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10 Types of Innovation: The Art of Discovering a Breakthrough Product

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10 Types of Innovation Infographic

The Art of Discovering Breakthrough Products

As venture capitalist Peter Thiel once put it, “competition is for losers.”

It’s inevitable that every company must be out there battling for market share, but you don’t really want to be in a situation where the competition is so stiff that any potential upside is eroded away in the process—―a scenario known as perfect competition in economics.

To avoid perfect competition, companies must strive to build an economic moat that gives them a sustainable competitive advantage over time. While these protective moats can arise from a number of different sources, in today’s information economy they most often arise from the power of innovation.

But where does innovation come from, and is there a universal framework that can be applied to help consistently make big breakthroughs?

The 10 Types of Innovation

In today’s infographic, we showcase the culmination of years of in-depth research from Doblin, an innovation-focused firm now owned by Deloitte.

After examining over 2,000 business innovations throughout history, Doblin uncovered that most breakthroughs don’t necessarily stem from engineering inventions or rare discoveries.

Instead, they observed that innovations can be categorized within a range of 10 distinct dimensions—and anyone can use the resulting strategic framework to analyze the competition, to stress test for product weaknesses, or to find new opportunities for their products.

Here are the 10 types of innovation:

#Innovation TypeDescription
1.Profit ModelHow you make money
2.NetworkConnections with others to create value
3.StructureAlignment of your talent and assets
4.ProcessSignature of superior methods for doing your work
5.Product PerformanceDistinguishing features and functionality
6.Product SystemComplementary products and services
7.ServiceSupport and enhancements that surround your offerings
8.ChannelHow your offerings are delivered to customers and users
9.BrandRepresentation of your offerings and business
10.Customer EngagementDistinctive interactions you foster

From Theory to Practice

What does innovation look like in practice?

Let’s see how well-known businesses have leveraged each of these 10 types of innovation in the past, while also diving into the tactics that modern businesses can use to consistently make new product breakthroughs:.

Innovation Types #1-4: “Configuration”

According to Doblin, the first four types of innovation center around the configuration of the company, and all the work that happens “behind the scenes”.

Although innovation types in this category are not directly customer-facing, as you can see in the examples below, they can still have an important impact on the customer experience. How your company and products are organized can have a crucial downstream effect, even enabling innovations in other categories.

Configuration innovation types

Two of the most interesting examples here are Google and McDonald’s. Both companies made internal innovations that empowered their people to make important advancements further on downstream.

In the case of McDonald’s, the franchisee insight that led to the introduction of the Egg McMuffin spearheaded the company’s entire breakfast offering, which now accounts for 25% of revenues. Breakfast is also now the company’s most profitable segment.

Innovation Types #5-6: “Offering”

When most people think of innovation, it’s likely the offering category that comes to mind.

Making improvements to product performance is an obvious but difficult type of innovation, and unless it’s accompanied by a deeply ingrained company culture towards technical innovation, such advancements may only create a temporary advantage against the competition.

This is the part of the reason that Doblin recommends that companies focus on combining multiple areas of innovation together—it creates a much more stable economic moat.

Offering innovation types

Apple has a reputation for innovation, but the product ecosystem highlighted above is an underappreciated piece of the company’s strategy. By putting thought into the ecosystem of products—and ensuring they work together flawlessly—additional utility is created, while also making it harder for customers to switch away from Apple products.

Innovation Types #7-10: “Experience”

These types of innovation are the most customer-facing, but this also makes them the most subject to interpretation.

While other innovations tend to occur upstream, innovations in experience all get trialed in the hands of customers. For this reason, intense care is needed in rolling out these ideas.

Experience innovation types

In the early days of the internet, online shipping was precarious at best—but Amazon’s introduction of Amazon Prime and free expedited shipping for all members has been a game-changer for e-commerce.

Executing on such a promise was no small task, but today there are 150 million users of Prime worldwide, including some in metro areas who can get items in as little as two hours.

Making Innovations Happen in Your Organization

How can organizations approach the 10 types of innovation from a more tactical perspective?

One useful resource is Doblin’s free public list of over 100 tactics that correspond with the aforementioned framework.

The one-pager PDF provides a range of typical dimensions for approaching each type of innovation. In essence, these are all different ways you could consider when trying to differentiate your product or service—and at the very least, it provides a useful thought experiment for managers and marketers.

For those interested in learning more on this topic, Doblin also has a highly-rated book as well as other accessories that leverage the above framework.

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Markets

Charted: What are Retail Investors Interested in Buying in 2023?

What key themes and strategies are retail investors looking at for the rest of 2023? Preview: AI is a popular choice.

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A cropped bar chart showing the various options retail investors picked as part of their strategy for the second half of 2023.

Charted: Retail Investors’ Top Picks for 2023

U.S. retail investors, enticed by a brief pause in the interest rate cycle, came roaring back in the early summer. But what are their investment priorities for the second half of 2023?

We visualized the data from Public’s 2023 Retail Investor Report, which surveyed 1,005 retail investors on their platform, asking “which investment strategy or themes are you interested in as part of your overall investment strategy?”

Survey respondents ticked all the options that applied to them, thus their response percentages do not sum to 100%.

Where Are Retail Investors Putting Their Money?

By far the most popular strategy for retail investors is dividend investing with 50% of the respondents selecting it as something they’re interested in.

Dividends can help supplement incomes and come with tax benefits (especially for lower income investors or if the dividend is paid out into a tax-deferred account), and can be a popular choice during more inflationary times.

Investment StrategyPercent of Respondents
Dividend Investing50%
Artificial Intelligence36%
Total Stock Market Index36%
Renewable Energy33%
Big Tech31%
Treasuries (T-Bills)31%
Electric Vehicles 27%
Large Cap26%
Small Cap24%
Emerging Markets23%
Real Estate23%
Gold & Precious Metals23%
Mid Cap19%
Inflation Protection13%
Commodities12%

Meanwhile, the hype around AI hasn’t faded, with 36% of the respondents saying they’d be interested in investing in the theme—including juggernaut chipmaker Nvidia. This is tied for second place with Total Stock Market Index investing.

Treasury Bills (30%) represent the safety anchoring of the portfolio but the ongoing climate crisis is also on investors’ minds with Renewable Energy (33%) and EVs (27%) scoring fairly high on the interest list.

Commodities and Inflation-Protection stocks on the other hand have fallen out of favor.

Come on Barbie, Let’s Go Party…

Another interesting takeaway pulled from the survey is how conversations about prevailing companies—or the buzz around them—are influencing trades. The platform found that public investors in Mattel increased 6.6 times after the success of the ‘Barbie’ movie.

Bud Light also saw a 1.5x increase in retail investors, despite receiving negative attention from their fans after the company did a beer promotion campaign with trans influencer Dylan Mulvaney.

Given the origin story of a large chunk of American retail investors revolves around GameStop and AMC, these insights aren’t new, but they do reveal a persisting trend.

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