Incremental vs. Radical Innovation Bianca Backes Inga Janke Innovation, change, and decision-making...
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Transcript of Incremental vs. Radical Innovation Bianca Backes Inga Janke Innovation, change, and decision-making...
![Page 1: Incremental vs. Radical Innovation Bianca Backes Inga Janke Innovation, change, and decision-making in international organizations Prof. Dr. J. Beneke.](https://reader035.fdocuments.us/reader035/viewer/2022072013/56649e695503460f94b65a42/html5/thumbnails/1.jpg)
Incremental vs. Radical Innovation
Bianca BackesInga Janke
Innovation, change, and decision-making in international organizationsProf. Dr. J. Beneke
SS0411.05.2004
![Page 2: Incremental vs. Radical Innovation Bianca Backes Inga Janke Innovation, change, and decision-making in international organizations Prof. Dr. J. Beneke.](https://reader035.fdocuments.us/reader035/viewer/2022072013/56649e695503460f94b65a42/html5/thumbnails/2.jpg)
Overview
1. The notion of innovation (repetition)
2. The classification of Innovation
3. Incremental vs. Radical Innovation
4. Radical Innovations: historic examples
5. What influences Incremental/Radical Innovation?
6. Conclusion
![Page 3: Incremental vs. Radical Innovation Bianca Backes Inga Janke Innovation, change, and decision-making in international organizations Prof. Dr. J. Beneke.](https://reader035.fdocuments.us/reader035/viewer/2022072013/56649e695503460f94b65a42/html5/thumbnails/3.jpg)
Definitions (1)
“Innovation means a new combination of purpose and method.” (Schumpeter)
“Innovations are resulting in qualitatively new products or processes, which differ significantly from the former state – however this is to be determined.”
(Hauschildt)
![Page 4: Incremental vs. Radical Innovation Bianca Backes Inga Janke Innovation, change, and decision-making in international organizations Prof. Dr. J. Beneke.](https://reader035.fdocuments.us/reader035/viewer/2022072013/56649e695503460f94b65a42/html5/thumbnails/4.jpg)
Definitions (2)
“In contrast to a discovery - which is usually made coincidently- innovation is characterized by a (preceded) systematic innovation process with a certain objective at the beginning.” (Betz)
![Page 5: Incremental vs. Radical Innovation Bianca Backes Inga Janke Innovation, change, and decision-making in international organizations Prof. Dr. J. Beneke.](https://reader035.fdocuments.us/reader035/viewer/2022072013/56649e695503460f94b65a42/html5/thumbnails/5.jpg)
product
innovation
process
innovation
combination
product/
process
goods service
basic
improved
fake
Innovation
Type Degree
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Innovation
Incremental/Sustaining Radical/Disruptive
![Page 7: Incremental vs. Radical Innovation Bianca Backes Inga Janke Innovation, change, and decision-making in international organizations Prof. Dr. J. Beneke.](https://reader035.fdocuments.us/reader035/viewer/2022072013/56649e695503460f94b65a42/html5/thumbnails/7.jpg)
Incremental Innovation
Lower or first order innovations
“Repairing” the old
Keeps large companies competitive in a short term
Negatively correlated to breakthrough innovation
![Page 8: Incremental vs. Radical Innovation Bianca Backes Inga Janke Innovation, change, and decision-making in international organizations Prof. Dr. J. Beneke.](https://reader035.fdocuments.us/reader035/viewer/2022072013/56649e695503460f94b65a42/html5/thumbnails/8.jpg)
Incremental vs. Radical Innovation
Most innovations nowadays are incremental
Danger of getting caught unaware by newcomers
Companies need to come up with radical innovations
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Radical Innovation (1)
“If you cannot beat radical innovators, your best chance to stay relevant to your markets is to become one” (CommunityIntelligence)
Higher order or breakthrough innovations
Dramatically changes social or business practices
![Page 10: Incremental vs. Radical Innovation Bianca Backes Inga Janke Innovation, change, and decision-making in international organizations Prof. Dr. J. Beneke.](https://reader035.fdocuments.us/reader035/viewer/2022072013/56649e695503460f94b65a42/html5/thumbnails/10.jpg)
Radical Innovation (2)
Creates new markets
Leads to rapid growth
Confronted with uncertainties: technological market
![Page 11: Incremental vs. Radical Innovation Bianca Backes Inga Janke Innovation, change, and decision-making in international organizations Prof. Dr. J. Beneke.](https://reader035.fdocuments.us/reader035/viewer/2022072013/56649e695503460f94b65a42/html5/thumbnails/11.jpg)
Main DifferencesIncremental vs. Radical Innovation
• low uncertainty
• exploits existing technology
improvements in existing improvements in existing products/processesproducts/processes
• business plan developed at the beginning
• process is formal
• key players are cross-functional teams
• high uncertainty
• explores new technology
• business plan evolves through discovery-based learning
• process is informal
• key players are cross-functional individuals
development of new development of new products/processesproducts/processes
![Page 12: Incremental vs. Radical Innovation Bianca Backes Inga Janke Innovation, change, and decision-making in international organizations Prof. Dr. J. Beneke.](https://reader035.fdocuments.us/reader035/viewer/2022072013/56649e695503460f94b65a42/html5/thumbnails/12.jpg)
Radical Innovationshistoric examples
Telephone 1861Light bulb 1883Television 1929Atomic bomb 1945Computer (1st gen.)1946Floppy Disc 1950Compact Disc 1979WWW 1991 InventionCellphone 1992SMS 1994 Invention?
The development of radical innovations is decreasing!
![Page 13: Incremental vs. Radical Innovation Bianca Backes Inga Janke Innovation, change, and decision-making in international organizations Prof. Dr. J. Beneke.](https://reader035.fdocuments.us/reader035/viewer/2022072013/56649e695503460f94b65a42/html5/thumbnails/13.jpg)
What influences Radical/Incremental Innovations?
Organization size/age cultural characteristics (high/low risk) structure
Environment Process Management
![Page 14: Incremental vs. Radical Innovation Bianca Backes Inga Janke Innovation, change, and decision-making in international organizations Prof. Dr. J. Beneke.](https://reader035.fdocuments.us/reader035/viewer/2022072013/56649e695503460f94b65a42/html5/thumbnails/14.jpg)
Conclusion
The capacity to innovate and make life better is present in each individual
Without radical innovation there is no economic growth!
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The End…
…thank you for your attention!