Incremental and radical innovation

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exploring innovation space as we’ve already seen innovation is a journey it’s a journey that involves moving ideas to create value social value commercial value some combination essentially innovation is that journey from ideas to value but that does raise some questions if we want to manage it for example which ideas do we use which direction do we travel in and how far should we travel and we’re going to try and explore these concepts in this module exploring innovation space now if we’re going to make any kind of journey it’s useful to have some tools to help us for example a compass is pretty useful if we want some idea of the direction we’re going in needless to say a map is very helpful for direction and for distance and these days the advantage of GPS is we can have it in our pocket but we can benefit from having some tools to help us with the journey and that’s what we’re going to try and do in this module in particular we’re going to focus on two core concepts we’re going to think about distance that’s to say how far should we go along the road to novelty after all innovation is very much about change about new things how new that’s an important decision that brings into line the very interesting question of what’s called incremental or radical innovation doing what we do better or doing something completely different but the other thing we’re interested in and we’ll explore more is which type of energy innovation journey might we make in which direction there are lots of possibilities we could change what we offer the world or the ways we create and deliver that for example .

so we’re going to explore these two core concepts in this module so let’s begin with this question of innovation distance and what we’re interested here is basically how much novelty is involved are we talking about innovation in small steps or in big jumps now small step innovation is called incremental innovation it’s essentially doing what we already do but a little bit better it’s the kind of thing we’ll see when we talk about product improvement or process enhancement or extension to a market range it’s doing what we already do but better and it’s got a number of advantages first of all it’s quite low in risk because we’re doing something we have already done before it’s not so risky it builds on what we already know so it means that if we have a knowledge base we can exploit that to move a little bit further and it’s relatively easy to implement because we know a lot we’ve done it already before of course there are disadvantages as well in particular it has relatively low impact this isn’t going to change the world it’s by definition an improvement and one of the other risks that brings a course is that if we keep doing more of the same inching our way forward we do risk being overtaken by someone else doing something radical so that’s the incremental end of the spectrum and if we think about examples of this there are plenty of them for example light-emitting diodes as wonderful things that we see basically follow a pattern which Thomas Edison would have been familiar with basically the more performance we get below er the price and that’s changed dramatically over the last or years just like Edison’s original bulbs came down in price and improved in their performance classically this was not an invention of something new but basically continuous improvement doing what we do better same thing if we look at solar panels exactly the same kind of plummeting cost as they get better and more reliable and if we had a similar curve we’d find that the performance would at the same time be going up and it’s not a new idea Henry Ford when he was first introducing the Model T Ford the more he made the better he got the lower the price but the quality of the performance proved so we know a lot about incremental innovation it adds up in fact most of innovation most of the time is incremental doing what we do better but occasionally we do have more radical kinds of change and radical innovation basically is doing something we might never have done before.

 it’s doing something different it’s a big leap it’s a step change and as a result it doesn’t happen all that often now once again this has some big advantages first of all it’s possible to change the game to actually do something that we’ve not done before and in doing so change the whole game it’s a step change along key performance dimensions it cuts the cost not just by a little bit by a lot it improves the speed or improves the quality key performance dimensions changing in a rapid and in a radical way but there are disadvantages as well in particular it’s very high risk we don’t know the uncertainty is very high we don’t know whether this is going to work on that it’s uncertain to implement we’re having to tread very new paths and it requires a lot of new knowledge we have to do a lot of learning we can’t simply build on what we know now again let’s look at a few examples one of the very interesting things comes from the world of Windows for many many years we made windows on making glass and then grinding and polishing to make sure it was flat until one day somebody came up with a radical idea which took a long time to implement but the radical idea of using molten metal molten tin and floating the motor got molten glass on top of it and peeling off a thin sheet of perfectly smooth flat window glass this float glass process has changed the way we make glass most of the windows in the world today are now made with this process but it wasn’t an easy change ten years thousands millions of tons of scrap to learn to do it the digital computer there’s a picture of one of the very very first we’ve come a long long way since that radical innovation but in those days that was very uncertain very difficult to implement and the telephone Alexander bell demonstrated it was possible to have that kind of communication a radical innovation which has undoubtedly changed the world but at the time it was very high-risk very uncertain many people didn’t believe in it and back to our old friend LED lighting for a very long time the kind of lightbulb we had was essentially Thomas Edison’s incandescent bulb basically heating a wire up inside a glass bulb to make light LED lighting is very different comes from the world of electronics from the solid-state physics that allow different colors to shine out it’s taken a long time but it’s become a radical innovation which once again is transforming the way lighting works now most startups usually involve radical innovation .

they’re changing the game they’re not trying to do something everyone else’s done because the big players are already established startups are interested in radically different things Spotify for example trying to use streaming of music instead of selling it in a physically packaged form on a CD or more recently as an mp but Spotify essentially the big innovation was do we need to only in the music at all or do we or could we rent it Steve Jobs Steve Wozniak coming up not just with a computer that have been done years before theirs was the home computer the personal computer at the time there was no market for this it was a technical challenge which they could solve but growing it as an innovation creating a market that involved radical innovation Google of course coming up with ways to search the Internet in radical fashion and below that picture is actually of Jack mark and the original employees behind the Alibaba organization which has grown to be one of the biggest in the world competing in the Chinese speaking world very much with Google and the other search engines but moving beyond that into e-commerce and so on and right in the corner James Dyson’s radical innovation in the world of vacuum cleaners now vacuum cleaners pretty boring thing perhaps to keep your house clean but all of them until dyson came along involved suction system which sucked the dust ‘another dirt into a bag or James Dyson do did was basically get rid of the bag once again a radical innovation now one of the things we ought to recognize if we’re going to manage innovation is that it comes in patterns and there’s a very important set of patterns here associated with the kind of novelty we’re talking about it’s not a case of radical innovation is good and incremental it’s bad both of the matter both make a difference but in different ways incremental innovation over time often has more impact than those occasional radical shifts and there’s a great deal of research evidence to support this in all sorts of industries radical innovation anyway even if it is a step change is going to require a lot of incremental innovation to sort the bugs out to make the system actually work so that idea of improving stretching and developing is the consequence of a big step forward and it basically reminds us that there’s a lot to do with radical and incremental innovation and a lot of interplay between the two the other thing we have to think about is how over time we consolidate what we’ve learned the uncertain new world that we move into with a radical innovation building a knowledge base and then using that developing it incrementally systematically over time through incremental innovation.

 we can see this with many examples think about the very early generations of mobile phones those ones have Nokia produced or think about blackberry and then think about the smart phone each of them as a category were very very radical but they were followed by periods of incremental innovation other people coming into the market developing their versions and then their subsequent versions until we had a whole range of players in those mobile phone markets same thing with motorcars when Godfrey Benz first invented the motorcar that’s a picture of his very first motorcar on the left it was radical no one had seen it before by the time of Henry Ford we’re talking about many people making it and Ford’s really big innovation was finding the kind of product the Model T in the picture and the way of manufacturing mass production to make it the car for everyone at a price everyone can afford but innovation in motorcars continues occasionally radically changing very often systematic incremental improvement but over a hundred years we’ve very much seen this pattern of innovation think about the first airplane that was of course the Wright brothers back in Kitty Hawk at the very beginning of the th century well it’s a bit flimsy but what came after that well over a whole century or sorts take this one for example this is the Boeing clearly a big step forward in terms of what it did compared to what the Wright brothers could do but it actually first flew in so we’re talking of a year old plane still in production more importantly new versions are still being launched these are not brand new designs they’re stretching they’re modifying the engines and making them more fuel-efficient these are essentially incremental innovations following the initial radical product innovation and it’s not a bad thing to do over its life over , of these planes have been built so what we need to think about in managing innovation is a spectrum of novelty at one end we have incremental innovation doing what we do but better and at the other end we have radical innovation doing something different we need both we need to manage both and we need to recognize there are different challenges in doing both so let’s summarize innovation can involve change in different degrees of novelty think about it is the distance we might travel on our innovation journey so trips will be local familiar essentially doing what we do but better incremental innovation some trips might be big leaps perhaps right into the unknown radical innovation it’s not a case of either/or but a spectrum and the further you go we take that distance metaphor the higher the risk that’s going to be involved.

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