Disruptive vs Incremental #Innovation: What the Experts Say

Over the last couple of weeks I’ve shared the views of some great thinkers on innovation.  In the first post, Cracking the Code: The Experts Talk Fostering Innovation, we explored best examples of innovation practice, and in the second post, The Expert’s View: Disruptive Innovation, we looked at what is necessary to foster innovation successfully in enterprise contexts. In this last post in the series, I asked my expert panel to tell us what matters more to business - disruptive innovation or incremental innovation. Their responses range the most in this series, as some are quite clear about the need for one or the other, or a blend of both. But the reasons for their responses are fascinating.

Once again I want to thank the people who so generously offered their time and insights to this series of posts. I am so grateful and have learned so much from this exercise. It’s truly humbling to have inspired such a brains trust.

Question: Should enterprises be focused more on disruptive or incremental innovation?

Jonathan Salem Baskin: I think the distinction between disruptive and incremental innovations is more management theory than reality. 'How many incremental innovations does it take to disrupt something?' I know it sounds like a bad joke, but the premise that organisations should spend a lot of time trying to become things they're not is somewhat silly.

Ongoing, everyday improvements - something that used to be recognised via Six Sigma and other operational systems - are the core of any business, and shouldn't be discounted. People and processes should be challenged relentlessly to not just improve efficiency, but understand efficacy (by drawing in more data points into their measures of success).

But every company should spend some money and time trying to blow itself up. For instance, DNB Bank has a literal group it has tasked with disrupting its business, reporting outside its normal channels. The key is to enable such innovation, and have the organisational capacity to incorporate those insights into constant improvement.

Don Peppers: Businesses should focus on BOTH disruptive and incremental innovation. Both are important, but most companies are better able to organise and manage for incremental innovation. Disruptive is, well, disruptive.

Martin Lindstrom: In my opinion, disruptive is the direction to focus on. Consumers are constantly bombarded by messaging in today's world, and a brand must create an emotional bookmark in their mind to truly be remembered. I call this a somatic marker - something so dramatic you will never forget it. All brands should create somatic markers if they really want to disrupt and innovate the market.

Drew Boyd:  It depends on the state of your business. Some of my largest clients have essentially banned the notion of disruptive innovation in favor of many incremental, clever ideas that move the company forward. But if your busy model is declining and under attack, you have no choice but to change things in a big way.

Dr. Emily Verstege: Incremental, for sure. There's so much noise about disruptors: what many legacy businesses don't see is that these new business models are increments upon already solid business models. I reckon the disruptive imperative is unempowering and makes us feel we need to be something bugger IR better than we already are. But most successful businesses have been adapting, forking off new businesses and incrementally optimising throughout their business lives: it's just now we call is disruption.

Question: Should enterprises be focused more on disruptive or incremental innovation?

Steve Blakeman: If you want to move fast and get ahead of your competitors then the only choice is disruptive innovation. If you only need evolution rather than revolution then incremental innovation will suffice.

Gregg Fraley: It’s not either/or, it’s both. For those starting an innovation program I would advise incremental. With a success or two under the innovation teams’ belt, it’s easier to get resources and mandates for more adventurous things. Ideally, an innovation team would alternate disruptive or incremental projects in a continuous cycle of projects. So, first quarter, a more tactical project. Second quarter, something bigger and more strategic, etc. What you’re looking for is a balance, which is a way to manage risk.

Nick Skillicorn: One of the fastest routes to failure is to think of innovation as an either/or for disruptive vs incremental. To succeed, a company needs to have a variety of types of innovations it's working across in its innovation portfolio, each with different timescales and aims. Generally a good strategy is for the majority of budget (more than half) to be set towards incremental innovations, then the remainder split between adjacent / platform innovations for the medium term and transformational / disruptive innovations for the long term.

Alice Almeida: When it comes to disruptive versus incremental innovation, brands shouldn't pick one over the other, as they need to have the flexibility to work with both. This reiterates the importance of constant industry and consumer insights. Incremental innovation is important, as you need to be constantly improving on what you offer. However, disruptive innovation cannot be ignored. There'll always be some teenager out there building a simplified and more appealing offering via an app!!

Heidi Therese Dangelmaier: If your brand is healthy and stable there is no immediate need to force innovation, but few brands enjoy that privilege today. The challenges brands face can not be solved incrementally. How to deal with commoditization, with the digital native market; these are the hard questions that brands face, and they are too significant to be addressed with tweaks.

Question: Should enterprises be focused more on disruptive or incremental innovation?

Frederic Joye: It depends on the opportunities and the market the businesses are in. Some businesses are ripe for disruptive innovation, but most of businesses / markets are more ready for incremental innovation. I think it’s also a matter of who the market is targeted at. Some markets are ready to adopt disruptive innovation while some others are not.  In the end, what matters for the survival of an idea, is maybe not to be the first to present the disruptive idea when the market is not read, but to bring the users to slowly adopt new technologies without making them confused about what you offer.

Kate Henley: It has to be a blend of both. Disruptive innovation "is a process not a product". Surely then disruptive innovation is iterative, developmental, or incremental - otherwise it won't remain disruptive. The Apple case study of disruption over decades (PC/music/mobiles/laptop) is a great example.

But the first iteration has to be allowed to grow - and possibly fail - within the enterprise  in a disruptive mode in order to develop and flourish. It can't be micro managed in chunks or it may never take off. There can't be a preoccupation with risk before starting. Hackathons, incubators innovation labs, prototypes and new business models need to start and develop unencumbered.

There must also be a long term play and a risk assessment and investment plan to continue disruption. That's where business is failing and lacks courage.  Intel are challenged at the moment and have all but exited the mobile processor market.  Apple’s share price is now at  a near 2 year low, with everyone asking "What's the next big thing?".  Kodak's failure is legendary. Disruption by definition must falter at some point. What is the enterprise response when it does?

As Christensen says, the concept of disruption is about competitive response; it is not a theory of growth.

Question: Should enterprises be focused more on disruptive or incremental innovation?

Steve Faktor: I say, know thyself. Know your culture. If you've never done an acquisition, released one groundbreaking product in 20 years, and take months to make a market-facing decision, you are not likely to disrupt anybody. Not without a major threat or  overhaul - and maybe not then either. In these cases, I advise clients to be the very best at what they do and augment their efforts with innovative relationships and technologies. Here is my formula for creating successful partnerships, investments or acquisitions of tech startups to drive long term growth and innovation - without trying to turn companies into something they're not.

Laura Williams: Companies should focus on both - it’s the balance between them and the internal culture around innovation that’s important. Some large companies are happy spending 80-90% of their innovation/R&D budget on incremental innovation, spending very little on disruptive innovation. Increasingly, I've seen these companies are now threatened by entrepreneurs moving into their territory - sectors are no longer sacred to the brands and businesses that already exist within them (we only need to look at the banking sector for examples). Companies should focus on disruptive innovation: thinking and activities that ‘move the needle’ and future proof their business. One benefit of a long-term future focus is the ‘exhaust’ - ideas for incremental innovations are identified that can improve aspects of the business and product.

In conclusion….

I believe that in order to be truly competitive in modern enterprises, we can’t just assume that our innovation is limited to optimising business-as-usual. We need to be much more attuned to the technologies that are emerging as vehicles for consumer engagement, and we need to be prepared to take leaps of faith in new ways of doing business. Risk can be managed by embracing rapid prototyping methods of generating, testing and implementing minimum viable products and services. And with wearables, the internet of things, virtual reality and artificial intelligence all beginning to have an impact on enterprise activities, now is the time to seize the initiative, and mobilise disruption.

A final thanks to my generous experts! Please be sure to follow up on their books and projects, included below.
________________________________________________

Jonathan Salem Baskin, President, Arcadia Communications Lab https://jonathansalembaskin.com/ Latest book: Today in the Histories of Social Media (2014)

Don Peppers, Founding Partner, Peppers & Rogers Group https://www.peppersandrogersgroup.com/ Latest Book: Customer Experience: What, How and Why Now (2016)

Martin Lindstrom, Branding Expert & Consultant, Best-Selling Author and Brand Futurist https://www.martinlindstrom.com/ Latest Book: Small Data: The Tiny Clues That Uncover Huge Trends (2016)

Drew Boyd, Executive Director Master of Science in Marketing Program at University of Cincinnati  https://www.insidetheboxinnovation.com/authors/ Latest Book: Inside the Box: A Proven System of Creativity for Breakthrough Results (2014)

Emily Verstege, CEO and Founding Director, Multiplicite https://emilyverstege.com/

Steve Blakeman, Managing Director (Global Accounts) at OMD https://omdsaid.com/author/steveblakeman/

Gregg Fraley, Partner & Chief Solver, Kiln https://greggfraley.com/ Latest Book: Jack's Notebook: A business novel about creative problem solving (2008)

Nick Skillicorn, CEO & Founder, Improvides Consulting https://www.improvides.com/author/admin/ Latest Book: 30 days of Creativity Training (2013)

Alice Almeida, Manager of Innovation & Insights, Hitwise https://au.linkedin.com/in/alicemdonaldson

Heidi Therese Dangelmaier, Disruptive category innovation for female + digital native market https://www.dhirubhai.net/in/girlapproved

Frederic Joye, Co-Founder & CRO, Arcanys https://www.arcanys.com/team/

Kate Henley, Global Head of Communication, Digital and Internal Communication, Group Corporate Affair, Standard Chartered Bank
https://hk.linkedin.com/in/kate-henley-29351914

Steve Faktor, CEO of IdeaFaktory innovation incubator, Author of Econovation https://www.ideafaktory.com/ Latest book: Econovation: The Red, White, and Blue Pill for Arousing Innovation (2011)

Laura William, Head of Front End Innovation, The Good Lab. https://www.aboutlaura.co.uk/ Artworks:https://www.lauramelissawilliams.com