Guest Post: by Ralph-Christian Ohr
Triggered by a couple of recent discussions, I’ve been pondering for a while now over the question how evolution relates to revolution when it comes to innovation. In the following, I’ll try to develop my view on this. Let’s define evolution as continuous and incremental innovations of a firm’s existing business. Whereas revolution can be described as radical and discontinuous leaps to completely novel offerings, opening up new business and growth trajectories. Jeff Stibel writes:
Evolutionary innovators ask questions based on the limitations of existing solutions; revolutionary innovators ask questions no one else has thought of. This sentiment was eloquently captured by Robert Kennedy when he paraphrased a quote by George Bernard Shaw: “Some people see things as they are and say why? I dream things that never were and say why not.
I’ve noticed time and again that this issue often leads to either-or positions. It can be argued that evolutionary innovators can be highly successful with limited risk – in large part, innovation returns come from evolution. Moreover, evolution accounts for the majority of innovation activities in most firms. The problem: evolutionary innovation only optimizes and exploits existing businesses and prolongs their trajectories. Revolutionary innovation, in turn, explores new-to-the-world opportunities and creates new business potential. Both types of innovation require dedicated conditions, capabilities and mindsets in order to thrive. Whereas evolution strongly depends on customer insght capabilites, revolution is mainly fed by visionary foresight. Revolutionary innovation is closely connected with high uncertainty as it addresses a future that doesn’t exist yet, but is going to emerge through the innovation itself. The concept of customer orientation can be considered twofold:
- Evolutionary innovation focuses on orientation TOWARDS today’s customers
- Revolutionary innovation focuses on orientation OF tomorrow’s customers
Basically, firms need both, revolutions and evolutions in order to operate sustainable and profitable on the long term. At some point in time it becomes mandatory for every organization to operate „ambidextrously“. Those organizations are at risk of failing because innovations might be driven in the wrong system. Consequence: the existing business dies, the novel idea dies, or both. Organizational and individual capabilities to integrate opposing innovation systems prove to be increasingly crucial.
According to Don Norman and Roberto Verganti, the complementary relation of incremental innovation (within a given frame of solutions) and radical innovation (change of frame) can be depicted as hill-climbing paradigm (see figure). They write:
Although the hill-climbing procedure guarantees continual improvement with eventual termination at the peak of the hill, it has a well-known limit: there is no way to know whether there might be even higher hills in some other part of the design space. Hill-climbing methods get trapped in local maxima. Incremental innovation attempts to reach the highest point on the current hill. Radical innovation seeks the highest hill. (…)
Without radical innovation, incremental innovation reaches a limit. Without incremental innovation, the potential enabled by radical change is not captured.
Source: D. Norman, R. Verganti: Incremental and Radical Innovation – Design Research versus Technology and Meaning Change (2012)
“Revolutionary ideas rely on evolution to survive”, says Rieva Lesonsky in a great post on that issue. This important interplay also becomes obvious upon considering the innovation adoption cycle, as discussed by Greg Satell. He writes:
When an early innovation comes to market, there will undoubtedly be a small amount of people who are excited about it. After all, it can do things nothing else has been able to do before. That’s cool and the “cool crowd” gets it immediately. They are enchanted by their new toy and start advocating it to friends. Adoption increases.
There is, however, a problem. The new product doesn’t work very well, it’s hard to use and it’s expensive as many disruptive innovations tend to be. Many people can’t see the point in shelling out big money to buy a product that confuses them, makes them feel stupid and the final product experience doesn’t seem worth the effort.
That’s when a change in the basis of competition happens. Success begins to become less a matter of features and functions and depends more on the interaction with the user. In other words, less on engineering (in the classical sense of the word) and more on design.
The point is: at the outset, radical innovation attracts early adopters due to its novelty. In order to cross the chasm and capture the mass market, the innovation needs to get optimized in terms of customer needs and user experience. That’s accomplished through steady incremental steps, typically leveraging insights gained by employing customer-centered methodologies. Drawing on the model of Norman and Verganti above, launching a revolution is like leaping to a new hill. Eventually succeeding in the marketplace, however, requires climbing up the hill to the peak through evolutionary progress.
Source: http://www.digitaltonto.com/2011/a-radical-shift-toward-design/
Another take comes from Jeff Stibel:
While both types of innovation play a vital role in the developmental ecosystem of technology, industry and business, it is the non-linear or revolutionary innovations that make the most significant advances. These are the ones that make the real difference. The really huge achievements in technology and the world at large are the result of visionary activists who imagine and then build something none of us had previously thought possible. (…)
Reasonable people can debate whether a particular innovation belongs in the first category or the second. What is not debatable is that while both play a role in the ecology of innovation, it is the truly revolutionary innovations that make all subsequent incremental improvements possible.
Takeaway
Sustainable innovation isn’t about either evolution or revolution – it’s about both/and. Organizations are required to develop a “complementary innovation system” by integrating opposing approaches, capabilities and mindsets.
- Evolution tends to optimize the world as is. Revolution aims at creating the world as it could be.
- Evolution needs revolution in order to explore further potential to be tapped.
- Revolution needs evolution in order to survive and thrive.
Appears we have different dictionaries, Ralph. 😉 Innovation consultants/authors always baffle me with their semantics and creative misuse of terms.
Evolution by way of Freedictionary.com is defined as change, progression, metamorphosis.
Revolution is defined as forcible overthrow for a new system…a drastic, radical, far-reaching, and momentous change.
Both evolutionary innovation and disruptive/revolutionary innovation must focus on orientation of today’s customers AND tomorrow’s customers.
Both evolutionary innovation and disruptive/revolutionary innovation are fed by visionary foresight.
Both are connected to high uncertainty.
Not all firms need both (or can/must manage both).
The difference? EVOLUTIONARY INNOVATION mounts challenging hill after hill at an even pace, day after day. Evolution plans for the world as it could be and begins calculated migration to new ideas while understanding the world as it is today. Revolution (particularly unmitigated revolution) can deplete energy and resources; akin to climbing a hill comprised of Confectioner’s sugar. Frenetic pacing over unstable, dramatically varied terrain – forcing change for a new system or idea prematurely while ignoring the realities of today’s market — is a lot more challenging.
Your charts are pretty but they are theoretical, lacking evidence-based research and real-world application.
See numerous examples where evolution worked and revolution failed from the automotive, energy, technology, and transportation industries here: http://www.reinventioninc.com/innovation-and-the-middle-of-the-road-fallacy. Proof that non-linear or revolutionary innovations do not make the most significant advances.
The facts? Practical research rooted in reality proves that:
Speed to market (disruptive, revolutionary innovation) is only optimal under the following conditions: high performance products, long product lifecycles, a relatively long window of market opportunity, relatively high sales, stable margins, and relatively flat development costs. Only given these conditions, can companies generate sufficient revenue to offset the increased costs incurred with speed to market and “disruptive innovation.”
– Source: “Speed to Market and New Product Performance Tradeoffs,” Journal of Product Innovation Management
There are really only three scenarios in which speed to market can guarantee a sustainable advantage: (1) if you can secure ironclad patent protection (2) if you can set a proprietary industry standard, or (3) if you can use your lead to establish such a beachhead that even if better options become available, your customers will find it too much of a hassle to switch.
– Source: Jim Collins, “Good to Great”
Companies that EVOLVE AND REFINE an innovation tend to achieve greater stock value gains than the original company disruptor. More: http://bit.ly/QNhRWM.
– Source: National Bureau of Economic Research
Lest we forget, iPod was not the first MP3 player, the iPhone wasn’t the first smartphone, and the iPad wasn’t the first tablet. Apple copies too. Apple ENHANCES. Apple EVOLVES ideas. The idea that Apple is a disruptive, revolutionary innovator is pure bunk. Apple excels at EVOLUTIONARY INNOVATION.
Inventors disrupt; most companies evolve. Companies that try to disrupt (take for instance, biotech companies) rarely commercialize anything at all.
The reality is that most successful companies out-execute the competition with a new twist on an existing product or service *OR* they are better-equipped to commercialize an invention than the original inventor. Companies should see competition as an opportunity to improve products and customer service. Connecting with customers in the marketplace is the ultimate goal, not speed to market or revolutionary innovation. Companies are generally better off when they focus on people and process rather than technology and technique. People (customers and employees) drive company prosperity and change the world for good.
Hat tip for a thought-provoking blog post.
Looks like a continuation of our interesting discussion, Kirsten.
Upon closer consideration, I don’t think our lines of thought are too much apart. I basically agree with you that successful innovation isn’t about first-to-market or pioneering but about first-to scale and subsequent evolution. It’s not the inventor of a revolutionary technology or product who is likely going to succeed, but the innovator who is capable of embedding it in a scalable business model. That’s one major reason why e.g. Apple stands out. As you can see, I included this point in a slightly revised version of this post:
http://www.innovationexcellence.com/blog/2012/08/29/evolutionary-and-revolutionary-innovation/
Now let me comment to some of your further points:
• It seems to me, that you strongly identify ‘revolutionary innovation’ with invention and first-to-market, but that’s not my point. I’m trying to say that companies need to be able to evolve and improve their existing business (to be described as upward movement on a s-curve) on the one hand. On the other hand, they are also required to start a new business (s-curve) when the old business matures and growth declines. This implies in most cases a discontinuous transition to a novel business model. The challenge for companies during this transition phase is then to manage execution of the old and validating/scaling of the new business model in parallel. Research (e.g. Tushman / O’Reilly or Nagji / Tuff) indicates that companies capable of balancing this tension tend to show higher performance.
• If we really stick to literature definitions, that would go quite well together with C. Christensen’s interpretation (1997) of evolutionary and revolutionary innovation:
– Evolutionary innovation: An innovation that improves a product in an existing market in ways that customers are expecting.
– Revolutionary innovation: An innovation that is unexpected, but nevertheless does not affect existing markets. (this definition says, revolutionary innovation doesn’t necessarily need to be disruptive, but can become disruptive in combination with an appropriate business model)
• Evolutionary innovation (i.e. evolving existing business) and revolutionary innovation (i.e. preparing future business) address different time horizons. You are right in saying that both are connected with uncertainty. However, the level is inherently higher for the latter. Furthermore, evolutionary innovation can be based on insights of an existing customer base. Revolutionary innovation, in contrast, is an emergent customer development process and validation of hypotheses about preferences at the outset. Understanding of the world as it is today won’t help too much when it comes to anticipating the future. That’s what I mean by customer insight vs. visionary foresight.
• In terms of the used charts: well, I think customer diffusion cycle and hill-climbing (related to the s-curve concept) are recognized and intuitive models, well suited to explain my basic line of thought here.
Final thought: In order to succeed on the long term, it’s essential for organizations, not necessarily to be first, but to get novel ideas to scale. Therefore, they range at the intersection of revolutionary and evolutionary innovation – requiring different capabilities of validation vs. execution and scaling.