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What is Discontinuous Innovation?
Discontinuous innovation is a major innovation that creates a new market or significantly transforms an existing one. It is a type of discontinuous change, which entails a significant shift in an organization’s business model or offerings.
It is also known as breakthrough or radical or disruptive innovation. According to the Harvard Business School Press, disruptive innovation is an innovation that creates a new market and eventually goes on to disrupt an existing market.
Discontinuous innovation is a type of innovation that represents a significant departure from existing products, services, or technologies. Discontinuous innovations are often built on new technology platforms and can create entirely new markets or significantly disrupt existing ones.
While discontinuous innovations can deliver significant improvements in performance, they often require customers to change their behavior or adopt new ways of doing things. As a result, discontinuous innovations can be more difficult to commercialize than incremental or radical innovations.
Meaning of Discontinuous Innovation
Discontinuous innovation is the introduction of new technologies or services that are new to the world and have the potential to create a new market or transform an existing one. Discontinuous innovation can be found in both small start ups and large corporations.
While discontinuous innovation is often associated with new technologies, it can also refer to new business models, processes, or services. Discontinuous innovation is often disruptive technologies, which can lead to the displacement of an existing product, service, industry, or business model.
Why use Discontinuous Innovation?
Discontinuous innovation is important because it allows organizations to create new products, services, or technologies that can have a major impact on their business.
Discontinuous innovations often lead to the creation of new markets or the significant disruption of existing ones. Some of the reasons behind the use of discontinuous innovations for different business models are-
- To enter new markets
- To create new customer segments
- To target unserved or underserved customers
- To address new customer needs
When to use Discontinuous Innovation?
Discontinuous innovation is often used when organizations want to create new products, services, or technologies that can have a major impact on their business. Discontinuous innovations often lead to the creation of new markets or the significant disruption of existing ones.
However, discontinuous innovation can also be used in existing markets to target unserved or underserved customers, or to address new customer needs.
There are three main types of innovation: incremental, radical, and discontinuous. Incremental innovations involve making small changes to existing products, services, or technologies. Radical innovation entails creating completely new products, services, or technologies.
Discontinuous innovation represents a significant departure from existing products, services, or technologies. Discontinuous innovation is most appropriate when an organization wants to make a significant change to its product offering or business model.
Discontinuous innovation can be difficult to achieve, as it often requires the development of new technology platforms and the adoption of new ways of doing things. As a result, discontinuous innovations can be more difficult to commercialize than incremental or radical innovations.
When deciding whether to pursue a discontinuous innovation, organizations should consider the potential impact on their business, as well as the risks and challenges associated with commercializing the innovation. Discontinuous innovation can be a powerful tool for organizations that want to make a significant change to their business. However, it is important to carefully consider the risks and challenges before pursuing this type of innovation.
How to use Discontinuous Innovation?
There are four main steps that organizations can take to successfully commercialize a discontinuous innovation:
1. Develop a clear understanding of the market opportunity
The first step is to develop a clear understanding of the market opportunity that the innovation will address. This includes identifying the problem that the innovation will solve, the customer needs that it will address, and the size of the potential market.
2. Identify and assess the risks
The second step is to identify and assess the risks associated with commercializing the innovation. This includes assessing the technical feasibility of the innovation, as well as the regulatory, legal, and financial risks.
3. Develop a commercialization strategy
The third step is to develop a commercialization strategy for the innovation. This includes determining how the innovation will be introduced to the market, who will be responsible for marketing and selling it, and how it will be priced.
4. Build a strong team
The fourth and final step is to build a strong team to commercialize the innovation. This team should include individuals with the necessary skills and experience to successfully launch and market the innovation.
Implementing Discontinuous Innovation
Discontinuous innovation can be a powerful tool for organizations that want to make a significant change to their business.
However, it is important to carefully consider the risks and challenges before pursuing this type of innovation. When done correctly, discontinuous innovation can lead to the creation of new markets or the significant disruption of existing ones
Each organization is different, and there is no one-size-fits-all approach to commercializing a discontinuous innovation. However, these four steps can help organizations to develop a clear plan for success.
When pursuing discontinuous innovation, it is important to have a clear understanding of the market opportunity.
This includes identifying the problem that the innovation will solve, as well as the potential size of the market. Additionally, organizations should identify and assess the risks associated with commercializing the innovation.
These risks can include the technical feasibility of the innovation, as well as the regulatory, legal, and financial risks.
Finally, organizations should develop a commercialization strategy for innovation. This includes determining how the innovation will be introduced to the market, who will be responsible for marketing and selling it, and how it will be priced.
Organizations should also build a strong team to commercialize innovation. This team should include individuals with the necessary skills and experience to successfully launch and market the innovation.
Characteristics of Discontinuous Innovation
The key characteristics of discontinuous innovation are
1. It is built on new technology platforms
Discontinuous innovation is built on new technology platforms that are significantly different from existing ones. This can make it difficult to commercialize, as there may be no existing infrastructure or customers for the new technology.
2. It creates new markets or significantly disrupts existing ones
Discontinuous innovation often leads to the creation of new markets or the significant disruption of existing ones. This can be a risky proposition, as it is difficult to predict how customers will react to the new innovation.
3. It requires a different business model
Discontinuous innovation often requires a different business model than existing businesses. This can make it challenging to finance and commercialize the innovation.
4. It is often accompanied by high levels of risk
Discontinuous innovation is often accompanied by high levels of risk. This includes both technical risks, such as the feasibility of the innovation, as well as regulatory, legal, and financial risks.
5. It has the potential for high rewards
Discontinuous innovation has the potential for high rewards. However, it is important to carefully consider the risks before pursuing this type of innovation.
Pros of Discontinuous Innovation
1. The potential to create new markets or significantly disrupt existing ones
Discontinuous innovation has the potential to create new markets or significantly disrupt existing ones. This can lead to increased market share and profits for organizations that are able to successfully commercialize the innovation.
2. The potential for high rewards
Discontinuous innovation has the potential for high rewards. This can include both financial rewards, such as increased profits, as well as non-financial rewards, such as improved customer satisfaction.
3. The ability to stay ahead of the competition
Discontinuous innovation can help organizations stay ahead of the competition. This is because discontinuous innovations often require different business models and technology platforms than existing businesses.
4. The potential to solve important problems
Discontinuous innovation has the potential to solve important problems. This can lead to increased social and economic value for organizations that are able to successfully commercialize the innovation.
Cons of Discontinuous Innovation
1. The high level of risk
Discontinuous innovation is often accompanied by high levels of risk. This includes both technical risks, such as the feasibility of the innovation, as well as regulatory, legal, and financial risks.
2. The need for a different business model
Discontinuous innovation often requires a different business model than existing businesses. This can make it challenging to finance and commercialize the innovation.
3. The need for a strong team
Discontinuous innovation often requires a strong team to commercialize the innovation. This team should include individuals with the necessary skills and experience to successfully launch and market the innovation.
4. The possibility of failure
Discontinuous innovation can be a risky proposition, with the potential for failure. This is why it is important to carefully consider the risks before pursuing this type of innovation.
5. The need for a long-term commitment
Discontinuous innovation often requires a long-term commitment from organizations. This includes both financial and human resources commitment.
Conclusion!
In the end, it is apparent that discontinuous innovation is a risky proposition. However, it has the potential to create new markets or significantly disrupt existing ones.
This can lead to increased market share and profits for organizations that are able to successfully commercialize the innovation. Discontinuous innovation has the potential for high rewards.
What are your thoughts about discontinuous innovation? Have you pursued this type of innovation in your organization? Let us know in the comments below!
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