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Vijay Govindarajn in the HBR:
What kind of Innovation are you doing? What kind of Innovation are you doing?
Not all innovation is created equal. I put all innovations into two broad categories: linear innovations (which are consistent with the firm’s current business model) and non-linear innovations (not perfectly continuous with the current business model). But we need to add another layer of complexity to those categories: innovations can be incremental or radical. To illustrate, consider the Tuck School of Business, my employer. A linear, incremental innovation would be if professors from different disciplines co-taught a course. A radical (but still linear) innovation would be a major overhaul of the two-year MBA curriculum. If we were to fundamentally change our business model by offering an online MBA, that would be non-linear. Not only is there no well-understood process for creating such a program, but doing so would require Tuck to build an entirely new set of capabilities.
Govindarajan is good with the way he thinks about the context and provides a way to make sense of it. This is a useful of breaking down your innovation and thinking about where your current innovation fits it.