4 Types of Innovation Strategy: Which One Should You Adopt?

As many as 83% of senior executives rank innovation among their organization’s top three priorities. Surely that means they’re ready to create the conditions for innovation to thrive, right? Not quite; only 3% actually are.

How’s that gap even possible?

For most companies, it comes down to an innovation strategy that’s either too fuzzy or too sprawling. It’s like trying to cook a Michelin three-star meal without a recipe: lots of ingredients but no idea what you’re making.

And that tracks, given how critical innovation strategy really is. It’s what connects a company’s bold ideas to its business goals, aligning creativity with direction, resources, and market needs. 

But before you zero in on a single strategy to cook up success, it helps to know what’s on the menu.

This article outlines four main types of innovation strategy to consider.

Key takeaways

• Innovation strategy is the bridge between ideas and impact
  Most organizations talk about innovation, but few execute it effectively. A clear innovation strategy aligns creativity with business goals, helping companies focus their resources and efforts where they’ll deliver measurable results.

• There’s no one-size-fits-all approach to innovation
  From incremental improvements to radical breakthroughs, each innovation strategy serves a different purpose. The most successful companies mix multiple approaches.
  Apple’s innovation playbook blends several types at once: incremental updates, product innovation, disruptive innovation, and radical innovation. The lesson: balance stability with bold bets.

• Empowering employees fuels continuous innovation
  Real innovation happens when employees are empowered to contribute ideas and improve how work gets done. Creating systems for idea sharing, validation, and collaboration ensures creativity becomes a daily habit, not a lucky accident.

• The right tools turn strategy into results
  Technology is the backbone of every innovation strategy. With rready’s innovation suite, organizations can source ideas, manage innovation pipelines, and scale intrapreneurship programs.

4 types of innovation strategy worth considering

Innovation has never fit neatly into one box. And that’s kind of the point. 

While some experts categorize innovation approaches by markets, technology, degree of change, or approach, we’re here to spotlight what works.

These four types of innovation strategy have proven to drive real impact when executed with intent.

1. Product innovation strategy: Out with the old, in with the wow

Product innovation means creating new products (or reimagining existing ones) to meet evolving customer needs in smarter, more exciting ways.

This strategy is most commonly used by companies competing in fast-moving markets where customer expectations shift quickly. Tech, consumer goods, and automotive brands rely on it to stay ahead.

But the companies that win aren’t just chasing speed. They’re solving real problems, delighting users, and scaling sustainably. 

When you get it right, it leads to:

• Bigger research and development budgets fueling faster progress

• More innovative ideas flowing across teams

• Stronger sales from better products

• A growing stack of patents to show for it

Constantly coming up with winning ideas is no small feat. It takes structure, support, and a steady flow of creativity. That’s why the best innovators don’t leave it to chance. Instead, they build systems that make innovation repeatable.

Take Siemens Energy as an example.

Through rready’s KICKBOX Intrapreneurship program, the energy giant empowered employees across more than 50 locations to turn ideas into real results.

The outcome?

• Over 240 ideas validated

• 12 patents filed

• $2.8 million in financial impact

All from a program that scaled globally and increased ROI by a remarkable 820%.

2. Service innovation strategy: The customer is always… evolving

Service innovation focuses on improving how users interact with your product, making every touchpoint easier, faster, and more memorable. It turns everyday transactions into experiences people talk about.

This strategy is ideal for customer-centric brands that compete on experience, not price. When done right, stellar service becomes your strongest differentiator. 

Nike is a great example of a company that turns service into theater. Its House of Innovation allows customers to customize their gear, while the Speed Shop concept takes convenience to the next level, letting shoppers order online, try on in-store, and check out in seconds.  

3. Process innovation strategy: Where there’s a will, there’s a workflow 

Process innovation rethinks how work gets done.

Instead of changing the product, it changes the path to delivering it, by applying new methods, tools, or technologies that make operations faster, smarter, and more cost-effective.

This approach is especially valuable for large organizations or scaling startups that are looking to reduce waste, boost collaboration, and stay competitive through operational excellence. 

The table below highlights a few key areas where process innovation can make a tangible impact.

Pro tip

One of the best ways to boost collaboration and spark real process innovation is by giving employees a space to share and shape ideas together.

With rready’s Idea Management platform, companies can tap into the collective brainpower of their teams through an intuitive, AI-driven system that makes idea sourcing, feedback, and evaluation effortless.

Features like comments, reactions, and gamification turn collaboration into a daily habit, helping ideas grow faster, stronger, and across every corner of your organization.

It’s a process innovation strategy designed to spark… more process innovation.

4. Business model innovation strategy: Don’t hate the player, change the game

Business model innovation redefines how a company creates, delivers, and captures value by changing the rules of the business itself. It’s the move for companies stuck in saturated markets or facing eroded margins who need to rethink how they make money.

Amazon is one of the clearest examples: what began as an online bookstore evolved into an everything marketplace, then into an ecosystem of subscriptions, cloud computing, and digital services. 

Changing your business model could also mean:

• Switching from one-off sales to subscriptions 

• Moving from selling goods to providing services or experiences around those goods 

• Closing brick-and-mortar shops and opening an online store 

4 levels of intensity in different types of innovation strategy

Choosing the right innovation strategy for your business is just the beginning. Once you know what type of innovation you’re pursuing, you also need to decide how far you’re willing to push it. 

Here are four levels that describe how bold or transformative your chosen strategy can be.

1. Incremental innovation: Slow and steady wins the race

Incremental innovation is all about evolution, not revolution.

It means making continuous, small-scale improvements to existing products, services, and processes to make what already works just a bit better, smarter, or more appealing.

For most organizations, this is the go-to strategy. In fact, about 98% of all innovation is incremental. 

This approach might not make front-page headlines, but it’s perfectly suited for companies that already have strong market positions and want to maintain their edge.

Large enterprises, in particular, thrive on it, including:

• Apple: With each new iPhone, the tech giant fine-tunes the familiar: better cameras, faster chips, improved usability.

• Gillette: From one blade to six, the evolution of its razors shows how small enhancements can make customers loyal for decades.

• Spotify: By continuously improving its recommendation engine, the streaming service makes discovering new music feel personal.

2. Architectural innovation: Teach an old system new tricks

Architectural innovation reimagines how existing technologies fit together to create something fresh: not by starting from scratch, but by rearranging the familiar in unexpected ways.

The components themselves stay largely the same. What changes is how they’re connected, packaged, or delivered.

Because it builds on proven tech, it carries less risk than some of the other types of innovation, making it a smart move for established companies looking to tap into new markets without reinventing the wheel.

The best examples show how old ideas, configured in new ways, can unlock entirely new audiences:

• Smartwatches - repurposed smartphone technology for wearable convenience.

• Peloton - combined fitness hardware, streaming, and community into an at-home experience.

• Canon personal copiers - shrank office machines for individual users.

• Hybrid cars - paired combustion engines with electric motors for cleaner efficiency.

• Solar garden lights - applied solar tech to consumer décor, creating a new lifestyle category.

3. Disruptive innovation: Rules are meant to be rewritten

Disruptive innovation is what most people picture when they hear the word innovation: bold, industry-shaking ideas that don’t just improve the game but change it entirely.

This innovation happens when a new technology or a business model upends an established market, often by starting small, serving overlooked segments, and scaling fast.

This approach is usually driven by startups and fast-moving challengers unafraid to rewrite the rules. 

Some of the most revolutionary examples of a disruptive innovation strategy include:

• Netflix - turned DVD rentals into on-demand streaming and rewrote entertainment 

• Airbnb - transformed spare rooms into a global hotel alternative

• Uber - redefined personal transport with ridesharing

• Spotify - disrupted music ownership with streaming access

4. Radical innovation strategy: Go big or go home

At first glance, radical innovation might seem similar to disruptive innovation: both promise breakthroughs that change industries.

The difference? Disruptive innovation shakes up existing markets, while radical innovation creates entirely new ones.

It combines cutting-edge technology with bold new business models to solve problems most people didn’t even know they had.

This approach is typically pursued by organizations with deep R&D capabilities, visionary leadership, and a high tolerance for risk: tech giants, research institutions, or startups chasing moonshots.

The table below highlights some of the most transformative examples of radical innovation and what makes them revolutionary:

Turn every kind of innovation into a success story

Most companies don’t stick to a single strategy or level of innovation. Just look at Apple.

Each new iPhone is a case study in incremental innovation. The original iPhone was a product innovation that redefined communication itself. The iPad marked a moment of disruptive innovation, reshaping the computer market, and AirPods represented a radical leap in how we experience sound.

Successful innovators don’t have to pick just one approach. Instead, they need an ecosystem that supports all types of innovation strategy.

That means giving teams the tools, processes, and culture they need to innovate in any direction. And while the methods may vary, one constant remains: you can’t do it without the right technology.

That’s where rready comes in.

Our suite of innovation tools helps organizations empower employees, manage ideas, and execute them, whether they’re small tweaks or groundbreaking breakthroughs.

With rready, you can:

• Collect and manage ideas across your organization with Idea Management, ensuring no spark gets lost in the shuffle

• Validate and scale innovations through the KICKBOX Intrapreneurship program, turning employee ideas into measurable impact

• Foster collaboration and feedback through built-in newsfeeds, reactions, and gamification features that keep teams engaged

• Track, report, and optimize innovation performance with powerful analytics and dashboards

• Leverage AI support to refine concepts, automate workflows, and accelerate decision-making

• Integrate seamlessly with your existing systems for a truly connected innovation ecosystem

Whether you’re optimizing workflows, reinventing customer experiences, or redefining your entire business model, rready gives your employees everything they need to innovate, anytime, anywhere.

Book your free rready demo today and see how easy innovation can be.

FAQ

What are innovation strategies?

Innovation strategies are structured approaches organizations use to develop new ideas, improve existing products or services, or transform how they operate.

What is an example of an innovation strategy?

A good example is Apple’s innovation strategy, which blends multiple approaches: incremental updates to the iPhone, disruptive launches like the iPad, and radical moves such as the AirPods. Each reflects a different way to stay ahead by continuously reinventing value for customers.