How to Manage Disruptive Innovation: Introducing the Innovation Matrix

Innovation is important for holding a competitive advantage, particularly due to megatrends like digitalization, internationalization, and sustainability. However, it's crucial to understand the differences between sustaining and disruptive innovation. While sustaining innovation sustains a market by building on an existing one, disruptive innovation creates new markets by making old technologies obsolete. Both sustaining and disruptive innovation can be radical or incremental. To manage innovation effectively, individuals must be able to balance between sustaining and disruptive innovation. If companies wait too long to invest in disruptive innovations, they risk being replaced by competitors. However, if too much focus is directed towards disruptive innovation, revenue and profit can decline. Balancing these two types of innovation is key to future growth.