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Published by: University of California, Berkeley
Published in: "California Management Review", 1996

Abstract

Companies that compete effectively over the long run in technology intensive fields exhibit an ability for both continuous (or incremental) innovations and discontinuous (or radical) innovations. The latter, which lead to the creation of entirely new businesses and product lines, pose a unique set of challenges for management. They typically require a long, investment intensive process, marked by pervasive uncertainty, unpleasant surprises, and no guarantee of success. Conventional approaches to new product development, while appropriate for continuous innovation, are inappropriate and sometimes even detrimental when applied to the more discontinuous regime of innovations. For instance, the familiar admonition to be customer-driven is of little value when it is not at all clear who the customer is or will be, or when the product class itself does not yet exist. This article presents four discontinuous innovations - CAT scanners (by GE), optical fibers (by Corning), cellular phones (by Motorola), and NutraSweet (by Searle, now Monsanto) - which explore the process of developing discontinuous innovations and demonstrate how they are different from incremental innovation.

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Abstract

Companies that compete effectively over the long run in technology intensive fields exhibit an ability for both continuous (or incremental) innovations and discontinuous (or radical) innovations. The latter, which lead to the creation of entirely new businesses and product lines, pose a unique set of challenges for management. They typically require a long, investment intensive process, marked by pervasive uncertainty, unpleasant surprises, and no guarantee of success. Conventional approaches to new product development, while appropriate for continuous innovation, are inappropriate and sometimes even detrimental when applied to the more discontinuous regime of innovations. For instance, the familiar admonition to be customer-driven is of little value when it is not at all clear who the customer is or will be, or when the product class itself does not yet exist. This article presents four discontinuous innovations - CAT scanners (by GE), optical fibers (by Corning), cellular phones (by Motorola), and NutraSweet (by Searle, now Monsanto) - which explore the process of developing discontinuous innovations and demonstrate how they are different from incremental innovation.

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