Is your innovation stuck in the brainstorming phase? You’re not alone! Innovation is on everyone's minds. 83% of senior executives ranked it as their top-three organizational priority, according to BCG’s 18th Annual Innovation Study. Despite this focus push from top leadership, only 3% to 8% of businesses are ready to deliver on these goals.
Common Mistakes Made When Businesses Try To Innovate
If you’re tired of pouring investments into the innovation abyss and watching as rivals pull ahead, you’ll want to keep reading. We’re breaking down the four types of innovation you can start implementing today to succeed in today’s competitive market.
There’s a common misconception about innovation. Most people think that innovation refers to a new product. While that is one of the types (we’ll cover it towards the end), it’s not the only way you can innovate. There are four ways you can innovate, as demonstrated originally by Professors John Bessant and Joe Tidd in their management textbook, “Managing Innovation: Integrating Technological, Market and Organizational Change,” and called “The 4 P’s Of Innovation.”
These innovation types include:
- Process Innovation
- Position Innovation
- Paradigm Innovation
- Product Innovation
Process Innovation – The Unsung Hero Of Competitive Advantage
The first type of innovation is process innovation. The goal is to change how you create and deliver a product. This is often the unsung hero of competitive advantage. While largely invisible to consumers, this is transformative to your business’s ability to produce, scale, and deliver. Process innovation ranges from automating a single workflow step to fundamentally reorganizing how an entire organization creates value.
A classic example of process innovation is Toyota’s lean manufacturing system. This impactful process didn’t create new products; it transformed how cars were built. This allowed Toyota to produce higher-quality vehicles at a lower cost, fundamentally changing the competitive landscape in the automotive industry.
How Product Managers And Business Leaders Can Implement Process Innovation
This type of innovation is at the heart of business evolution even to this day. (Think about Amazon’s delivery and fulfillment centers.) While not a new product, process innovation can be exactly what you need to maintain your competitiveness in the market. There are two ways you can start implementing process innovation in your business.
- Incremental Process Innovation: This is small but continuous improvements to your systems. (You don’t need to overhaul everything.)
- Radical Process Innovation: This requires significant and disruptive changes to systems in your organization.
So, what does this mean for product managers? You’re going to want to look inward at how products are built, tested, launched, and maintained.
Some examples of process innovation could be implemented in your:
- Agile Development
- Manufacturing
- Customer-Feedback Systems
Innovating any of the above can help establish a durable advantage that’s not easily replicated by competitors.
Position Innovation – Changing The Frame
The second type of innovation is position innovation. This changes the market context of an existing product or service. A great example of this is the Stanley Cups. Historically, they were a male-centric industrial brand targeting outdoor enthusiasts and construction workers. When their new “Adventure Quencher Travel Tumbler” was introduced, it performed poorly. So, they repositioned this product to women. Using influencer and affiliate marketing, they reached a whole new demographic that absolutely loved their “Adventure Quencher Travel Tumbler.” This position innovation would lead to product innovation, as they embraced vibrant, trendy colors for their cups.
As Ashlee LeSuer, the founder of the Buy Guide, says, “Any brand on the planet that isn’t marketing to the 25 to 50 year old woman is really missing the mark. Even if you are a men’s clothing line — no matter what you are — if you are not finding a way to speak to this 25-to-50-year-old female, you’re missing the mark because those are the buyers of our economy.”
The Two Fundamentals For Implementation
So, product managers, how do you change the framework of an existing offering? In two key ways…
- Introduce your product or service to a new customer segment.
- Change the narrative around the product.
Sometimes you can do both; after all, that’s what Stanley did. The goal is to keep your focus on moving the framework. If it’s a success, you can always make small updates to your product to better position yourself in the market.
Paradigm Innovation – The Riskiest But Most Rewarding Innovation
The third type of innovation is paradigm innovation. This is by far the most risky but most rewarding of the innovation types. It requires you to abandon or fundamentally disrupt the assumptions that define your industry or your identity. It’s not for the faint of heart. It requires a lot of buy-in and trust. You’re not just improving existing ways of doing things. You’re calling into question what it means to be in a given business at all. This type of innovation is often the catalyst for all other forms of innovation. It opens up previously unseen opportunities for the product, process, and position.
Remember when everyone was renting DVDs? Well, Netflix first entered the scene by mailing out rental DVDs to customers. They could keep things the same, after all, everyone in the industry, from Redbox to Blockbuster, was renting DVDs. But, they didn’t. Netflix overhauled its entire business model and went against what everyone in the industry was doing. They started streaming their movie collection to customers. This was a complete paradigm shift in entertainment. All of their competitors had to respond, and most were unprepared.
What Business Leaders Should Know About Paradigm Innovation
High risk, high reward, this type of innovation isn’t easy. While there isn’t a concrete way to know if your idea will revolutionize everything or tear your company down, there are a couple of things you can be on the lookout for when you want paradigm innovation.
- This type of innovation is usually dismissed because the ideas are unproven and unconventional.
- Ideas for this innovation usually come from industry outsiders.
- They’re not perfect; often, they require further refinement or positioning before finding Product Market Fit.
Product Innovation – The Most Visible Innovation
Product innovation is what most people think of when they’re talking about innovation. It is the easiest to see for both those inside the business and customers. Innovation here can range from incremental improvements to an existing product line to novel offerings. This is where the majority of innovation budgets are focused and traditionally where product managers and business leaders are most comfortable.
While there are too many examples of product innovation to name, we’ll highlight one – the Apple iPhone. In an age when most cell phones could only call and play Tetris, the iPhone came out with a camera (something most people didn’t even know they wanted), a music player, and internet access. This forever changed the landscape of cell phones, and the features they introduced would become the new industry standard.
The Pitfall Of Product Innovation
The real challenge of product innovation doesn’t come from the risk; it comes from missing the opportunity to innovate in other ways. A technically superior product that is delivered inefficiently, positioned to the wrong audience, or built on an outdated business model will underperform every time. Why? Often, because product innovation alone isn’t enough.
The Benefits Of Mastering All Forms Of Innovation For Product Managers
Product managers occupy a unique position in every organization. It’s not an easy one. You’re responsible for outcomes you don’t always control across functions that don’t always align in markets that shift faster than roadmaps track. The 4Ps framework is one of the most practical tools available because it gives you a structured way to audit where your innovation efforts are concentrated. It’ll also help you flag where your innovation efforts are too thin.
Here are a few questions to help you evaluate your innovation investments.
- Where is our innovation focus currently concentrated?
- What innovation is underinvested relative to its potential?
- Are there fundamental assumptions that we have not questioned in 3+ years?
- How can you leverage one type of innovation to create movement in other areas of innovation?
Innovation Without The Guesswork
Understanding the 4Ps of innovation is a great start. Deploying them with strategic intentionality is what separates reactive organizations from category leaders. That requires more than intellectual familiarity with a framework; it demands a structured methodology. It calls for ideation, business case development, organizational alignment, development, qualifications, and more. The best product managers and innovation leaders don't just know these frameworks. They've internalized the foundation of all these concepts so they can apply them under pressure, across competing priorities, in organizations that weren't necessarily built for the pace of change they're now facing.
The AIPMM Certified Innovation Leader Course will equip you with the knowledge, skills, and tools to strategically ally and successfully drive innovation in your business. Its certification is recognized worldwide, with courses available in-person or online on demand. Learn more by visiting https://aipmm.com/cil.
Sources
Asel, P. (2024, August 24). Paradigm shifts: Ten winning strategies for disruptive innovators. Medium. https://paulasel.medium.com/paradigm-shifts-ten-winning-strategies-for-disruptive-innovators-540fcba70aec
Boston Consulting Group. (2024, June 4). Innovation systems need a reboot. https://www.bcg.com/publications/2024/innovation-systems-need-a-reboot
Jansen, C. (2023, November 14). The rise of the Stanley tumbler: How a 110-year-old brand achieved viral success. Retail Dive. https://www.retaildive.com/news/stanley-quencher-tumblers-viral-success/699416/
KDAN. (2025, March 30). Process innovation examples: Transforming industries with new approaches. KDAN Blog. https://www.kdan.com/blog/innovation-examples
Michigan State University Online. (2025, January 20). The 4 Ps of innovation in healthcare. https://www.michiganstateuniversityonline.com/resources/healthcare-management/applying-4-ps-for-healthcare-innovation/