How to Develop product and Service Delivery Innovation

The meaning of Product/service delivery innovation

This is the process of translating an idea or invention into a good or service that creates value or for which customers will pay. To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need (Business Dictionary, 2019).

The term Innovation refers to the practical implementation of new or improved ideas that create value for customers, organizations, or society. While innovation has become a popular buzzword, it does not always mean inventing something completely new. Instead, it can involve improving existing products, processes, or business models to meet changing needs (Baer, 2019).

Types of Innovation

1. Product Innovation

Product innovation focuses on what the organization offers to the customer. It involves creating new products or improving existing ones to deliver better value.

Product innovation may take the following forms:

New product development – introducing a completely new product to the market, such as fitness trackers like Fitbit or e-readers like Amazon Kindle.
Improvement of existing products – enhancing performance or quality, for example improving camera resolution in smartphones.
Addition of new features – adding useful features to existing products, such as power windows or smart dashboards in vehicles.

Drivers of product innovation include:

Technological advancements
Changing customer preferences
Market competition
Obsolete product designs

PRODUCT DEVELOPMENT VSPRODUCT INNOVATION

PRODUCT DEVELOPMENT	PRODUCT INNOVATION
The structured process of designing, improving, testing, and launching products	The introduction of a product that is new or significantly improved
How the product is created and delivered	What new value the product offers to customers
Low to moderate; often incremental changes	Moderate to high; can be incremental or radical
Improve efficiency, quality, or functionality	Create customer value and competitive advantage
Supports day-to-day operations	Shapes long-term business strategy
New model of an existing phone, updated packaging	Smartphones, mobile money (M-Pesa), electric vehicles
May or may not result in innovation	Always results in innovation

2. Process Innovation

Process innovation involves improving how products or services are created, delivered, and supported. It focuses on increasing efficiency, reducing costs, and improving quality.

Process innovation may include:

Use of new manufacturing equipment and technologies
Improved software for design, production, and logistics
Better supply chain and delivery systems
Enhanced accounting, sales, and customer service methods

Unlike product innovation, process innovation is not always visible to customers, but it significantly improves internal operations.

Examples of process innovation:

Henry Ford’s moving assembly line, which reduced vehicle production time from 12 hours to 90 minutes.
Use of digital sales dashboards by multinational companies to improve decision-making and reduce meeting time.

3. Business Model Innovation

Business model innovation refers to changes in how a business creates, delivers, and captures value, rather than changes to the product itself.

This type of innovation involves:

New ways of reaching customers
New pricing or revenue models
New customer relationship strategies

Business model innovation is often radical and transformational, and therefore involves higher risk compared to product or process innovation.

Examples include:

IBM shifting from hardware manufacturing to technology and consulting services.
Amazon eliminating traditional retail channels and selling directly to customers through online platforms.

Traits of Successful Innovation Teams

Successful innovation does not happen by chance. Research shows that organizations with strong innovation performance share common characteristics (Tucker, 2018).

Characteristics of Successful innovation teams

Focus more on transformational innovation than small incremental changes.
Involve the right mix of skills, creativity, and leadership.
Offer effective incentives to motivate innovative behavior.
Allocate adequate financial resources to innovation projects.
Embed innovation into the organizational culture and values.
Collaborate with investors and external partners.
Use flexible funding sources to adapt to change.
Minimize internal politics by working closely with business units.
Align innovation efforts with the overall organizational strategy.

Business Innovation Strategies (product and service delivery innovation)

Meaning of Innovation Strategy

An innovation strategy refers to the approach an organization uses to develop, adopt, and manage innovation in order to achieve competitive advantage. According to Dodgson, Gann, and Salter (2008), innovation strategies can be classified into proactive, active, reactive, and passive depending on risk appetite, market position, and technological capability.

Types of Business Innovation Strategies

1. Proactive Innovation Strategy

A proactive innovation strategy focuses on leading the market through innovation rather than following competitors.

Characteristics Proactive Innovation Strategy

Strong research and development (R&D) orientation
First-mover advantage
Willingness to take high risks
Access to knowledge from many internal and external sources

Types of innovation used:

Radical innovation – major breakthroughs that fundamentally change products or services=Incremental innovation – continuous improvements that enhance performance

Examples: Apple, DuPont, Singapore Airlines

2. Active Innovation Strategy

An active innovation strategy involves protecting existing markets and technologies while remaining flexible enough to respond quickly once innovations are proven.

Key characteristics:

Medium-to-low risk exposure
Broad knowledge sources
Focus on applied research and development
Gradual adoption of proven technologies

Type of innovation used:

Mainly incremental innovation

Examples: Microsoft, Dell, British Airways

3. Reactive Innovation Strategy

A reactive innovation strategy is used by organizations that follow industry leaders rather than innovate first.

Key characteristics:

Wait-and-see approach
Strong focus on operational efficiency
Low-risk orientation
Adoption of already successful innovations

Type of innovation used:

Entirely incremental innovation

Example:
Ryanair, which adopted the low-cost, no-frills airline model pioneered by Southwest Airlines.

4. Passive Innovation Strategy

A passive innovation strategy involves minimal innovation activity, where firms only change when customers demand it.

Key characteristics:

Customer-driven changes
Very low risk
Limited investment in innovation

Examples:
Automotive component suppliers that only adjust product specifications when requested by manufacturers.

Successful Innovation Implementation (product and service delivery innovation)

Innovation is not only about generating ideas but also about effectively implementing them and sustaining an innovative culture (Brands, 2015). Successful implementation involves three key components: ideas, people, and process.

1. Big Ideas and Innovation Culture

Organizations should develop a clear innovation mantra that guides daily decisions, such as:

“Inspire innovation”
“Create one meaningful innovation each year”

Key practices include:

Building innovation gradually
Encouraging accountability
Reinforcing shared values

A major challenge is innovation resistance, also known as innovation assassination. Fear, insecurity, and organizational uncertainty can lead to resistance against new ideas.

Solution strategies:

Acknowledge resistance
Understand its causes
Promote a culture that embraces risk and learning

Many innovative organizations view failure as a learning experience, using phrases such as “fail fast and fail cheap”.

Competency focus:
Learners should be able to explain how organizational culture influences innovation success.

2. People and Organizational Structure

Innovation implementation is often limited by people-related challenges.

Key considerations:

Recruiting and retaining the right talent
Managing diverse generations in the workplace
Adapting to technological change
Reviewing organizational structures and workspaces

Modern organizations must ensure that every employee is engaged and expected to contribute to innovation.

3. Process: Create, Align, and Repeat

Effective innovation requires structured yet flexible processes.

Key points:

Collaboration across teams
Clear alignment with organizational goals
Continuous improvement

According to Soren Kaplan, competitive advantage comes not only from what organizations innovate, but also from how they innovate.

Registration and Patenting of Innovation (product and service delivery innovation)

Meaning of a Patent

A patent is a legal right granted by the government that gives the inventor exclusive rights to prevent others from making, using, or selling an invention within a specific country.

Patent protection is territorial, meaning it only applies in countries where the patent is registered.

Patent Registration in Kenya

In Kenya, patents are examined and granted by the Kenya Industrial Property Institute (KIPI) under the Industrial Property Act, 2001.

Inventors may also apply for regional protection through the African Regional Intellectual Property Organization (ARIPO), which serves several African countries.