This document presents an innovation map framework that defines and differentiates four main types of innovation: operational innovation, product and service innovation, strategic innovation, and management innovation. The map charts these according to whether they are internal or external focused and evolutionary or revolutionary. It provides descriptions of each innovation type and discusses how the map can be used to align innovation initiatives and focus discussions. The goal is to help organizations better define innovation objectives and outcomes.

1. Innovation? © Marc Sniukas www.sevenprophets.com 1 10.08.2009

2. © Marc Sniukas www.sevenprophets.com 2 Revolutionary Innovation Management Innovation Service Innovation Experiential Innovation Business Model Innovation Value Innovation Structural Innovation Market Innovation Process Innovation Strategic Innovation Evolutionary Innovation Application Innovation Marketing Innovation User Lead Innovation Product Innovation Technological Innovation Brand Innovation Supply Chain Innovation Disruptive Innovation 10.08.2009

3. What are you talking about? © Marc Sniukas www.sevenprophets.com 3 10.08.2009

4. Innovation comes in many flavors. © Marc Sniukas www.sevenprophets.com 4 10.08.2009

5. A map provides orientation. © Marc Sniukas www.sevenprophets.com 5 10.08.2009

6. The Innovation Map A Framework for Defining Innovation Outcomes 6 © Marc Sniukas www.sevenprophets.com 10.08.2009

7. What‘s the „direction“ of your innovation efforts? Internal Innovation vs External Innovation © Marc Sniukas www.sevenprophets.com 7 10.08.2009

8. Just how innovative do you want to be? Continuous / Evolutionary Innovation vs Discontinuous / Revolutionary Innovation © Marc Sniukas www.sevenprophets.com 8 10.08.2009

9. The Innovation Map: 4 prototypal innovation types © Marc Sniukas www.sevenprophets.com 9 Internal Management Innovation Operational Innovation Continuous Discontinuous Product & Service Innovation Strategic Innovation External 10.08.2009

10. What‘s the difference? © Marc Sniukas www.sevenprophets.com 10 10.08.2009

11. Operational Innovation What is it about? Process innovation: making processes for established offers in established markets more effective or efficient technological innovation in manufacturing Of course concepts like the moving assembly line, TQM, SCM, Six Sigma or Lean Manufacturing were radical innovations at the time they were being invented. If your company implements such concepts today, they might represent a radical innovation for your organization, but the concept as such is not revolutionary. It would rather be the application of best practices. © Marc Sniukas www.sevenprophets.com 11 10.08.2009

12. Product & Service Innovation What is it about? taking established offers in established markets to the next level making surface modifications that improve customers' experience of established products Product & Service innovations can of course also be radical and disruptive...but than it‘s rather strategic innovation, the difference being that radical product innovations provide an completely new level of value to both the customer and the company producing them. © Marc Sniukas www.sevenprophets.com 12 10.08.2009

13. Strategic Innovation What is it about? new business models (including a new value chain architecture), or new markets (either by creating new ones or reshaping existing ones), or increased value for both the customer and the company or a combination of these three, and as such it‘s nature is radical. It‘s a departure from a company‘s traditional definition of „how we do business around here“. Strategic Innovation does include concepts like Value Innovation, Blue Ocean Strategy and Disruptive Innovation and Business Model Innovation. For more about the relationship of BMI and Strategic Innovation, see the „Putting it all together“ prezi at www.sevenprophets.com. For more on strategic innovation, download „Reshaping strategy: The who, what and how of strategic innovation“ at www.sevenprophets.com. © Marc Sniukas www.sevenprophets.com 13 10.08.2009

14. Management Innovation What is it about? Management Innovation changes the way managers do what they do, and does so in a way that enhances organizational performance. „Management innovation is anything that substantially alters the way in which the work of management is carried out, or significantly modifies customary organizational forms, and, by doing so, advances organizational goals.“ Gary Hamel The target of innovation efforts are the business processes and not the manufacturing processes. It‘s about „fundamental breakthroughs in how companies organize, coordinate, plan, motivate and allocate resources...“ Gary Hamel For more on management innovation have a look at „The Future of Management“ presentation at www.sevenprophets.com © Marc Sniukas www.sevenprophets.com 14 10.08.2009

15. The Innovation Map © Marc Sniukas www.sevenprophets.com 15 Internal 10.08.2009 Technological innovation Partner interfaces Internal structures and processes Management Innovation Operational Innovation Processes Networking People Management Continuous Discontinuous Disruptive Innovation Brand Supply Chain Product & Service Innovation Strategic Innovation Customer interfaces and experiences Technological innovation Blue Ocean Strategy New offerings Channels New markets External

16. How to use the Innovation Map? © Marc Sniukas www.sevenprophets.com 16 10.08.2009

17. How to use the Innovation Map? Use the map to illustrate the 4 definitions, differences and commonalities of the 4 types. Which ones would you like to target? In your next innovation meeting, put out the map and focus your discussion on the 4 quadrants and what you would like to achieve. Next, draw a cross on a flip chart and map all your innovation projects and initatives on it. Are your initiatives inline with the proclaimed objectives? All of these uses can help to resolve issues and never ending discussions on what should be done or not done and what the desired objectives are. 10.08.2009 © Marc Sniukas www.sevenprophets.com 17

18. Some final thoughts... Of course these 4 types can overlap. Strategic Innovation will have internal implications, just as management innovation can have an impact on how your organization relates to external stakeholders. Product innovation can be ongoing or it can be revolutionary. Nevertheless the initial focus of innovation efforts are primarily internal or external and aiming at continuous or discontinuous innovation to start with. No matter how you‘ll be using the map, it will provide orientation and focus the discussion and your efforts. © Marc Sniukas www.sevenprophets.com 18 10.08.2009

19. Want more? © Marc Sniukas www.sevenprophets.com 19 10.08.2009

20. www.sevenprophets.com © Marc Sniukas www.sevenprophets.com 20 10.08.2009

21. This presentation was inspired by... Marc Sniukas „Reshaping Strategy: The Who, What, How of Strategic Innovation.“ Research paper, 2008 Gary Hamel, Bill Breen „The Future of Management“, Harvard Business School Press, 2007 Michael Mol, Julian Birkinshaw „Gian Steps in Management“, FT Prentice Hall, 2008 10.08.2009 © Marc Sniukas www.sevenprophets.com 21

22. A presentation by Marc Sniukas www.sniukas.com 10.08.2009 © Marc Sniukas www.sevenprophets.com 22