Before discussing the issue at hand let me first define what incremental innovation and radical innovation actually mean.

Incremental innovation is the improvement in component performance that build upon the established technological concept; or the refinements in systems design that involve no significant changes in the technical relationships among components.

Radical innovations, on the other hand, involve both a new architecture and a new fundamental technological approach at the component level (Jerald Hage and Marius Meeus)

Strong proponents of radical innovation have denounced the significance of incremental innovation arguing that only radical innovations have a positive impact on business performance. Indeed, it has has become quite fashionable among researchers in the field of innovation  management to undertake enourmous efforts in order to make sure their samples exclusively contain radical innovations. Scholars from the “radical school”  argue that mediocre companies are focusing on the opinions of mainstream customers, are consequently pursuing incremental innovations and are therefore losing their competitiveness. Among these scholars Christensen and Bower have had the most important impact on the scientific consesus in this area.

As Slater and Narver rightfully pointed out, however, the above argument is at danger of mixing up the term “market orientation” with “customer leadership.” When market orientation is taken to the extreme, a company will only focus on the short term responding to customer’s expressed wants with only tiny innovations. On the other hand, market orientation in its modest form, represents a long-term commitment to understanding customer needs—both expressed and latent—and to developing both radical and incremental innovative solutions that produce superior customer value.  Thus, Slater and Narver effectively explain that the original premise of the “radical school”, namely that taking into account the needs of average customers is having a harmful effect on innovation, is based on a misunderstanding. Yet, this fallacious premise does not explain why radical innovations are just as important as incremental innovations.

Verspagen argues that the strong distinction between radical and incremental innovations obscures the fact that the size distribution of innovations is not a dichotomy but instead covers a continuous range of innovation sizes. In reality there is an important interaction and interdependence between radical and incremental innovations. For example, the first workable steam engine was very large and had a limited applicability as well as efficiency. It took more than fifty years for the next step to be taken, i.e. James Watt’s engine with a separate condenser. If we can characterize the impact of some innovations as “radical,” it is only because of a continuous stream of incremental innovations following the introduction of a basic new design (Verspagen). Consequently, when you take a hollistic look at the phenomena of innovation you realize that the cumulative impact of incremental innovations is just as great (if not greater) as that of radical innovations (Lundvall).

Granted, radical innovations are very important and can lead to an improved business performance. However, on a factual level one cannot draw a clear distinction between radical and incremental innovations as they go hand in hand and even cross-fertilize each other. Discrediting the importance of incremental innovation is like discrediting the importance of the drone in a swarm of honey bees. While the drone might not be as productive as the worker bee, without the drone there would be no swarm (and without the swarm there would be no honey).

Sources:

Christensen, C. and J. Bower . “Customer power, strategic investment, and the failure of leading firms”, Strategic Management Journal, 17(3), 1996

Hage, Jerald and Meeus, Ed. Marius,Innovation Science, and Institutional Change, Part 2, Product and Process Innovation, Edquist, Charles and Meeus, Marius, Oxford University Press, New York, 2006

Lundvall, B.A. (ed.) National Systems of Innovation: Towards a Theory of Innovation and Interactive Learning, London: Pinter, 1992

Slater, S.F. and Narver, J.C. . Customer-led and market-oriented: let’s not confuse the two. Strategic Management Journal, 19, 1998

Verspagen, Bart in The Oxford Handbook of Innovation Edited by Jan Fagerberg, David C. Mowery, and Richard R. Nelson, Oxford University Press, 1996