7.4 The Importance of Directional Innovations

Marcos Antonio de Lima Filho, PhD.

This section highlights the vital, albeit often overlooked, importance of incremental innovations. While disruptive and radical innovations capture the public imagination, the cumulative effect of incremental innovation plays an equally important role in product development. Based on historical examples such as the evolution of the light bulb and the automobile industry, this section underscores the fundamental importance of incremental improvements in product enhancement and cost reduction.

Designers know that most successful products are subject to a constant process of incremental innovation, a strategy targeted at improving performance while diminishing costs. This common innovation strategy is not as exciting as radical innovation, but it is just as important (Norman & Verganti, 2014). Granted, incremental innovations may not command the attention that radical and disruptive innovations do, yet their cumulative impact can be equally profound and influential. The evolution of the light bulb illustrates this argument:

By 1909 the initial tungsten filament and vacuum bulb innovations were in place; from then until 1955 there came a series of incremental changes (…) In the same period the price of a 60 watt bulb decreased (even with no inflation adjustment) from $1.60 to 20 cents each, the lumens output increased by 175 percent, the direct labor content was reduced more than an order of magnitude, from 3 to 0.18 minutes per bulb (Abernathy & Utterback, 1978).

In this period, both the product and the manufacturing process of electric light bulbs have undergone gradual, measured, and incremental changes. Advances of this sort are inevitably accompanied by process standardisation and specialisation, the progressive embodiment of human skills in machines, substantial changes in the nature of work, and the increasing rigidity of the whole production system (Abernathy et al., 1983, p. 112). The production process evolved from a flexible job-shop configuration, involving more than 11 separate operations and a heavy re­liance on manual labour skills, to a single machine attended by a few workers (Abernathy & Utterback, 1978).

In the automobile industry, both products and production processes evolved in a similar manner. When Henry Ford began experimenting with the idea of producing automobiles, the industry was young and its technological direction was unclear. In garages and small workshops, aspiring entrepreneurs produced a diverse array of automobile designs, including electric, steam, and gasoline-powered vehicles, as well as those with three or four wheels and different steering mechanisms. Technological ambiguity prevailed among producers and buyers, as no one knew which technologies would prove most effective (Abernathy et al., 1983).

In 1908, the United States had 500 automakers producing custom-made luxurious automobiles (Kim & Mauborgne, 2015). During this era of technological diversity and experimentation, certain concepts achieved general acceptance, such as internal combustion engines powered by gasoline, front-mounted engines, and direct drive shafts. In 1908 Henry Ford synthesised these concepts into an overall design, the Model T, that was about to dominate the industry for fifteen years (Abernathy et al., 1983).

The Model T design was a success: Ford’s market share surged from 9% in 1908 to 61% in 1921, and by 1923, a majority of American households owned an automobile (Kim & Mauborgne, 2015). However, during that fifteen-year period there were incremental but no fundamental innovations in the Ford product (Abernathy & Utterback, 1978). Nonetheless, thanks to this long period of incremental innovations, the Model T became so inexpensive that it enabled a much larger population of people to afford their first car (Christensen & Raynor, 2003).

The automobile, while initially a radical innovation, has seen a century of continual incremental improvements since its inception. Because of a century of incremental innovations, today’s automobiles are much quieter, faster, more efficient, more comfortable, safer, and less expensive than those early vehicles (Norman, 2013, p. 279). This highlights the undeniable significance of incremental innovation, often overshadowed by the widespread emphasis on disruptive innovations, in maintaining economic viability and competitive edge across diverse industries. Modern examples of this transformative process include the personal computer, LED lighting, and electric refrigeration — all have evolved from exclusive luxuries to ubiquitous commodities in homes and workplaces due to steady and incremental innovations.

However, the focus on incremental or directional innovation, which emphasises the conservation and enhancement of established designs, can make companies more vulnerable in the face of technological shifts or changes in market preferences. A strategy of incremental innovation can trap management into a short-sightedness and risk aversion attitude, as the immediate rewards of improving existing technology often outweigh the incentives to make groundbreaking changes. Thus, disruptive innovations are viewed as difficult, unpredictable, and risky, whereas incremental innovations are typically viewed as generators of predictable results in shorter timeframes (Utterback, 1994).