What is differentiated innovation?

Sara DoucetteBlog

At the end of last year, we introduced the next report in our EveryDay innovation series, on Differentiated Innovation – putting the customer at the heart of your innovation programme.

In the first report in the series, The New Innovation Conversation, we introduced the notion that innovation applies to all businesses, in all sectors. It’s also about making innovation part of everyone’s role, in every team, every day. As such, innovation becomes the by-product of an innovative organisation.

In this initial report, we also introduced a framework to work from, based on the five pillars of innovation: Strategy, Leadership, Management, Culture and Tools & Processes.

Next, we created the Guide to Becoming an EveryDay Innovator, providing actionable and practical steps for organisations to establish their own innovation culture and build their own repeatable and sustainable innovation models. This is based on discovering their starting point to innovate, using a tool such as Innovation Pulse.

This now brings us to the most recent report in the series, on Differentiated Innovation which is focused on providing customer-centric innovation. This report focused on the first pillar, Strategy, r and how to include Differentiated Innovation in your innovation mix.

The innovation Mix

The innovation spectrum includes three broad categories of innovation: incremental, differentiated and radical.

  • Incremental – focused on improving existing products and services as well as continuous improvement/process improvement.
  • Differentiated – focused on medium-scale changes with low to medium risk, that involve multiple teams. Innovations in this category are generally customer focused, to create competitive advantage.
  • Radical – large-scale, radical projects, usually complex and typically requiring significant investment.

Digging deeper, what do we mean by Differentiated Innovation?

  • External, customer-centric focus
  • Clear objectives to identify and solve real customer problems with creative solutions.
  • Focus on speed to market as customer needs evolve quickly.

How to get started with Differentiated Innovation?

Getting started can be daunting but if the building blocks of innovation have been put in place through incremental innovation initiatives, it will be much easier. If your staff is already involved in innovation and your organisation encourages them to participate and listens to their ideas and solutions to address internal problems, listening to customers and other external stakeholders is a natural progression.

Here are the necessary steps, succinctly put:

  • Define the problem to be solved, which should be tied to your overall strategic objectives.
  • Involve your internal stakeholders in coming up with ideas to improve customer experience.
  • Take it a step further and involve external stakeholders, by looking at a broader group for help in delivering a better customer experience – Open Innovation

Our report Differentiated Innovation – Putting the customer at the heart of your innovation programme expands on these ideas and concepts and provides real life examples from our customers such as Aviva or the British Library. To read it, head to our website to download for free.

For further reading, check out Cris Beswick’s blog post on the The Future Shapers website on this subject, titled Building Differentiated Innovation.

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