Inder Sandhu, SVP of Strategy and Planning at Cisco has written an article in Forbes about new product platform development and product improvement. The idea is that an organization needs to focus on developing new product platforms while generating revenues from incremental improvements to existing platforms. He calls it Disruptive and Sustaining Innovation.
But doing both isn’t easy. Start-ups often prefer the dogged pursuit of the next big idea. And large companies are often reluctant to invest in disruptive innovation, feeling constricted by their commitments to existing customers, pressure from investors for short-term results or even fear of upsetting existing revenue streams.
But when companies do both, the payoff can be great. Two complementary options, in this case sustaining and disruptive innovation, can amplify one another many times over. When Cisco makes an advance in one form of innovation, it usually gains a benefit in the other. And that is the true power of doing both.
Clearly, author has a great point and R&D managers need to effectively balance R&D investments across disruptive and sustaining projects. There are also other axes that factor in: Early stage or mature, discriminating vs sustaining, skill-set enhancing vs. feature developing etc. However, the right balance is often difficult to find and tools to visualize and effectively guide the R&D portfolio are nonexistent.
I am not sure if I would necessarily call adding features to an existing product innovation. However, definition of innovation it self is some what confusing. Clearly, one can make disruptive innovations in production of an existing product and there by gaining a new advantage in the market place (see the earlier post about R&D at 3M). However, calling all R&D innovation may hinder effective R&D portfolio balancing.