Incremental Innovation: What is it and Why is it Important?

  • Oct 22, 2020
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Incremental Innovation: What is it and Why is it Important?

Incremental Innovation Defined

Before we can truly understand incremental innovation, we need to have a solid understanding of innovation itself. This term refers to something new and subversive especially in the world of software and tech, but there are several types of innovation. 

Disruptive innovation is what we hear about most often. This term refers to innovation that has completely altered a specific market. One of the most obvious and widespread examples of disruptive innovation is the internet. Since its inception, it has completely revolutionized many areas of different markets from communication to marketing. Companies had to learn how to alter their practices and adapt to this innovation or face failure.  

Incremental innovation, on the other hand, is a much more gradual change to a company’s products, services, or practices and it can present itself in numerous ways. Incremental innovation is essential to a company’s success because it allows the business to grow and change based on customer and employee feedback and a changing market landscape.  

However, incremental innovation does not value change simply for the sake of change. You can think of this in relation to the common saying, “if it’s not broken, don’t fix it.” If there is a problem or room for improvement that will provide tangible value, then work towards a solution in incremental steps.  

Scale and Maturity 

These are two of the most important factors when determining if and when it’s time to introduce incremental changes. The larger the scale of your operation, the more impact this type of innovation will have. For example, if you’re looking to automate a particular process within the company, but it only impacts a small sector of your employees, the value may not be worth the effort. It could take months for the benefits to outweigh the financial investment, which may tie up necessary capital. If your innovation will impact a major part of the company, you may find that the cost savings in the end is worth the initial investment. 

The maturity of a product, service, or business process depends entirely on how thoroughly developed it is. If you’ve recently launched a new product, there are always changes and improvements that will need to be tweaked in the early stages. However, if your product, services, or process has been in place for an extended period of time (hence, it is “mature”), then it may be a better time to consider small, incremental changes that will help to evolve something already in place. 

The Benefits of Incremental Innovation 

Although incremental innovation may not be as attractive as the idea of disruptive innovation, in the long run, incremental alterations can provide insurmountable benefits. Prior to planning your small changes, you should consider Return on Engineering (ROE). Is the cost of engineering changes to a product or process worth the return? If so, incremental innovation may be the best route.  

The potential for cost savings, or a decrease in expenses, is another potential benefit to incremental innovation, particularly when it comes to automating processes. Automation has become increasingly popular over the last 10 years as more companies realize the cost efficiency in automating processes that do not require human supervision. This also opens the door for human employees to focus their efforts elsewhere in the company. 

Examples of Incremental Innovation:

Improved Products or Services 

A simple example of incremental innovation can be seen in improvements made to existing products. Using customer feedback and technological advancements, you can tweak products or services that have already been successful in the past to grow your business and save money at the same time as opposed to investing in the creation of an entirely new offering. You can use this opportunity to add new features, improve upon existing ones, or eliminate aspects that are costly and not functional to the consumer. 

Automation 

Perhaps one of the most valuable methods of incremental innovation, automation is the process of taking a task normally conducted manually and implementing technology to automatically take over the responsibility. Some people fear that automation will put human employees out of a job, but this often is not the case. Automation can help speed up one step in a larger process, reduce the cost of paying an employee to complete the task, and lower the chances of human error that could cost the company money. 

The Value Incremental Innovation 

Evaluating the future of your company and determining areas of improvement is the first step in identifying potential incremental innovations. But, remember that change for the sake of change does not always provide value. Scalability and the maturity of a product will help you decide if incremental innovation will provide ROE and cost savings. Over time, improving already existing products, services, and processes will keep you ahead of the competition and prevent you from playing catch-up in the future. 

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