Radical vs increasing innovation – a guide

In the dynamic economic world of the 21st century, companies are faced with the crucial question: should they rely on a radical or progressive innovation? Although radical innovation can revolutionize comprehensive markets and create new commercial models, the incremental approach offers the possibility of continuously improving existing products and processes.

The difference between the two types of innovation could not be greater. Radical innovation is like a quantum jump – it breaks with existing structures and creates completely new solutions. Think of the introduction of the first iPhone which has fundamentally changed the mobile phone market. Innovation increasing, on the other hand, is gradually improving as we know them of the annual smartphone updates.

For managers, it is essential to understand when the approach of innovation is the best choice. The two strategies have their authorization and can, judiciously deployed, generate decisive competitive advantages. Factors such as market dynamics, available resources and corporate culture play a central role.

In the following article, we analyze the characteristics of the two forms of innovation and their respective advantages and disadvantages in detail. We illuminate the circumstances in which radical or incremental innovation is more promising and gave concrete recommendations for the action for an optimal allocation of resources. These results help you make a well -founded decision for your innovation strategy and make your business to the test of future.

The following table compares the two innovation approaches.

Radical innovation must be continued, especially if the basic changes in the market are emerging or disruptive technologies appear on the horizon. This is particularly the case in the dynamic industries where the established trade models are threatened by technological progress or the modified requirements of customers.

An ideal environment for radical innovation is ideal when companies have sufficient financial resources and a risk culture at risk. These prerequisites are important because radical innovation projects often require considerable investments and must accept longer development times without guaranteed success.

This approach becomes particularly relevant on the markets which approach saturation or when existing solutions no longer adequately meet the needs of customers. Here, radical innovation can open up new markets and create competitive advantages that could not be carried out thanks to progressive improvements.

Even if industry borders dissolve or new technologies have the potential to transform whole areas of activity, radical innovation is often the most promising means. This applies in particular if companies target a pioneering role and are willing to replace or supplement existing skills with new.

Automobile industry – Tesla (2008-2012):

Tesla has revolutionized the automotive industry thanks to the introduction of the S model, which has for the first time proven that electric vehicles can be friendly, luxurious and powerful. Tesla has not only introduced a new reader concept, but has also changed sales via direct sales and has created a brand new ecosystem with a super-cargeur network and live updates.

Financial industry – Blockchain / Bitcoin (2009):

The introduction of blockchain and bitcoin technology as the first cryptocurrency fundamentally questioned the traditional financial system. This innovation allowed decentralized and independent financial transactions for the first time and created the basis of intelligent contracts and decentralized financial applications (DEFI).

Entertainment industry – Netflix Streaming (2007):

Netflix transformed the entertainment industry thanks to the introduction of the streaming service. The company has not only broken with the classic television and video rental model, but also revolutionized content production thanks to internal data -based productions and the introduction of the concept of frenzy observation through the simultaneous publication of whole seasons.

Progressive innovation is particularly suitable for stable markets where already established products and services exist and can be permanently improved. This approach is optimal if companies wish to consolidate and extend their position on the market thanks to constant optimization without taking major risks.

This type of innovation is particularly promising in the following scenarios:

• In mature markets with high competitive pressure, where small improvements can already create significant competitive advantages

• For customers sensitive to prices that appreciate the reliability and proven solutions

• If the company has limited research and development resources

• In regulated industries where radical changes are difficult to apply

• For products with long life cycles that can be continuously optimized

The incremental approach allows companies to optimally use their existing skills and technologies and gradually extend them. This also allows better predictability of resources and results. In addition, improvements can be tested more quickly on the market and adjusted if necessary.

Another advantage is higher acceptance among employees and customers, as changes remain manageable and adapt to existing processes and use habits. This often leads to faster investment damping and a more stable return on investment.

Smartphone volutions: Annual updates of iPhone or Samsung Galaxy models with cameras, processors and improved screens.

Microsoft Office: continuous improvement in the user interface and features on many versions.

Automobile industry: gradually optimization of engines, safety systems and driving assistants in existing vehicle models.

Companies must be aware of the division of departments in which they are a market environment. Rule 70-20-10 is a solid basis and can be adapted according to the situation by posting more or less resources in monitoring radical innovation.

70% for additional innovations:

• Improvement of existing products

• Secure short -term return

• Minimize the risk

• Financing of other areas

20% for moderate innovations:

10% for radical innovations:

Several central success factors must be observed for a successful implementation of innovation projects, whether radical or progressive. First, the creation of clear evaluation criteria for innovation projects. These criteria must be transparent and understandable in order to allow an objective assessment and to prioritize the right projects.

A Systematic knowledge management Play a key role in this – both in radical and progressive innovations. By meticulous documentation of success and failures, companies can learn past experiences and avoid mistakes. Analysis of failing projects is particularly precious, as they often provide precious knowledge for future innovations. Failures can even inspire new ideas when the information obtained is systematically prepared and made accessible.

The regular examination of the innovation portfolio is another essential factor of success. The portfolio should be able to change the market conditions in dynamic evolution. This requires an allocation of flexible resources and the desire to re-evaluate projects or, if necessary, to stop.

The supply of sufficient budgets for experiences is also crucial. In particular with radical innovations, companies must be ready to invest in uncertain projects. A culture must be established which accepts failure as a legitimate part of the innovation process and considers a chance to learn. It is only if employees are not afraid of the failure that they can develop and implement creative and courageous ideas.

Knowledge management must be understood as a transversal function that supports all innovation activities. It not only makes it possible to avoid rehearsal errors, but also promotes cross cooperation and knowledge transfer between different innovation projects. With the systematic recording and the evaluation of project experiences, companies can continually improve their ability to innovate and increase their success rate for future projects.