Radical innovation is the polar opposite of disruptive
innovation. The challenge here is purely technological.
The emergence of genetic engineering and
biotechnology in the 1970s and 1980s as an approach
to drug discovery is an example. Established pharmaceutical
companies with decades of experience in
chemically synthesized drugs faced a major hurdle
in building competences in molecular biology. But
drugs derived from biotechnology were a good fit
with the companies’ business models, which called
for heavy investment in R&D, funded by a few highmargin
products.
Architectural innovation combines technological
and business model disruptions. An example is digital
photography. For companies such as Kodak and
Polaroid, entering the digital world meant mastering
completely new competences in solid-state electronics,
camera design, software, and display technology.
It also meant finding a way to earn profits from
cameras rather than from “disposables” (film, paper,
processing chemicals, and services). As one might
imagine, architectural innovations are the most
challenging for incumbents to pursue.