2/8/2022 Types of Business InnovationOver the course of my 20-plus year career, I’ve had the opportunity to work with a lot of innovative products and brands, including Red Bull and medical cannabis. These companies that I’ve worked with are innovative primarily because they offered original, unique products to consumers.
But business innovation can be so much more than that. One type of business innovation is architectural or recombinative innovation. That’s where one takes an approach, technology or methodology from one field and applies it to another. Uber is one example of architectural innovation. Freelance workers, ride sharing and geolocation were not new ideas by the time Uber was launched. But Uber combined those technologies and models in a new way. And voila! An entirely new type of business was born. Architectural innovation shares some characteristics with another type of business innovation: Disruptive innovation, an idea popularized by Clayton Christensen, the American economist. Disruptive innovation is when a business creates a new market or enters an existing market but changes the way consumers interact with it. Netflix is a perfect example of disruptive innovation. Before Netflix, the only way we could watch movies and TV shows at home on demand was through a visit to Blockbuster. (Remember them?) Netflix changed the way we enjoy entertainment on our home television screens. A far-less sexy form of business innovation is incremental innovation, the most common form of innovation in business. Incremental innovation is when a series of small improvements eventually result in a large-scale change. This is the most accessible form of innovation – it can be achieved without huge budgets, big teams or even a major shift in business strategy. The razor company Gillette is a great example of this kind of innovation strategy. Gillette invented the world’s first safety razor and has been slowly refining its product for years to better address customer needs. Not flashy by any means, but obviously incredibly effective. Of course, radical innovation is the kind of innovation that comes to mind most when we think about business innovation. This is simply the introduction of revolutionary, game-changing technologies. It’s probably the rarest form of business innovation – but when it hits, it hits. Think about smartphones. The world was one way before smartphones and now so much is different because of their introduction. You could argue that someone who lived before the smartphone era might not even recognize many of our common cultural and business customs now. Smartphones radically changed humanity. That’s innovative. But I like best the simplest form of innovation, the form that I’ve built my career upon: Introducing new products to consumers. There was a time when energy drinks weren’t a thing. Same for cannabis products. I like to innovate by entering wholly new markets. It might not be radical or disruptive, but it’s exciting and it has just as much chance to change the world as any other business innovation approach. |
AuthorGeorge Scorsis is a long-time entrepreneur who specializes in highly regulated industries. He is the the co-founder and chair of Awakn Life Sciences Corp. and executive chairman of Entourage Health, formerly known as WeedMD. ArchivesCategories |