The Innovation Idiot Tax – Radical Innovation
A large number of companies have made very good businesses out of doing incremental, rather than radical innovation.
The search giant Google, for example, is a company that’s kept current primarily through repeated incremental innovations.
Apart from the business model innovation created with pay-per-click ads (which incidentally, it did not invent in the first place anyway), Google has spent a great deal of its time innovating in the one thing it does very well.
PageRank, the algorithm that first propelled its success, by making search results results better than competitors, was only an incremental improvement on the search engines of the time. Google has continued its leadership in the area, though, by tweaking and enhancing what it already knows how to do. It has proved a very successful strategy indeed.
Naturally, it is stupid to argue that big hits from radical innovation are always failures. Furthermore, not all firms have had to manage the long series of failures that companies such as Apple have had to endure in order to create those few, golden hit products.
However, the evidence is that those lucky companies which have done this are few and far between. The chances that your company will be similarly lucky are rather slim.
For some people, buying a lottery ticket is a little like an idiot-tax. The ticket is bought in the hope it will win, but in order to secure the win, people have only to put a little change across the counter. They’re buying hope, but more often than not, they experience disappointment when most of the time, they don’t win anything at all.
A focus on radical innovation in the hope it will create a hit product is an idiot-tax on your business. It is not a sensible strategy to leave something to luck when it is possible to reduce the risk of a return by creating a balanced portfolio of innovation which contain both radical and incremental components.
The secret to business growth is a balanced portfolio of innovations, one of the techniques of innovation management. James Gardner’s free online innovation book is an excellent resource if you want to know more. This and other unique content ” articles are available with free reprint rights.