A Deeper Dive into the 4 Types of Innovation: Breakthrough Innovation

Innovation can often feel like an empty buzzword, what do we mean when we say innovation is essential to business success? Innovation is hard to define, but many have attempted it. Computer scientist Alan Kay said, “The best way to predict the future is to create it”. And that is one way of summarizing innovation, it is focused on creativity, and looking forward to what can be done next, to improve some facet, no matter how small, towards societal progress. 

The four main types of innovation as defined by Greg Sattel are: basic research, disruptive innovation, breakthrough innovation and sustaining innovation. In this article we will be explaining breakthrough innovation: what it is, how it works, why it is important and why understanding it, is essential to your career. 

What is breakthrough innovation? 

Breakthrough innovation is arguably the most exciting form of innovation to many. Think about the launch of the first iPod, and then the first iPhone. Those are iconic moments in tech history.  Apple released new products that went on to create a long term demand for handheld technologies that we all take for granted now. Apple are an example of breakthrough innovation themselves.

In Sattell’s quadrant of innovation, breakthrough innovation occurs when the problem faced is well defined, but the domain it exists in is still only operating at part of its potential. In other words, breakthrough innovation is often the start of something new. Breakthrough innovations are quite the opposite to incremental innovation, known also as sustaining innovation. Breakthrough innovation works to create a new, never seen before product or service, introduces it to new markets, creating a competitive advantage for the organization.

Examples of breakthrough innovation

Breakthrough innovation does not occur frequently, but when it does, it can totally change entire industries, and start an avalanche of real economic growth. A new innovation like the iPhone, changed the game for both Apple and the customers who bought into this brand new idea. If we think back to the invention of mobile phones, their conception was not something people knew they needed, but once the first product was released to the market, people quickly realized the convenience it provided them, and mobile phones quickly became essential to most. That was another example of breakthrough innovation.

In more recent times, the development of wearable technologies for people living with chronic health conditions like diabetes, have made hundreds of thousands of people’s lives easier to manage. Yes, they were able to get along just fine before with the old resources they were offered, but this new technological development has drastically changed their life, and most would say, now they simply can’t live without it. 

Why is breakthrough innovation important? 

It is easy to demonstrate why breakthrough innovations like new technologies are so important to societal progress, but why should businesses care about creating the next iconic, or indispensable product or service? Profit is the first clear answer, being the first to make something guarantees a head start in profit margins and often leads to a high business value for the brand. However, being the first doesn’t guarantee success, which is why in breakthrough innovation, the product or service must have scalability and continue getting better. Those established businesses must respond to new demand, new markets and continue to have focus on new product lines.

How do breakthrough innovations occur? 

Breakthrough innovations are an inherent part of any established company's business models because in order to succeed, a brand must grow and adapt their innovation strategy to maintain a competitive advantage. Sustaining innovation focuses on those small incremental adaptations and frequently relies on customers feedback, but that feedback can often lead to breakthroughs for a organization trying to find something new to develop. 

As previously discussed, technology is a key area where breakthrough innovations occur regularly: mobile phones, digital photography, blood sugar monitors, augmented reality. Some brands are known for their iconic products that were the result of breakthrough innovations. Brands like Dyson, who invented the bagless vacuum cleaner, Dyson cool and the company's bladeless fan. However, breakthrough innovation can occur in any industry or area of business, it is more about the business models a organization adopts, and the new ideas they incubate, that decide the breakthrough impact of any given product or service. After all, entire industries can be turned upside in a matter of minutes, when a revolutionary product is launched.

If we look back on tech history with rose tinted glasses it is easy to imagine that technology like the iPhone just arrived on the scene overnight. What customers don’t see is all of the failed attempts, many interactions of product, various incubation stages and plenty of R&D that comes before that first official product release. That is what makes breakthrough innovation strategy more complex for an organization to implement properly. A company must try to introduce a new business model whilst maintaining an existing business model that keeps them afloat.

Breakthrough innovation vs sustaining innovation

In order to create breakthrough innovations, a company's existing business model must have adequate funding allowances, and multiple streams of capital that will be able to sustain the sometimes long and laborious research and development stage of a new technology or product. Breakthrough innovation strategy therefore tends to work best in tandem with other innovation strategies such as sustaining innovation.

There are multiple differences between sustaining innovation and breakthrough innovation, but most obvious is that sustaining innovation strategy is the continuous improvement of an existing product or service, whereas breakthrough innovation is all about developing something brand new. Sustaining innovation is the tortoise of the race, and perhaps breakthrough innovation can sometimes be seen as the hare. However, in the realms of business, there is not always a clear winner. In fact, some of the most successful companies use a combination of the radical new product lines developed from breakthrough innovation, combined with the reliability of steadily improving products they have released previously.

Which business areas is breakthrough innovation useful in?

If you are hoping to one day be part of a business that creates a life changing new product or service, you may see yourself working for a startup, or a more established and historic company such as Dyson or Apple. However, breakthrough innovation is less about the brand name, and more about the business model and the company's ethos that has business leaders who want to create those breakthrough innovations using a radical new approach in their specialized market area.

How can I gain experience in breakthrough innovation? 

As a young entrepreneur, you may spend your evenings dreaming of becoming the next Steve Jobs or James Dyson, hoping you’ll invent the next breakthrough innovation the world is waiting for. However, these so-called inventions do not happen overnight, and their success is dependent on many factors. 

Therefore, it is vital to have a wide-reaching understanding of the many facets of business and entrepreneurship, whilst you keep dreaming big. An MBA qualification at a school that focuses on entrepreneurial spirit, and has modules that cater to your needs, is a great step to gaining further knowledge required for secure success. 

Which Business schools offer specialization in innovation and entrepreneurship?

Most importantly, an MBA program provides a secure and welcoming environment to test out new ideas alongside fellow learners who want to achieve too. Who knows, you could meet your future business partner in a Monday evening seminar. Gaining experience in different areas of innovation and strategy will be vital in preparing for work in the real business world.

The Stern Business School, New York, offers a Tech MBA, which has focused areas including innovation and strategy, offering a specialized learning experience that could be perfect for candidates looking to join the tech industry, as the next generation of innovators. On the opposite coast, Haas School of Business, Berkeley, has cutting edge elective courses in a huge range of topics including entrepreneurship and international business, that aims to imbue students with, in their words, “an ability for leadership, fresh thinking and positive impact”.

Outside of the USA, multiple business schools are offering specialized courses within their programs that will teach candidates the key tenets of innovation, those include: 

• SDA Bocconi School of Management, Milan, Italy
• Warwick Business School, Warwick, England
• Indian Institute of Management, Bangalore (IIMB), India

Now you have understood breakthrough innovation: how it works and why it is important , you can explore other forms of innovation here, or take a look at our program finder to see what MBA options are available to you, no matter what part of the globe you'd like to study in.