InnovationBreakthrough Chapter V Innovation Risk Management

Innovation management assessment and measurement is both art and science. The perception will come from the usage you're doing with metrics.

Digital brings both unprecedented opportunities and risks to businesses today. Innovation becomes simply creating value by solving simple or complex problems. Innovation comes with a risk of failure; many say that innovation won’t happen without enough failures.

Every innovation pursuit has a risk in it. Therefore, it is important to set guidelines for monitoring innovation pulse and handling risks in a structural way. 

• Monitor the pulse of innovation risk management: The primary focus of innovation risk monitoring and management would be to identify and control risks that can be addressed through financing, market understanding, competitor analysis, identifying the space of opportunity, defining the scalability of the products/services, as well as what timescale to allow before making a go/no-go decision. 

Part of innovation is about not knowing how and for what you will use the budget; and some innovations need to be fed with resources while others get better by “starving” them. From a finance management perspective, consider what capital you are prepared to risk in making the innovation - never let this be so much that losing it will cripple your business if it cannot obtain the funding to continue to move towards fulfilling its core mission.

• Monitor innovation capacity and culture pulse: Monitoring the innovation pulse of your organization is to help the leadership team make an objective assessment of the business’s innovation capability; and read the organization’s cultural expression, with the goal to build the working environment in which creative thinking and experimenting are encouraged. 

Some companies use innovation quotients which integrate both numerical and qualitative information that relates to innovation success. Besides the hard numbers or numerical success indicators, it is important to bring more qualitative information that is crucial to understanding the health and well-being of the firm's innovation efforts. Always keep in mind, the goal of innovation assessment and measurement is to build innovation capacity and capability, not add another layer of complication.

• Monitor innovation performance management: The variety of innovation studies showed that the innovation success rate is not proportional to the amount of R&D investment. It means the more money or resources you pour into the innovation initiative do not guarantee higher ROI from innovation effort. Therefore, monitoring innovation management performance is critical to improving the innovation management success rate. 

Assuming an organization believes that metrics can lead to continuous improvement and improve innovation effectiveness, it won’t be just a matter of explicitly communicating the intention behind metrics, but a matter of guiding the leadership team via an in-depth understanding of the purpose of doing that and engaging on that, with the goal to build innovation capacity.

Only innovation can keep businesses cross sectors relevant. Risk is part of innovation, especially for breakthrough innovation. Risk management needs to be an integral component of innovation management. The success of innovation management is never an accident; it’s a holistic management process with an embedded risk management mechanism, and an iterative thought-out planning and execution continuum.

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Innovationbreakthrough Chapter IV: The Breakthrough Innovation Best Practices

Managing disruptive innovation demands insightful understanding, patience, persistence, and courage, among other things.

Innovation is the core activity of human evolution to change the environment for making collective progress. In the business setting, innovation is what differentiates the leader from followers. Often, innovation is disruptive and risky. It’s no surprise to know that many organizations avoid risks, the immediate pressure from shareholders or “keeping the lights on” bottom line mentality is making them look inward to make incremental improvement by optimizing what they know.

But from the long term perspective, the strategic concern is that they perhaps do not invest enough to craft a great innovation strategy with a harmonized vision about building enterprise innovation competency. The challenge is about how to proactively search for disruptive or breakthrough innovation to build long term business advantages?

• Deep listening: To disrupt, you must hear the whispers of customers, business contexts, inner worlds, or outside worlds. The disruptive innovation often evolves exploring the new market territories or attracting new customers by designing and delivering new products/services or new business models. Thus, one of the critical issues is to focus on end-user need gaps even by looking beyond your current products/services categories. People should be the center of innovation. 

One of the tests for whether it’s a disruptive innovation or not is about how significantly the value proposition it brings to the company, how impactful the problem it helps to solve, as well as how it makes any difference to dimensions that are valued by customers. Therefore, to disrupt, it’s important to practice deep listening skills, engage and empower customers for innovating, to gain insight and empathy. 

To implement innovation successfully, it’s also critical to build a strong team by maintaining their motivation and focus. Collectively, they have a good understanding and appreciation of the business processes, fully aware of the organizational structure and who is responsible for what - both infrastructure and application to truly deliver innovative products or services consistently.

• Objective attitude: It’s also important to have an objective attitude to understand innovation cycles thoroughly. Many disruptive opportunities are brought to life with new thinking on how to monetize them. A disruptive innovation is a breakthrough in the existing solutions, something that has a potential to disruptively challenge all existing solutions. At the early stage of the exploration, these innovations can be defined as offering an initially lower performance while at the same time bringing some new attributes to the market. Thus, it requires fresh thinking on how to monetize them. 

Although there is no “one size fits all” scenario, they almost always deliver some combination of the benefits of affordability, convenience, and ease-of-use compared to higher-performance existing solutions. To improve the innovation success rate, study success stories across the industrial sectors or global territories about disruptive innovation or gain “lessons learned” by avoiding others’ mistakes. After ideation, companies need to filter, prototype, and validate their ideas, and ultimately deliver innovative solutions. Also, be aware of the innovation cycle. A disruptive product over time weakens as it moves towards the eventual commodity status. So, companies have to keep searching for new opportunities to disrupt, rather than being disrupted.

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  Ecosystem viewpoint: Leverage ecosystem viewpoint and create a road-map for disruptive innovations. Digital dynamic enables companies to leverage their various environments or ecosystems, to chase innovation and accelerate performance. Variety, complexity, diversification, and collaboration are the very characteristics of the digital ecosystem. It’s great to create a roadmap for disruptive innovation because they are macro trends and patterns that give clues and there are unmet needs. 

Being digital fluent with an ecosystem perspective aids the management in understanding what’s relevant and what’s not. Try to digitally connect key assets or context to the resource-rich innovation hubs and clusters across enterprise ecosystems. In doing so, you can create a shared context for learning and co-creating. That, in turn, will further fuel broader collaboration in generating fresh ideas. How successfully the organization can manage “disruptive ideas” and deliver innovative products or services depends on how those ideas are recognized, filtered and dealt with. Innovation leaders should fill their innovation toolbox with tailored frameworks, processes, technologies, various problem-solving tools, and metrics to evaluate innovation performance. Structural innovation management requires laying out different thought processes, structures, or cultures for bringing ideas into full fruity.

Managing disruptive innovation demands insightful understanding, patience, persistence, and courage, among other things. It’s important to set a good innovation agenda and start new conversations that galvanize inspiration and gain traction on a powerful theme of business renewal and growth.

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Initiatescenariologic

If the scenario is well designed and executed, you have the highest probability of getting the best outcome in the state of knowledge accessible.

We have a predisposition to seeking patterns, or potentially in the pursuit of logic. Logic is crucial, it is an interdisciplinary approach which involves cognitive science, sociology, culturology, psychology, philosophy, ecology, etc, to predict and prevent certain critical problems from happening. Even though you couldn’t predict anything beforehand, you can always imagine different scenarios based on “lessons learned” with many experiences involved in current or in the past. Strategic scenario planning is to navigate through the digital dynamic, discover the path via unconventional thinking, believing in yourself and most importantly, in your team to achieve the high performing results. 

What is invaluable about even quick high-level scenario planning is that you can often establish a set of “What-if’ scenarios with agreed-to response plans in place: While scenario planning can benefit from computer simulations, it is less formalized and can be used to make plans for qualitative patterns that show up in a wide variety of simulated events. Organizations need to make sure they have a robust and shared view about Why? Why are they here and what is their real intention? Ask "what if” questions as well. 

Applying creative thinking to ask open-ended questions would make changes often more effective, fun and desirable, motivate people riding above the learning curve, stimulate intellectual curiosity. Not only ask deep “WHY” to diagnose the root cause of problems but also ask open-ended questions such as “WHY NOT” or “What If” to spur creativity.  Good scenario planning stimulates creativity and increases risk intelligence. 

 You can use your scenarios to explore how your current strategies will or will not help you against possible disruption: Scenarios can be very strong planning tools qualitatively, and get you the best time-value results. A good middle ground is to estimate a range of potential impacts for each scenario; then itemize the steps and costs required to create a detailed plan once the disruption appears to be certain. Strategic planning depends on the context-internal and external dimensions you and your organization want to focus on and how you go about it. 

Strategic planning is a statement of “higher intent'' but is not a detailed plan in itself as you need to enable desirable emergent property and make adjustments accordingly. It takes commitment and discipline to stay focused on the real priorities of the business instead of being distracted by what seems to be more urgent at any given moment. It's critical to make a middle ground balance of investing aggressively and managing cost wisely. Use your scenarios to explore how your current strategies will or will not help you against possible disruption and compare your strategies to your current competitors and even invent future competitors. 

Scenarios can be very strong planning tools qualitatively, and get you the best time-value result:  The value of scenario planning is to uncover significant risk in a strategic plan. Assuming the risk is indeed significant, then the question of how far do you go to create contingency plans to address the issues.  

The kick-in of a Scenario Plan has been prepared in advance.  It is a matter of figuring out "where are you now," and "where do you want to be" by navigating the full set of “Ws: Why, What, How, Who, When and Where, etc.” Estimate a range of potential impacts for each scenario; then itemize the steps and costs required to create a detailed plan once the disruption appears to be certain.  

Nonlinearity, hyperdiversity, information exponentiality, unpredictability, etc, are all causes of uncertainty. There are strategic risks and systemic risks, there are financial risks, operational risks, or regulation risks, etc, in portfolio management. The more complex the change is, the more comprehensive the changing scenario needs to be. Be cautious of the learning curve and risk behind the large scale of changes. It is important to experiment, explore, engage and strike the right balance between flexibility and process; creativity and logic. Business management is multifaceted; it takes multistage logical scenarios to create multiple pathways for leading changes smoothly.

You can use your scenarios to explore how your current strategies will or will not help you against possible disruption. If the scenario is well designed and executed, you have the highest probability of getting the best outcome in the state of knowledge accessible. This gives immediate guidance and allows everyone to anticipate costs and effort if/when the market changes.

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Ripe Autumn

The full moon of –tonight makes us pondering-what a spectacular scene, a converged, harmonious whole world would be?

The summer heat has not faded away yet,

The golden Mid-Autumn Festival is already coming;

The floral fragrance makes us delightful,

Tonight’s sky was covered with –

a layer of halo,

Family gathering cures –

our nostalgic feeling,

Where will the brightest moon rise tonight?



The imaginary moon is to –

connect East and West;

The silver moon bridge is framed in-

our hearts,

connect our minds, seamlessly.

The rolling-forward Pacific Ocean makes us-

feel passionate inside,

The long charming Yangtze River awakes-

our thoughts, deeply…

The twinkling stars illuminate-

the earth, boundarylessly,

the physical-virtual reality has to-

be integrated, fluently.

When the sun rises in the East,

the moon shines in the West,

synchronously.

The beauty of autumn nourishes-

the entire world, with hope;

Ripe rice harvests –

the East with enrichment;

Giant pumpkin symbolizes-

the abundance of the West,

The quiet town makes –

the West fresh & calm,

The modern streets bring –

joy & blooming to- the East.

The full moon of –

tonight makes us pondering,

What a spectacular scenery,

a converged, harmonious whole world would be?

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InnovationBreakthrough Introduction：Chapter 3 Business Model Innovation

Business modeling is the basic and key business system you need to design, test and validate, to keep companies viable.

A business model is a description of the way in which an enterprise intends to make a profit. It’s an entire frame of elements that describe the intents and constraints of a business or organization. Business model innovation is often a breakthrough. Tuning business models is all about foreseeing and applying the emerging trends, that’s where you win the competitive advantage. As a business leader, when you begin to develop a business model, you also have to be very clear about your organizational strength and how to explore different paths and take the alternative value creation approach.

• Start with a process: Running a future driven and innovative digital organization is an adventure to explore the alternative business models and create a process to examine possible alternatives by addressing some critical questions such as: Who are your target customers? What need is met for the customer? Which offer will you provide them to address that need? Etc.

 The robust processes and tools enable the organization to generate winning concepts on a consistent basis. The high-level strategic questions can produce a wide range of potential business models, but each of them needs to be examined further in more detail to ensure it makes sense strategically and technically. To craft a new business model, there are a series of decisions you need to make and each of the decisions could lead to a set of outcomes. 

Taking an innovation spiral approach to do business model investigation and innovation suggests a loosely structured and circular process that allows companies to connect with the various points of the spiral in different ways and at different times, and ultimately reach an innovation breakthrough. 

Business model innovation is one of the most desired types of innovations, and different types of innovations can be managed via tailored management processes. To improve the success rate of business model innovation, it’s important to keep optimizing innovation processes by breaking down those management barriers such as silos, inflexibility, linearity, or bureaucracy, etc, in order to nurture a business environment that catalyzes business model innovation and accelerates business performance.

• Enforce intrapreneurship: Intrapreneurship has been seen as a great practice to explore business model innovation. Corporate entrepreneurship (Intrapreneurship) activities can improve organizational growth and profitability by willing to take risks and exploring new business models to create revenue streams. Especially in large and well-established organizations, if they identify a new value proposition that requires a change in business models or creation of the new business model, it’s strategically important to develop new ventures for improving organizational growth and profitability. 

Every corporate venture comes with a business model innovation. Corporate Entrepreneurship improves company performance by increasing the firm’s pro-activeness and innovation competency. The entrepreneurial activities help companies develop new businesses that create revenue streams, and depending on the company’s competitive business environment, their impact will increase over time.

• Develop business competencies: Create a new business model based on unique business competencies. Business model reinvention also needs to be based on the business’s core capabilities, either through providing new value-added services or products to current customers or exploring the new customer need. 

There is the mapping relationship between the business model (value model) and capability model, between the capability model and process model. The business model designers should methodologically review a list of levers for business model components, and generate a list of potential business model options systematically, narrow choices based on their unique competencies in order to maximize the business value via newly developed business models. 

A strong business model is hard to copy because it focuses attention on how all the critical business elements (internal and external) of the system fit into a working whole to make it differentiated in the marketplace. In a business environment that is driven by change, starting the business model based on the technologic vision and on the mega-trends is to be able to build the core competencies and the critical capabilities early enough to catch the emerging digital wave and keep the business ahead of the fierce competition.

With hyper-competition and the shortened business life cycle, to avoid fast obsolescence and gain long term business advantage, besides incremental improvement, the business model needs to allow space for innovation. Business Modeling is the basic and key system you need to design, test, and validate to keep companies viable. The emerging digital trends bring significant opportunities for companies across vertical sectors to pursue growth through the methodical examination and development of the alternative business model to reach the next level of the business growth cycle and achieve high-performance business results.

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Innovationbreakthrough Chapter 2 Introduction: The Innovation Framework and Key Success Factors

 Innovation Management needs to establish a comprehensive framework to manage innovation in a systematic way. 

Innovation is not serendipity. Working in an innovation garden not only takes passion but also needs processes and hard work. A systematic innovation approach is to depict innovation as a system, rather than a traditional process. Innovation performance depends on the alignment of its various components such as people, process, resources, actions, controls, or measurement, etc. Although there's no single structure that will work in every organization, a comprehensive innovation framework with all important enterprise components is the great tool to intensify innovation with focus and manage innovation in a structural way.

• Innovation strategy: Digital is the age of innovation. At today's modern organizations, variety, complexity, diversification, and collaboration are the very characteristics of the digital innovation ecosystem. Innovation is similar to "the sum is larger than its parts." Innovation strategy is an integral component of the business strategy. It helps to diagnose the critical business issues which need to be solved creatively, set guidelines and manage innovation systematically. 

Innovation is costly most of the time; that is why you should really concentrate innovation on the main issues of your strategy. In general, business innovation is a management discipline. Innovation return on investment is often proportional to the risk it exposes. The realities of corporate survival don't allow companies to spend all their resources on radical innovation, because of the high percentage of risks of failure. Therefore, a comprehensive innovation strategy creates a clear line of sight between the enterprise vision and how to build a balanced portfolio with mixed breakthrough innovations and incremental innovations.

• Innovation process: The innovation management is not a thing or even a state, but a management process of lining up the culture of change and creativity that people would like to take calculated risks in experimenting with a new way to do things. Innovation processes should enable us to focus on the most attractive opportunities. Innovation management is not just about generating ideas, but rather the processes to transform ideas into business value. 

The “hard” issues to stifle innovation are that the systems, processes, or technology many organizations are using to capture innovation value are becoming inefficient in this rapidly changing world with the high degree of digital convenience. Organizations can become more effective in executing innovative ideas by relying less on silo functions, more on cross-functional collaboration and continuous improvement. 

There is a great deal of uncertainty involved in the process of innovation. Innovation process includes both idea creation and implementation. Before ideation, companies need to discover insights. After ideation, companies need to filter, prototype, and validate their ideas. The right level of guidance and process is important, but the overly rigid processes or too “pushy” goals will stifle innovation. Innovation processes evaluation is clear, but the process of "planned innovation" shouldn’t be too rigid. Planning in some steps is ok, but chaos to some extent is necessary.

• Innovation culture: Innovation can occur anywhere in the organization, and frankly, it has to occur in every aspect of the organization. Innovation culture is a collective mindset, a way of doing things, a risk-taking attitude, doing things differently, asking the hard questions, failing and being able to fail again without repercussions. Innovation culture provides a mechanism for the organization to freely express ideas and for these to be built upon, then this model can greatly enhance idea generation within the business. 

People have to be inquisitive to ask why things are done a certain way, why people use products or services in a certain way, what products or features that the customer doesn't even know they want, why certain processes are done in certain ways, etc., and overall, how to improve products, services, processes, or business models to delight customers. 

The risk is part of innovation. You want people to be able to and dare to take risks. It is important to create a safe environment within the group and organization which encourages people to come forward with new ideas with calculated risks.

• Innovation talent: Innovation is a mindset and a prerequisite to doing sustainable business these days. People are innovation masters, neither processes nor tools. To create a new idea requires not just one skill, but many, not just old experiences, but new perspectives. Innovators are the round pit, don't fit the square hole, they are disruptive to the status quo. Indeed, innovation is all about how to disrupt the old thinking and the old way to do things. 

It’s important to spot and develop innovators because they are the driving force to bring up new ideas or rejuvenate an innovative culture, and achieve the ultimate business value. Focus on individual capabilities and potential to innovate. The indicators to assess the intrinsic capacity of individuals such as interdisciplinary skills and knowledge, plasticity (fast learning), openness to experience, tolerance of ambiguity, cognitive ability and styles, intellectual engagement, creative problem-solving, ability to identify patterns, ability to make unusual connections, tendency to constantly question the status quo, capacity to adapt, emotional intelligence and risk-taking attitude. 

Collectively, a highly innovative team is composed of complementary mindsets and skill sets, has inclusive and progressive traits, to embrace the diverse viewpoints and maximize the collective potential.

• Innovation risk management: Digital strategies are changing frequently and innovation in its basic nature is a high-risk area; more often you are doing something that hasn't been done before. The challenge is having a framework that allows you to say when to quit or simply “can do it” for a while. Innovation Risk Management means stepping away from the accepted "best practice" and asking whether a fundamentally different approach would provide more flexibility, more sensitivity, and more responsiveness. 

The primary focus of the risk management would be to identify and control those risks that can be addressed; financing, market understanding, competitor analysis, identifying the space of opportunity, defining the scalability of the products/services, and what timescale to allow before making a go/no-go decision. 

Innovation risk would also broadly need to consider both endogenous and exogenous drivers. From a finance management perspective, consider what capital you are prepared to risk in managing innovation, never let this be so much that losing it will cripple your business, the best judgment or a qualitative approach is given for risk and innovation.

• Innovation measurement: Innovation is a process, which needs to be measured for making continuous improvement. Innovation has a very low success rate; most Innovation Management initiatives are not successful and are incredibly wasteful. The problem is that the measurement in business has so often been predominantly financial in nature. But the leading indicators for successful innovation are not financial. The key is to properly measure their success behaviors and hold them accountable. 

You choose the performance measurement by deciding which are seen as critical to making progress in order to deliver more innovative products or services. The fewer the better, but they have to be credible and relevant in the eyes of the stakeholders. 

Assuming an organization believes that metrics can lead to continuous improvement and enhance innovation effectiveness, it won’t be just a matter of explicitly communicating the intention behind metrics, but a matter of advancing innovation leadership effectiveness and optimizing innovation process and capability.

Innovations in the digital era are coming at a seemingly much faster pace, with changes and potential disruptions. Therefore, Innovation Management needs to establish the framework to manage innovation in a systematic way. The best framework is good because of underlying data and structural elements. There lies the quandary because innovation may not have the data to back it up! Bridging innovation execution gap requires a systematic execution scenario with a fine-tuned framework, clear-defined stages, decision-making parameters, performance thresholds, metrics selections, combined with the iterative learning process and organizational structure that supports wide-ranging exploration at each stage, to pursue a high-mature way for achieving the great business result.

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InnovationBreakthrough Book Introduction Chapter 1 Breakthrough Innovation Types

Breakthrough innovation is not something everyone can accomplish. You have to systematically develop the capability to execute it successfully, and that is something you do not accomplish overnight.

Digital innovation is the right mix of art and science. The science of innovation is to take a structural approach with the logical steps. The art of innovation is that it involves new ways of bringing together ideas and resources to create something novel. Breakthrough innovation is disruptive, with high return and high risks. There are many areas within a company where the innovation process can be applied to create value, from product innovation to service innovation, from process innovation to business model innovation, etc. 

Innovation breakthroughs can really hit the spot because they are often the radical new approach that makes a leap of the business to the next level of the growth cycle and achieves the high return on investment. Breakthrough innovation has greater ROI but with a much bigger risk.

• Respond to true human needs: The matter of fact is, the pace of change is significantly increasing, innovation is the only path and the core activity of human evolution to changing of the environment for unlocking business performance, for profit, for resource optimization, and for customer satisfaction, etc. With the unprecedented convenience that digital technologies bring to us, business leaders and professionals should ask themselves: Why is innovation so important or even more important when technology becomes more advanced? The breakthrough innovation has to respond to the true human need. 

• Leave competitions behind in some way: Breakthrough innovation is not something everyone can accomplish. It's a kind of “out of the box” thinking and leapfrog change. There is a consensus that the external environment is an important antecedent of spurring innovation. It is important to capture the rising trends and take advantage of changes in the external environment to spur breakthrough innovation and develop the capability to execute it systematically. 

An enterprise has always been part of simple or complex ecosystems, and it has to be linked to the many and varied “touch points” between itself and the marketplace environment of which it is a part. Digital innovation must be a multi-disciplinary effort to connect the wider dots, which would apply nonlinear thinking to provide better opportunities for leading breakthrough innovation than linear thinking. Highly innovative organizations embed innovation into every aspect of their organization and adopt spiral approaches to manage breakthrough innovations successfully. 

• Continually revamp business models to achieve competitive advantages: Every corporate venture comes with a business model innovation. Taking an innovation spiral approach to do business model innovation suggests a loosely structured and circular process that allows companies to connect with the various points of the spiral in different ways and at different times, ultimately reach an innovative breakthrough. 

To disrupt, you must hear the whispers of customers, contexts, inner worlds and outside worlds. Business model innovation is often breakthrough because if an established firm identifies a new business value proposition that requires a change in the business model or the creation of a new one, and then, it’s strategically important to develop the new venture for improving organizational growth and profitability depending on the company’s competitive environment, their impact perhaps increases over time. 

• Accelerates digital paradigm shift: Differentiation between incremental and breakthrough innovation relates to the degree to which a particular innovation changes the competitive landscape. Breakthrough innovation is disruptive and changes your organization in many fields, potentially making entire industries obsolete, as digital photography did to the film industry. As things change, the old paradigm becomes incompatible with the new reality and there occurs a digital paradigm shift. 

Therefore, radical/breakthroughs/transformational innovation is not something everyone can accomplish. You have to systematically develop the unique business capability to execute it successfully, and it is something you cannot accomplish overnight. Every organization needs to develop tailored innovation principles, methodologies, and practices by leveraging effective technologies, tools or methodologies and apply them wisely with the expertise to really add value, drive innovation and develop the organizational level innovation competency.

• People must be the center of innovation: The speed of change is expedited, so does the speed of innovation. Innovation is not an invention; it must prove its value in the market. Customers must be willing to pay for it, be it a product/process/service innovation. When managing the innovation life cycle, customer involvement at all stages often elicits highly valuable information. People must be the center of innovation. It is not a question of whether the customer is right or not, it is more of whether you are truly and proactively listening to their needs and gaining a deep understanding of customers through empathy. Here is the “magic formula” (if having the one): 

Breakthrough/Disruptive innovation = New Users + New Products/Services. 

• Disruptive with high return and high risks: Innovation is both art and science. To manage innovation and control risks systematically, the scientific processes should be in place. You need new technologies, new processes, new customers, new knowledge, and may be new business models. All these make breakthrough innovation very risky but on the other hand, you will get very great chances and opportunities for new product lines or platforms, etc, to make breakthrough innovation happen. 

From a marketing perspective, the management needs to check whether organizations are able to create entirely new industries or products capable of empowering an overwhelming number of those who were previously unserved and underserved; or expand to displace the dominant incumbents of existing industries that were only able to cost-effectively serve far smaller segment of the greater market. If shareholders valued innovation more, then, they would value companies that devote resources toward future innovation more than those that optimize short-term profits.

• Change the competitive landscape: Differentiation between incremental and breakthrough innovation relates to the degree to which a particular innovation changes the competitive landscape. Breakthrough innovation is disruptive and changes your organization in many fields, potentially making entire industries obsolete, as digital photography did to the film industry. As things change, the old paradigm becomes incompatible with the new reality and there occurs a digital paradigm shift. Therefore, radical/breakthroughs/ transformational innovations are not something everyone can accomplish. You have to systematically develop the capability to execute it successfully, and it is something you cannot accomplish overnight. 

Every organization needs to develop tailored innovation principles, methodologies, and practices by leveraging effective technologies, tools or methodologies and apply them wisely with the expertise to really add value, drive innovation and develop the organizational level innovation competency.

Breakthrough innovation can bring significant opportunities for the business to reach the next growth cycle and deliver high business value. Innovation ecosystem or the methodological environment should cover the whole innovation from processes in managing ideas or idea handling systems to idea implementation and promotion. Becoming a consistently innovative company requires tuning both organizational structure and culture that nurture new ideas and is able to profitably execute on those ideas and manage a healthy innovation portfolio with both incremental innovation and breakthrough innovation.

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