Innovation Strategy: Core Concepts

Innovation: Not All New Ideas Are Equal!

Understanding the type of innovation helps you plan your strategy.

1. Incremental Innovation (Small, Steady Progress)

• What: Making existing products/services better, cheaper, faster.
• Example: A new model of smartphone with a slightly improved camera.
• Goal: Keep current customers happy, optimize existing business.
• Risk: Low.

2. Radical Innovation (Big Breakthroughs)

• What: Completely new products or technologies that create new markets.
• Example: The first personal computer, the internet.
• Goal: Create future growth engines.
• Risk: High, but high reward.

3. Disruptive Innovation (Clayton Christensen)

• What: Starts simple/cheap, serves an underserved niche, then moves upscale to displace incumbents.
• Example: Netflix (mail-order DVDs) disrupting Blockbuster.
• Goal: Create new market dynamics, often overlooked by established players.
• Risk: Can be a huge threat if you’re the incumbent.

Your Innovation Strategy Checklist:

• Are you dedicating resources to ALL three types of innovation?
• Does your company culture support experimentation and learning from failure?
• How are you identifying potential disruptive innovations in your market?

Golden Rule: Don’t just innovate; innovate strategically. A balanced portfolio of innovation (from incremental to radical) is key for long-term survival.