Unlocking Value with Incremental Innovation Strategies

Beo Thai

Hi everyone, welcome back to MARK344 Marketing Strategy & Innovation. I’m Dr. Beo Thai, your host for this episode. Today, we’re tackling a topic that is really at the heart of long-term competitive advantage—incremental innovation strategies. Now, if you listened to last week’s episode on core marketing strategies, you’ll remember we talked a fair bit about tweaking and optimising current products. Well, incremental innovation is all about those tweaks…but also about the things that, despite our best efforts, can sometimes go wrong.

Beo Thai

Let’s start with a fact that might sound, I dunno, a little confronting: about 40% of all new products actually fail. Yeah, forty percent! That number’s been floating around research and it’s a strong reminder that innovation is challenging for everyone—B2B, B2C, big corporates, startups, all of them. But there’s also this big gap in success rates. Some organisations—the top performers—crush it with around 68% commercial success. But on the other side, we’ve got companies hovering down around 45%.

Beo Thai

Why does this happen? What sets the high performers apart? Often, it’s not necessarily more resources or fancy offices, it’s, you know, having these rigorous criteria for which ideas get the green light, and just as importantly, knowing when to stop an idea before it eats up time and money. So, quick story from my startup days—when I was running my little café back in Da Nang, Vietnam, I’d get all these great-sounding drink ideas. Some of them, honestly, were kind of weird—like avocado coffee! I really wanted to stand out, so we’d bring out these new drinks, but only a few stuck around. The rest? Let’s just say they quietly disappeared from the menu after a few weeks. The lesson? Even in small business, if you can’t screen out what really fits your customers or test properly, you end up with a lot of costly failures.

Beo Thai

So whether you’re working for Apple or just starting out, the challenge is the same—the process you use to spot, develop, and launch new ideas is what makes the difference between evolving winners and, well, those forgotten avocado coffees.

Beo Thai

Now, let’s move on to what actually drives a great innovation process—because, turns out, there’s a lot more to it than just brainstorming in a room with some sticky notes. Researchers like Kahn and her colleagues have mapped out seven key dimensions that really separate the top players from the rest. So, let me try to rattle these off without losing my train of thought—strategy, company culture, project climate, process, research, commercialisation, and metrics or performance. That’s seven, right? Yeah.

Beo Thai

Let’s peel these apart a bit. Strategy sits at the centre—your innovation has to align with your mission, your vision, your long-term goals. This isn’t about chasing every funky new idea, it’s about being strategic…making sure you keep the right balance across your portfolio—some ideas risky, some safe. Then there’s company culture. This is huge. If your whole organisation—from the CEO to the folks on the floor—believes that innovation is everyone’s job, that’s when those small improvements add up. Can't say enough about that.

Beo Thai

Next up, project climate. If you’ve got empowered, cross-functional teams—specialists from R&D, marketing, production, engineering—who are actually accountable, wow, things move faster and smarter. The process itself is the structure—the backbone. This is often where Stage-Gate® comes in, and I’ll get to that in a second. But process means being disciplined, not just creative.

Beo Thai

Now, research—another biggie. You can’t innovate in the dark. You need feedback, market research, sometimes even co-creation with your customers. Commercialisation is about how you actually launch and deliver value, and trust me, that’s often the most expensive stage; if you botch it, all your work can unravel. And finally, metrics—how you track, report, and, yep, reward innovation progress at every stage. I know that all sounds a bit checklist-y, but here’s why it matters: think about Toyota’s Kaizen philosophy—continuous improvement. Every employee at every level contributes, whether that's a tweak on the assembly line or a tiny change in logistics. It’s this ecosystem that lets those small, safe bets compound into world-class performance.

Beo Thai

Alright, let’s dig deeper into one of those dimensions that always gets people nodding—the process part, particularly the Stage-Gate® model. If you’ve ever worked in product development, you’ve probably heard the term. If not, here’s the quick version: it’s a structured framework where your ideas move through defined stages—scoping, build a business case, development, testing, launch—and at every stage there’s a gate. Those gates are basically ‘Go’ or ‘Kill’ checkpoints.

Beo Thai

What’s really smart about this approach is, it lets you experiment, but with discipline. So, take Apple, for example. Over the years, they keep releasing improved versions of the iPhone. Are they radical changes? Not really—it’s “better camera,” “longer battery,” “sharper display.” Each update flows through a version of this stage-gate process, so new features must prove their worth before millions of units get made. Even Gillette, with their razors—it’s almost kind of funny, right?—from two blades to three, then four, then heated, then with a vibrating handle… Each time, incremental change, but each one had to pass through its gate.

Beo Thai

The beauty of this model is you avoid betting the farm on a single moonshot idea. Instead, you funnel a lot of ideas, weed out the weak, and only launch what’s actually got a good shot of winning in-market. Some ideas will get stuck at the gate, and that’s a good thing—it’s much less costly than discovering a dud after going all-in.

Beo Thai

So, whether you’re a startup or a giant, the stage-gate system kind of becomes your safety net for turning those little improvements into reliable, incremental wins.

Beo Thai

So, process is essential, but how do you make sure all this innovation ties back to what you actually deliver and how you organise your business? Here’s where the Business Model Canvas comes, well, into the picture. If you remember from previous episodes, innovation isn’t just about the product—it’s about how you create, deliver, and capture value. The Canvas, developed by Osterwalder and Pigneur, has nine key building blocks: customer segments, value proposition, channels, customer relationships, revenue streams, key resources, key activities, key partners, and cost structure.

Beo Thai

Every time you revisit these blocks, you’re looking for places to nudge, tweak, test—anything that can make your model more effective without fully reinventing it. Let’s say, for example, Netflix—they started with DVDs by mail, but then gradually improved their streaming technology (that’s channels and value prop), all while constantly personalizing content recommendations. Or when Starbucks kept updating its mobile app—better loyalty rewards, faster payment, easy order customisation—that’s a series of little improvements on customer relationships and channels.

Beo Thai

Even massive companies like Amazon aren’t above tinkering with key resources—think warehouse automation—or tweaking cost structures as they scale. On a personal note, my own research in consumer behaviour actually backs this up—when you make it just a bit easier for customers to get that value, even by changing a channel, you can breathe life into a tired product. So, using the Canvas isn’t just a startup trick—the smartest big brands are pretty much always iterating around these building blocks.

Beo Thai

Finally, let’s wrap things up with some common stumbling blocks—and more importantly, how to dodge them. Even with a solid process, you can hit what’s called innovation saturation; all those little changes don’t seem to move the needle anymore. Or sometimes, people just get complacent, like, “We’ve always done it this way—why change?” And of course, there’s the classic roadblocks: internal resistance, resource constraints, or simply losing sight of the big picture.

Beo Thai

Here’s where best practices come in. First, you need real feedback loops. Set up channels to hear directly from your users—data is only useful if you act on it. Cross-functional teams, again, are key: don’t let innovation become a siloed activity. Google’s a master of this—they make hundreds of tiny updates to their search algorithm every year, always refining, always responding to new user behaviour. Tesla? Same thing—new features arrive through over-the-air software updates, constantly nudging the car’s performance a little bit higher, a little safer, a little cooler.

Beo Thai

The other trick is genuinely fostering a culture of experimentation. Celebrate the small wins and treat so-called “failures” as lessons. Sure, there will always be tension between quick wins and bold change, but the art of incremental innovation is in knowing how to keep the improvement engine running while staying open to occasional, bigger leaps down the track.

Beo Thai

Alright, that’s my whistle-stop tour of incremental innovation strategies! If you want to keep driving impact as a marketer—or as a future leader—you can’t just rely on luck or one big idea. It’s the small, thoughtful changes that, bit by bit, lead to those big advantages over time. Thanks for tuning in to MARK344, and I’ll see you in the next episode, where we’ll take these ideas even further.