Incremental vs Disruptive Innovation: Why Organizations Need Both

For any organizations, innovation is not just an advantage—it’s essential. But innovation comes in many forms. Some organizations refine existing processes and products; others upend entire industries. The key to long-term success? Balancing both incremental and disruptive innovation. 

Whether you’re a seasoned executive or an emerging leader, understanding the difference between these innovation types—and how to use them strategically—can make the difference between growth and stagnation. 

What is Incremental Innovation? 

Incremental innovation refers to small, continuous improvements made to existing products, services, or processes. This type of innovation is often driven by customer feedback, market trends, and operational needs. 

Examples of Incremental Innovation: 

• Apple releasing annual updates to the iPhone’s features 
• Google improving its search algorithm 
• A manufacturer automating part of its production process to boost efficiency 

Benefits: 

• Lower risk 
• Cost-effective improvements 
• Quick implementation 
• Builds customer loyalty through consistent value enhancements 

Incremental innovation allows organizations to stay competitive and agile without overhauling their core business models. 

What is Disruptive Innovation? 

Disruptive innovation introduces groundbreaking changes that transform industries and consumer behaviours. It often begins at the low end of the market or creates a new one entirely—and eventually displaces established competitors. 

Examples of Disruptive Innovation: 

• Netflix: Shifted from DVD rentals to on-demand streaming, redefining the entertainment industry 
• Uber: Transformed personal transportation by challenging traditional taxi services 
• Airbnb: Disrupted hospitality by enabling people to monetize their personal spaces 

Risks and Rewards: 

• High risk and uncertainty 
• Requires significant investment 
• Potential for exponential growth and market leadership 

Disruptive innovation is bold and visionary—but also demands a strong tolerance for ambiguity and long-term payoff. 

How Businesses Thrive by Combining Both Innovation Strategies 

Organizations that rely solely on incremental innovation may achieve steady progress but risk becoming obsolete as new technologies and models emerge. Conversely, businesses that focus exclusively on disruptive innovation may burn resources, alienate loyal customers, or face internal resistance. 

The most successful companies—like Amazon, Apple, and Microsoft—balance both. 

• Apple enhances existing products (incremental) while occasionally unveiling category-defining innovations (disruptive). 
• Amazon continually optimizes logistics (incremental) while launching new business models like AWS (disruptive). 

Tips for Balancing Both Innovation Types: 

• Foster a culture of experimentation 
• Separate “core” and “breakthrough” innovation teams 
• Encourage leadership buy-in for long-term vision 
• Empower teams to test ideas with minimal risk 

Striking this balance enables companies to stay relevant today and ready for tomorrow. 

How Schulich ExecEd Helps Leaders Drive Innovation 

Innovation doesn’t happen by accident—it’s led by individuals who understand both the strategy and the skillsets behind change. Schulich ExecEd empowers leaders with the tools and mindset to foster innovation at every level. 

Whether you’re improving existing systems or championing radical change, Schulich ExecEd can help you: 

• Understand innovation frameworks that apply across industries 
• Navigate organizational resistance and risk 
• Build agile teams capable of driving transformation 

Explore Masters Certificate in Innovation Leadership—designed to help managers and innovators lead systematic, sustainable innovation. Speak to an advisor today and take the next step toward becoming an innovation leader.