What Is Incremental Innovation? Definition and Examples
April 24, 2023 Max 6min read
Have you ever wondered why some companies are able to stay ahead of the curve while others struggle to keep up? Innovation is the key to staying relevant in today’s fast-paced business world. Without it, companies risk becoming obsolete and losing their competitive edge.
But innovation isn’t just about coming up with revolutionary ideas that will change the world. Sometimes, it’s the small changes that can make all the difference. That’s where incremental innovation comes in. By making small improvements to existing products, services, or processes, companies can stay ahead of the game and meet the evolving needs of their customers.
In this article, we’ll explore the concept of incremental innovation in more detail and provide practical tips on how to implement it in your own business.
We’ll also look at some real-life examples of companies that have successfully used incremental innovation to drive growth and stay ahead of the competition. So, let’s dive in and discover how small changes can lead to big results.
What Is Incremental Innovation?
Definition of Incremental Innovation
Incremental innovation involves making small yet impactful improvements to existing products, services, processes, and tools to enhance performance, productivity, and user experience. Companies can save costs and differentiate themselves from competitors with incremental innovation, improving their market position and attracting a larger audience over time.
Let’s take a closer look at a fascinating concept – incremental innovation. It’s all about making small but significant improvements to existing products, services, processes, and even organizational structures. If a change adds value and introduces a hint of novelty, it’s incremental innovation in action.
And guess what? Nearly every organization engages in incremental innovation to some degree. Unlike radical or disruptive innovations that require huge technological leaps and impact market dynamics, incremental innovations are more subdued.
The beauty of incremental innovation lies in its simplicity. It’s quicker, easier to implement, and involves less uncertainty than other types of innovation. This predictability makes it a safer bet for organizations to rely on.
Types of Incremental Innovation
Let’s explore incremental innovation by diving into the different types of improvements that organizations can make to their products, services, processes, and tools.
Product and service enhancements
Companies can listen to customer complaints and requests and make small, but meaningful improvements to their products and services. From better instructions to higher quality materials and redesigned user interfaces, these changes can help prevent future complaints and boost customer satisfaction.
Automation can save organizations time and money by eliminating tedious, time-consuming tasks and freeing up resources for value-creating activities. With Robotic Process Automation (RPA), companies can reduce human errors and increase efficiency.
Waste reduction can have a big impact on the bottom line of large-scale manufacturers or retailers. Better demand forecasting, automated replenishment software, and recycling are just a few ways to minimize waste and save costs.
Internal process and tool improvement
In B2B businesses, even small improvements in sales productivity can accelerate growth dramatically. Better materials, more convenient tools, and ongoing training can all help increase sales rep effectiveness and drive business growth.
Examples of Incremental Innovation
Time to explore five examples of companies that have successfully used incremental innovation to stay ahead of the competition.
Sony is known for its top-quality electronics, and its Walkman is an iconic product that has undergone over 160 different versions in just a decade. By making small improvements to its existing product lines, Sony maintains a strong market share and product leadership.
Toyota Industries Corporation
Toyota Industries Corporation has a reputation for being an incremental innovator in manufacturing and assembly. Its popular Kaizen approach focuses on continuous improvement, and this has helped the company create cars, textile machinery, and material handling equipment to an excellent standard.
Gillette is a personal care brand that uses incremental innovation to stay on top of the industry. Its safety razors have continuously evolved with various features added to avoid razor burns. These improvements have helped the brand stay relevant and maintain its market share.
Since its introduction 130 years ago, Coca-Cola has experienced a number of alterations, including the addition of the cherry, vanilla, and lime flavors. These incremental innovations have contributed to the brand’s longevity and relevance, keeping it afloat in the industry.
Sainsbury is a UK-based supermarket chain that has used incremental innovation to improve its services. It was the first to offer organic food and launch nutritional labeling on products, providing customers with valuable information. The company also incorporated a click-and-collect service with same-day delivery to address customer needs.
Benefits of Incremental Innovation
Incremental innovation, often overlooked or underestimated, is a steady and practical approach that yields significant benefits for businesses. Instead of trying to revolutionize the market, it focuses on making continuous improvements to existing products or services, leading to impactful change over time. Here are the five advantages of incremental innovation.
Incremental innovation reduces the risk of innovation failure that comes with major investments. By making small continuous advancements, businesses can balance risk with market share.
Enhances product diversification
Focusing on incremental innovation allows for gradual shifts towards new concepts, making it easier for consumers to adopt upgrades while expanding product lines and sustaining cash flow.
By continually iterating on existing ideas, businesses can generate profit from current versions while developing newer, better ones, staying competitive and top-of-mind in the industry.
Selling to current markets
Incremental innovations integrate seamlessly with existing market dynamics, making it easier to pitch ideas for upgrades and novel features to customers.
Reduced Innovation Costs
Incremental innovation offers a degree of affordability that allows businesses to make minor enhancements without breaking the bank.
Achieving product-market fit faster
Incremental innovation helps achieve product-market fit quickly by building and shipping products in small batches. This method enables modern product teams to release daily improvements to their product, making it easier to test the effectiveness of the changes. Every iteration brings them closer to their goal.
Risks of Incremental Innovation
Incremental innovation is not without its risks, and companies should be aware of these potential pitfalls to ensure the success of their projects. Here are some of the key risks associated with incremental innovation:
Lack of coordination within the company
One of the most significant risks of incremental innovation is the lack of coordination within the company. When teams work in silos and fail to collaborate effectively, it can lead to duplication of efforts, miscommunication, and delays in the project timeline.
Incremental innovation is a slow and steady process, which can be a disadvantage if the market is changing rapidly. Companies may find themselves falling behind their competitors if they do not innovate quickly enough.
Not enough planning and measurement
When examining the hidden risks of incremental innovation, a lack of planning and measurement during the project phase can be a significant problem. Without clear goals and metrics for success, companies may struggle to evaluate the effectiveness of their innovations.
Lack of qualified personnel
Another hidden risk of incremental innovation is the lack of qualified personnel. Innovation projects require a diverse set of skills and expertise, and companies may struggle to find the right talent to lead these initiatives.
Uncertainty of the demand for innovative offerings
One of the primary risks of incremental innovation is the uncertainty of the demand for innovative goods or services. Companies may invest significant resources into developing new features or products, only to find that customers are not interested.
Not enough customer insight
Finally, companies must have a deep understanding of their customers’ needs and preferences to succeed with incremental innovation. Without this insight, they may develop features or products that do not resonate with their target audience.
Role of Product Managers in Incremental Innovation
Product managers play a crucial role in implementing incremental innovation strategies to improve existing products or services. By making small modifications, product managers can impact customer retention, competitive differentiation, and market position.
Strategically Prioritize Improvements
To achieve the greatest outcome, product managers should prioritize improvements by asking three questions about any potential product features. Making the most significant changes first gets ensured by this prioritization procedure.
Nurture Understanding of Customers
Product managers must continue to nurture a deep understanding of customers and their evolving needs to ensure that incremental innovations align with customer preferences.
Incremental innovation involves making small improvements or modifications to existing products or services based on customer feedback or insights, while radical innovation aims to develop entirely new technologies that can provide products that have never been available before. The former intends to enhance the profitability of existing products, while the latter focuses on creating disruptive technologies that can lead to new markets or industries.
To foster a culture of incremental innovation, businesses should encourage employee involvement, provide training and resources, set achievable goals, and create a supportive environment. Leaders should also promote experimentation and risk-taking while recognizing and rewarding successful initiatives. Effective communication and collaboration across departments are also essential for fostering a culture of incremental innovation.