What is incremental innovation?
Incremental innovation is the continuous and gradual improvement of existing products, services, processes or business models. Incremental innovation includes, for example, the improvement of internal processes, the development of new product features or the digitization of existing processes.
This continuous form of innovation is represented within companies by idea management, the continuous improvement process (CIP) and innovation management. The management of incremental innovation is characterized by a clear innovation process and a largely static process from idea generation to implementation. In contrast to radical innovation or disruptive innovation, incremental innovation follows clear rules, defined processes and defined responsibilities. In stable markets, incremental innovation secures the market position of companies through processes improvement, continuous product improvement and close customer proximity.
Incremental innovation is supported by tools such as Innolytics® idea management software and innovation management software. These tools make it possible to involve employees in the process of continuous improvement and further development of products. In addition, tools based on the principle of collaboration promote the exchange of information (e.g. the discussion of customer needs) underlying incremental innovation.
Step-by-step improvement through incremental innovations
In incremental innovation, known technologies, products, services, business models or processes are further developed, but the core remains the same. Incremental innovation is designed for a manageable timeframe of one to two years. The aim is to strengthen the company’s competitive position in the short term and achieve rapid profits. The development of new ideas serves to adapt products to market trends, ensure their quality and make processes more effective.
From the customer’s perspective, a new edition of a product is an improved version of the predecessor model. The distribution channels and customer benefits remain almost the same. The unique selling propositions in comparison to similar products of the competition are very low. The market participants within an industry are essentially identical.
Incremental innovation can be developed in the company with existing thought and trade patterns and from the knowledge and experience of one’s own employees.
Foreseeable successes based on analyses and facts
The basis of incremental innovation is an innovation strategy that can often already be underpinned by figures, established insights and business plans. The market, the customers, the sales and even the turnover are already largely predictable at the beginning of the innovation process. Although coincidences and surprises cannot be ruled out, risks can be minimized.
Incremental innovation is process-oriented and straightforward. The best-known innovation process is the Stage Gate Model: So-called “Stages” – phases of development – and “Gates” – decisions – are defined in clearly separated and fixed stages. If the steps from idea generation of a product or service to market launch are predictable, this method is well suited. The Stage-Gate process can be implemented quickly and easily with Innolytics® Innovation Software.
The limits of incremental innovation
In times of rapidly changing markets, large companies are reaching the limits of what is possible with incremental innovation. Many organizations are rethinking in the face of digital change to be able to respond more flexibly to changing market conditions. With the introduction of an innovation culture, companies are creating a creative, innovation-friendly climate. Or they go further with radical innovation and create new markets. Nevertheless, the improvement and optimization of the existing remain important even in times of disruptive change.
In our free study “Think Innovation Management Further” you will learn how companies can manage both forms of innovation: Radical innovation and incremental innovation.