Innovation Junkies Podcast

BONUS: What is Innovation

The Jeffs break down 3 aspects of innovation (breakthrough, incremental & disruptive) & how businesses can apply them. Don’t miss it as they discuss: the ways that new technologies support breakthrough innovation, how incremental innovation keeps you ahead of the competition, & why disruptive innovation affects the marketplace so greatly.

Jeff Standridge: This is Jeff Standridge and this is the Innovation Junkies podcast. If you want to drastically improve your business, learn proven growth strategies, generate sustained results for your organization, you’ve come to the right place. Over the next half hour, we’re going to be sharing specific strategies, tactics, and tips that you can use to grow your business. No matter the size, no matter the industry, no matter the geography. We’ll be talking about everything from sales and marketing, to organizational, operational, and leadership effectiveness, innovation, digital transformation, everything in between. Routinely we’ll bring in a top mover and shaker, someone who’s done something unbelievable with his or her business. We’ll dig deep, we’ll uncover specific strategies, tactics, and tools that they’ve used to help you achieve your business goals. Welcome to the Innovation Junkies podcast.

Hey guys, if you’re looking to put your business on the fast track to achieving sustained strategic growth, this episode is sponsored by the team at Innovation Junkie. To learn more about our strategic growth diagnostic, go to Now let’s get on with the show.

Jeff Standridge: Hey guys, Jeff Standridge and Jeff Amerine here with the bonus episode of the Innovation Junkies podcast.

Jeff Amerine: Man, it’s good to be back. What are we going to talk about Jeff?

Jeff Standridge: Today we’re going to talk about innovation. What is innovation? And we’re going to break down three various or very specific aspects of innovation: incremental innovation, breakthrough innovation, and disruptive innovation. First of all, Jeff, how would you define the word innovation itself?

Jeff Amerine: You know, I think about disruption. I think about, personally, something that is a change from the status quo. So it’s a change with the normal way of operation and it can be a significant change or it can be a minor change, but it’s something that is different than what you’ve previously been doing. And the hope is that it’s going to deliver something of greater value as a result.

Jeff Standridge: Absolutely. So let’s talk about incremental innovation. You talked about that. Many times that’s really viewed in an organization as just ongoing process improvement, a lean Six Sigma and ways that we can eliminate waste. It enables very small improvements or extensions to existing products, services, or processes. Any examples you can think of, of where incremental innovation is occurring in organizations today?

Jeff Amerine: Yeah. You can think about it in terms of products. You can think about it in terms of just the way people are operating. You take a retail example, incremental innovation is not completely doing away with a personnel or staff that would typically check people out, but it’s introducing this idea of self checkout with some monitoring, or introducing the idea of using RFID tags or near-field so that people can just throw stuff in their cart and roll out. That’s not really a massive change from what’s been done. It’s still a scanning technology or radio-frequency technology, but it’s got a different mix of personnel and staff that are involved with it. So you’re using people differently really in that case.

Jeff Standridge: I think of Coke. Coke Classic, New Coke, Coke Vanilla, Coke Cherry. It’s the same base product, but we’re making extensions to that product and we’re incrementally making it better to broaden the appeal of that particular product. Another example.

Jeff Amerine: They talk a lot about the idea of working on the 1% changes, just 1% improvements. And if you do that across an entire organization, those 1% improvements can lead to something really substantial. No doubt about it.

Jeff Standridge: You know, that reminds me of that except of the compound effect that we talk about a lot, that seemingly small actions consistently applied over time, yield massive results. And I like to use the example of, if I offered you a penny a day doubled daily for 30 days, or offered you a million dollar check, which one would you take? And most people will say, “Well, I’d take the penny a day doubled daily for 30 days, but I’m not really sure why.” And then I tell them, “Well, actually, if you chose the million dollars, you would be absolutely correct until you get to Day 28, and then it goes dreadfully wrong because you cross over somewhere between 27 and 28, the million dollar mark, and then it doubles again, it doubles again. And so you end up at about five and a half million dollars if you choose the penny a day.” So, seemingly small actions consistently applied over time, yield massive results. That’s the best description of incremental innovation that I can even think about.

Jeff Amerine: No question. And it’s something you can do on a continuous basis and should do really on a continuous basis.

Jeff Standridge: So let’s talk about breakthrough innovation. Breakthrough innovation is where you effectively use a new technology to create a new product or a new service variation or new process variation. Think about a new product within an existing business model or … What did I just say there? A new product within an existing business model or a new business model for an existing product. So a new product within an existing business model, I think of Uber, right? Actually no, that’d be the reverse. Uber is the new business model. We’ve always had taxi services, we’ve always had shuttle services, but when Uber developed a new business model around that, it kind of changed the game.

Jeff Amerine: Hey folks, we’ll be right back with the episode. But first we want to tell you about a limited opportunity to take advantage of our strategic growth diagnostic. For short time only, we’re offering a free strategy call to see whether or not our unique diagnostic tool is right for you. Go to\diagnostic to learn more.

Jeff Amerine: So here’s one that’s, that’s kind of interesting that it’s a breakthrough. Self-contained, sodium-cooled nuclear reactors that don’t require any water whatsoever that could be contained within a community. It’s still a power production business model, but it’s a completely new product that has really long life and zero emissions. That would be an example. Another one that’s kind of interesting, that is yet to roll out the university, but you think about using new compounds, like graphene, for a variety of different applications. A thing can be one atom thick and can be applied in all sorts of electronics and quantum computing and energy production, et cetera. So there’s a lot of that stuff that could be really disruptive. Disruptive innovation tends to take longer to get to market, but it can have really massive changes when it does.

Jeff Standridge: Yeah. And so that’s a good segue into disruptive innovation, where something generally is displaced. I think about web-based video streaming services. We talk about cutting the cord all the time, where people are stepping away from traditional cable, traditional antenna-driven television consumption and moving to video streaming.

Jeff Amerine: Yeah. And how many people have DVD players that they still use? Not many, right? Because streaming is now available and that was absolutely disruptive into the marketplace. And I think Netflix is actually a really good example of people that could see where the world was headed. They had that mail out DVD distribution model. They realized that streaming was where it was at and in a relatively short period of years they flipped the entire model towards streaming. And that was reliant on another breakthrough technology, which was high speed fiber optics to the home, which is widespread now. You can get a gig ethernet, essentially gig internet, in a lot of places to the home. So those, you could argue they were incremental, but they were disruptive in what they did to the overall marketplace.

Jeff Standridge: Yeah. So, incremental innovation, where we’re making incremental very small improvements, seemingly small actions consistently applied over time. Breakthrough innovation, where we have a new product within an existing business model or a new business model wrapped around an existing product. And then we have disruptive innovation where something actually displaces something else, web-based video streaming displaces cable TV, for instance. So let’s talk about … [crosstalk 00:08:10] Yup, go ahead.

Jeff Amerine: A question for you just along those lines. Interested in your thoughts. Where would you put something like the Pfizer vaccine for COVID 19? Would you view that as disruptive or would you view that as incremental?

Jeff Standridge: I’d actually put it in the middle at breakthrough, right?

Jeff Amerine: At breakthrough. Okay.

Jeff Standridge: It’s a new product or service within an existing business model, right? We’ve been doing vaccines for decades. And so whether it’s Pfizer or Moderna or AstraZeneca or whomever, it’s a new product to serve a new market or solve a new problem within the same business model we’ve had for years. What about iPhone? iPhone is an example of a new product within an existing business model. Cell service had been around for a number of years, but then Apple figured out how to create the smartphone. Maybe the smartphone is a better example than just iPhone, because [crosstalk 00:09:09] the same thing.

Jeff Amerine: Well, and there was other competition. You had PalmPilot and you had Blackberry. And it was something about the way they packaged, not just the phone itself, but all the supporting applications and services and the fact that it was essentially bulletproof and rock solid and the customer service and all of that was great. You knew that the thing was going to operate very successfully and now they dominate. I mean, between that and Samsung, LG, and some of the other Android-based phones, you don’t hear much about the alternatives at this point. They really dominate the entire market.

Jeff Standridge: Let’s focus on the bonus. Let’s talk about how our listeners can actually take these three different types of innovation and begin applying them in their businesses today. Jeff, where would you suggest they start?

Jeff Amerine: Well, the first thing is that idea of don’t lose sight of the existing customers you have that are going to expect constantly improving service. And I think in that case, you’re going to work on incremental, operational efficiencies to make sure you’re more efficient, you’re cutting costs out and you’re delivering the existing service to the customers extremely well. That’s something I think it has to be core to every business, that incremental level of innovation to stay ahead of the competitive landscape.

Jeff Standridge: No, I agree completely. And I think you also hit the operative word there, as well as your customers. So talk to your customers, understand where you’re serving them well. Ask them where you’re not serving them well, how you could serve them better, and look for ways to make incremental improvements to start with that will generate more value for your customers.

Jeff Amerine: Yeah, for sure. And then from a longer, slightly longer term plan, you’re going to be looking for the breakthroughs. Where are the gaps in the offering? Where are the gaps in the market? What are those big things that people would pay for that no one is yet working on, or they’re not working on adequately. They’re not delivering enough of a cost-effective solution. I think that’s the next echelon of activity that you’d focus on, those things that are going to fill gaps that are beyond just incremental, but that are really going to provide a breakthrough that will enable even better service.

Jeff Standridge: No, I agree. And just because I know the two of us and the work that we do on a daily basis, I know that quite often we’re going to refer to the term “customer discovery” as we talk through innovation and strategic growth and what have you. So, let’s take just a couple of moments and give a bit of a primer on customer discovery.

Jeff Amerine: Yeah. Customer discovery is the art and science of asking really good open-ended questions and avoiding putting any confirmation bias in the questions with what you or hope the answer should be. So when you do a good job in customer discovery, you’re not leading with the solution you have in mind. It’s a learning exercise where you’re really trying to find out, almost like a forensic investigator, what that customer is really experiencing in terms of pain points and unmet needs. And, and it’s lots of questions that are not yes no questions, not multiple choice questions, but they’re questions that start with words like “when” and “how” and “how much” and “why” and all that. And you let them fill in the blank. And it’s really an exercise in good, active listening and in follow-up questions to get to the core of where real demand might be from your customers.

Jeff Standridge: Completely agree. And it’s not something that’s effectively and optimally done using a SurveyMonkey or an email. It’s face-to-face, or at least virtual face-to-face telephone conversations, video conversations, or actual in-person conversations to ask those questions, and knowing what questions you’re going to ask on the front end to try to derive the answers. And really, as you said, avoiding that confirmation bias, trying to step away from ideas or solutions that we already have, and really learn from the mouth of the customer. So, customer discovery, you’ll hear us talking about it over the course of our series of episodes in the Innovation Junkies podcast and so we wanted to make sure that you understood what we’re talking about when we say that.

Jeff Standridge: But incremental, breakthrough, disruptive innovation. As Jeff Amerine said, look for ways to begin understanding from your customers, ways that you can incrementally add value to those customers and start the innovation journey. As we continue with the podcast, we’re going to be talking more about how you progress through the innovation journey, how you institutionalize it within your company, how you celebrate the successes, et cetera. And so with that, Jeff, I think we’ll leave it with them.

Jeff Amerine: Hey listeners, this is Jeff Amerine. We want to thank you for tuning in. We sincerely appreciate your time. If you’re enjoying the Innovation Junkies podcast, please do us a huge favor. Click the subscribe button right now and leave us a review. It would mean the world to both of us. And don’t forget to share us on social media.

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