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June 26, 2018 | 01:45 AM
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03.08.2011There Are Three Kinds of Innovation. Don't Get Trapped Doing the Wrong One.

The three kinds of innovation are "incremental," "platform," and "breakthrough."


Forbes.com

There are in the world of product development just three kinds of innovation. They’re all necessary, yet too many companies get fatally trapped pursuing only one of them. That’s the finding of a new study from Accenture with the grim title “The Innovation Death Spiral” and the hardly more cheerful subtitle “How Companies Get Stuck Throwing Good Money After Bad Ideas—and What That Mistake Is Costing Them.”

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The three kinds of innovation are “incremental,” “platform,” and “breakthrough.” Incremental innovation basically means doing what you must to keep a product up to date, and it “plays a necessary role in defending the company’s baseline against competition.” You don’t want to focus exclusively on it, but “many consumer goods companies spend over half their innovation budgets on incremental innovations, generally because they lack the ability to systematically scan the market for the most attractive opportunities and develop winning ideas to capitalize on them.” That’s bad news, and the researchers analyzed the activities of 10 large global food companies over three years to show just how bad.

Platform innovation means coming up with a new product like Vanish or Coke Zero. Its “main function is to grow the innovator’s market share by giving customers a reason to switch from a competitor brand.” And then there is breakthrough innovation, which means developing, say, the iPad, or Sara Lee‘s Senseo coffee pads (which suffered from inadequate patent protection). Breakthroughs are “market-changing innovations. By delivering new benefits to customers, they create a new market that the innovator can dominate for some time.”

The “innovation death spiral” happens when a company gets stuck throwing all its resources at incremental innovation. This happened at Unilever, the report says, until over the past few years its chief executives Patrick Cescau and then Paul Polman launched a “One Unilever” program to get the company unstuck from a focus on incremental innovation and out into groundbreaking innovation. The result: 10% revenue growth in 2010 and volume that grew faster than in 30 years. The study discusses how that was achieved.

The study concludes with a six-step process for getting out of the death spiral:

1. Define top-level ownership of innovation and clear accountabilities
2. Create an innovation strategy aligned with corporate strategy

3. Identify white spaces and must-win battles (Doing the Right Things)

4. Reduce time to market (Doing Things Right)

5. Increase innovation efficiency (Doing Things Right)

6. Continuously measure and improve innovation performance


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