Home Business Organizational Innovation Has Many Definitions for Companies
Organizational Innovation Has Many Definitions for Companies

Organizational Innovation Has Many Definitions for Companies

Start an arts and humanities degree program at American Public University.

By Dr. Bjorn Mercer
Program Director, Communication, Humanities, Music, Philosophy, Religion and World Languages Programs, American Public University

If you have worked at any company or institution during the last few decades, you will have noticed the constant push for innovation. When presidents and CEOs talk to stakeholders, they always mention innovation. When employees have meetings with their directors or VPs, innovation is always among the talking points.

How Should Organizational Innovation Be Defined?

In business, we are surrounded by the desire to be innovative. But innovation has more than one definition. Innovation can mean:

  • Upheaval
  • Transformation
  • Metamorphosis
  • Breakthrough
  • New methods
  • Modernization
  • Novelty
  • Newness
  • Creativity
  • Originality
  • Ingenuity
  • Inspiration
  • Inventiveness

Satell’s Four Types of Innovation

In a Harvard Business Review article, The 4 Types of Innovation, author and lecturer Greg Satell lists the broad types of innovation as:

  • Breakthrough innovation
  • Sustaining innovation
  • Disruptive research
  • Basic research

Breakthrough innovation and disruptive research are the types of organizational innovation that we dream of. This type of innovation creates amazing new ideas that shake an industry, changes how people live and use products, and maybe even changes the world. These ideas often emerge from hard work as well as time-intensive sustaining innovation and basic research.

Sustaining innovation and basic research are the everyday types of innovation that are not as exciting as breakthrough or disruptive innovation. But they are important in moving companies and industries forward because they improve things incrementally. Small gains year after year eventually turn into large profits.

Keeley’s 10 Types of Innovation

According to Paul Sloane of Innovation Excellence Weekly, author Larry Keeley defined 10 types of innovation:

  1. Profit model – how price points and differentiated service might make money.
  2. Network – relationships with other companies to provide better products or efficiencies.
  3. Structure – making internal structures as cost-effective as possible.
  4. Process – ensuring that individual processes do not waste time and resources.
  5. Product performance – carefully launching new products or services.
  6. Product system – the ability to leverage other companies and talent in connection to a product.
  7. Service – having the best possible service that enhances the customer experience.
  8. Channel – excellent logistics creating no impediment for customers.
  9. Brand – having a brand that stands out in the field.
  10. Customer engagement – having the best possible experience for the customers that is different and unique.

These 10 types of innovation fall into Satell’s sustaining innovation and basic research categories. They offer examples of how different parts of an institution or company can be innovative.

In practical terms, imagine that a company finds an improved process that saves the business 2% of its costs. That 2% could translate into hundreds of thousands or possibly millions of dollars in savings every year.

Other Types of Innovation

There are other types of innovation as well, depending on the writer and the industry. These other types include:

Organizational Innovation Demands Support, Resources and a Willing Attitude

For innovation in business to be successful, it needs support and resources. There should also be a willingness to change and an acceptance of failure. Organizational innovation cannot just be talking points for the CEO or bullet points on a deck. Every company needs to aspire to exciting, new products while also working to find the everyday innovation that creates efficiencies internally and externally.

As Satell wrote, “start treating innovation like other business disciplines — as a set of tools that are designed to accomplish specific objectives…we need to build up a portfolio of innovation strategies designed for specific tasks.”

About the Author

Dr. Bjorn Mercer is a Program Director at American Public University. He holds a bachelor’s degree in music from Missouri State University, a master’s and doctorate in music from the University of Arizona, and an M.B.A. from the University of Phoenix. He writes about leadership, management and why the humanities and liberal arts are critical to career success. Dr. Mercer also writes children’s music.



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