Innovation has to come from somewhere. Even the biggest game-changers come from understanding the “game” and are built on in-depth knowledge of how existing products or processes work.
How businesses conduct operations on a daily basis can encourage or discourage breakthrough innovation. Businesses that strive for continuous improvement lay a better foundation for breakthroughs than businesses that preserve the status quo at all costs or otherwise eschew change.
Even though it is the breakthrough innovations that grab headlines, continuous improvement can produce astounding results over time. Businesses actually need both types of improvements for maximum long-term success. Here’s why.
Improvements tend to build on each other, similarly to how compound interest works. Over time, these incremental improvements tend to accelerate. Japanese car manufacturers used principles of continuous improvement in the second half of the twentieth century to build up enormous cash reserves on top of strong reputations for quality.
It doesn’t just work in business, either. The British cycling team used incremental improvements to go from also-rans to winning seven of ten gold medals in the 2008 Olympics. It’s why any financial advisor will tell clients to start saving for retirement yesterday; small steps add up astoundingly over time.
The iPhone was considered a true innovation back in 2007, opening up an entirely new approach to telecommunications and changing how people used phones forever. Yet even that breakthrough innovation was built upon decades of smaller innovations in telecommunications, internet technology, and computing technology.
Likewise, flat-screen televisions, entertainment innovations (like Netflix), and even transportation breakthroughs like self-driving cars and ride-sharing apps could not have happened were it not for the countless smaller innovations that had gone before.
Breakthroughs also count on the “break” part of their name. Major disruptions often happen because something (like people’s patience with the way things are) breaks. It requires acceptance of risk at a level that is not required for incremental improvements.
Why Both Are Necessary to Business Success
It wouldn’t make sense for a business to focus on continuous improvement exclusively, nor would it make sense to stake a business’ future on breakthrough innovation. Both types of change are necessary for maximum long-term success.
Continuous improvement increases efficiency and/or productivity, and these incremental improvements can confer a strong competitive advantage, particularly over longer time periods. At the same time, however, breakthrough innovations are how businesses develop revolutionary new processes, develop products that shake up the industry, or even result in brand new business models. Breakthroughs can leave competitors scrambling to catch up, and that’s a good position in which to be.
The following table summarizes how both continuous improvement and breakthrough innovation support business goals and are necessary for success.
|How It Supports Business Objectives||Why It’s Necessary for a Competitive Advantage|
|Continuous Improvement||Increases efficiency or productivity; decreases costs||Incremental improvements add up significantly over time|
|Breakthrough Innovation||By delivering new processes, products, and business models||Because it can put competition into “catch-up” mode|
Many people think of disruption and breakthroughs when they think of innovation, but innovation can take shape at any scale, and may or may not attract attention. Companies that actively encourage innovation across operations are the ones that are likeliest to produce both incremental and breakthrough innovations.
Today, more businesses and organizations of every type realize the value of putting innovation to work. IdeaScale offers an innovation platform solution that allows any organization that is serious about innovation to solicit, gather, evaluate, prioritize, and move forward with the best ideas out there. “Innovate” is a verb, and it requires goals, organization, and hard work. IdeaScale ensures that all those moving parts produce results. If you want to start putting innovation to work, IdeaScale invites you to get our Innovation Starter Kit.