Larry Keeley: Building breakthroughs in your business


These 10 types of innovation will boost your company's business and upend the market in which it operates

By Iga Motylska

“People tend to believe myths about innovation. These need to be replaced with method,” says Larry Keeley, innovation scientist, founder of innovation consultancy, Doblin Inc., and author of ‘10 types of Innovations: The discipline of building breakthroughs’. Keeley advises that innovation should never be the result of fear. Instead, it should be regarded as hugely important for a business to understand how the business ecosystem is going to shift and to innovate on the right things, he says.

He cites African examples of innovation including Kiva, Green Belt Movement, Mpesa, and Kopo Kopo, and talks about how innovation can help African companies identify new business opportunities, analyse their competitive environment and upend their market. “You too, can build something amazing, as long as you focus on the misery, need or scarcity that needs to be solved,” he says.

The following are Keeley's 10 types of innovation to ensure a business breakthrough:

  1. PROFIT MODEL: How you make money
    Innovative profit models find a fresh way to convert a company’s products or services and other sources of value into profits. Effective profit models reflect a deep understanding of what customers and users need, how businesses can solve customers' problems, and where new revenue opportunities may lie. Innovative profit models disrupt a sector's worn assumptions about what to offer, what to charge and how to collect payments. Most industries retain the dominant profit model for decades because it works, but as a result they fail to innovate and adopt new technologies to develop more cost-effective and financially lucrative models.
  2. NETWORK: Connect with others to create value
    In today’s hyper-connected, technologically advanced and competitive entrepreneurial space, companies need to focus on their niche. It is important to understand that a company cannot provide everything to consumers. Network innovations provide a way for companies to take advantage of other companies’ processes, technologies, offerings and channels. This allows a company to maximise and capitalise on its own strengths, while simultaneously harnessing the strengths of other companies. Network innovations also help executives share the risks of developing new ventures. These kind of network collaborations can be short- or long-term and may be formed between even the staunchest of competitors to provide the best possible solution for consumers.
  3. STRUCTURE: Organise and align your talent and assets
    Structure innovations focus on organising company assets, whether they are human or intangible, in ways that create optimised value. They can include everything from superior talent management systems to ingenious configurations of heavy capital equipment. A company's fixed costs and corporate functions can also be improved through structure innovations, including departments such as research and development, human resources and IT. Such innovations will also attract talent through the creation of productive work environments and hence encourage a high level of performance with which competitors cannot keep up.
  4. PROCESS: Use signature methods 
    Process innovations involve the operations that produce a company's primary product or service offerings. Innovating at this level requires a dramatic change from a business-as-usual approach to one that enables the company to utilise unique capabilities, function efficiently, adapt quickly to the changing business landscape, and build market-leading margins. Process innovations often form the core of a company, and may include patented or proprietary approaches that are unique to the business. Keeley calls it the “special sauce” for which your competitors simply do not know the recipe.
  5. PRODUCT PERFORMANCE: Develop distinguishing features and functionality
    Product performance innovations address the value, features and quality of a company’s products or services. This includes new products and updates that ensure the products' or services' longevity and staying power in the sector. People often mistake product performance as the sum of innovation. It is important, but only one of the 10 Types of Innovation, and is often the first and easiest to copy. Think about any product or feature war – Apple and Samsung are the most relatable. Too quickly, it devolves into an expensive and mad dash to parity. Product performance innovations that deliver a long-term competitive advantage should be rule rather than the exception.
  6. PRODUCT SYSTEM: Create complementary products and services
    Product system innovations are rooted in how products and services connect with one another to create a scalable system. This is made possible through integration, interoperability, modularity, and other ways of creating connections between otherwise distinct offerings. Product system innovations help your company create ecosystems that captivate potential customers and highlight your business over competitors.
  7. SERVICE: Amplify the value of your offerings
    Service innovations enhance the performance and utility of a product or service. They make a product easier to try – especially to new customers, who may be transitioning from competitors – and use. They make light of functionalities and features that customers may otherwise overlook. They also work towards fixing any problems and queries that customers may have. Service done right elevates average products into compelling customer experiences, which ensures customer retention. 
  8. CHANNEL: How you deliver your offerings to consumers
    Channel innovations encompass the way companies connect their offerings to their consumers. While e-commerce continues to boom, traditional channels such as stores are still necessary, especially when it comes to social interactions and immersive experiences. Skilled innovators need to find multiple ways to bring their products and services to consumers and the know-how of how to address each consumer segment. The goal is to enable consumer to make purchases how and when they want, with the greatest ease.
  9. BRAND: How you represent your business
    Brand innovations are important because these are the best advertisement. They ensure customers recognise, remember, and choose your brand over competitors or generics. The most successful brands present a product or service promise that is irresistible to consumers, and helps them identify with a distinct identity. Carefully crafted strategies are implemented across many touchpoints between the company and the customers, which includes public communications and interactions, word of mouth promotion, advertising, editorial content, service interactions, channel environments, as well as employee and business partner conduct. The most effective brand innovations transform commodities into prized products, and confer meaning, intention, and value to your business and its offerings.
  10. CUSTOMER ENGAGEMENT: Foster compelling interactions
    Customer engagement innovations are about understanding the deep-seated aspirations of customers, and using insights from consumer interaction and feedback to create meaningful connections with your brand. Effective customer engagement innovations help make consumers' working or personal lives more memorable and position your products and services within this.

According to Keeley, the first four innovations fall into the 'configuration' subset as they focus on the inner-most workings of a company and its system. Innovations 5 and 6 are part of the 'offerings' subset, and focus on a company's core product, service or combination of the two, while the remaining four innovation types are part of the 'experience' subset that focuses on the consumer-facing elements of a business.

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