Examples of innovation: Your internal vs external research options explained

As we all know, ‘innovation’ isn’t a description of a specific thing or a specific method. If you hear the term ‘innovation’, you could think of anything from the alphabet to research and development! It’s clear that business innovation comes in all different forms, and the many types of innovation can be achieved in different ways. So it’s important to understand the different options available, ensuring you’re achieving your innovation goals in the best possible way. 

There are many, many examples of innovation processes. But in most cases, they can all be broken down into two simple categories: internal research and external research. 

Let’s take a look at some examples of innovation processes, both internal and external:

Internal Innovation Options

Internal research options mean leveraging the innovation power of your people, or recruiting new hires to expand innovation capacity. This is usually the most obvious choice for businesses, especially for those wanting to keep innovation in-house. 

The main benefit of internal innovation is that you’re innovating from a place rooted in company culture. Your people don’t just understand the business, the customer, and the goals for the future, but are also shaped by this understanding. On the other hand, this can sometimes limit how far your people are able to deviate from the norm, and so the biggest benefit of internal innovation is also the biggest downside of this option. 

Some examples of innovation processes using internal resources include…

• R&D Department: A dedicated research and development department made up of your existing people, or of new recruits. The role of the R&D department is to identify opportunities and determine if it makes sense to explore them further. 

Advantage: You have an entire department dedicated to generating new ideas

Disadvantage: It can be costly to pay salaries for a new team of permanent employees

• Insight Director: An analytical manager whose role is to identify and analyse trends, and translate these trends into insights that help to determine what sort of innovation would be best for helping the business achieve its corporate goals. 

Advantage: You can be sure ideas are being sparked from real industry trends

Disadvantage: New ideas are generated whether they’re feasible or not

• Intrapreneurship: A person within the organisation that has a naturally entrepreneurial mindset. This person - or people - can start setting up projects, and essentially create a more informal research & development department

Advantage: Giving employees greater responsibility can help you retain top talent

Disadvantage: Delegating innovation completely can mean you forfeit control

• Analytical Department: An analytical department is an extended version of an insight director; an entire team dedicated to analysing customer, business, and industry trends, and generating insights to help drive the right kind of innovation.

Advantage: You’re giving yourself the capacity you need to keep innovation in-house

Disadvantage: As with an R&D department, hiring for innovation can be costly

External Innovation Options

External research options mean bringing in support from the outside to help drive your innovation efforts. Whatever resources you decide to utilise won’t become a permanent part of your team, but will provide on-demand support as required. 

The obvious benefit of external innovation support is that you can see things from a new perspective, through a fresh pair of eyes – or through the three lenses of innovation. It addresses the main problem of internal research: that your employees are restricted in how far they’re comfortable stepping out of the business’ established processes and ideologies. The downside of research process outsourcing (or any kind of external outsourcing) is that there’s no standard. Quality can vary considerably by provider. 

Some examples of innovation processes using external resources include…

• Consultants: Experienced business support experts from large consultancy firms who work as an extension of your business to generate ideas. Consultants are usually hired on a contract basis, and may work for multiple firms at any time.

Advantage: Experienced consultants have seen it all; they’ve ‘been there, done that’

Disadvantage: Very expensive, and likely to have their own pre-established ideas

• External Researchers: Those who perform a similar job to consultants, but rather than working for consultancies are often hired on a freelance or more independent basis. They help businesses to see a different view of reality. 

Advantage: Ability to reach external data and use this to provide a bigger picture

Disadvantage: Like consultants, external researchers can be very expensive

• Desk Research: Individual problem solvers that can be brought in to work on specific challenges depending on their own area or areas of expertise. Essential on-demand skills to extend capacity in specific niches of innovation and growth.

Advantage: Ability to obtain the input you need, exactly when you need it

Disadvantage: Quality varies; it’s vital to choose a provider that validates resources

So what’s best? There’s no clear answer to that question. Some businesses will see results from calling solely on internal resources to deliver their innovation strategy, while others will find they can’t quite get out of the everyday mindset without bringing in some fresh perspectives. And, most of the time, the best solution is to embrace a combination of both… they’re not mutually exclusive!