What is Discontinuous Innovation?

Discontinuous innovation (DI) is a type of innovation. That creates something new and different from what currently exists. It is also known as “breakthrough innovation” or “revolutionary innovation.”

DI can contrast with incremental innovation. Which builds on existing products or services and improves them. Incremental innovation is more common and less risky. Discontinuous innovation can also be less transformative and impactful.

These types of innovations are often game-changing, but they can also be disruptive. They can create new markets or destroy existing ones. And they can threaten the very existence of entire industries.

Whether an innovation is discontinuous depends on your perspective. Something that seems like a small change to one person might be a disruptive shift for another. And something that might seem new to one generation. It might seem like a minor improvement to another.

In general, discontinuous innovations are rarer than incremental innovations. Still, they can have a much more significant impact when they do occur.

Types of Discontinuous Innovation

There are three types of discontinuous innovation: Architectural, Component, and Modular. 

Architectural discontinuous innovation is when you create a new architecture. Or a system that is much better than the previous one. 

Component discontinuous innovation is when you start a new feature. That is much better than the previous one. 

Modular discontinuous innovation is when you create a new, much better module. Than the previous one in the market.

Process

Process discontinuous innovation changes the way businesses make products or deliver services. 

An example of process discontinuous innovation; 

It is when Netflix changed how movies are already on the watchlist. And given by introducing a monthly subscription service. That allowed customers to keep movies as long as they wanted. This discontinuous innovation can make it expensive. Or difficult-to-reach goods and services are more affordable and accessible to consumers.

Discontinuous innovation usually follows a three-phase process:

1. Pre-paradigm phase: There is no dominant design. And some competing paradigms or technologies vie for supremacy. 

2. Paradigm phase: Once a dominant design or technology emerges. It becomes the new standard and grows in popularity and market share. This phase is a “land grab.”

3. Post-paradigm phase: Once the dominant design or technology is in the market. It becomes difficult for new entrants to challenge it. This phase is a “shakeout.”

Product

Product discontinuous innovation changes the way customers interact with a product or service. Product discontinuous innovation can take many forms. Such as when Tesla created the first all-electric car, a luxury car. This discontinuous innovation changes customer behavior. By making an unavailable good or service accessible. 

Business Model

Business model discontinuous innovation changes the way businesses generate revenue. A classic example of business model discontinuous innovation is when iTunes was on the market, and customers could buy individual songs instead of an entire album. This discontinuous innovation can make products and services more affordable for customers and open new revenue streams for businesses.

A business model is a company’s plan for making a profit. It identifies which customers the company will serve and what value it will offer them. It also outlines the company’s costs and how it will generate revenue.

Discontinuous innovation can be radical or incremental. But it always results in a change to the way businesses operate. This type of innovation usually happens. When companies either invent new technologies. Or find new ways to use existing technologies.

There are three main types of discontinuous innovation:

– Technological discontinuities happen when companies invent new technologies. Or find new ways to use existing technologies.

– Business model discontinuities happen when companies change how they do business. Such as by introducing new business model innovations.

– Market discontinuities happen when companies enter or create new market segments.

The Role of Discontinuous Innovation in Business

 Today, discontinuous innovation is an essential driver of growth. For companies in various industries. Most of the time, it creates new markets and can impact our lives and work.

While discontinuous innovation can benefit businesses, it also presents several challenges. Chief among these is that it can be difficult to predict. Which innovations will be successful, and which will fail? 

Another challenge is that discontinuous innovation often requires businesses to rethink their operations. Which can be a complex and disruptive process. Finally, discontinuous innovation can often create new competitors. Better positioned to take advantage of the unique opportunity than incumbent firms.

Despite these challenges, discontinuous innovation is essential for businesses. They want a future and remain competitive in today’s changing marketplace.

How to Encourage Discontinuous Innovation in Your Business

Many businesses tend to focus on continuous innovation, which is incremental and evolutionary. But, discontinuous innovation is radical and transformational. It is often necessary to stay ahead of the competition. So, how can you encourage discontinuous innovation in your business?

 

Encourage Creativity and Risk-Taking.

Discontinuous innovation requires a different mindset than traditional incremental innovation. Rather than improving upon what already exists. Discontinuous innovation is about creating something new and different. This type of innovation often comes from outside the traditional boundaries. So, it is vital to establish an atmosphere. That welcomes fresh perspectives from all directions.

Encouraging creativity and risk-taking can be challenging. By creating a culture of openness and allowing employees to explore new ideas. You can create an environment ripe for breakthrough innovations.

 

Encourage Collaboration

Discontinuous innovation thrives on collaboration. Between different parts of the business and external partners. This type of innovation is often said to be ‘open,’ relying on many inputs from other sources.

Encouraging collaboration can be complex in traditional hierarchical organizations. Where there can be a lot of territorialism between different departments. One way to overcome this is to create innovation teams. That work across departmental boundaries. These teams should be free to experiment and supported by senior management.

It’s also important to encourage collaboration with external partners. Such as suppliers, customers, and academic institutions. It can help ensure your business is open to new ideas and technologies.

Encourage Open Communication

Encourage open communication: 

A lack of communication between each other is one of the most significant barriers. When it comes to discontinuous innovation. You can create an environment where new ideas can flow with no regrets. By encouraging open communication between departments.

Make time for blue-sky thinking: 

To encourage discontinuous innovation. It would help if you made time for blue-sky reflection. Which means setting aside time for your team to brainstorm new ideas. 

Encourage risk-taking: 

Discontinuous innovation requires taking risks. Not all these risks will pay off, but the ones that do could lead to breakthroughs for your business. Create a culture where mistakes flow as learning opportunities.

Invest in R&D: 

Research and development are crucial for discontinuous innovation. By investing in R&D, you’re giving your team the resources to explore new ideas. And develop them into potential game-changers for your business.

 

The Benefits of Discontinuous Innovation

Disruptive innovation is also known as discontinuous innovation. It is when a new product or service completely changes. How the customer thinks about and uses a particular technology. This type of innovation is often game-changing. And can create new markets and leave the old ones behind.

 

Increased Competitiveness

Discontinuous innovation can lead to increased competitiveness. When a company shares a new product or service different from what is currently on in the market. It can create a “blue ocean” in which the company can thrive. This type of innovation can also increase market share. And help a company to defend itself against disruptive startups better.

Increased Market Share

When a company innovates without a stopping point. It can grab market share from its competitors. Companies that innovate without an end to the product. Often create new markets. Consider how Apple disrupted the music industry with the iPod and iTunes. By introducing a new product and business model. Apple took market share from established players such as Sony and Microsoft.

Increased Profitability

Companies innovate experience increased profitability for some time after the innovation. Because discontinuous innovations are usually more impactful and valuable to customers, they give the company a competitive advantage. The increased profitability allows the company to reinvest in future discontinuous innovations. They are leading to even more profitability.