Types of Innovation: A Practical Guide for Organizations (2026)

Ask ten people to define “innovation” and you’ll get ten different answers. One person thinks it means inventing something entirely new. Another thinks it’s just improving what already exists. A third equates it with digital transformation, and the person next to them is convinced it’s about disrupting an industry.

They’re all partially right, which is exactly the problem. When everyone in your organization has a different mental model of innovation, you end up with an innovation program that tries to do everything and accomplishes nothing.

This guide breaks down the major types of innovation, explains what each one actually looks like in practice, and helps you figure out which types matter most for your organization. No academic jargon, no McKinsey frameworks you’ll never use. Just a practical overview that helps you think more clearly about where to focus your innovation efforts.

Why understanding innovation types matters for your organization

This isn’t just a taxonomy exercise. The type of innovation you pursue determines everything: what ideas you ask for, who you ask, how you evaluate them, and how you measure success.

An organization focused on incremental process improvements needs a system for capturing small, frequent ideas from frontline workers. An organization pursuing radical product innovation needs a system for evaluating risky, long-horizon bets. These are fundamentally different programs with different success metrics.

Most innovation programs fail not because they lack ideas, but because they lack focus. Understanding the types of innovation gives you a vocabulary to define what you’re actually trying to do, communicate that clearly to your organization, and build a program around it.

The 4 types of innovation (the classic framework)

The most widely used framework divides innovation along two dimensions: how much the technology changes and how much the market or business model changes. This gives you four quadrants.

1. Incremental innovation

Small, continuous improvements to existing products, services, or processes. This is the most common type of innovation and the one most organizations are best at, even if they don’t call it “innovation.”

Examples: A manufacturing line reducing changeover time by 15 minutes. A retail chain improving its shelf stocking process to reduce waste. A software company fixing UX friction points based on customer feedback.

Incremental innovation doesn’t make headlines, but it compounds. Toyota’s entire production system is built on the idea that thousands of small improvements, driven by the people doing the work, add up to massive competitive advantage over time. This is the heart of continuous improvement and Kaizen methodology.

Who drives it: Frontline workers, operational teams, anyone close to the daily work. These are the people who notice that a process takes three steps when it could take two, or that a tool doesn’t quite work the way it should.

How to capture it: You need a system that makes it easy for anyone (especially deskless and frontline workers) to submit small ideas frequently. Anonymous submission, mobile access, and QR codes matter here because the people with the best incremental ideas are often the ones furthest from a desk.

2. Radical innovation (breakthrough innovation)

Entirely new products, technologies, or approaches that create new markets or fundamentally change existing ones. Radical innovation involves high uncertainty, long timelines, and a high failure rate.

Examples: The transition from film photography to digital. mRNA vaccine technology. Electric vehicles replacing internal combustion engines.

Most organizations talk about wanting radical innovation, but very few are structured to actually pursue it. Radical innovation requires tolerance for failure, long investment horizons, and a willingness to cannibalize your own existing products. It also requires a different evaluation approach: you can’t score a breakthrough idea the same way you score a process improvement.

Who drives it: R&D teams, technology scouts, partnerships with universities and startups. Increasingly, organizations combine internal ideas with external technology scouting (what Hives.co and Findest call innovation intelligence) to spot breakthrough opportunities earlier.

How to capture it: Targeted idea challenges that ask specific strategic questions, combined with technology scouting to identify emerging technologies relevant to your business.

3. Disruptive innovation

A term coined by Clayton Christensen that specifically describes innovations that start in low-end or new-market segments and gradually displace established competitors. Disruptive innovations typically start as “worse” products that are cheaper, simpler, or more accessible.

Examples: Netflix disrupting Blockbuster (started with worse selection but better convenience). Budget airlines disrupting legacy carriers. Smartphone cameras disrupting dedicated point-and-shoot cameras.

Disruptive innovation is probably the most misused term in business. Not every new technology is “disruptive.” True disruption follows a specific pattern: the new entrant targets overlooked customers with a simpler solution, then gradually improves until it displaces the incumbent. The reason incumbents miss it is precisely because the disruption starts in segments they don’t care about.

Who drives it: Often external startups, but large organizations can pursue it through separate innovation units, venture arms, or partnerships. The key is organizational separation from the core business, because the core business will always prioritize protecting existing revenue.

4. Architectural innovation

Recombining existing technologies or components in new ways. The individual pieces aren’t new, but the way they fit together creates something genuinely different.

Examples: The Sony Walkman (portable + cassette player, neither was new individually). Meal kit delivery services (recipes + pre-portioned ingredients + delivery logistics). Hives.co’s merger with Findest combines internal idea management with external technology scouting, creating a new category of innovation intelligence.

Architectural innovation is interesting because it’s often achievable by organizations that can’t afford radical R&D. You don’t need to invent new technology; you need to see new connections between existing capabilities. This type of innovation particularly benefits from diverse perspectives, because people from different functions and backgrounds see different possible combinations.

Who drives it: Cross-functional teams, people who work at the intersection of different departments or disciplines. This is why broad employee engagement in innovation matters: the best architectural innovations come from someone in logistics noticing a connection to something happening in product development.

The 10 Types of Innovation framework (Doblin/Deloitte)

While the 4-type framework focuses on the degree of change, the Ten Types of Innovation framework (developed by Doblin, now part of Deloitte) categorizes innovation by where it happens in a business. It’s a useful checklist for organizations that tend to fixate on product innovation and ignore everything else.

The ten types are grouped into three categories:

Configuration (how the business is structured):

1. Profit model: How you make money (subscription vs. one-time, tiered pricing, freemium)
2. Network: How you partner with others to create value
3. Structure: How you organize talent, assets, and operations
4. Process: How you do the work (operational methods, proprietary processes)

Offering (what you deliver):

5. Product performance: Features, functionality, quality of your core product
6. Product system: How individual products work together as a platform or ecosystem

Experience (how customers interact with you):

7. Service: How you support and enhance the value of your offering
8. Channel: How your offering reaches customers
9. Brand: How you present your identity and promise
10. Customer engagement: How you foster interaction and loyalty

The insight from this framework is that most organizations focus their innovation efforts on types 5 and 6 (product) and ignore the other eight. But some of the most impactful innovations happen in profit models (think subscription pricing), processes (think Toyota’s production system), or customer engagement (think loyalty programs). When you’re collecting ideas from employees, framing idea challenges around these ten types can surface opportunities your team wouldn’t otherwise consider.

Other useful innovation distinctions

Product innovation vs. process innovation

Product innovation changes what you sell. Process innovation changes how you make or deliver it. Most employee idea programs lean heavily toward process innovation because the people doing the work see inefficiencies every day. That’s not a bad thing: process innovations often have the fastest payback and the most predictable ROI.

If you’re building an idea management program, knowing whether you’re primarily after product ideas or process ideas shapes everything from who you invite to participate to how you evaluate and prioritize submissions.

Sustaining innovation vs. disruptive innovation

Sustaining innovations improve an existing product along dimensions that existing customers already value (faster, cheaper, more reliable). Disruptive innovations introduce a different value proposition that appeals to new or underserved customers. Most corporate innovation programs naturally produce sustaining innovations because the evaluation criteria are set by people who think in terms of current customer needs.

Open innovation vs. closed innovation

Closed innovation keeps R&D internal. Open innovation deliberately brings in ideas, technologies, and expertise from outside the organization: universities, startups, customers, or the public. The Hives.co and Findest merger is built around this idea: combining internal employee ideas with external technology scouting creates a more complete picture than either source alone.

Business model innovation

Changing how you create, deliver, or capture value, without necessarily changing the product itself. Netflix didn’t invent movies or TV; they innovated the delivery model (streaming) and the business model (subscription). Business model innovation is often the most impactful and the hardest to replicate, but it’s also the hardest to pursue through traditional idea management because it requires strategic thinking that cuts across the entire organization.

How to apply innovation types in practice

Understanding these frameworks is one thing. Actually using them to build a better innovation program is another. Here are some practical applications.

Define your innovation ambition. Google famously uses the 70-20-10 rule: 70% of resources on incremental innovation (core business improvements), 20% on adjacent innovation (expanding into related areas), and 10% on radical/transformational innovation (new markets, new technologies). You don’t have to copy Google’s exact split, but having an explicit allocation helps you avoid the default, which is 100% incremental because those ideas are easiest to evaluate and approve.

Frame challenges around specific types. Instead of asking “do you have any ideas?” (which tends to produce a grab bag of unrelated suggestions), frame your idea challenges around a specific innovation type. “What process in your daily work could we eliminate or automate?” targets process innovation. “What adjacent market could we serve with our existing capabilities?” targets architectural innovation. Specific questions get specific answers.

Match evaluation criteria to innovation type. A process improvement idea should be evaluated on estimated time savings, cost reduction, and implementation ease. A radical product idea should be evaluated on market potential, strategic alignment, and feasibility, with a much higher tolerance for uncertainty. Using the same evaluation method for both types guarantees that incremental ideas always win (because they’re easier to quantify) and breakthrough ideas die in committee.

Measure what matters for each type. Incremental innovation should be measured on implementation rate and cumulative impact. Radical innovation should be measured on learning velocity and portfolio progression. If you measure your innovation program using only one set of KPIs, you’ll optimize for one type and starve the others.

Reach different people for different types. Your frontline workers are the best source of incremental process improvements. Your R&D team and external partners are better sources of radical technology innovations. Your sales and customer success teams see unmet customer needs. A good idea management system lets you target different groups with different questions, rather than sending the same open-ended prompt to everyone.

Common mistakes organizations make with innovation types

Calling everything “innovation.” When the CEO says “we need to be more innovative” and the operations team hears “fix our broken processes” while the product team hears “build something no one has ever seen,” everyone nods in agreement while pursuing completely different goals. Be specific about which type of innovation you’re pursuing and why.

Only pursuing one type. Most organizations default to incremental innovation because it’s safe, predictable, and easy to approve. That works until a competitor introduces something genuinely different. A healthy innovation portfolio includes multiple types, weighted according to your strategy and risk tolerance.

Using the wrong evaluation lens. Judging a radical innovation idea by this quarter’s revenue potential is like judging a tree by how much fruit it produces in its first week. If your evaluation framework is built entirely around near-term ROI, you’re structurally incapable of pursuing anything except incremental improvements. If you’re struggling with this, our business case guide walks through how to justify different types of innovation investments.

Ignoring where ideas come from. Breakthrough ideas don’t come from the same process as incremental improvements. If your suggestion box collects both types but evaluates them the same way, the incremental ideas always win. Good ideas get ignored not because they’re bad, but because they landed in the wrong evaluation pipeline.

What are the 4 types of innovation?

The four types of innovation are incremental, radical (or breakthrough), disruptive, and architectural. Incremental innovation makes small improvements to existing products or processes. Radical innovation creates entirely new products or markets. Disruptive innovation starts in overlooked market segments and gradually displaces incumbents. Architectural innovation recombines existing technologies or capabilities in new ways. Most organizations benefit from a balanced portfolio that includes all four types, though the emphasis depends on your industry, competitive position, and risk tolerance. For a framework on balancing these, see our guide on the 70-20-10 rule.

What are the 10 types of innovation?

The 10 Types of Innovation framework, developed by Doblin (now part of Deloitte), categorizes innovation by where it happens in a business rather than how radical it is. The ten types are: profit model, network, structure, process, product performance, product system, service, channel, brand, and customer engagement. The framework’s key insight is that most companies focus too narrowly on product innovation (types 5 and 6) while ignoring eight other areas where innovation can create significant competitive advantage. Process innovation, profit model innovation, and customer engagement innovation are often more impactful and harder for competitors to copy than product features alone.

How do you manage different types of innovation in one organization?

The key is running parallel but distinct processes rather than funneling everything through a single pipeline. Use targeted idea challenges to collect specific types of ideas from the right audiences. Apply different evaluation criteria based on the innovation type: near-term ROI for incremental improvements, strategic fit and market potential for radical bets. Track implementation and impact using metrics that match each type. And invest in an idea management platform that supports these different workflows rather than treating every idea the same way.

Which type of innovation is most important?

It depends on your organization’s situation. For most mid-sized companies, incremental innovation delivers the fastest and most reliable returns. Capturing process improvements from frontline workers can generate measurable cost savings within weeks. But relying solely on incremental innovation is a long-term risk: eventually, a competitor with a genuinely different approach will change the game. The healthiest approach is a portfolio: mostly incremental (keeping the lights on and improving efficiency), some adjacent (expanding your capabilities), and a small allocation to radical innovation (future-proofing the business). The 70-20-10 framework provides a starting point for this allocation.

How do you build an innovation program that captures all types?

Start with clarity about what you’re trying to achieve. Run specific idea challenges rather than leaving an open suggestion box. Use different channels for different audiences: QR codes and mobile for frontline workers submitting process improvements, strategic workshops for leadership teams exploring breakthrough opportunities, external scouting for technology innovations. The platform you use matters: look for one that supports custom workflows, targeted challenges, and different evaluation criteria for different types of ideas. Our best idea management software guide compares tools that handle this well, and our pricing comparison helps you find one that fits your budget.