Radical innovation through incremental innovation
In a recent conversation with someone I know, a remark fell regarding a Danish medico company (OMX C20) who for years and years have done very well.
That medico has during the past five years seen their market lead deminish. The executives of that company have so far cut back and Leaned out.
Today, leaders and employees who are not 100% allocated “core business” are no longer with the company. That means that the whole of the out-of-the-box creative layer has been sliced away.
This spring, the same medico asked their customers (as they always do) how they compare with competetor products. The answer was “we can’t see any difference between you”.
Now they are faced to bring themselves ahead. To set the agenda in the market. To find their edge and seize winning strategies. You’ve heard it before.
Except for this one! An executive at this company said just a couple days ago “we will reach our vision through incremental innovation”.
Now, I happen to know the vision, and it’s truely a radical innovation. It’s right there next to implementing the flying car as the standard transport vehicle.
The question on the table is “can that be done?!”
The answer in short is absolutly no way!!
I’ll tell you why. Incremental innovation by definition means “small transformation”; you keep the design, the function and the form.
Change any one of those (function, design or form) and you got radical innovation. Radical innovations don’t have to be huge folks! They simply introduce a new degree of freedom. That’s all. But that is also different than simply improving.
For instance; if we are looking at, say, “Buying shoes”, well, we’re all used to going to the store. Buying them on the internet is a transformative innovation because it not only introduces a new degree of freedom. It acutally defines a new degree of freedom: That degree of freedom didn’t exist “just a moment ago”. The downside is that when you both define and introduce a new degree of freedom, your customers wont have a default practice for working with that degree of freedom. For the same reason only about 10% buy through the internet.
Obviously, you gotta make a half-way-point before or at the same time as introducing you’re transformative innovation. Who doesn’t get that? Take the introduction of the computer. Now how the heck do you work them?? Nobody knew at the time. So why didn’t that introduction become a HUGE failure? Because people could be entertained with the computer in a way they had never been entertained before. But to get there, people had to figure out how to work with this new degree of freedom.
Another way to introduce how to work with a new degree of freedom is to introduce things in small chunks instead of the whole package at once. For this program to work your company must design the whole of the package. That means that you know what the WHOLE of the transformative innovation is!!
If you instead take an existing product and alter this or that (from a customer need perspective or by technology introduction), what you’re really doing is keeping to the product you have. That is true until either the design, form or function is changed: A new degree of freedom is introduced).
Philips Europe got this point when they looked at TIVO. TIVO introduced an all hardisk recording unite to replace the ol’ VHS. But the jump was huge (transformative innovation).
Philips Europe introduced first a VHS/DVD and then DVD + DVD/harddisk. BUT the transformative innovation was actually well known by Philips.
The products and services your business has now follow a rule. Incremental innovation will keep you WELL within those rules. Radical innovation and transformative innovations will break those rules and introduce new ones.
Now either you break them or you don’t. Did I say “can’t”?
Here’s my final point. You can’t play it safe.