Four Types of Innovation – part 1

by Jane Stevenson and Bilal Kaafarani

Four Types of Innovation - part 1“Operational and Marketplace Innovation tend toward a left-brain orientation, whereas Transformational Innovation requires a strong right brain orientation. Category Innovation straddles the fence. All four types of innovation benefit from whole-brain thinking and the innovation flow it creates.”  – excerpt from the book Breaking Away by Jane Stevenson & Bilal Kaafarani.

THE FOUR TYPES OF INNOVATION

Part 1–Transformational Innovation

While most people think of innovation as “light blub” big, the truth is opportunities for innovation, large and small are all around us. By looking at innovation as a multilevel construct, continual innovation is open to all facets of the company. In this expanded vision there are four distinct levels:

  1. Transformational
  2. Category
  3. Marketplace
  4. Operational

Each level, while remarkably different from one another, is a viable and valuable resource for innovation.

1. TRANSFORMATIONAL INNOVATION
This is the granddaddy of innovation. It comes along rarely and is so big and powerful that others continue to build on it for generations to come. In fact, that is one of the hallmarks of Transformational Innovation—it’s a disruptive breakthrough that changes society and so impacts the way we live that over time we can’t thrive without it. Few companies commit to the resources and risk that allows Transformational Innovation to succeed, but those that do can eventually reap tremendous rewards.

Examples: the automobile, the light bulb, and the Internet.

Defining Characteristics of Transformational Innovation

  • Driven by curiosity
  • Changes society and the way we live
  • Is disruptive, revolutionary in scope, and sustainable in dimension
  • Creates follow-on Innovation at Category, Marketplace, and Operational levels
  • Becomes something we depend on
  • Provides benefits to our culture

Business Attributes of Transformational Innovation

  • Adoption rate unclear
  • Full market potential difficult to define
  • No defined P&L or timeline
  • Risk-reward ratio exponentially higher than any other type of innovations
  • Can’t survive in a large corporate environment unless it’s buffered from standard success metrics
  • Legacy vs. current

In part two of this series, we will look at a second type of  innovation we call Category Innovation and discuss how it differs from the other three types of innovation. While Transformational Innovation is almost all risk, Category Innovation is an equal mix of risk and opportunity.

image credit: McGraw Hill


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Jane StevensonNamed by BusinessWeek as one of the “100 Most Influential Search Consultants in the world”, Jane Stevenson is Vice Chairman, Board & CEO Services at Korn/Ferry International (Atlanta/New York). An industry expert on recruiting leaders, Jane was responsible for bringing in many of the first Chief Innovation Officers and CEOs who focused on growth through innovation. Jane is the coauthor of  Breaking Away: How Great Leaders Create Innovation that Drives Sustainable Growth–and Why Others Fail. (McGraw-Hill 2011).

Bilal KaafaraniNamed by BusinessWeek as one of the worlds “Top 25 Masters of Innovation”, Bilal Kaafarani is Chief Innovation Officer and Group President for Yildiz Holding (owner of Godiva, Ulker and 90+ other global brands) and Vice Chairman of Northstar Innovation in Istanbul, Turkey. A global innovation executive at P&G, Kraft, FritoLay, PepsiCo International and The Coca-Cola Company, he has worked with top brands and developed many innovations under his leadership. Bilal is the coauthor of  Breaking Away (McGraw-Hill 2011).