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Definition and Value of Incremental Innovation
When looking at incremental innovation in any large organisation – the business model is always known, repeatable and scalable. The organisation’s main focus is on the execution of the known business model and organisational success is measured on metrics that reflect success in execution.
The value of incremental innovation is that you continuously improve the known business model for greater efficiency. This is generally through the implementation of new technologies, policies, procedures and functions (HR, Finance, etc.) that leads to more efficient execution. For XXXXX P/L, incremental innovation has been the central value and efficiency driver in the organisation.
Definition and Value of Explorative Innovation
When looking at explorative innovation– the business model is unknown. The focus of breakthrough innovation is to extend rather than execute the core
business model. The focus for organisations should be to search for and identify new value opportunities and then validate and test these in a small way.
Explorative innovation also encourages organisations to re-imagine how an industry can operate and grow by focusing on and developing better value propositions. Moreover, organisation’s focusing on breakthrough innovation create products and services that never existed before, offer new cost structures which results in customer migration and drives competition. For XXXXX P/L, opportunities for breakthrough innovation are abundant. The challenge is developing and embedding a repeatable process internally that can accelerate them to deliver tangible business impact.
Incremental Versus Explorative
This is not to say that explorative innovation
initiatives don’t exist. The problem is that these
initiatives are not given enough leadership $ support, funding or time to produce tangible
results. Managed incorrectly, these investments
can actually damage innovation in an
organisation and lead to significant loss of
investment.
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