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.

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Innovation Capital

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Big Data Analytics

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Competitive Intelligence

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Employee Engagement

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