What is incremental innovation and how does it create an advantage for your company?

Incremental innovation occurs when a company or team innovates a product, process or technology in small steps. In the case of product enhancements, this may include small new functions or features, or improving the performance of existing ones.

This type of innovation involves the creation or improvement of a product or service based on a product that already exists in the market.

This existing product may be a competitor’s or its own. One of its characteristics is upgraded, for example, the maximum speed a car reaches or the time it takes to reach 0 to 100 km/h. One or several characteristics can be upgraded.

Examples of Incremental Innovation

The introduction of the iPhone by Apple is considered a radical innovation. However, as a new version of the phone is released, we see incremental innovations, through the addition of higher resolution, speed, better camera, and new updates to the operating system.

Often, these changes are in response to improvements from other brands such as Samsung, Google or Sony. This mobile phone technology market is the most competitive compared to the global market.

Another well-known example is video game consoles. The Sony PlayStation and Microsoft Xbox incrementally innovate by adding higher quality graphics and improved speed, leaving Nintendo behind.

Nintendo innovated radically, focusing on new features focused on a different gameplay, with Nintendo Wii controls and targeting more casual gamers.

Another example, if you were to open a new restaurant and you wanted to increase the number of customers, you could make incremental improvements by adding a better sound system, more tables and more seating. You could also add new dishes to your menu.

What type of innovation should you use? Incremental Innovation vs. Radical or Disruptive Innovation

Remember, incremental innovation is innovation that introduces small improvements gradually. Radical innovation, also known as disruptive innovation, is the one that introduces products to the market all at once, being a completely new product. Generally, this type of innovation changes the rules of the game in one or more industries. It is the result of an important investment in research and development. It may even require the creation of a new business model.

You should invest in both types of innovation in a balanced way, where incremental innovation has a maximum share of 70%. However, you may not have much experience innovating in your organization. In that case, you can focus entirely on incremental innovation and reinvest 50% to 100% of the benefits in radical innovation.

What advantages can it offer me?

You may be wondering, how can incremental innovation help my company? These are its main advantages

It can help you as a first step to be recognized as an innovator in the industry, showing which company can adapt
It does not require large investments
It does not require having a research and development area–any area and employee can do incremental innovation
It can be added to or supplemented by continuous improvement initiatives in your company
It can favor the creation of an innovative culture

What are the disadvantages?

It is not enough to enter or develop new markets
If you do not combine both types of innovation, you may lose the differentiating factor and the competitive advantage of your products in the long term

How do I decide which features or functionalities I should incrementally innovate?

The objective is to create value in some aspect perceptible to the end customer. As we can work on a modification that requires a lot of technical effort, then we have to take into account:

That the customer perceives it, that is, that he/she notices the difference.
That the increase helps to differentiate from the competition by offering superior performance.
That it helps maintain an advantage over the competition in the eyes of the consumer.
That the customer is willing to pay more for improved functionality.

How can incremental innovation be applied?

Define the market segment in which you believe there are opportunities to create value.
Conduct a market research process, i.e., talk to your customers and re-understand their needs and pains.
Characterize market requirements and the applicable laws.
Analyze your competition, review established companies in the industry and research what new improvements, new features or upgrades they have released in the last year.
Now, you can make a list of changes that can be made to your products and services.
Put the list in order, with the improvements that represent the greatest value to your customers at the top.
Start including them progressively, one by one.
Involve a small number of customers in the testing phases and review adherence to these changes. This tactic will help you see the stickiness and what you need to adjust to ensure the success of your new product or service within the market before implementing it with all other customers.
Measure the impact of these small modifications: Is your customer more satisfied? Are new customers considering buying your product?
Continue with your listing, implementing the other items in the listing progressively. Evaluate when to stop and start again with another customer segment.

Conclusion

Incremental innovation is a process that requires constant re-evaluation of all aspects of your business and making adjustments accordingly in order to stay ahead of the competition. This process involves trial and error, as the process is not linear. Incremental innovation is a process that is carried out continuously and must be complemented by radical innovation.