Strategy thoughts

Its been a while since I posted a new topic on Learning Innovation series I started last time here. I thought I would keep on posting frequently, but not to be so. Anyways, here is my another attempt at writing one more article in the Innovation series.

Last time I wrote about one of the techniques of learning Innovation called Innovation by Subtraction. This time, I would be trying to explain one more type of Innovation viz., Incremental & Radical Innovations.

The Incremental & Radical innovation techniques are most commonly used across the world for innovation. They are also called Sustaining & Disruptive Innovation techniques.

Incremental innovation generally relates to enhancements or small improvements in the existing products or services, whereas the Radical innovation brings a significant improvement in the product or the service.

One of the most common examples of the Incremental innovations are the early Pentium chips developed by Intel. From Pentium I to IV, they were generally based on the similar pattern however as the new version came out they brought out newer technologies & innovations in their chipset, which could be attributed to the Incremental innovation. Moving from a single core to dual or quad cores in their latest processers could be termed as a Radical innovation though.

Another example of Incremental innovation being Microsoft’s Windows 98 operating system, which was an enhancement over the Windows 95 operating system. The Windows 95, however was a Radical innovation over the previous Windows 3.1 operating system interface.

Now you may ask me how to differentiate between the Incremental innovation from a Radical innovation or you may even ask, what should be the degree of deviation between an innovation to be considered as Incremental vs Radical?

The answer to this question was defined by a team at Rensselaer Polytechnic Institute. They recommend to consider an Incremental innovation as a Radical if it meets one or more of following characteristics,

• The innovation provides entirely new set of usage features and experience
• In terms of statistics, it provides about five times or better performance
• Or it provides more than 30% reduction in the costs of the product / service

Normally the Incremental & Radical innovations go hand in hand. If you see my previous examples you would see that the Radical innovation has followed after one or more Incremental innovations. So you would relate to the fact that the Radical innovation is characterized by a long period of Incremental innovations before and after it.

The diagram shows the cycle of the Radical Innovations and how they arrive after a series of the Incremental innovations.

The important benefit of the Radical change is the fact that it can potentially and significantly change the basis of competition in the favour of the innovator.

Incremental innovation is relatively easy to obtain than Radical one and I am sure by now you would have understood pretty much of it.

There are significant examples of where the Radical innovations have given great advantages to the innovators. Some of them are as follows,

IBM

Introduction of electronic typewriter, nearly wiped off the manual type writers form the market and gave IBM a significant business advantage.

Wal-Mart

Innovated a radical process change in the way the supply chain was managed throughout its stores in the US that gave a significant advantage in terms of time & cost and helped it cement its position as No. 1 in the retail market.

Incremental Vs Radical – Which one to choose ?

Radical Innovations are significantly risky, take more time to develop and are more expensive to obtain in nature, whereas, the Incremental are significantly less risky, relatively cheaper & based on a proven product or a process and are more likely to produce results in a shorter time frame.

The Incremental innovations provide the businesses with a steady stream of enhanced and improved products / processes or services, but due to relatively simpler nature of these innovations it is required to keep in mind the following,

• Ensure that the innovations are focussed around the market demands.  Since the nature of innovation is such that you would eventually keep on developing new enhancements, small features, there is a danger that you might do something which the customers would not want and may not need in their product.  If you continue to churn out the improvements or new features that the customer does not want, the customer eventually might look for alternative products.
• Don’t forget Radical innovation ! Incremental innovations do not necessarily envisage the future technology and attempt to provide a bridge between current and future technologies. Imagine what would have happened to iPhone if Apple would have used the traditional keyboard design of the phone !!  Also, remember that its on Radical innovation that changes the business game in your favour !

So when you look around next and do a brain storming about innovation, you might want to start with an Incremental innovation and who knows you might bring out a Radical innovation in your product / process or your service ! 

Good Luck !