When we hear the word innovation, we immediately think of some shift in progress's direction. While a product's idea is what causes a change, innovation is the main process of how to put a product into action, capitalise on that idea and help it succeed.
A corporation must build economic progress out of innovation in order to realise its vision. Even if a corporation creates an invention that puts them far ahead of their competition in the market, it is the strength of innovation that will keep them there.
For example, the iPhone made a significant leap in product quality many years ago, but Apple has stayed the best of the best manufacturers using a constant innovation that entices customers to shop constantly.
It is difficult to find a word that is more prevalent in economic literature right now than the word innovation. There is no doubt that innovations have enabled economic development throughout history, but as this concept has gained popularity, its scope has expanded and the definition itself has become increasingly complicated.
There are several types of innovation, but this time we will focus on radical innovation and incremental innovation. Read on to learn more about these innovations, how they work, and how you can benefit the most from them.
What Is Incremental Innovation Strategy
A change in the speed of the car's engine or an improvement in appearance is not the same as a change in the type of engine and a completely new concept of the car's appearance, is it? This is the difference between incremental and radical innovation.
Incremental innovation is a process of minimal improvements that successively upgrade the same product. Such innovations improve the general characteristics of the product they deal with, but retain the main concept.
Products are rarely introduced into the market, and in the case of incremental innovation, it is frequently a matter of removing errors from the system. Continuous improvement of this type has attracted a lot of attention in recent decades, first as part of the Total Quality Management (TQM) program, which reflected the huge gains made by Japanese manufacturers due to quality and productivity improvements.
Recent experiences with the "lean" philosophy in manufacturing and services, as well as its application both within the company and in the interaction between companies, highlight the enormous scope of continuous innovation. Incremental innovations typically introduce minor changes to existing products, capitalise on the potential of a defined dominant design, and frequently highlight the dominance of established businesses.
The issue of strategy implementation - communicating and training people to use the strategic framework - is critical if an organisation wants to avoid a situation in which it has "know-how" but no "know-why" in its innovation process. Creating a strategic framework is a prerequisite for the focused internal improvements associated with lean and kaizen philosophy.
In concept, it is possible to mobilise a large number of people to work on continuous quality improvement, but in practice, such initiatives frequently fail. The key factor is the presence or absence of a strategic focus toward which a wide range of small-scale innovation activities can be directed.
Although sometimes some products require radical innovations, incremental ones are much more common due to less risk and a higher success rate. Based on related research, it was concluded that only 25% of the presented innovations in corporations are successful, while as many as 75% fail.
Paul A. Herbig in "The innovation matrix: culture and structure prerequisites to innovation" lists three types of incremental innovations (or as he calls them "lower order innovation"):
- Continuous
- Modified
- Process innovation
Continuous innovation means expanding the product offer (line extensions).
Modified innovation imply a slightly higher degree of change because they introduce new technology that basically has the same functions as the old one.
Process innovation consist of improvements in the way existing products are produced (eg TQM).
What are the primary characteristics of incremental innovation?
- Minor alternations
- Change that is gradual and consistent
- Everyone's participation is required
- Collective effort, group effort, systemic approach
- A little research and a lot of effort are expected to keep the progress going
- It performs in a slow growing industry
What Is Radical or disruptive Innovation Strategy?
When the Internet appeared in 1969, it was a real radical innovation. A completely new concept of everything we have known so far, and it has completely changed the way such a system is viewed and used. With many incremental innovations, the Internet has become more and more represented and useful. This is exactly the easiest way we can explain the definition of radical innovation.
Such innovations represent something completely different, new technology, new use of products and some idea that has never been seen before, either in your company or in the market in general.
Steve Jobs implemented the Iphone on the market in the same way. Radical innovation in the market of mobile devices, with a completely different use - touchscreen and unseen technology has caused a change to which years later companies in the same domain have been adapting.
Whether you are the one who needs to adapt to the market or maybe the market is adapting to you, radical innovation is necessary for the survival of companies.
GC O'Conner defines radical innovation as having one of the following characteristics:
- provide new opportunities to the world
- provide significant enhancements to existing opportunities (5-10 times),
- provide substantial cost savings (50%)
The following are the primary characteristics of radical innovation:
- Significant changes
- Unexpected
- Involvement of a select few
- Individual approaches, ideas and efforts
- Excellent research, with less effort required to keep the benefits
- It is more effective in a rapidly growing economy
Organisational disruptions caused by radical innovation can range from almost none (when existing businesses overlap) to extremely high (requiring a completely new department or company). But one thing is certain: radical innovation is the engine of economic development, as well as a source of better products and increased utility for customers.
What Is The Connection Between Radical And Incremental Innovation?
Incremental innovations serve to meet expressed / manifested needs, whereas radical innovations serve to meet unspoken / latent demands.
The origin, i.e. the distinction between incremental and radical innovations, can be represented by the S-curve concept as it relates to the development of new technologies. Once a specific curve has been successfully formed through radical innovation, only incremental innovation remains.
However, as time passes, the space for incremental innovation shrinks, and the likelihood of a new radical innovation that creates a new S-curve and reopens the space for incremental innovation grows. To put it another way, radical innovations create new platforms, whereas incremental innovations improve and refine existing platforms until new ones emerge.
It is necessary to develop competencies in both radical and incremental innovation at the same time, and innovation and market orientation do not have to be mutually exclusive, but can be successfully complemented. Furthermore, the prerequisites for creating incremental and radical innovation are basically the same, rather than different as previously thought.
If we concentrate on radical innovation, we will notice that it is impossible to meet the required quality and market demands through incremental innovation. Furthermore, if we are constantly focusing on incremental innovation, i.e. small product shifts, our market will miss out on something new.
Incremental And Radical Innovation - Conclusion
It is necessary to combine these two ways of innovation - to update the products of radical innovation with incremental innovation, and thus get the best results. If we complement successful ideas / radical innovations with incremental innovations for the purpose of improvement, constant commitment will surely achieve quality and recognisable results.
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