Key Innovation Models

Why This Matters

Innovation doesn't happen by accident—it follows patterns that researchers and practitioners have studied for decades. When you're tested on innovation management, you're not just being asked to name models. You're being assessed on whether you understand why certain approaches work in specific contexts, how companies choose between competing frameworks, and when to apply each model based on organizational goals and market conditions.

These models represent fundamentally different philosophies about where innovation comes from, who should be involved, and how to manage uncertainty. Some prioritize speed and iteration; others emphasize structure and risk reduction. Some look inward for ideas; others deliberately seek external input. Master the underlying logic of each approach, and you'll be able to analyze any innovation scenario on an exam. Don't just memorize the names and founders—know what problem each model solves and when it's the right tool for the job.

---

Market-Disrupting Frameworks

These models focus on creating entirely new competitive spaces rather than fighting for share in existing markets. The core principle: sometimes the best strategy is to change the game entirely rather than play by existing rules.

Disruptive Innovation Model

• Introduced by Clayton Christensen—explains how smaller, resource-constrained companies can topple established market leaders by targeting overlooked segments
• New market creation occurs when innovations initially serve low-end or non-consumers, then improve until they capture mainstream customers
• Incumbent blindness is the key mechanism—established firms rationally focus on profitable customers while disruptors gain footing in seemingly unattractive niches

Blue Ocean Strategy

• Developed by W. Chan Kim and Renée Mauborgne—advocates creating uncontested market space rather than competing in crowded "red oceans"
• Value innovation simultaneously pursues differentiation and low cost, breaking the traditional trade-off between the two
• Strategy Canvas and Four Actions Framework are diagnostic tools that help identify which factors to eliminate, reduce, raise, or create

---

Customer-Centered Approaches

These frameworks place deep understanding of customer needs at the center of the innovation process. The underlying insight: successful innovation solves real problems for real people, not just what companies think customers want.

Design Thinking

• Human-centered innovation methodology—prioritizes empathy and user understanding before generating solutions
• Five-stage process: Empathize, Define, Ideate, Prototype, Test—designed to be iterative rather than linear
• Cross-functional collaboration breaks down silos and brings diverse perspectives to creative problem-solving

Jobs-to-be-Done Framework

• Focuses on functional and emotional "jobs" customers hire products to accomplish—not demographic segments or product features
• Outcome-driven innovation identifies the specific metrics customers use to measure success when completing a job
• Reveals hidden competitors—products that seem unrelated may compete for the same job, like milkshakes competing with bagels for the "make my commute bearable" job

---

Speed and Iteration Models

These approaches prioritize rapid learning and adaptation over extensive upfront planning. The governing principle: in uncertain environments, fast feedback beats perfect forecasting.

Lean Startup Methodology

• Developed by Eric Ries—applies scientific method to entrepreneurship through hypothesis testing and validated learning
• Minimum Viable Product (MVP) is the smallest version of a product that allows you to collect meaningful customer feedback
• Build-Measure-Learn loop drives rapid iteration—pivot or persevere decisions are based on real data, not assumptions

Business Model Canvas

• Strategic visualization tool with nine interconnected building blocks covering value creation, delivery, and capture
• Key components: Customer Segments, Value Propositions, Channels, Customer Relationships, Revenue Streams, Key Resources, Key Activities, Key Partnerships, Cost Structure
• Enables rapid iteration on business model hypotheses—pairs naturally with Lean Startup for testing assumptions

---

Structured Process Models

These frameworks bring discipline and systematic evaluation to innovation, reducing risk through defined stages and criteria. The core trade-off: more structure reduces costly failures but may slow breakthrough innovation.

Stage-Gate Model

• Project management framework dividing innovation into discrete stages separated by decision "gates"
• Gate reviews assess projects against predetermined criteria—go, kill, hold, or recycle decisions prevent resource waste
• Cross-functional accountability ensures technical, marketing, and financial perspectives inform each gate decision

Diffusion of Innovation Theory

• Developed by Everett Rogers—explains how innovations spread through social systems over time
• Five adopter categories: Innovators (2.5%), Early Adopters (13.5%), Early Majority (34%), Late Majority (34%), Laggards (16%)—each requires different communication strategies
• Adoption rate depends on perceived attributes: relative advantage, compatibility, complexity, trialability, and observability

---

Knowledge Source Models

These frameworks address where innovative ideas originate and how organizations can access them. The fundamental question: should innovation come from inside the organization, outside, or both?

Open Innovation Model

• Proposed by Henry Chesbrough—challenges the assumption that all good ideas must originate internally
• Inbound and outbound flows allow external ideas to enter the firm and internal ideas to reach market through external channels
• Ecosystem collaboration with universities, startups, and competitors accelerates innovation while sharing costs and risks

Technology Push and Market Pull Model

• Technology Push occurs when R&D breakthroughs create products before explicit market demand exists—think smartphones before consumers knew they needed them
• Market Pull responds to identified customer needs and gaps—innovation is demand-driven rather than capability-driven
• Balanced approach typically succeeds best—pure technology push risks building products nobody wants; pure market pull may miss transformative opportunities

---

Quick Reference Table

---

Self-Check Questions

1. Which two models both aim to escape direct competition, and how do their starting points differ?

2. A company wants to understand why customers buy their product. Should they use Design Thinking or Jobs-to-be-Done first, and why might they eventually use both?

3. Compare the Stage-Gate Model and Lean Startup Methodology: what type of organization or project is each best suited for, and what's the key trade-off between them?

4. If an FRQ describes a breakthrough technology searching for applications, which model (Technology Push or Market Pull) applies, and what risks should the company consider?

5. Using Diffusion of Innovation Theory, explain why a product that performs well in early testing might still fail to achieve mainstream adoption—and which adopter category represents the critical transition point.