Innovation Management: Breakthrough/Radical Innovation (Part Three)

In this 12-part series on innovation management, we started by introducing the four main types of innovation. Last month we discussed sustaining innovation, exploring what it is, its advantages and disadvantages, and how it is applicable to market research.

This month we are looking at breakthrough/radical innovation, what it is, and why market researchers need to know about it. 

What is breakthrough/radical innovation?

Breakthrough/radical innovation creates new value and applications from existing technologies and knowledge. This can shift how an organisation behaves or it can change its structure. This allows an organisation to create new models, products, services, and customer interactions that provide a competitive edge.

“Radical innovation focuses on long-term impact and may involve displacing current products, altering the relationship between customers and suppliers, and creating completely new product categories.”

– Christian Hopp, David Antons, Jermain Kaminski, and Torsten Oliver Salge

GREG SATELL, HBR.ORG

Examples of breakthrough/radical innovation

An example of breakthrough/radical innovation is Zipcar. Zipcar changed the business model for the car rental industry by offering a subscription car rental service. Zipcar identified a market need; to rent cars anytime and drop off rental cars in nearby locations to them. To fulfill this need, they used existing technologies such as wireless communication and the internet in a new way which enabled consumers to reserve and open cars themselves – therefore eliminating physical dealerships and creating a new market by renting cars by the hour.

Why market researchers need to know about breakthrough/radical innovation

Internally, by understanding breakthrough/radical innovation, market researchers can improve their own research practices by exploring existing technologies and possible new applications of these technologies to add further value and offerings to their clients, and therefore increase their revenue. The understanding of breakthrough/radical innovation allows researchers to venture out and combine other industries (e.g., design, finance, technology) with market research to improve the value of market research or the chance to create a new hybrid industry.

Externally, there is a downside in the relationship between breakthrough/radical innovation and market research. The role of market research is perceived to be less effective in the space of breakthrough/radical innovation. Market research is seen as less effective because it’s likely that the customers and users in research samples might not be able to describe their requirements for a new product that is unknown or a problem that is not fully understood or defined.

“If I had asked people what they wanted, they would have said faster horses.”

– Henry Ford

Advantages of breakthrough/radical innovation

• It creates new partnerships – Breakthrough/radical innovation uses existing technologies and knowledge. However, you might not have these technologies and knowledge within your business. Therefore, collaboration with other companies is necessary. This leads to forming new partnerships which could enhance your reputation.
• It allows you to move into new markets – By combining different industries through partnerships, it opens up the possibility to reposition an organisation and create new offerings to expand into new markets and gain a new range of clients.
• It helps the company to evolve – The expansion into new markets and the ability to supply new offerings allow the company to grow and evolve with the market’s evolving needs.

Disadvantages of breakthrough/radical innovation

Like sustaining innovation, there’s little to no protection from disruptive innovation.

While radical innovation allows a company to grow in its offerings and expansion into new markets, it offers little to no protection of an organisation’s competitive edge against disruptive innovation – which we will cover in part four – as disruptive innovation can completely topple traditional models, products, and services through the creation of a completely new product that the market has not seen.

Next month…

Next month, we will dive deeper into disruptive innovation.