Breakthrough vs. Incremental Innovation: Which Strategy Should Your Company Adopt?

April 18, 2023
3 mins read

Introduction: The Yin and Yang of Innovation Strategies

In the ever-evolving world of R&D, breakthrough and incremental innovation are like the yin and yang of corporate strategies – two seemingly opposite forces that often complement each other. However, choosing the right approach depends on your company's unique circumstances and objectives. So, let's delve into these two innovation strategies and determine which one suits your business best.

The Innovation Follower: Mastering the Art of Incremental Improvements

As an innovation follower, your primary focus is on tracking competitor activity, understanding their solutions, waiting for patents to expire, or working around existing patents. This approach is akin to a scientist meticulously observing natural phenomena to unravel the underlying principles.

Incremental innovation is ideal for companies with a cost leadership business model. These organizations focus on improving efficiency and reducing production costs while maintaining competitive product quality. By adopting this strategy, you can make small but significant improvements in your products or processes without taking substantial risks.

The Innovation Leader: Pioneering Breakthrough Discoveries

On the flip side, as an innovation leader, you need to predict the future and make it happen. Focus on understanding customers' underlying needs and requests while inventing creative solutions to address them. This approach resembles a visionary physicist who challenges conventional thinking to develop groundbreaking theories. An innovation leader often has a business model that emphasizes pushing boundaries and setting industry trends. These companies invest heavily in R&D activities and prioritize long- term growth over immediate profits. By pursuing breakthrough innovation, they aim to create new markets or disrupt existing ones with game-changing products or services. The Technology Scouting Compass: Guiding Your Innovation Strategy Depending on your corporate strategy, technology scouting activities should be tailored accordingly:

  1. For incremental innovators: Focus on monitoring competitors' patents and research developments to stay abreast of industry progress. Identify opportunities to improve upon existing solutions or work around patents to create cost-effective alternatives.
  2. For breakthrough innovators: Concentrate on understanding customers' unmet needs and identifying emerging trends that can drive future demand. Invest in cutting-edge research and development, and create a culture that fosters creativity and risk-taking.
The Quantum Leap Decision: Choosing the Right Path for Your Company

There's no one-size-fits-all answer when it comes to choosing between breakthrough and incremental innovation strategies. The best approach depends on your company's specific goals, resources, and competitive landscape. Consider the following factors when making your decision:

  1. Market dynamics: Assess the current state of your industry and determine whether there is room for disruptive innovation or if incremental improvements would be more beneficial.
  2. Risk tolerance: Evaluate your company's appetite for risk – breakthrough innovation often involves higher risks but can yield significant rewards, while incremental innovation typically entails lower risks with more predictable outcomes.
  3. Resource allocation: Determine the amount of resources you're willing to dedicate to R&D activities – breakthrough innovation typically requires substantial investments in talent, time, and capital.
Conclusion: Harmonizing Your Innovation Strategy

In the grand symphony of corporate success, both breakthrough and incremental innovation strategies play essential roles in creating harmony. By carefully assessing your company's objectives, market dynamics, risk tolerance, and resource availability, you can determine the right mix of these strategies for your business.

So, dear R&D managers, it's time to fine-tune your innovation strategy like a seasoned composer orchestrating a masterpiece. Whether you choose the path of an innovation follower or leader, remember that striking the right balance is crucial for achieving sustainable growth and long-term success in today's competitive landscape. Happy innovating!

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