| Incremental Versus Radical Innovation |
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| Written by James A Gardner |
| Wednesday, 10 March 2010 16:07 |
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Many organisations imagine innovation to be about big, strategic initiatives that create brand new categories or support new revenue streams. These innovations, usually, are described as radical or breakthrough by most analysts. They're explained as being highly lucrative, but come with very significant risks. Stated differently, the chance of them being hits is pretty low, but when they are, they're company defining. When they start innovation teams working on new things, executives tend to expect they will be getting radical innovation, but usually they won't want to accept the risk associated with such projects. Consequently, innovators are unable to achieve radical innovation with very much reliability, usually resulting the cancellation of the innovation programme altogether. In contrast, incremental innovation has many fewer risks. It examines what is already being done and develops some minor improvement that delivers new value. Such improvements are usually not that earth-shaking, and will usually take out cost, or enable charging higher prices, or expand the reach of a product or service in the market. The point is not how big these gains are initially, but that when many incremental innovations are added together, they can add materially to the fortunes of an organisation. More sophisticated innovation programmes quickly work out they have to have a balance of projects in both categories if they are to be successful. The fact is, many small incremental innovations have the ability to balance the expense of having a few radical failures, something that is critical until the innovation team strikes it lucky with a big hit. In my experience, innovation teams start with "radical" innovation on the expectation they will deliver spectacular benefits in a short time. It quickly becomes clear to stakeholders though that such spectacular benefits are not so close, and may, in fact, not be so spectacular after all. Faced with significant disappointment, they cancel the innovation programme. Tip for new players: it is important to avoid the trap of concentrating on radical innovation at the start. By making sure most activity is incremental at the beginning, you will find your innovation programme creates basic capabilities which will become very important as your team starts doing more important work. About the Author: Is this the year you will concentrate on innovation in your organisation?There's more about incremental and radical innovation in my free online innovation book. |