If you’re looking for new sources of growth in your business, a key question is typically: will it come from incremental improvements to the existing business or will it come from a whole new business model that radically changes the way your business creates and or captures value. In other words, are you looking to generate radical or incremental innovations?
There are many ways to analyse the differences between radical and incremental innovations, however, Abernathy-Clark did some pioneering work in the 80s which led to a simple model which classifies innovations according to their impact on the existing technological and market knowledge. This classification defined two types of innovation:
Importantly this distinction is made from the perspective of the knowledge that exists within the innovating organisation – building the Apple Watch was considered to be incremental for Apple but the SmartWatch was a radical innovation for Pebble when a whole new business was created to target the wearable technology sector.
This distinction between radical and incremental innovations becomes important for a couple of reasons. Firstly, it needs to be aligned with your organisations’ appetite for risk. Radical innovations are inherently more risky but can also have significantly bigger upsides if they work. Secondly, the way radical innovations are managed is quite different from the way incremental innovations should be managed (see “Team of Experts or an Expert Team). So distinguishing between the two has important consequences for the design and leadership of your whole innovation program.
If you would like to discuss whether you should be pursuing radical or incremental innovations in your organisation, or anything else related to innovation and growth, please feel free to get in touch with me at firstname.lastname@example.org or contact anyone here at Orange Squid – we’d love to chat!