RADICAL OR INCREMENTAL?

Ruchitha Perera looks to solve the business conundrum vis-à-vis innovation

The application of innovation differs between industries, sectors and technologies. Structural and organisational factors influence the effect of innovation on business performance. While managers acknowledge the importance of it, they’re often dissatisfied with the flow and management of innovation in organisations.

Research suggests that businesses that innovate with products, services and/or processes outperform their competitors, by achieving market growth and profitability. Not every innovation translates into market acceptance or commercial success. Implementation of innovation poses high risks but can become successful by using distinct management skills, knowledge and business acumen.

Businesses normally adopt the four ‘Ps’ of innovation, comprising all or a combination of product, process, position and paradigm. Many organisations continue to ignore the dimensions and correlations between these components that determine the degree of innovation that can be applied, thereby failing to meet customer value.

The lack of customer and market insights is an important challenge that continues to hamper the degree of innovation that can be applied. This could be due to a reliance on irrelevant technology, limited market insights, and lack of creative analysis of internal and external customer data.

Sluggish management processes have been identified as a death sentence for the successful application of innovation. A majority of businesses generally lack openness, risk appetite and a willingness to change, preventing organisations from embracing the required degree of innovation.

Certain businesses tend to bet on a particular aspect of innovation and rely on that single degree of application.

When the desired results do not materialise, they continue along the same path hoping for a change. A wise alternative would be to create an innovation portfolio that aims for short and long-term goals. Well-balanced portfolios enable continuous delivery of business results, paving the way for sustainable innovation success.

To survive in the post-pandemic economic climate, businesses must understand the importance of the dimension and degree of radical or incremental innovation concepts, and how they can increase organisational competitive advantage.


The challenge is to understand how the degree of innovation is caused by different techniques and apply suitable strategies to succeed.

For instance, the application of radical innovation or ‘new to the world’ creates novel knowledge and ideas, leading to commercialisation of completely new products and services, and works best when embraced with new technology.

Although local businesses boast abundant technological expertise, there is no evidence of application due to a lack of willingness, collaboration and creativity displayed by management that has been tasked with the responsibility of driving towards shared goals.

Whilst technology is advancing, it’s also becoming competitively cheaper. This enables businesses to explore radical technologies such as 5G and IoT, driving brand-new innovation.

It is time for businesses to embrace radical innovation by encouraging creativity, and more experimental and robust thinking amongst employees – and most importantly, valuing their feedback.

Google’s project allocating employees 20 percent of paid work to pursue personal projects and inspire innovation was a radical innovation – it improved employee motivation, performance and retention, making way for talent attraction.

The key differentiator with incremental innovation (a.k.a. ‘new into the old’) is the cumulative efficiencies that can be achieved from a series of small improvements.

They could be product, service or internal process improvements. Most incremental changes are relatively quick and easy to implement. Low-cost improvements help further differentiate a business from the competition while building on present offerings.

Incremental innovation requires less capital and is known to be of lower risk but needs a strong support system alongside a company culture that rewards creative thinking for implementing changes successfully. It’s generally the most widely used approach although not much effort has been made to explore it.

But incremental innovation can provide a competitive advantage to those who try it. Keeping in mind that the pandemic has created a ‘new normal’ in how workplaces function, local businesses can explore improvements in employee engagement by digitalising human resource practices such as recruitment, assessing training needs and employee feedback.

Radical and incremental innovations are interconnected. Whereas radical innovation typically follows incremental innovation, and delivers great leaps forward in terms of revenue and efficiency, the tweaks offered by incremental innovation result in benefits
that tend to be more modest.

No single innovation will be sufficient in the future; rather, applying new combinations would be the answer.