Innovation is in many ways a buzzword, almost with the same semi-magical touch that the word “quality” had a few decades back (everyone wanted it, no one knew exactly what it was).
So, what then, is innovation?
A common way to categorise different types of innovation is like this:
Incremental innovation. Making what you do a little better, faster, cheaper. Usually, the market leaders shine at this.
Radical innovation. Is when something new reaches the market and sets new standards for what is expected. This often happens when an existing player on a market is in a crisis and is forced to do something to change. Remember the Motorola Razr? Perfect example of a radical new product that introduced a whole new category of phones (super thin clamshell) that all the other players on the market had to adapt to.
Disruptive innovation. This is the kind of innovation that shakes a market by its roots. The rules are completely rewritten. The Internet has already done this to a number of markets but many more will be “eaten by software” and disrupted to their core. Giant companies have fallen, often fast and brutal, and many more will. This kind of innovation seldom comes from an existing player on the market, that’s what makes it so difficult to defend against.
Putting all your R&D efforts in incremental innovation will give you a short term boost against your competitors but you are putting your company at huge risk if you don’t also do development on radical and disruptive innovations.
Want to know more about how to insure your company against future disruption? Contact us and lets talk!