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Radical Innovation versus Incremental Innovation High-Risk-High Return versus Low-Risk-Low-Return Projects |
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By: Vadim Kotelnikov
Inventor, Author, and Founder of:Ten3 Business e-Coach – Inspiration and Innovation Unlimited!
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"Economic success comes not from doing what others do well, but from doing what others cannot do, or cannot do as well." – John Kay |
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Two Different Patterns "Because much of the innovation taking place today is incremental, so is its impact on growth. Little ventured, little gained. Other firms, after years of incremental innovation, suddenly throw millions or even billions of dollars at ideas that are poorly conceived, poorly timed, and poorly executed, only to have near-catastrophic consequences."5 There is practical value in understanding the patterns in and the differences between evolutionary incremental innovation projects and revolutionary radical innovation projects. This understanding can help you apply right management practices to different types of innovation projects and make the course of radical innovation shorter, less sporadic, less expensive, and less uncertain. High level of uncertainty is a hallmark a radical innovation projects, especially at early stages. The criteria used to evaluate a radical idea and concept should differ from those applied to evaluating incremental innovations. Viewing radical ideas - associated with high uncertainties - from the perspective of the mainstream business and applying traditional evaluation methods and criteria to them is inappropriate and counterproductive. Either these methods give a false sense of security, or they lead to premature rejection of good ideas. "It is easier to say "no" or to require more detailed information than to defend a decision to invest resources in the absence of "hard data."1 Down the road, uncertainties influence the course of radical project development that requires flexibility and creativity in resource and competency acquisition, while incremental projects follow more formal and predictable route. The Art of Innovation: 9 Truths By: Guy Kawasaki
Innovation Project Management: Two Approaches Incremental innovation projects, due to low levels of uncertainties, are usually follow the orderly process:
Radical innovation projects, due to high levels of uncertainties, cannot be described by this orderly process. "Even though the radical innovation life cycle includes many of the same sets of activities and decision points, the reality of managing the process is strikingly different for radical versus incremental innovation."1 General characteristics of the radical innovation life cycle:
Strategic Innovation Strategic Innovation is the creation of growth strategies, new product categories, services or business models that change the game and generate significant new value for customers and the corporation... More Case in Point General Electric (GE) "Shun the incremental, and look for the quantum leap," taught Jack Welch, the former legendary CEO of GE, other leaders at the company. Live productivity and quality, but also make surprise moves - shock your rivals. Shake things up while other look on from the sidelines, sitting idly by while you knock your competitors for a loop. The three critical ingredients of the quantum leap are surprise, boldness, and shock...More Using an Innovation Portfolio
The market leader is dominant in its industry and has substantial market share. If you want to lead the market, you must be the industry leader in developing new business models and new products or services. You must be on the cutting edge of new technologies and innovative business processes. Your customer value proposition must offer a superior solution to a customers' problem, and your product must be well differentiated ... MoreLessons from Silicon Valley Firms Deciding If Your Innovation Portfolio Has Enough Stretch Adapted from Relentless Growth, Christopher Meyer
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