IIn this episode of the Innovation Cafe Podcast, Sandie Glass shares the three (3) primary Types of Innovation when looking at new products
– Sustaining Innovation (also called Incremental or close-in innovation)
– Breakout Innovation (a function change due to a new benefit)
– Disruptive Innovation (totally new category. Made popular by Clayton Christiansen’s book of the same title)
In a world where anything can and will be innovated, this quick overview will help you understand the advantages of each Type of Innovation (sometimes referred to as Innovation Classifications), and why it’s important to include and plan for all 3 as your innovation strategy develops..
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Hi and welcome back to Innovation Café. I’m the Founder and Host Sandie Glass. Just a quick side note to mention. The topics for the shows are random – some a better suited for those of you just starting out in the innovation space, while other shows might be considered more advanced topics. So please be patient as we get this podcast off the ground. I believe there’s something to learn no matter what level of innovator you are.
Welcome to Episode 4. I’ll be giving you a short overview on the 3 Innovation Classifications when developing New products. So sit tight and don’t go away, I’ll be right back.
Episode 004: Types of Innovation
I’m going to make a bold statement and say that anything can be innovated. I say this because even the most common items – from the air we breathe, the water we drink, even the dirt beneath our feet has been innovated. Just look at how the water market has exploded – from an incredible number of variations on bottled water, to Brita and Pur water filters, to commercial in-home water filtering systems. We now even have better dirt – some mixed with moisture-control pellets, some have been enhanced with nutrients and vitamins for optimal plant growth, not to mention dirt with built-in weed control.
We even innovate beyond the creation of new products and services. We see process innovation, business model innovation, customer experience innovation, supply chain innovation and even crowd sourcing or open innovation. While we will be tapping into some of these topics in future podcasts, I’d like to focus today on New Products innovation. And within new products innovation there are 3 classifications commonly used.
I’d like to introduce these classifications by giving you an overview of each.
First there’s Sustaining Innovation.
- Sustaining – This is the most common one you see in the market. I consider it the bottom rung or basic type of innovation. It’s important for Products and services to stay fresh and relevant to their customers to just stay in the game. And another good reason is to keep retailers happy so they don’t reduce or eliminate our valuable shelf space and put someone else’s new product in its place. These incremental innovations can be thought of as variations on a theme. For example, in the category of household cleansers, a sustaining innovation might involve making the cleaning agent 10% stronger or coming out with a new scent. There is no behavior change with this type of innovation. This is considered a very close-in innovation.
- Breakout offerings are those that significantly up the level of play within an existing category. We saw this happen in the cell phone industry. It all began with those clunky car phones, then technology progressed and we all bought flip-phones. Then– bam – it seemed like overnight and our basic cell phone designed to just talk to someone else became a smartphone with email capability, text messaging, apps, internet access. You name it – the iPhone changed the way we looked at cell phones. Between the new touchscreen technology, the amazing photo and video camera, and the ability to have your own music playlist all in one device, Apple upped the level of play with the competition. These innovations result in mild behavior change. The magic with breakout innovation is that we didn’t know we needed it – and couldn’t live without it — until we saw it. These are the harder ones to convince Senior Management about because you never hear a customer asking for exactly what you are creating. Each capability is wanted individually, but putting it all together is a different story.
- Now let’s look at Disruptive innovations. This was made a household word by the book of the same name by Clayton Christiansen. And while I could spend an entire show just on this one type of innovation, I’ll just give you the quick overview for now. These are the big BIG ideas that many of us have in mind when we think about an innovation. They are called disruptive because they disrupt the current market behavior, making existing solutions obsolete, transforming value propositions, and bringing previously marginal customers and companies into the center of attention. The iPod, which radically changed the way we listen to and buy music, is one such innovation. Probably an offshoot from the huge buzz captured by start-ups like Napster and other rogue sites that allowed people to download music tracks – often illegally – in order to create a customized music library, The iPod coupled with the earbuds and the Apple Store, allowed us to legally download and assemble our custom music library and carry it with us wherever we went. And the shuffle option was just an added genius function. Again, we didn’t know we needed it until we saw it and had it in our hands – and it resulted in a major behavior change.
Although I provided a few examples, it’s probably best to give you a few more so the principles of each classification set in. When Maxwell House came out with a dark roast version, it introduced a sustaining innovation. While it took a higher temperature and longer roasting time to achieve this new level of coffee robustness, it was only a variation on their existing product. Something that customers could instantly and easily understand. A breakout innovation was when General Foods’ introduced its line of International Coffees, which added gourmet flavors to the instant coffee category and elevated the at-home coffee experience. And obviously Starbucks would be considered a disruptive innovation, turning coffee into a destination experience worth paying a lot more for.
Another example of Sustaining innovation would be Crest toothpaste coming out with a different form of toothpaste like a gel or the hybrid paste & gel that looks like stripes, or a new flavor like Clean Mint or Cool Peppermint. A Breakout innovation would be Crest with Whitening which changed and amplified an additional benefit to brushing your teeth. And then along came Crest Whitestrips which was a Disruptive innovation since this product category never existed over-the-counter before. This to me was a game-changer for Crest because it elevated the perception of Crest traditionally known for cavity prevention to being a hybrid oral care-beauty product.
As you can imagine, it’s harder to come up with Disruptive innovations than sustaining or breakout innovation. It’s also typical that when a disruptive innovation is introduced, that it is followed up with a series of incremental innovations. This was true of Crest Whitestrips which came out with several follow-up product variations or improvements after the initial introduction. They started out in 2001 with Crest Whitestrips Classic, Professional, and Supreme. Then they progressed to faster results – Overnight and 4-hour then 2-Hour. Now the most recent innovation is Crest 3D White 1-Hour Express Whitestrips.
Another thing I should mention is the ROI on these types of innovation. Sustaining innovation – while a minor improvement – is still priced at the same as your current product. And because it is an incremental improvement, you’re probably going to experience some cannibalization of the base brand. Conversely, Breakout and Disruptive Innovation can command a price premium and typically provide significant, sustaining share gain. Disruptive innovation creates an entirely new category or business that drives total company growth.
As long as companies continue to prioritize innovation efforts, you will continue to see All three types of innovation in the marketplace. And what’s really interesting, is that these different types of innovation will cycle through categories, over and over again.
Hopefully this helps you when setting your goals for your next innovation project. Sustaining innovation seems like childs-play after learning about Breakout and Disruptive Innovation. I know which one I would set my sights on if I wanted to catapult my career.
And that’s our show for today – and Thanks for listening. If you like what you’ve heard please go to iTunes and subscribe to the Innovation Café podcast. And while you’re at it, please give me a Rating & a Review. This will make it easier for other to find this podcast. Plus, you’ll be automatically entered to win a $25 gift card to Target or Starbucks. We will be announcing a winner each month for at least 3 months to celebrate the launch of Innovation Café. So make sure you get yourself entered.
And make sure you tune in next week where we will be discussing a brainstorming technique that will help jump-start your creative juices. Until then, I’m wishing you blue skies and great ideas!