There are advantages and disadvantages to both incremental and
radical innovation. Radical innovation has the advantage of creating a step
change in growth. The disadvantage is the high level of risk and high cost
of failure. The advantages of incremental innovation are lower risk and
the possibility of achieving small degrees of growth. However, the
disadvantage compared with radical innovation is the slowness to reach
growth targets before competitors, leading to a loss of competitive
advantage. Most organizations adopt a dual approach to the size and scope
of their innovation activities. There are usually many incremental
innovations going on at the same time, yielding short-term results. They
may also develop some potentially radical innovations that may yield
significant results in the medium to long term. Therefore, the innovative
effort of an organization consists of a portfolio of innovations rather than
just one specific project. As a result, decisions involving the innovation
process become much more complex, as does the attitude of the
organization toward risk taking in order to fund the innovations.