It is the goal of this chapter to offer an organizing framework, or typology, of types of innovations that a firm may create or experience, and to briefly describe the differences in management processes required by firms for executing these various innovation types. Because of the plethora of terms used to label innovations (see Table 13.1 and Garcia and Calantone, 2002 for details), the focus here is on the most widely referenced types of innovations: product/service versus process; radical versus incremental; technological versus administrative; architectural versus modular; and disruptive versus sustaining. There are many ways of categorizing innovations (Table 13.1), with the greater number of categories adding greater and greater refinement for understanding the differences in innovation typology. However, we use the bi-level categorization because of its simplicity and frequency of use when discussing innovations.
First, we provide a definition for the general conceptualization of innovations. A classic dictionary definition of innovation is the embodiment, combination, or synthesis of knowledge into a new idea, method, or device. Peter Drucker, famed management consultant, defined innovation as a change that creates a new dimension of performance. We use this broader description to define innovation as a new idea, method, process, or device that creates a higher level of performance for the adopting user. ...