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  • Radical Innovation Definitions & Examples

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    What is Radical Innovation?

    Radical innovation can be summarized as a combination of new, revolutionary technology and new ways of conducting business, radical innovation goes far beyond incremental innovation, while incremental steps optimize existing products or services, radical innovation changes how we live or how companies conduct business. Also referred to as “Disruptive Innovation” in a business context, the term offers a management concept with the goal of growth for the next five to ten years.

    Far-reaching changes brought about by radical innovations have the potential to transform entire markets and involve displacing current products as well as creating completely new product categories. It is not about high-end or low-end market encroachment, but about disrupting the status quo,

    If established businesses or new entrants decide to go down the path of radical innovation, the company becomes an innovation driver, trendsetter, and market shaper. The unique selling propositions and competitive advantages are significantly greater compared to less innovative companies.

    Radical innovation cannot be applied like a template to every organization in the same way. To remain competitive, it is therefore important to determine in advance how far-reaching the changes should be and what kind of product, service, or business model innovation your company is aiming for.

    Related: Massive Transformative Purpose (MTP) – Finding your Business Purpose

    Radical Innovation vs Incremental Innovation

    In many cases, incremental innovation is no longer sufficient to compete in today’s rapidly changing markets. Especially in times of digital change and the so-called “Digital Disruption”, established companies and their business leaders have to radically question the existing system and constantly offer new business models to exploit new opportunities.

    This is only possible if businesses focus on developing solutions to implement fast, flexible, and growth-enhancing innovation methods, which make a long-term impact. This is why disruptive or radical innovation is indispensable in today’s day and age. Companies, which create functioning innovation structures, will be ahead of their competitors in the foreseeable future.

    Companies that actively drive radical innovation often have different characteristics than those that do not embrace radical innovation. Innovative companies work extensively with outsiders, including on a temporary basis.

    Not only the company as a whole but especially teams and employees develop relationships with people who can act as catalysts for the innovation process. Further, the company culture has a mindset, in which employees feel comfortable sharing new ideas and challenging outdated processes, structures, and industry paradigms.

    Related: Types of Innovation in Business – How to Choose yours?

    The 3 Horizons of Innovation:

    Radical innovation can be summarized as a combination of new, revolutionary technology and new ways of conducting business. The 3 horizons of innovation framework emphasize innovation, change, and growth on all levels. It is important to mention that an organization is only able to achieve long-term growth if it works concurrently on all three horizons to improve the business model on all levels.

    but how can you ensure stable output at scale and still be innovative? Innovation vs. standardization is a balancing act, that most organizations fail to understand. With the UNITE Horizons of Growth framework, you know exactly when and how to improve, transform or innovate your business.

    The UNITE 3 Horizons of Growth
    The UNITE Horizons of Growth
    Designed By: Digital Leadership AG – Inspired by the work of Baghai, Coley, and White

    Horizon 1: Improve an Existing Business

    The first horizon is the most basic step and refers to the status quo of your business. It represents what your business is currently doing, including products, services, and your existing market.

    In this phase, you mainly apply incremental innovation and publish new versions of your product or service. Further, you make use of and optimize already existing technology. The aim of this stage is to continuously improve your products and services to serve your current market.

    Horizon 2: Transfer an Existing Business

    Horizon 2 goes one step further. It aims at innovating your business models to better serve your current and new markets. The goal is to reach out to a larger audience and establish new distribution channels. Besides new markets, you should also offer extra products and services to your existing customers.

    By introducing new, innovative models, you will also have the opportunity to rethink your vision for the future, ability, industry, technology, and long-term goals. This lays out the fundamentals for future growth and innovation.

    Horizon 3: Innovate a New Business Model – Disruptive & Radical Innovation

    While the first two horizons are more or less of incremental nature, horizon 3 is where actual change happens that can have a long-lasting effect on your company. Therefore, the focus of Horizon 3 is all about radical innovation.

    This step should be combined with horizon 2. While horizon 2 delivers new business models and extends your current customer base, horizon 3 incorporates technological innovations in order to bring your new vision to life. In this context, radical innovation focuses on new technologies to conduct business in order to achieve better market positions in the long term.

    Obviously, horizons 1, 2, and 3 do not only differ in terms of results but also in the time and effort it takes to plan and implement them. While horizon 1 can relatively easily be implemented, horizon 3 may take years to fully reap the desired results.

    Disruptive Innovation
    Sustaining Innovation vs Disruptive Innovation

    However, as a rule of thumb, the longer it takes to implement groundbreaking changes, the bigger the results will be. Therefore, it is of utmost importance to organizations in every industry to continuously work on all 3 horizons at the same time in order to lay the necessary foundation to stay relevant in the years to come.

    Related: The Three Horizons of Growth: A Roadmap to Successful Innovation Strategy

    Examples of Radical Innovation

    Disruptive innovation is associated with radical change. No matter what industry you belong to, the concept can take on many forms and requires creativity and the ability to generate new ideas in organizations.

    Radical innovations have the potential to change customers’ lives and the way we conduct business. This section shows some prominent examples of how radical innovation has shaped our world today.

    Personal Computers

    Can you imagine a life without personal computers? This shows exactly the power of disruptive innovation. PCs have not only changed the way we communicate or consume media but also spilled over to all other branches of the business world.

    No matter whether we use accounting systems, create documents, or set up our own servers – everything started with the introduction of PCs. Further, personal computers serve as a basis for a wide variety of new disruptive innovations, such as the internet, cloud computing, big data, and smartphones.  

    Cloud Technology

    Cloud Technology Radical Innovation
    Cloud Technology Radical Innovation

    Cloud technology is a disruptive innovation, which would not be possible without the introduction of the personal computer and the internet. A cloud can be compared to a virtual storage space, which enables you to store a huge amount of data without the necessity to physically own a hard drive. Further, sharing documents, pictures or any other digital files of any size has become as easy as writing an email.

    But this is not where cloud technology stops. Companies have established new business model innovations such as software as a service (SaaS) models in order to serve customers all over the world more efficiently. These new models allow customers and businesses to take advantage of advanced software solutions at a relatively low price. Even though clouds have not been around for a very long time, we can already see the impact they have on businesses and our personal lives.

    Washing Machine

    Washing Machine Radical Innovation
    Washing Machine Radical Innovation

    When we mention radical innovations, most people would think about examples involving Industry 4.0, digital photography, or internet-related technology. However, not all technological change is digital.

    Radical innovation has been around almost as long as there are people on the planet. Examples include the invention of the wheel, modern farming equipment in today’s farming industry, and of course the washing machine. All these examples were at one point in time a new technology, which could change our lives forever.

    Nowadays, there is almost no household in the Western world, which does not own a washing machine. Before the washing machine, people had to wash their clothes in rivers by hand, which does not only require a lot of work but is also time-consuming. After the introduction of the washing machine, people had more free time, which they could use to develop new abilities or create new products.

    The UNITE Business Model Framework: A Framework for Innovation Success

    How to Create Innovation includes a number of canvases that focus on value creation and finding the right business model to meet your customer segment and customer needs. The framework is built to inspire drastic changes that help you find a competitive advantage. Our hope is that your company grows through business model innovation, and so we again encourage you to look deeper into our website and the book.

    Here is a summary of the key ingredients of the Business Model Framework:

    Business Model framework
    The UNITE Business Model Framework
    Designed By: Digital Leadership AG

    Business Models

    The centerpiece is the Business Model Canvas, which covers the six main areas of a Business Model (the Operating, Value, Service, Experience, Cost, and Revenue Models).

    The eXtended Business Model Canvas adds the immediate business context, including Business Drivers, customers, and the team, as well as the Unfair Advantage.

    Detailed Models

    A Business Model can be broken out into its numerous aspects. Depending on what challenges you face, you can zoom in on your area of interest using an appropriate tool or canvas:

    • Your Business Intention and objectives as well as your Massive Transformative Purpose summarize your drivers and give direction to what you do.
    • The Value Proposition Canvas details the central components of your offering (the product or service).
    • To dig into your Customer Segments, work with data-driven Personas.
    • The JTBD Customer Job Statement and Job Map frame the JTBD of your customers.
    • The Business Model Environment puts your Business Model in a market context composed of emerging trends and disruptive forces.
    • The Innovation Culture Canvas helps you understand and consciously shape a culture that supports innovation.
    • The Innovation team structure enables you to draft a team structure for your innovation initiative.
    • Using learning and growth metrics, you can measure progress at the initial stages of development. These metrics help you focus on what really matters instead of creating a detailed business plan that will not really help you. Later on, you can expand the financial aspect of the Revenue and Cost Models with a full business case.
    • The Operating Model Canvas helps you think through the Operating Model.
    • Business Capability Map: A Practical Business Approach

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