By: Pearl Zhu
Breakthrough innovation is not something everyone can accomplish. You have to systematically develop the capability to execute it successfully, and that is something you do not achieve overnight.
Breakthrough innovation is when you bring something new to the world. It is developing something that no one else has done before; really original, something that couldn’t have been possible. It is the innovation that opens the organization to new markets or changes the way customers interact with the market or the industry.
Breakthrough innovation is the most important concept in innovation because it can be demonstrated virtually all real economic growth or societal progress which is driven by disruptions. Breakthrough innovation has greater ROI but with much bigger risks.
Breakthrough innovation is a radical new approach that leaves competition behind in some way
Breakthrough innovation is not something everyone can accomplish. It’s a kind of “out of the box” thinking. There is a consensus that the external environment is an important antecedent of spurring innovation. It is important to capture the rising trends and take advantage of changes in the external environment to spur breakthrough innovation and develop the capability to execute it systematically.
An enterprise has always been parts of simple or complex ecosystems, and it has to be linked to the many and varied “touch points” between itself and the marketplace environment of which it is a part. Digital innovation must be a multi-disciplinary effort which would apply nonlinear thinking to provide better opportunities for leading breakthrough innovation than linear thinking.
Highly innovative organizations embed innovation into every aspect of their organization and adopt spiral approaches to manage breakthrough innovations successfully.
Companies must continually revamp their business models to achieve competitive advantage
Every corporate venture comes with a business model innovation. Taking an innovation spiral approach to do business model innovation suggests a loosely structured and circular process that allows companies to connect with the various points of the spiral in different ways and at different time, ultimately reach an innovative breakthrough.
Breakthrough innovation is a radical new approach that leaves competitions behind in some way. To disrupt, you must hear the whispers of customers, contexts, inner worlds and outside worlds. Business model innovation is often breakthrough because if an established firm identifies a new business value proposition that requires a change in the business model or the creation of a new one, and then, it’s strategically important to develop the new venture for improving organizational growth and profitability and their impact perhaps increases over time.
Breakthrough innovation can bring significant opportunities for the business to reach the next growth cycle and deliver high business value.
Differentiation between incremental and breakthrough innovation relates to the degree to which a particular innovation changes the competitive landscape
Breakthrough innovation is disruptive and changes your organization in many fields, potentially makes entire industries obsolete, as digital photography did to the film industry. As things change, the old paradigm becomes incompatible with the new reality and there occurs a digital paradigm shift.
You have to systematically develop the capability to execute it successfully, and it is something you cannot accomplish overnight. Every organization needs to develop tailored innovation principles, methodologies, and practices by leveraging effective technologies, tools or methodologies and apply them wisely with the expertise to really add value, drive innovation and develop the organizational level innovation competency.
Respond to a true human need
The fact of the matter is, the pace of change is significantly increasing, innovation is the only path and the core activity of human evolution to changing of the environment for unlocking business performance, for profit, for resource optimization, and for customer satisfaction, etc.
The breakthrough innovation has to respond to the true human need. With unprecedented convenience that the digital technologies bring to us, business leaders and professionals should ask themselves: Why is innovation so important or even more important whereas technology becomes more advanced? The speed of change is expedited, so does the speed of innovation.
Innovation is not an invention; it must prove its value in the market. Customers must be willing to pay for it, be it a product/process/service innovation. Responding to the true human need is the very goal of engaging in innovation, especially breakthrough innovations. When managing the innovation life cycle, customer involvement at all stages often elicits highly valuable information. People must be the center of innovation. It is not a question of whether the customer is right or not, it is more of whether you are truly and proactively listening to their needs and gaining a deep understanding of customers through empathy.
Here is the “magic formula” (if having the one): Breakthrough/Disruptive innovation = New Users + New Products/Services.
Breakthrough innovation is disruptive with high return and high risks
Innovation is both art and science. To manage innovation and control risks systematically, the scientific processes should be in place. You need new technologies, new processes, new customers, new knowledge, and maybe a new business model. All these make breakthrough innovation very risky but on the other hand, you will get very great chances and opportunities for new product lines or platforms, etc, to make breakthrough innovation happening.
From the marketing perspective, the management needs to check whether organizations are able to create entirely new industries or products capable of empowering an overwhelming number of those who were previously unserved and underserved; or expand to displace the dominant incumbents of existing industries that were only able to cost-effectively serve far smaller segment of the greater market. If shareholders valued innovation more, and then, they would value companies that devote resources toward future innovation more than those that optimize short-term profits.
Innovation ecosystem or the methodological environment should cover the whole innovation scenario from processes in managing ideas or idea handling systems to idea implementation and promotion. Becoming a consistently innovative company requires tuning both organizational structure and culture that nurture new ideas and is able to profitably execute on those ideas and manage a healthy innovation portfolio with both incremental innovation and breakthrough innovation.
About the author
Pearl Zhu is an innovative “Corporate Global Executive” with more than twenty-one years of technical and business working experience in strategic planning, Information Technology, software development, e-commerce and international trading, etc. She holds a master’s degree in Computer Science from the University of Southern California, and she lives in the San Francisco Bay Area for 15+ years. She is the author of the Digital Master book series and the Future of CIO blog.