In today’s constantly changing business environment, new opportunities and challenges arise every day which are often driven through digitalization. As a result various market forces like knowledge as business capital, the Information and Communication technologies, Internet of things and of course due to digitalization every organization seeks a competitive advantage. To master over the resulting challenges and get benefited from the opportunities, we must have a systematic and well managed Innovation. That is why now a days innovation has become a core focus area for high performing organizations to ensure long-term survival by making the desired revenue and goals.
WHAT IS AN INNOVATION?
According to Peter Drucker innovation the specific function for entrepreneurship whether in an existing business or a public service institution or a new venture started by a lone individual in family kitchen. Innovation is the means by which the entrepreneur either creates new wealth producing resources or endows existing resources with enhanced potential for creating wealth.
WHAT IS INNOVATION MANAGEMENT ?
Innovation management involves the process of managing an organization’s innovation procedure, starting from the initial stage of ideation to its final stage of successful implementation. It encompasses the decisions, activities and practices of devising and implementing an innovation strategy. These decisions, practices and actions are aimed at achieving a certain target – to generate an idea, product or a service that is of sizeable business value.
According to Gartner, innovation management is a structured process of generating, capturing, discussing and improving, organizing, evaluating and prioritizing valuable insight or alternative thinking that would otherwise not have emerged through normal processes.
The innovation management process necessitates the use of certain management tools that assist in bringing both managers and other entities on a common platform and get them to move towards a common goal. These innovation management tools can look simple but are most effective in reality. Such management tools are considered as brainstorming sessions, planning and finally prototyping. Let’s discuss about various types of innovation which helps in the growth of business.
TYPES OF INNOVATION:
INCREMENTAL INNOVATION: The overwhelming majority of innovations are incremental in nature. Incremental innovation is nothing but improvement or adding new features or characteristics to already existed product which brings a large-scale organisational change. Incremental innovation is arguably the most accessible form of innovation, as it can often be performed without requiring huge budgets, a large team or a reorientation of the business’s strategy.
Incremental innovation doesn’t change it’s original dominant design. Incremental innovation will have less financial risks because this innovation doesn’t bring a new product or services into market rather it just modifies already existed product. This innovation can build a strong customer relationships and improves the product longevity in the market and most importantly incremental innovation is the best strategy to get a quick win in the competitive market.
The best example of incremental innovation is, The most famous E-commerce site COCO COLA, CADBURY etc…
DISRUPTIVE INNOVATION: Disruptive innovation is a theory that refers to a concept, product, or a service that creates a new value of network either by entering an existing market or by creating a completely new market. Moreover disruptive innovation refers to innovations by using new technologies that make expensive or sophisticated products and services accessible and more affordable to a broader market.
Disruptive innovation requires enabling technology with an innovative business model for building a coherent network value. One of the key features of disruptive innovation is that it modifies the process of evaluating the company and helps in the provision of better services with its new modification brought in the industry. It improves and modernize a lot of processes of a company, which further benefits the company a lot.
Examples of disruptive innovation are TESLA MOTORS, YOU TUBE, SKYPE etc…
SUSTAINING INNOVATION: Sustaining innovation is the opposite of disruptive innovation as it exists in the current market and instead of creating new value networks, it improves and grows the existing ones by satisfying the needs of a customer. Just like incremental innovation, the products that perform sustaining innovation is slightly made better with every iteration by reducing defects.
A sustaining innovation targets the high-end customers with its better performance than previously available one. The established competitors always win the battles when they operate sustaining technology efficiently. This strategy entails making a better product that can sell for higher profit margins to their best customers.
Examples of sustaining innovation are, IBM, TOYOTA etc..
RADICAL INNOVATIONS: Radical innovation is rare. It has similar characteristics to disruptive innovation but it is different in a way that it simultaneously uses revolutionary technology and a new business model. Radical innovation solves global problems and addresses needs completely in a new way. This type of innovation completely transforms the market, or even the entire economy .
Technological innovations, such as personal computer and the internet are examples of radical innovations that have transformed the way the entire world functions and communicates. These disruptive innovations provide our society with a platform to build on top of which leads to highly accelerated economic growth where as radical innovation destroys or supplants an existing business model and blows up with something that is entirely new to the market. This types of innovation typically require a lot of time and technological development before they’re ready for the mainstream markets.
Examples of Radical innovation are, I PHONE, NETFLIX, INTERNET etc..