What Type of Innovation?

Understanding the opportunity can be best understood by specifying what type of innovation you are talking about. This article explores three types of innovation, largely developed on work from Harvard Professor and renowned writer on innovation Clayton Christensen.

3 Types of Innovation
Source: Strategyzer


Efficiency explores how to deliver improvements to how a company operates based its existing business model. It is not about changing the model, rather addressing the systems and processes within the organisation that can be improved such as operations, logistics etc.

Advantages: Lower level of risk, speed to apply and benefit, predictable outcomes
Disadvantages: Does not provide any protection from disruption or assist the company transform to meet future demands.


Sustaining explores the organisations business models, investigating ways to strengthen and grow. Typically sustaining innovation is in the area of new products and services or addressing new markets.

Advantages: Lower levels of risk, focused on competition and delivering financial benefits. Short to medium horizon.
Disadvantages: No protection from market disruption


Transformative innovation considers and explores how a company can grow outside its traditional area of expertise. Often this requires a radical change of the companies business model and or markets. This approach looks at how to cover and compete with opportunities that are disrupting existing business.

Advantages: Has a long term focus, provides approach to counter disruption.
Disadvantages: Higher risk and uncertainty

For most organisations the strongest innovation approach is a balanced innovation portfolio which has candidates in each type. Strategyzer have a new book titled The Invincible Company which explores these themes in detail and provides innovation tools and templates as well as case studies.

The Invinicble Company

Key Takeaways

  • An innovation strategy needs to take account of long and short term horizons as well as the macro threats and opportunities that face the company.
  • A balanced innovation strategy builds initiatives that focus on each of efficiency, sustaining and transformative aspects of the firm.
DIGEST of an article from Strategyzer
What type of innovation are you talking about?
By Frederic Etiemble
Published: 11th November 2020

Leave a Reply