Importance of Incremental Innovation

Mapping Innovation space

Innovation can take place along an axis running from incremental through to radical change. Is there potential innovation space within which an organization can operate? Whether it actually explores all the space is a question for innovation strategy and we will return to it later.

As far as managing the innovation process is concerned these differences are important. The ways in which we approach incremental day to day change will differ from those used occasionally to handle a radical step change in product or process. But we should also remember that it is the perceived degree of novelty which matters; novelty is very much in the eye of the beholder. For example in a giant technologically advanced organization like Shell or IBM advanced network information systems are commonplace but for a small car dealership or food processor even the use of a simple PC to connect to the Internet may still represent a major challenge.

Although innovation sometimes involves a discontinuous shift – something completely new or a response to dramatically changed conditions – most of the time it takes place in incremental fashion. Products are rarely new to the world process innovation is mainly about optimization and getting the bugs out of the system (Ettlie suggests disruptive or new to the world innovations are only 6% to 10% of all projects labeled innovation). Studies of incremental process development (such as Hollander’s famous study of Du Pont rayon plants) suggest that the cumulative gains in efficiency are often much greater over time than those which come from occasional radical changes. Other examples include Tremblay’s studies of paper mills.
Continuous improvement of this kind has received considerable attention in recent years, first as part of the total quality management movement, reflecting the significant gains which Japanese manufacturers were able to make in improving quality and productivity through sustained incremental change. But this is not new — similar principles underpin the famous learning curve effect where productivity improves with increase in the scale of production, the reason for this lies in the learning and continuous incremental problem solving innovation which accompanies the introduction of a new product or process. More recent experience of deploying lean thinking in manufacturing and services and increasingly between and within enterprises underlines further the huge scope for such continuous innovation.

One way in which the continuous innovation approach can be harnessed to good effect is through the concept of platform or robust design. This is a way of creating stretch and space within the envelope and depends on being able to establish a strong basic platform or family which can be stretched and otherwise modified to extend the range and life of the product including Boeing airliners and Rolls-Royce jet engines. Major investment by large semiconductor manufacturers like Intel and AMD are amortized to some extent b being to design and produce a family of devices based on common families or platforms such as the Pentium, Celeron, Athlon of Duron chipsets. Car makers are increasingly moving to produce models which although apparently different in style make use of common components and floor pans or chassis. Perhaps the most famous product platform is the Walkman originally developed by Sony as a portable radio and cassette system; the platform concept has come to under pin a wide range of offerings from all major manufacturers for the market and deploying technologies like minidisk, CD, DVD, ad now MP3 players.

In processes much has been made of the ability to enhance and improve performance cover many years form the original design concepts – in fields like steel making and chemicals for example service innovation offers other examples where a basic concept can be adapted and tailored for a wide range of similar applications without undergoing the high initial design costs – as is the case with different mortgage or insurance products.