Innovation is the process of developing new ideas, products, services, or processes that create value. It’s the driving force behind progress in business, technology, and society. It enables organizations to adapt, grow, and stay competitive in ever-changing environments. However, not all innovation is the same, some changes are small and continuous, while others completely reshape industries. To better understand how innovation works and how it can be strategically applied, it’s helpful to explore its four core types: incremental, adjacent, radical, and disruptive innovation.
1. Incremental Innovation
Incremental innovation refers to small, continuous improvements made to existing products, services, or processes. This is the most common type of innovation and is often low-risk and cost-effective. Companies use it to refine what they already do well—making things faster, cheaper, or more user-friendly.
Example: A smartphone manufacturer releasing a new model with a better battery and camera, but with the same core design and features.
Purpose: Maintain competitiveness, meet customer expectations, and gradually improve performance.
2. Sustaining Innovation
Sustaining innovation improves existing products or services to meet the needs of current customers—usually through incremental or evolutionary improvements.
Example: A car company releasing a new model with better fuel efficiency and a sleeker design.
Purpose:Maintain or grow market share by making things better, faster, cheaper, or more appealing for current customers.
3. Radical Innovation
Radical innovation introduces entirely new ideas, technologies, or business models that differ significantly from current offerings. These innovations often require substantial investment and involve higher risk, but they can also lead to major competitive advantages.
Example: The development of the first personal computers, which created a completely new product category and changed the way people interacted with technology.
Purpose: Create breakthrough solutions that transform industries or customer experiences.
4. Disruptive Innovation
Disruptive innovation occurs when a new product or service starts off serving a niche market and eventually replaces established market leaders. Unlike radical innovation, which aims for performance, disruptive innovation often starts with simpler, more affordable solutions.
Example: Netflix starting as a DVD rental service by mail and gradually disrupting the entire video rental and streaming industry, replacing Blockbuster.
Purpose: Challenge incumbents by offering more accessible, convenient, or affordable alternatives, reshaping entire markets over time.
Understanding the four types of innovation can help businesses plan strategically, allocate resources wisely, and navigate uncertainty. While some innovations enhance what already exists, others create entirely new paths forward. The key is to recognize which type of innovation fits your goals, capabilities, and risk tolerance, and to embrace innovation as an ongoing process rather than a one-time event.