Innovation management can be broken down into two categories: incremental innovation and radical innovation. An organization will either implement one or the other in their innovation management practices. It all depends on the current status of the marketplace and the company itself.

Incremental Innovation

Organizations regularly practice incremental innovation. This is the type of innovative management where the managers work to enhance the current systems, products, services, and processes of the organization.

The most common enhancement has to do with products. Most companies want to remain competitive in the marketplace by releasing products that are the best quality and the most affordable. Incremental innovation works to produce such products by expanding or upgrading their existing products. Nothing new is actually created, but rather enhanced and made better.

Radical Innovation

Radical innovation is a much riskier type of innovation for a company, but the potential benefits are considerably greater. Rather than enhancing current organizational systems, radical innovation management shifts toward completely new systems for the company. This could involve creating an entirely new business model or product line that doesn’t currently exist in the organization. The company may even want to enter new marketplaces that they don’t currently do business in.

Examples

Let’s look at some examples of incremental innovation and radical innovation. When the footwear manufacturing company, Nike, releases a new line of footwear products, this would fall under incremental innovation. They are already selling footwear, but they keep releasing new footwear products that are better than their previous products. Customers look forward to these releases because they’re familiar with the brand and enjoy what it produces. This makes incremental innovation a good thing for Nike to do.

Radical innovation is used when a company wants to expand itself by creating products or services in new marketplaces. There is no better example of this than Amazon. In the beginning, Amazon was just an online book retailer where people could go to buy and sell their books. However, Amazon didn’t just stay with the same business model of book dealing. They expanded into selling other types of products and services, such as electronics, video games, digital books, video streaming, and so on. This expansion allowed Amazon to grow into one of the most successful companies in the world. All this can be attributed to the radical innovation of the company that was implemented.