In this innovation model, authors Mikael Krogerus and Roman Tschäppeler explain the difference between sustainable innovation (incremental improvement) and disruptive innovation, and why small companies often outpace large ones with innovation.
Harvard economist Clayton Christensen has studied why virtually all breakthrough innovations have been missed by industry leaders. His work is considered a milestone in business administration.
Christensen distinguishes between two types of innovation: sustainable innovation (also called incremental improvement methods) and disruptive innovation. In the former, existing products are improved so that they can then be sold at a higher price. This contrasts with disruptive innovation, which involves creating new products that are typically simpler, faster, or cheaper. Established companies usually try to improve their successful products – even if these performance improvements were not requested by the customer at all. Christensen refers to this as “overshooting” – the manufacturing company’s management doesn’t even know why their product is popular and misses the customer’s needs when taking innovation steps. While the established company is still eyeing the upper end of the market, a disruptive innovation emerges from a previously unknown company and throws a completely new product onto the market. Soon, the overlooked innovation gains market share and eventually replaces the previous leading product.
Quote Georg Christoph Lichtenberg: “I don’t know whether it will be better if it becomes different. But it must become different for it to become good.”
