When thinking about innovation, ground-breaking developments usually spring to mind - Google, Uber, the iPod. But these are radical innovations, extremely rare but if executed successfully can change the shape of an existing market, render the competition obsolete or create an entirely new market.
In most cases, 70% of your innovation activity should be incremental. These are your small improvements such as software upgrades, new flavours or a grip on the handle. Gillette, Coca Cola and Cadbury are masters of incremental innovation. Such innovations are easy to execute, help organisations remain competitive and maintain predictable revenue streams. These are your quick wins.
However, incremental innovation only accounts for around 10% of your revenue. So how do you ensure as an organisation that you stay competitive by driving other more radical forms of innovation?
Knowing how to embed a culture, strategy and process for long-term innovation are central to an organisation’s ability to radically innovate.
Employees need to be able to embrace change and uncertainty and be empowered to think and act with curiosity. Leadership in this era takes courage and conviction to embrace the unknown, communicate and demonstrate a culture that values new ways of thinking and working.
An organisation fuelled by an innovation strategy can be the difference between flash-in-the-pan and exponential growth and longevity. One essential element is an Innovation Portfolio with a balance of incremental, adjacent and radical innovation.
The agility of the start-up movement has encouraged a renewal of the entrepreneurial spirit, but it's also leading companies to take more risks to create 'the next big thing'. Back your innovation strategy with a proven process for user-centred innovation and a reduction of investment risk through early end-user engagement, low-cost testing and continuous iteration to improve value. At G2 Innovation, we use Design Thinking as our preferred process, taking the best of agile and lean to complement and enhance.
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