By 2006, Nokia had been producing mobile phones for 24 years. It dominated the market and launched 35 different mobile phones in 2006. That works out to approximately launching three phones per month! Each phone served specific user needs, such as gaming, web browsing, streaming TV, listening to music and taking photos. Nokia offered rugged outdoor phones for hikers and sleek flip-phones for professionals. Nokia truly understood incremental innovation.
In 2007, Apple launched one iPhone and the notion of mobile phones was changed forever. The first iPhone was a result of radical innovation. What made the iPhone radical was not the fact that it had a touchscreen, it was the fact that it gave mobile phones a new meaning. Despite Nokia’s impressive product lineup and powerful specs, all of their phones were ‘fixed-feature’ devices whereas the iPhone was ‘open-feature’ and could be customised by downloading apps, giving customers increased control of their phones, and popularising the phrase “is there an app for that?”
What are the differences between incremental and radical innovation?
Incremental innovation is the dominant type of innovation in the commercial sector. Its methodologies were successfully adapted from manufacturing (e.g. design thinking, design sprints) since the late '90s, by companies such as IDEO and Google, respectively. Incremental innovation is about following a step by step process: a recipe, or playbook — the quantity of which has increased significantly during the last ten years. Incremental innovation is a safer option for risk-averse innovators; because, it produces commercially valuable outcomes quickly.
Incremental innovation impacts metrics such as customer satisfaction; cost to manage; product profitability; and, speed of service.
Radical innovation is about identifying new concepts, new behaviours, new norms that redefine the beliefs and attitudes that underpin consumer behaviours.
Radical innovation is about looking and questioning the underpinning conventions of your industry ('radix' means 'origin' or 'root' in Latin) rather than simply focusing on the incremental improvement of established features.
Radical innovation typically aims to identify and then foster changes in consumersʼ subjectivity and culture. Radical innovation impacts metrics such as share of revenue from new products; brand differentiation metrics; long-term revenue growth; and decreased consumer price sensitivity.
Radical and incremental innovations follow a certain pattern shown in the below figure from Norman & Verganti (2014).
Incremental innovations take organisations one step forward on a goal-ledhill-climbing track which is about product, service, and customer experience improvements. Organisations who engage in this hill-climbing race compete on speed, features, market share, and price.
Radical innovations on the other hand create new hills to climb and new opportunities for growth that didn’t exist before.
The change in meaning from a ‘fixed-feature’ phone to a truly personal device changed the rules of the game. As a result the iPhone no longer competed on specs, features, or price.
How can organisations systematically develop radical innovations?
Following a recipe or a simple step-by-step process is unlikely to produce radical innovations. For it to happen, organisations need to be willing and courageous enough to change their long-held beliefs about their product, the market, customers and competition and move beyond what everyone else accepts as given.
Using our experience (and frustration!) as innovation consultants, we developed an approach for radical innovation: "Hacking Cultural Beliefs". Hacking Cultural Beliefs begins with identifying and reframing internal and external beliefs held by your organisation and the industry you are in. Questioning what everyone else accepts ‘as given’ allows you to create radical innovation opportunities others don’t see.
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