The 4 P's innovation of Space

Background

The 4Ps of innovation space model was developed by John Bessant and Joe Tidd. They are two professors from Exeter University in the United Kingdom. 

The four Ps model is used to clarify how comprehensive our innovation is! The model focuses on four broad categories. 

All four categories consist of axes starting with incremental innovation and ending with radical innovation.

Incremental innovation means –”do what we do - but better” and radical innovation means – "do something differently".

In short – the more you move away from the known – the more you go from incremental innovation towards radical innovation.

The four broad categories of innovation types are

•The product or service – what we as an organization offer the world. 

•The Process – the way we create and deliver the product or service that we are offering. 

•The position – who we offer the product or service to and the story we tell about it. 

•The paradigm – the way we think about what our organization does and who we do it for. The paradigm is sometimes called” the business model”.

Product innovation

A new model of an existing car - such as a new Toyota model - is an incremental product innovation. Toyota does it a little better.

A new car concept with electric cars - such as a Tesla - was a radical product innovation. Tesla does it differently.

Process innovation

Improved retailing logistics – the goods reach the stores two weeks after ordering instead of four weeks. This is an incremental innovation. We do it a little better then before.

The customers are ordering the goods online and we are delivering the orders directly to the customers’ address. The stores are bypassed in the value chain. It is a radical innovation. We are doing it differently.

Position innovation

Airlines segmenting service offerings for different passenger groups, for example, Virgin Upper Class; BA (British Airlines) Premium Economy. This is an incremental innovation. There are slight improvements in meeting passenger needs

Low-cost airlines such as Ryan Air opening up air travel to those previously unable to afford it. Here they have created a new market. They also disrupted an existing market. Some passengers switched from the expensive airlines to the cheap ones. This is a radical innovation. Ryan Air changed the framework of the industry – they radically changed the rules of the Airline industry.

Paradigm innovation – This category is often the hardest to handle, as it is an expression of our self-understanding. An understanding we would like customers to appreciate.

A bank sets up a 24/7 hotline as many of the bank's customers have begun to travel abroad. It is incremental innovation. In our business model, the service is expanded. We consider who we are there for and then do it a little better.

Grameen Bank is lending money to poor people in developing countries - it has always been a no go market for traditional banks. If you – as an employee - lent money to this segment of customers you were fired! It is a radical innovation. Grameen Bank has mentally redefined itself – and rethinking the assumptions about credit and the poor – identifying them as a market. Grameen Bank has a total different ”the business model”.

Criticism of the model.

An interesting question arises when one tries to relate the “how new?” innovation research with the “new to whom?” question. Is it new if it is new to the company but not generally within the industry as such? Is it new if it is used in another industry but not in the one that we are a part of? Or, should it be completely new to all like e.g. the Internet and online shopping were in the mid-nineties.

The model does not provide a precise answer to the “new to whom?” question. You or the group you are a part of? You have to define that yourself.

Is it incremental innovation or radical innovation? There is a blurring of the transition between the two extremes.

It can be difficult to determine if it is the one or the other of the four categories we are talking about, they can overlap each other

There is no correct solution to the above mentioned criticism, but the good thing about the model is that it continuously forces you to discuss where you innovation takes place and how much you innovate. You will in the process of using the model get a clear understanding of where your innovation focus has to be placed.