organizations to profile in this study. Though they come from many industries-and even the social and government sector-each has demonstrated outsize impact in India based on their innovation efforts. We carefully edited the selection to only include companies whose efforts have not been as recently or extensively reported as some of the usual suspects (e.g., Tata Nano, Aravind Eye Hospital).