Incremental Vs. disruptive innovation



hi guys and welcome to incremental versus destructive innovation my name is Stefano and I'm a design strategist but also the founder of the strategy design hub today we are going to speak about it's very important difference between an innovation that is incremental and another type of innovation that is disruptive the simple reason why I'm creating this video is because there are many companies out there that are able to create some sort of value for their customers but only few are able to sustain and most importantly to capture that value so let's the game ok so let's start with the first type of innovation incremental innovation incremental innovation is something that looks pretty much like this in this graphic we add time in the horizontal axis and we add value or better added value in the vertical axis the orange curve shows you how companies implementing an incremental innovation agenda are able to create more value for their customers over time managers operating in this type of companies behave pretty much like hikers step-by-step are able to deliver more value for their customers and the way that that really happens is by adopting a set of best practices that are emerging in their industry now I believe that incremental innovation is something kind of easy to understand therefore let's move forward to the next type of innovation disruptive innovation the main difference between incremental and disruptive innovation is that in incremental innovation we only have one product and managers try to refine that product in a way that delivers more value for the customers when we speak about disruptive innovation that is no longer true we have two products we have product one in term one and we have a new product in term 2 here managers are no longer concentrating in refining the product behaving like hikers step-by-step adding more value for the customer but rather they come up with a new way to deliver value to their customer through a different product managers are parachuting themselves into new possibilities for value creation in other words managers are not incrementally thinking about their product or service but they are creative they are trying to define the new possibility to satisfy the needs of their customers after having introduced to different type of innovation let's now explore how they impact the way that companies compete companies that are embracing an incremental innovation approach improve the product and services by adopting the latest best practices in the industry the only problem with that is that sooner or later the company's competitor will adopt the same best practices therefore this generate a head-to-head competition in the industry and no company is able to capture the extra value that is generated for the customer actually the customer access that extra value without the need to pay for it another important point to highlight here is that the incremental innovation approach follow a pretty much stand path in many industries which can be summarized by the product lifecycle differently companies that are embracing a disruptive innovation approach are embracing change the management of such organization is no longer worried to adopt the latest best practices that are emerging in an industry but rather they are busy envisioning a future that doesn't exist just yet which means a new way to satisfy a customer need which materialize itself in a new product or service while competitors can always replicate best practices while they struggle when it comes to replicated creativity because creativity happens in the people working within an organization and it's very company specific therefore companies that are embracing disrupting innovation not only creates a different type of value a different kind of product or service but also there are able to capture the value that they create let me close this video making a very important observation if you look at the chart in terms to the new product adds very little value when compared to the old product that the company manufacture in term one but that is work for a very simple reason because the new product is an infant it just little more than a new idea therefore the company need to start an incremental innovation approach from that point now what is the catch here the catch is that is not that disrupting innovation is better than incremental innovation or incremental innovation is better than the shopping innovation that is not the point the point is that innovation requires both a disruptive and in incremental approach let me say that if companies just incrementally innovate without that shifting perception that is given by disrupting innovation where they for sure are not able to sustain and capture the value they they create but rather when a company is implementing an incremental innovation approach that is based on a shifting perception that is provided by disrupting innovation where companies will be able not only to sustain but also to capture the extra value that their product is delivering to their customers stay tuned

4 Comments

  1. Enron Co said:

    Quite a misleading definition of disruptive innovation. Please refer to Schumpeter's work on creative destruction, Kim and Maugarbone's work on blue ocean strategies and endeavor to understand Harvard Business Reviews article on the disruptive innovation model before attempting to teach the subject.

    June 27, 2019
    Reply
  2. Kite TV said:

    great video

    June 27, 2019
    Reply
  3. Arthur Kelderman said:

    very cool video!

    June 27, 2019
    Reply
  4. Zakk Yang said:

    The definition of disruptive innovation seems not right. Please refer some paper from Clayton Christensen.

    June 27, 2019
    Reply

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