Did you know that incremental innovations are the bread and butter of innovation landscape? I discussed four research-based insights on incremental innovations in our podcast this week.
The great thing about incremental innovations is that the investment is often small and risk is much lower than in large innovations. For a great invention, you may have to spend hundreds of millions of dollars only to find out that the investment didn’t yield a return. But incremental innovations often involve devoting small amounts. Even if one such project doesn’t succeed, the portfolio of innovations provides a reasonable return.
But how do you pursue such minor innovations? Is there a method to do so? By understanding the two types of incremental innovations, you can actively pursue them.
Lessons on Incremental Innovation From a Kindergartner
To explain these two, let me share two stories from my son’s early childhood.
A Tractor Ride
When he was in Kindergarten, he used to sit with me on a tractor while we mowed the grass in our yard. He used to love it. It was a great ride for him, and we used to get time together. One day when we were riding the tractor and cutting our grass, he pointed to our neighbor’s yard and made an observation. He said Erwin has overgrowing grass and weeds and we have a tractor. Why don’t we cut his grass and charge him money!
New Toys Spark New Ideas
Around the same time, we had gone for a vacation in Greece. As we were walking one night in Athens, we came across some toy sellers with new toys. They were selling gel based animal figured (a pig or a duck) that you could smash on the road or a piece of wood. When the toy struck the ground, it would flatten into what appeared to be a disfigured part of a cartoon character. And then it would come back to its original shape. It was fun to keep smashing the toy on the ground and see it disintegrate and then come back to its original form.
My son looked at it and asked me to lend him money. I told him I would just buy the toy for him. He said he didn’t want to buy one toy. He wanted to buy ten. I was surprised. He explained that those kind of toys were not available in the US. He would sell them for 3X the price there. I did lend him the money, and he learned many great lessons on business in that one fledgling venture.
The Two types of Incremental Innovations
If you look at the two stories above, you will realize that they show two types of incremental innovations. In the first one, he noticed a need and saw how it could be fulfilled. Thus it was a demand-driven or market driven innovation. In the second example, he found something cool and figured that it would be useful for many others. So this was a supply driven innovation.
These are the two types of incremental innovations and need different ways of pursuing them.
Companies such as P&G spend hundreds of millions of dollars on identifying demand driven ideas. They spend enormous time looking at their consumers interact with the product and thus come up with ideas that will solve problems for the users. This ethnography method led to the detergent companies realizing that people smell their freshly washed clothes to assess how clean they were. This insight resulted in them adding perfumes to washing detergents.
This packaging of ketchup is a great example of supply-driven innovation. You can squeeze ketchup on one end when you need to put it on a burger. On the other end, you can open it up to dip a fry. There is nothing new technologically here. Someone figured out that this possible to do and thus will solve an issue.
Searching for Innovation Opportunities
Your sales team has many insights based on their customer interactions. They know what the customers want and what critical pain points are. Salespeople are one of the best ways to search for market driven incremental innovations.
But what about the other kind of innovation? The technology or supply-driven innovation? How can you come up with that? You can come up with such innovations by looking for what can you do now that you couldn’t do earlier. What is that cool thing that is possible now?
Look at this iPhone cover. It is just a cover but someone added a pocket in it, and it allows you to use it as a wallet too. Someone asked the question what if and that led to this innovation.
Questions That Can Lead to Innovations
So what kinds of questions should you be asking to pursue incremental innovations?
For demand driven inventions you need to ask what will reduce the pain of the customers? Or what will delight the client and make her life easier?
For supply driven innovations, you can ask different types of questions
- What if? What if I could do X?
- Why not? Why not do this instead of that?
- Complete the statement – the stupidest thing about my product is…
- Complete the following statement – the surprising thing about this product is
It is through this line of questioning you can pursue incremental innovations.