What Is Configuration Innovation?
Configuration refers to the “back end” of innovation—the processes, structures, and profit models that support a company’s operations. While consumers may not directly see these innovations, they feel the effects in the form of better products, services, pricing, and overall reliability.
Businesses that succeed in configuration innovation manage to rethink how they operate behind the scenes. They create value through new business models, forge strong networks, redesign organizational structures, and streamline or revolutionize internal processes. The result? Competitive advantages that are difficult to imitate and are positioned for scale.
Let’s take a closer look at the four subtypes within the Configuration category: Profit Model, Network, Structure, and Process.
Profit Model Innovation: Rethinking Revenue
At its core, the profit model is about how a company generates income. But this is more than just setting prices—it’s about redesigning value capture and understanding new mechanisms to monetize offerings. The best innovators in this category challenge traditional pricing logic and explore alternative methods of capturing value.
A hallmark example is the shift introduced by companies in the sharing economy. Platforms like Airbnb reimagined hospitality by allowing individuals to monetize unused living space. Instead of owning hotels, they operate a marketplace. Their revenue model rests on commissions from hosts and guests, sidestepping the overhead costs that traditional hotel chains endure.
Another classic example is Gillette. Initially, razors were expensive and reusable, but Gillette flipped the model. By selling the razor handle at a low price and making profits on the replaceable blades, they created a consumables-based model that ensured recurring revenue and brand loyalty.
Profit model innovation invites companies to experiment with options like freemium plans, pay-per-use, licensing, and subscription billing. For example, cloud-based platforms often combine low-cost entry points with premium feature tiers. This not only boosts adoption but also ensures a scalable path to profitability.
Network Innovation: Collaborating for Competitive Edge
Network innovation is about leveraging partnerships, relationships, and collaborations to unlock new capabilities or access new markets. No company operates in a vacuum—successful innovators tap into external expertise, infrastructure, and technology.
A clear example is Target’s collaboration with designers like Michael Graves. By co-developing exclusive product lines, Target expanded its market presence while elevating its brand in the home goods segment. The network enabled Target to punch above its weight in design and appeal without building that capability from scratch.
Strategic alliances, outsourcing, and ecosystems also fall into this category. Open innovation, where companies crowdsource ideas or solutions from the public, is another powerful example. By inviting contributions from developers, researchers, or users, companies can harness collective intelligence without inflating costs.
Consider open-source software communities, where collaboration fuels progress. Organizations like Mozilla have built entire ecosystems on top of collaborative structures. Their network innovation helps them stay agile and relevant while relying on community feedback and development power.
Structure Innovation: Organizing for Agility and Scale
Structure innovation focuses on how a company’s assets—human, physical, and intellectual—are organized. It looks inward to reimagine the organizational model to be more resilient, responsive, and efficient.
One standout case is W.L. Gore & Associates. Instead of a traditional hierarchy, Gore operates with a flat structure composed of small, autonomous teams. Employees set goals collaboratively and are given the freedom to experiment. This unconventional structure not only drives innovation but also fosters ownership and motivation.
Another form of structure innovation lies in how roles, incentives, or ownership are designed. Employee stock ownership plans (ESOPs), remote-first models, and cross-functional teams can empower employees, speed up decision-making, and promote accountability.
Structure innovations also show up in decentralized companies or those leveraging automation to reduce middle management layers. With fewer bureaucratic hurdles, these companies can pivot quickly in response to market signals or technological change.
When teams are given the tools to operate independently but aligned under a shared mission, structure innovation becomes a potent differentiator.
Process Innovation: Mastering Operational Excellence
While structure focuses on organization, process innovation is all about execution—how work gets done. This type of innovation involves redesigning workflows, adopting new tools, or introducing novel approaches to service or product delivery.
FedEx’s logistics model is often cited as a powerful example. The company developed a hub-and-spoke system for package sorting and tracking that allowed real-time location visibility. By digitizing this process and sharing the information with customers, FedEx added transparency and control—an industry-defining shift.
Process innovations often go hand-in-hand with automation and digitization. Lean manufacturing, pioneered by Toyota, is another powerful case. The company’s just-in-time inventory system and focus on continuous improvement revolutionized not just its operations but also the global auto industry.
In today’s digital economy, process innovation increasingly involves AI, robotic process automation, and real-time analytics. For instance, fintech startups use automation to streamline credit approvals, fraud detection, and regulatory compliance.
Retailers, too, are leveraging process innovation by integrating RFID tags, predictive analytics, and smart inventory systems to optimize supply chains. These processes reduce overhead, shrink timelines, and elevate customer satisfaction.
The Strategic Impact of Configuration Innovation
Why does configuration matter? Because it is the foundation on which every other innovation stands. Without a strong internal structure, compelling brand experiences and game-changing products are difficult to sustain. The most admired brands in the world—whether in tech, logistics, or consumer goods—don’t just deliver amazing products; they’re built on powerful, efficient, and scalable systems.
Configuration innovations also tend to be more defensible. A new product can be copied, but an agile structure, proprietary process, or unique profit model is much harder to replicate. That’s why industry leaders invest heavily in these often unseen areas—they provide long-term competitive moats.
When configuration innovations are aligned, they build organizational momentum. For instance, a new profit model might free up capital to invest in partnerships. These partnerships might enable the development of a new process. Together, these reinforce one another and amplify impact.
Embedding Configuration Innovation in Your Organization
To bring configuration innovation into your business, start by evaluating your existing operations:
- How are you currently making money, and are there alternative monetization methods?
- Where are your strategic alliances adding (or failing to add) value?
- Is your organizational structure enabling innovation or creating silos?
- Which manual processes are ripe for automation or redesign?
From here, encourage cross-functional collaboration. Configuration innovation works best when teams are given the autonomy to challenge assumptions and test new ideas. Encourage leaders from finance, operations, and HR to sit at the innovation table—not just product or marketing.
Also, monitor emerging trends and technologies. What’s happening in adjacent industries may inspire new approaches in your own. Whether it’s blockchain reshaping supply chains or AI transforming support centers, staying curious and open-minded is critical.
Lastly, foster a culture that embraces experimentation. Not every change will succeed, but the learnings will inform future initiatives. Configuration innovation rewards persistence and a long-term lens.
What Is Offering Innovation?
Offering innovation is about building a product or system that delivers clear, superior value to the customer. While many businesses mistakenly focus only on incremental improvements, offering innovation encourages companies to revisit the core utility of the product itself—its form, function, features, and ecosystem.
True offering innovation doesn’t just create better versions of what’s already available. It challenges the conventions of the market and raises customer expectations. Done right, it redefines categories, shifts consumer behavior, and reshapes competitive dynamics.
Product Performance Innovation: Making Great Products Better
This form of innovation refers to improvements in a product’s core functionality, design, usability, quality, or features. It’s the most visible and easily recognized form of innovation, yet often the most difficult to sustain over time. Markets catch up, competitors replicate, and customer expectations move forward.
Still, breakthrough product performance innovation can propel a brand to iconic status. A prime example is Dyson’s bagless vacuum cleaner, which uses cyclone technology to vastly improve suction efficiency. While the concept of vacuuming wasn’t new, the technology redefined what consumers expected from a vacuum cleaner. James Dyson famously went through over 5,000 prototypes before achieving success—a testament to persistence and performance-based innovation.
Another powerful example is Tesla’s reimagination of electric vehicles. While EVs existed before, Tesla elevated product performance through battery life, acceleration, software integration, and autonomous driving capabilities. These features transformed perceptions of electric vehicles from utilitarian to aspirational.
Smaller product performance innovations also create a significant impact. Consider noise-cancelling headphones, double-insulated drinkware, or ergonomic keyboards. These are refinements that make the user experience richer, more efficient, or more enjoyable.
Performance innovation often relies heavily on research and development. It’s where science meets market relevance. Businesses that invest in R&D, user feedback loops, and quality testing are best positioned to lead in this space.
Yet, it’s important to remember that performance innovation has limits. A single-product advantage can fade quickly unless it’s part of a broader innovation ecosystem.
Product System Innovation: Creating Value Through Integration
Where product performance improves individual items, product system innovation focuses on the relationship between products—how they integrate, complement, or expand one another to create broader customer value.
Product system innovation encourages companies to develop modularity, bundles, or platforms that enhance utility and lock in customer loyalty. It enables differentiation not through isolated products but through how those products fit together.
A classic consumer-facing example is the Oscar Mayer Lunchables. This product combined separate food components—meats, cheese, crackers, and a beverage—into a convenient meal kit for children. Each item was simple on its own, but the system created convenience, ease, and a branded experience for parents and children alike.
In the tech sector, web browsers like Mozilla Firefox and Google Chrome exhibit strong product system innovation. By supporting developer extensions, they created platforms where external contributors could enhance the core offering. This approach not only customized experiences for different user types but also encouraged long-term engagement.
Another important illustration is Apple’s product ecosystem. While iPhones, iPads, MacBooks, and AirPods perform well individually, their integration through features like Handoff, iCloud, and AirDrop creates a seamless digital experience. Once consumers enter the ecosystem, switching to a competitor becomes increasingly unlikely due to the interdependence of these tools.
This form of innovation also powers B2B solutions. Cloud-based software that integrates with CRM tools, accounting systems, and marketing platforms allows businesses to operate with greater coherence and less friction. The integration adds far more value than any standalone feature.
The Strategic Impact of Offering Innovation
Offering innovation has the advantage of being easily demonstrable to customers. It builds strong first impressions, drives word-of-mouth, and often becomes the focus of marketing and sales efforts. But its value goes deeper.
Superior product performance can justify premium pricing and attract discerning customer segments. For example, professional-grade kitchen appliances or audio equipment command high margins due to reliability and design quality. This level of innovation speaks directly to the functional and emotional needs of users.
Meanwhile, product systems cultivate long-term loyalty by embedding the product into a broader experience. A smart home ecosystem, for instance, increases in value with each added device. From smart thermostats to connected security cameras, each product reinforces the brand’s value through interoperability.
Moreover, offering innovation builds pathways to personalization. When a system is modular or flexible, users can tailor the experience to their specific needs. This level of control enhances satisfaction and reduces churn.
In high-competition markets, differentiation based on price alone is rarely sustainable. Offering innovation enables differentiation based on value, user experience, and integration—attributes that are far more enduring.
How to Build Effective Offering Innovations
Introducing innovation in offerings requires deep market insight, a user-centric mindset, and a clear product development roadmap. Here are strategies businesses can adopt:
1. Start with Unmet Needs
Successful offering innovation always begins with understanding the customer’s pain points. This may involve user research, observation, interviews, or behavioral data analysis. What are users trying to accomplish? What frustrates them about current solutions?
When Dyson created its cyclone vacuum, the insight came from a frustration with clogged vacuum bags. When Lunchables was designed, the insight was that parents wanted healthy, fun, and convenient meals for kids.
Innovation rooted in real-world friction is more likely to gain traction.
2. Invest in R&D and Rapid Prototyping
Product performance improvement thrives on iteration. Companies must create testing environments where prototypes can be built quickly and refined based on feedback. Failures should be expected, but each one should provide data for refinement.
Startups often lead in this space by building minimum viable products (MVPs) that validate demand before scaling. Larger firms can adopt internal accelerator models to test ideas before moving to full production.
3. Build Modular Systems from the Start
Whether software or hardware, modularity offers a path to scale and flexibility. Designing products that can be expanded, bundled, or connected with others opens up opportunities for future system innovation.
Consider how smartwatches started as simple fitness trackers but evolved into multi-functional health, messaging, and entertainment hubs through software updates and app ecosystems.
4. Design for Ecosystem Thinking
Product system innovation benefits from a platform mindset. Instead of viewing the product as a single item, consider what services, accessories, or partnerships can surround it.
A great example is GoPro, which not only sells cameras but also offers mounts, editing software, and cloud storage. These elements form a complete ecosystem tailored to adventure content creators.
In software, many companies create public APIs to allow third-party developers to extend the core platform, further enriching the system.
5. Link Offering Innovation to Brand Values
When product innovation aligns with brand values, it strengthens identity and differentiation. A brand built around sustainability might focus on durable, repairable, and recyclable products. This deepens the emotional connection with users who share those values.
Innovation becomes not just a business decision, but a reflection of purpose.
Challenges in Offering Innovation
Despite its visibility, offering innovation presents several challenges. One major issue is saturation—once a product category becomes crowded, differentiation becomes more difficult. Another is the speed of imitation. Unless backed by IP or strong brand loyalty, product innovations can be copied and commoditized quickly.
There is also the risk of overengineering. Some companies add features not because customers asked for them, but to justify a higher price. This can lead to complexity, reduced usability, and customer dissatisfaction.
Another pitfall lies in failing to connect the offering with broader strategy. A standalone product, no matter how brilliant, may struggle without a support system—strong channels, good customer service, or complementary features.
Successful offering innovation, therefore, depends not just on product design, but on how that design fits into the broader business model.
Integrating Offering Innovation with Other Types
The real power of innovation comes when offering innovation connects with other types in Doblin’s framework. For instance:
- A breakthrough product paired with channel innovation creates new ways to reach customers.
- A product system connected to network innovation enables collaborations that unlock new market segments.
- Offering innovation supported by service innovation leads to holistic, end-to-end experiences that build trust and retention.
Consider the example of Nike+. The product itself—sensors embedded in shoes—is a form of performance innovation. But when combined with a mobile app, social sharing features, and integration with Apple devices, it becomes a product system with layered value.
This kind of innovation stack compounds competitive advantage and deepens customer involvement.
Service Innovation: Enhancing the Supportive Layer
While the product or service itself remains central, how it is supported, delivered, or customized has become equally important. Service innovation refers to rethinking the assistance, convenience, personalization, or emotional value that surrounds a product.
Chewy, the pet supply e-commerce company, has earned widespread loyalty not just for its range of products but for its empathetic customer service. Whether it’s sending handwritten condolence cards to customers who’ve lost a pet or encouraging the donation of returned products to animal shelters, Chewy exemplifies how service innovation can humanize digital retail.
Another case is Men’s Wearhouse, offering free lifetime pressing services on suits—a small but impactful offering that makes customers feel cared for even after the purchase is made. Similarly, brands like Tupperware or Pampered Chef remove risk by offering lifetime guarantees, reducing perceived cost, and increasing post-purchase confidence.
Service innovation doesn’t need to be expensive. It needs to be intentional. Consider offering smart onboarding experiences, proactive customer support, and post-purchase guidance. Even self-service options—when done right—can enhance service innovation by giving customers control.
Businesses aiming to innovate in this area should ask:
- What part of the customer journey causes friction?
- Are there new touchpoints where help or delight can be introduced?
- How can we anticipate needs before customers ask?
Designing better services is not just about reducing problems; it’s about creating moments that matter.
Channel Innovation: Rethinking the Route to the Customer
Channel innovation focuses on how you deliver your product or service. It explores unconventional, digital, or emotionally resonant methods to reach or interact with customers. This is different from network innovation (which involves partnerships) because it emphasizes direct paths and experiences.
A well-known example is NikeTown—flagship retail stores that act more like immersive brand theaters than traditional outlets. Staffed with athletes and designed for engagement, these stores were not just about selling shoes—they were about building an emotional narrative around performance and identity.
In a digital-first world, channel innovation increasingly includes e-commerce platforms, apps, social media integrations, and subscription models. For instance, Dollar Shave Club disrupted traditional retail by delivering razors directly to consumers’ doors on a subscription basis—simple, convenient, and personal.
Social media has also opened new channels for interaction. Companies like iOgrapher have used Snapchat not just for marketing, but for customer support, offering advice, and resolving issues in real time. Channel innovation in this context isn’t about tech novelty; it’s about meeting customers where they are in meaningful ways.
Consider how your business might benefit from reimagining its channel strategy:
- Can direct-to-consumer models eliminate unnecessary layers?
- Is there a role for experiential retail or digital storytelling?
- Could you extend service reach through apps, chat, or interactive platforms?
The goal is to create access—functional and emotional—that’s consistent with how your audience prefers to engage.
Brand Innovation: Building Identity Beyond Products
Brand innovation is about how a business positions itself in the hearts and minds of its customers. It’s not just about logos or taglines—it’s about the values, voice, promise, and symbolism that customers associate with the organization. A strong brand can serve as an emotional shortcut to trust and preference.
Apple provides a powerful example. While its product innovation has often led the industry, its real strength lies in its brand. The company has managed to represent simplicity, creativity, and status in every touchpoint—from product packaging to advertisements and retail experiences. The Apple logo itself evokes not just a product but a lifestyle.
Amazon, another case study in brand innovation, built its identity around speed, reliability, and convenience. That trust enables it to expand into nearly any category, from groceries to cloud computing.
Building a brand today requires more than a sleek identity—it requires authentic alignment between what you say and what you do. Transparency, social impact, and values now factor into brand perception.
Emerging brands that thrive in this space often adopt radical transparency or activism. Patagonia’s environmental advocacy and Allbirds’ sustainability-focused messaging are not just campaigns; they are integrated brand innovations.
Key considerations for brand innovation include:
- Does the brand consistently reflect the customer’s aspirations?
- Are we using storytelling to highlight purpose and values?
- Is the brand experience congruent across touchpoints?
Brand innovation should always tie back to meaning—why your company exists and how it makes people feel. Done right, it forms the emotional glue that binds customers to your business.
Customer Engagement Innovation: Fostering Deep, Lasting Relationships
This form of innovation revolves around how a business understands, communicates with, and involves its customers. Engagement goes beyond loyalty programs or customer service scripts; it’s about genuine participation, connection, and community.
Trader Joe’s stands out as a company that uses engagement innovation to transform ordinary retail into something unique. The experience begins with a smaller product selection, helping reduce decision fatigue. Friendly, empowered employees offer guidance, samples, and conversations, making customers feel like valued participants in the brand, not just buyers.
Engagement innovation often involves designing experiences that invite feedback, promote customization, or create shared meaning. Many digital companies now integrate forums, beta testing programs, and product roadmaps that customers can vote on. This not only improves product development but fosters a sense of co-ownership.
A compelling example is Method, the green cleaning company. In addition to innovating in product and structure, Method launched the People Against Dirty community site, gathering feedback, stories, and ideas from environmentally conscious users. This community drives brand loyalty, content generation, and future innovation.
For companies aiming to improve engagement, strategies might include:
- Designing two-way communication channels (not just promotional).
- Empowering users through customization or contribution.
- Rewarding loyalty not just through discounts, but through recognition.
Engagement is not about frequency—it’s about meaning. A few rich, empowering interactions can deliver far more value than frequent, generic messaging.
The Ripple Effect of Experience Innovation
When organizations invest in experience innovation, they unlock more than just sales. They build advocacy, drive retention, and reduce marketing costs through organic loyalty. In industries with intense competition, experience often becomes the last defensible frontier.
Consider a scenario where two companies sell similar products at the same price. The one that offers empathetic customer service, has an intuitive online store, maintains a trusted brand image, and interacts with customers authentically on social media will always win in the long term.
These experiences don’t just lead to satisfaction—they create stories. Stories that customers share, stories that media covers, and stories that inspire internal pride and motivation.
Moreover, experience innovation has a flywheel effect. Positive experiences lead to customer trust, which opens the door for deeper relationships and more meaningful engagement. Those insights, in turn, drive better product development, service delivery, and branding. The cycle reinforces itself.
Integrating Experience Innovation with Other Types
While experience innovation can be pursued independently, it becomes even more powerful when integrated with configuration and offering innovations.
- Service innovations can elevate a great product into a customer favorite.
- Channel innovations can make performance innovations more accessible.
- Brand innovations can turn profit models into movements.
- Engagement innovations can refine and inform structural changes.
Take Nike once again. Their Nike+ system blends product performance (sensor-based tracking), product system innovation (integration with mobile apps), and experience innovation (community, brand, engagement) into a singular user journey. This layered approach turns features into meaningful experiences.
Even in sectors like finance or logistics—traditionally seen as less emotional—experience innovations can transform perceptions. Banks offering mobile-first solutions, transparent fee structures, and community education programs are redefining what customers expect from financial institutions.
Building an Experience-Driven Business
For companies looking to lead with experience, the following steps can help guide the transformation:
- Map the Customer Journey
Identify every touchpoint, from discovery to post-sale support. Find areas of friction and opportunity. - Create Empathy-Led Personas
Use data, interviews, and observations to understand not just demographics, but motivations, anxieties, and goals. - Design for Emotion, Not Just Function
Functional excellence is a baseline. Go further by designing moments of delight, surprise, reassurance, or empowerment. - Build Feedback Loops Into Everything
Allow customers to express themselves easily. Use reviews, community forums, and NPS tools to gather insight and fuel innovation. - Empower Your Frontline Teams
The best customer experiences come from engaged, informed employees. Give them tools, autonomy, and purpose. - Be Consistent and Authentic
Every experience should reflect your brand’s personality and values. Disjointed experiences confuse and dilute.
Why Combining Innovation Types Matters
A product innovation on its own may attract short-term attention. A clever pricing model may boost revenue for a few quarters. A creative customer service touchpoint might earn praise. But isolated innovations—no matter how good—can be copied, commoditized, or forgotten.
By contrast, when innovation is systemically integrated across categories, it becomes far more difficult to replicate. The interconnected value multiplies, and the whole becomes greater than the sum of its parts.
In their research, the authors of Ten Types of Innovation: The Discipline of Building Breakthroughs observed that companies that used six or more types in a single innovation effort outperformed others significantly, especially when compared to businesses that used only one or two. These multi-type innovators delivered twice the return on innovation investments, sustained momentum, and remained ahead of their markets.
Innovation combinations work because they:
- Reinforce customer loyalty through integrated products and services.
- Create economic moats via hard-to-copy business models and ecosystems.
- Strengthen internal culture and enable continuous improvement.
- Drive greater ROI by maximizing every stage of the customer journey.
Now let’s explore real-world examples and strategic models that illustrate how multiple types of innovation can be orchestrated for growth.
Case Study 1: Nike – From Product to Platform
Nike began as a performance innovator, designing high-quality athletic footwear. But over time, it expanded into a masterclass in integrated innovation. Here’s how Nike layered multiple types of innovation to transform from a shoe manufacturer into a lifestyle platform:
- Product Performance: High-quality shoes with advanced sole technology.
- Product System: Nike+, which integrates shoes, sensors, and mobile tracking apps.
- Channel Innovation: NikeTown stores that offered retail as immersive brand storytelling.
- Brand Innovation: Emotional storytelling in campaigns like “Just Do It,” tied to empowerment.
- Customer Engagement: Nike Run Clubs and apps that enable user communities.
- Network Innovation: Partnerships with Apple to develop integrated fitness experiences.
- Service Innovation: Personalized coaching and recommendations in the Nike Training Club app.
This multifaceted approach helped Nike outperform athletic brands that only focused on product performance. Instead of just selling gear, Nike built a fitness ecosystem that consumers could live within.
Case Study 2: Method – Building a Brand Around Belief
Method, the eco-friendly cleaning product company, built an innovation model centered on sustainability. While their products alone were high-quality, the deeper innovation came from combining systems, values, and experiences:
- Profit Model: Premium pricing based on green value.
- Structure: Outsourcing manufacturing to maintain an agile, lean core.
- Product Performance: Non-toxic, biodegradable cleaning agents.
- Product System: Refill packaging, multi-purpose kits, and design-led containers.
- Brand Innovation: A brand narrative centered on “People Against Dirty.”
- Customer Engagement: An active online community sharing eco-tips and feedback.
By aligning every type of innovation with a central purpose—environmental responsibility—Method created a defensible and emotionally resonant business model that led to its acquisition by Ecover and growth in international markets.
Strategic Combinations to Consider
Not every business needs to use all ten types at once. But the key is to be intentional about combining types that create synergy. Below are several proven pairings and how they work:
1. Product Performance + Channel Innovation
This combo is ideal for companies launching something new but needing to stand out in how they deliver it. A breakthrough product can gain faster traction if the delivery model is fresh and direct. Consider subscription models, pop-up stores, or exclusive online launches.
Example: Warby Parker disrupted eyewear by offering stylish, affordable glasses online with a home try-on program, revolutionizing both product design and delivery.
2. Process Innovation + Service Innovation
Operational improvements gain customer-facing value when paired with better service. Companies that optimize behind the scenes and improve support channels make customers feel both the efficiency and the care.
Example: Domino’s streamlined its pizza-making and delivery process (process innovation) and layered in real-time order tracking and mobile app reordering (service innovation), reinventing customer expectations in fast food.
3. Brand Innovation + Customer Engagement
Businesses looking to forge deep emotional connections can integrate powerful storytelling with interactive experiences. Brands with clear missions that involve customers in meaningful ways generate loyal advocates.
Example: Patagonia tells stories about environmental activism (brand) and allows customers to repair, resell, or recycle used gear through Worn Wear (engagement), making sustainability a lifestyle, not just a message.
4. Profit Model + Network Innovation
Reimagining revenue streams while collaborating externally can unlock new markets. These types combine well for platforms, marketplaces, and companies entering new territories.
Example: Airbnb enabled property owners to monetize space (profit model) and built a peer-to-peer community with trust mechanisms like reviews (network), becoming a global alternative to hotels.
5. Structure + Product System
Redesigning how a company is organized can help it better deliver integrated offerings. This is particularly effective in industries requiring agility and personalization.
Example: Spotify structures teams into autonomous squads to build and iterate on modular features (structure), allowing it to expand from music streaming to personalized playlists, podcasts, and AI-based recommendations (product system).
Building Your Innovation Stack
To develop a multi-type innovation strategy, businesses should approach it like a design process—intentional, iterative, and aligned with both market needs and internal capabilities.
Step 1: Diagnose Innovation Gaps
Begin by mapping current innovation efforts against the ten types. Where is your business investing most? Which areas are underutilized? Use these questions:
- Are we over-relying on product development?
- Is our brand identity differentiated and meaningful?
- Are our services aligned with customer expectations?
- Do we have the right partnerships to scale or grow?
This audit will uncover blind spots and highlight missed opportunities.
Step 2: Define Your Strategic Anchor
Choose a central theme or outcome to guide innovation integration. This could be:
- A mission (e.g., sustainability)
- A market segment (e.g., Gen Z digital natives)
- A business goal (e.g., recurring revenue)
Having this anchor ensures that multiple innovation types are cohesively linked, not randomly stacked.
Step 3: Sequence Innovation Types Thoughtfully
While all ten types are valuable, they don’t need to be activated simultaneously. Build in phases:
- Phase 1: Product + process + profit model (lay the foundation)
- Phase 2: Brand + service + engagement (enrich the customer layer)
- Phase 3: Channel + structure + network (expand and scale)
Sequencing allows for manageable execution and resource allocation.
Step 4: Measure and Adapt
Innovation must remain dynamic. Use KPIs across customer retention, margin improvement, engagement rates, and market share to assess the impact of your combinations. Feedback loops should be established at each touchpoint to ensure alignment with user needs and changing market trends.
Overcoming Challenges of Integrated Innovation
While multi-type innovation offers exponential returns, it comes with challenges:
- Organizational silos may prevent cross-functional collaboration.
- Short-term thinking may limit experimentation with less visible types like structure or profit models.
- Resource constraints can make implementation difficult without prioritization.
To overcome these, leadership must create a culture of innovation that encourages risk-taking, funds long-term projects, and rewards collaborative, cross-functional thinking.
This might mean bringing HR, operations, marketing, and product teams into the same innovation meetings, or establishing roles that bridge departments, like innovation strategists or customer experience architects.
The Future Belongs to the Integrators
As industries face commoditization, automation, and saturation, innovation must evolve beyond novelty. Businesses that systematically combine and evolve innovation types will remain adaptive, resilient, and beloved.
Think of the ten types of innovation as tools in a builder’s workshop. You wouldn’t construct a house with only a hammer. Similarly, companies should craft their strategy with the right combination of tools, tailored to market needs, cultural identity, and growth ambitions.
This approach doesn’t just lead to better products—it builds enduring companies.
Final Thoughts
The Ten Types of Innovation Framework offers more than a vocabulary for innovation—it provides a blueprint for scalable, defensible, and inspiring business models. By understanding and combining configuration, offering, and experience innovations, any business—large or small—can move from functional improvement to transformational growth.
Innovation isn’t about waiting for a great idea to strike. It’s about designing, aligning, and orchestrating innovation efforts across the full spectrum of business operations. The most successful companies in the world—from Nike to Apple, from Patagonia to Spotify—prove that integrated innovation is not only possible—it’s essential.
Start by selecting one or two underused types in your business. Explore how they might connect with existing strengths. Then, build forward with intention.
Because the future of business isn’t about being the first to innovate—it’s about being the best at integrating innovation across everything you do.
