Ground-breaking innovation requires discontinuous thinking. John Bessant, Julian Birkinshaw and Rick Delbridge reject innovation as usual.
Most established companies recognise the need for innovation, as a driver of organic growth and as a means of differentiating themselves from competitors. But when you look at the fruits of their innovation activities, the vast majority are incremental technologies or me-too products – Intel’s next-generation microprocessor, Coca Cola’s Lemon Coke, or Porsche’s new Sports Utility Vehicle. There is nothing wrong with innovations of this type: they often involve significant R&D investment, and they frequently catch on very rapidly. The trouble is, they are simply not enough. Coca Cola can develop brand extensions as a means of reinforcing its current market position, but it also needs to look for completely new ways of reaching its existing customers, and it needs to develop new products to increase its “share of throat”. Intel needs to develop a new, faster Pentium processor, but it also needs to position itself for the next wave of disruptive change in its industry.
The real challenge, in other words, is for companies to get better at managing discontinuous innovation. We use this term to refer to anything that goes beyond the business-as-usual, steady-state approach to innovation. For example, Prudential’s launch of the internet bank, Egg, was discontinuous, because it challenged so many of the prevailing norms of the company. Similarly, when the UK retail chain Dixons created the ISP Freeserve it was a discontinuous innovation because it opened up a completely new market for the company.
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