BUSINESS RESEARCH

Make Radical Innovation Happen

Successful radical innovations are rare – and most attempts at them fail. High uncertainty and the risk of failure lead many senior managers to stay in their comfort zone: they resist radical innovation and instead focus on incremental improvements to existing offerings.

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February 2016

Yet with high risks come potentially high returns. To make radical innovation happen, we need to be clear exactly what it is – and importantly what it is not. Simply put, incremental innovation entails improvements within a given frame of solutions (“doing better what we already do”), whereas radical innovation requires a change of frame (“doing what we did not do before”). We can further break down the distinctions between incremental and radical innovation as follows:

MAKE RADICAL INNOVATION HAPPEN
Incremental InnovationRadical Innovation
Exploits existing technologyExplores new technologies
Low uncertaintyEntails high uncertainty
Focuses on cost or feature improvements in existing products or services, processes, marketing or business modelsFocuses on processes, products or services with unprecedented performance features
Improves competitiveness within current markets or industriesCreates a dramatic change that transforms existing markets or industries, or creates new ones

It’s also important to distinguish radical from disruptive innovation. Disruptive innovation usually requires a new business model that challenges or disrupts other companies – but not necessarily a technological breakthrough. For example, Apple started to give its Mac OS X operating system away for free, whereas Microsoft had been used to commanding expensive license fees (up until Windows 10). Radical innovation, however, tends to focus on new technological breakthroughs only. Architectural innovation, the most challenging for competitors to imitate, combines technological and business model disruptions.

Sources: Pisano (2015) You Need an Innovation Strategy, HBR, June; Australian Institute of Commercialisation (2012) Innovation Can Be Incremental or Radical, Innovation Toolbox, Queensland Government; Norman, D. and Verganti, R. (2012) Incremental and Radical Innovation: Design Research Versus Technology and Meaning Change, Design Issues, 30(1), pp. 78-96.

Referenced techniques

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Information Management

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Types of Innovations

Innovations may manifest in a variety of forms and are a critical competitive capability of most firms. Case study evidence presented alongside practical implementation steps, assist business leaders to understand how different types of innovation help to build an innovation culture.

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Innovation Capital

Innovation capital is critical to building a competitive advantage in the knowledge economy. The concept explains how organisations can leverage their unique organisational knowledge to create economies of scale and scope, as well as differentiation.

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Big Data Analytics

Big Data analytics is complex, in order to succeed organisations need to invest in the people behind the technology. Strengths and weaknesses are considered and practical case studies of implementation are shared to help organisations build up their Big Data capabilities.

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Competitive Intelligence

Competitive intelligence concept is designed to aid managers and business owners in their decisions through competitive intelligence. You will gain an understanding of how to gather intelligence and use it to achieve organisational goals.

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Employee Engagement

The concept explores the significance of employee engagement and the factors that influence the extent to which employees are committed to organisational goals, mission and vision. It also provides an insight as to how organisational employee engagement can increase productivity and decrease staff turnover.

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