While conducting research on General Motors, Daeyong Lee saw automotive engineers using plastic rulers to measure stretching in metal fenders and asked how well the primitive-looking technique worked. "They said the accuracy was poor but that there was no alternative," Lee recalls. "I said there must be a better way to do it."
Lee began to search for a completely new tool to perform the measurements and eventually devised a way to use a video camera to automatically gauge the stretch in the fenders. That innovation formed the basis for the Troy, New York, company called CamSys that Lee founded in 1989. He now employs 10 people who sell the measuring system to car makers and steel companies around the world.
The practice of pursuing such radical innovations has fallen out of favor in recent years as more incremental approaches have come to the fore. But a new study by Rensselaer Polytechnic Institute (RPI) suggests it may be time to try for bigger gains.
Radical innovation is losing out to the incremental approach because it's much more difficult and the risks are huge, says Gina O'Connor, assistant professor of marketing at RPI in Troy. "But the payoff is greater as well," she adds.
Companies that create radically new innovations can gain long lead times over their competitors, which leads to higher profit margins and a competitive advantage, the RPI researchers say. And, they found, while many radical new ideas appear to be the result of chance combinations, there are systematic techniques you can apply to increase the chance your organization will generate the next big idea.
In reality, of course, few firms come up with more than one truly significant new idea--if that many. Radical innovation researchers don't think it has to be that way, however. "If we can understand these processes," reasons O'Connor, "then it can become a repeatable phenomenon."
Mark Henricks is an Austin, Texas, writer specializing in business topics.