R&D Management: Types of innovation and useful tools

Summary

The transcript discusses three levels of innovation: incremental (small process improvements), breakthrough (significant product or direction changes), and radical (major shifts in business strategy). It emphasizes that while incremental improvements have established methods like Six Sigma, radical innovations carry high risk and lack formal guidance. The middle ground, where most innovation happens, involves a mix of techniques. The speaker highlights innovation and R&D management as a professional discipline that deserves recognition and utilizes established best practices to improve organizational performance.

Takeaways

• 🔧 Incremental innovation involves small tweaks to improve company processes, like answering phones faster.
• 🚀 Breakthrough innovation means a shift into relatively new areas, such as introducing a new product line.
• 🌍 Radical innovation represents major changes, requiring transformations in multiple parts of a company.
• 🎶 An example of radical innovation is Virgin moving from a record company to transatlantic travel.
• ⚠️ Radical innovations carry significant risks and can lead to either transformation or failure.
• 📉 GE’s failed transition to an internet-based communications company is a cautionary tale of radical change.
• 📚 Incremental innovation has clear rules and techniques, such as Six Sigma training for efficiency.
• 🔄 Most innovation happens between incremental and radical, requiring a mix of approaches.
• 🎯 Innovation management, especially R&D management, is a serious discipline with established practices.
• 🌐 The website exists to promote best practices in R&D and innovation management, emphasizing its importance.

Q & A

What are the three levels of innovation mentioned in the transcript?

The three levels of innovation mentioned are incremental, breakthrough, and radical.

How is incremental innovation defined?

Incremental innovation involves making small improvements to existing processes or products, such as answering phones more rapidly or slightly enhancing current systems.

What is breakthrough innovation?

Breakthrough innovation refers to a significant change that introduces a new direction for the company, such as creating a new product line rather than simply improving an existing one.

What characterizes radical innovation?

Radical innovation is a substantial shift in a company's product or business model, requiring major changes across the company and often involving higher risk.

Can you provide an example of radical innovation?

An example of radical innovation is Virgin, which started as a record company and then moved into transatlantic travel, representing a significant change in its business model.

What are the potential risks of radical innovation?

Radical innovations carry the risk of either transforming a company or leading to failure, as seen with GE in the UK, which attempted to switch from a conglomerate to an internet-based communications company but ended in disaster.

How does innovation typically occur in companies?

Innovation mostly sits between incremental and radical, often combining elements of both. While there are rules and techniques for incremental innovation, the radical side has fewer established guidelines.

What are some structured approaches for incremental innovation?

For incremental innovation, there are structured techniques such as Six Sigma training, which offers a rule-based approach to process improvement.

Is there a structured method for managing radical innovation?

No, there are fewer established methods for managing radical innovation compared to incremental innovation. Companies are often on their own when pursuing radical changes.

How is innovation management described in the transcript?

Innovation management, and particularly R&D management, is described as a professional discipline in its own right, with a great deal of established good practices that not everyone fully utilizes.