innovation radicalness

Innovation radicalness is a concept measuring the degree to which an innovation deviates from existing practices, products, or business models in terms of technology and market. It stands in contrast to incremental innovation. While not explicitly defined in ISO 56002:2019 (Innovation management system — Guidance), the standard provides the framework for managing an 'innovation portfolio,' which requires balancing projects of varying radicalness. Within a risk management framework like ISO 31000, radicalness is a key risk factor; highly radical projects entail greater technical, market, and financial uncertainty. Therefore, assessing innovation radicalness is fundamental to aligning innovation activities with the corporate risk appetite, ensuring that high-risk, high-reward projects receive appropriate governance and resources.

Applying innovation radicalness in ERM translates an abstract concept into a manageable risk variable. Key steps include: 1) Establish an assessment framework. Develop a quantitative scorecard based on dimensions like technology newness and market unfamiliarity to score each project's radicalness, aligning with the risk identification and analysis phases of ISO 31000. 2) Conduct portfolio management. Map all projects on a risk-reward matrix based on their radicalness scores and expected returns to ensure the portfolio aligns with the firm's risk appetite. 3) Implement differentiated governance. Use flexible stage-gate or agile processes with frequent risk checkpoints for highly radical projects. For instance, a global tech firm might run incremental product updates through a standard process while managing breakthrough AI research in a separate 'innovation lab' with distinct funding and milestones, effectively balancing its risk profile.

Taiwanese enterprises often face three key challenges. First, a risk-averse culture, rooted in manufacturing excellence, prioritizes efficiency over high-uncertainty projects. Second, rigid resource allocation, with annual budgets and KPIs tied to existing business units, stifles long-term, radical innovation. Third, a reliance on traditional financial metrics like NPV, which are ill-suited for evaluating projects with undefined markets. To overcome these, firms should: 1) Implement a dual-track innovation system with separate funding and governance for radical projects. 2) Adopt strategic evaluation tools like real options analysis that value flexibility under uncertainty. 3) Foster a culture that tolerates failure by creating innovation sandboxes and rewarding experimentation. These actions can create a more balanced and resilient innovation pipeline.

Winners Consulting specializes in helping Taiwan enterprises navigate the complexities of innovation radicalness. We have extensive experience in guiding companies to build robust management systems compliant with international standards like ISO 56002 within 90 days. Our tailored approach addresses the unique cultural and resource challenges faced by local firms, enabling them to balance their innovation portfolios effectively. Get a free consultation to diagnose your innovation management framework: https://winners.com.tw/contact