Innovation Program – Innovation and Commercialization
– Module II
In-Depth Exploration of Innovation Dynamics
Introduction and Reflection
Where Module I established the language, concepts, and a shared framework for learning, Module II represented a clear shift in both ambition and seriousness. The focus was no longer on understanding what innovation is, but on exploring in depth how innovation actually emerges—and why it so often fails. The perspective became more analytical, more demanding, and at the same time more realistic.
Module II made it clear that innovation is not an idealistic endeavor detached from power, interests, and risk.
On the contrary, innovation is a process in which organizations must continuously navigate uncertainty, resistance, and difficult priorities. This was also where the program began to seriously challenge established assumptions about leadership, organization, and execution.
Program Overview
Module II was structured as a three-day session with a clear academic progression. The main focus was an in-depth exploration of key innovation models as presented in the program’s core literature: Christensen, Utterback, Van de Ven, and Afuah. The session combined lectures, group presentations, discussions, and reflection, and was deliberately designed to require participants to apply theory to their own challenges.
An important feature was that participants themselves were responsible for presenting and discussing parts of the curriculum, with an explicit focus on its relevance to their own work and project assignments. In this way, theory was continuously tested against practice rather than treated as abstract knowledge.
Key Academic Themes
Innovation as a Structural and Organizational Challenge
A central theme in Module II was understanding innovation as a structural challenge for established organizations. Drawing on Schumpeter and further developed through the work of Afuah and Christensen, it became clear that innovation is not primarily constrained by a lack of ideas, but by existing structures, routines, and incentives.
Schumpeter’s distinction between entrepreneurial innovation and capitalist operations was brought into focus through the discussion of creative destruction. Innovation was presented as a force that radically transforms economic structures from within—often to the disadvantage of those who have the most to lose from change. Innovation therefore also became a question of power and position, not just creativity.
Small vs. Large Organizations
Another recurring theme was the tension between small and large organizations as innovators. Schumpeter I and II represented two seemingly opposing views: on the one hand, small entrepreneurial firms as sources of radical innovation; on the other, large, resource-rich organizations with the capacity to invest heavily in research and development.
Module II added considerable nuance to this picture. The empirical evidence showed no simple relationship between size and the ability to innovate. What mattered was the type of innovation. Incremental innovations often favor established organizations, while radical innovations are more likely to create opportunities for new entrants—particularly when new technology renders existing expertise obsolete.
Radical and Incremental Innovation – Two Perspectives
The distinction between radical and incremental innovation was analyzed through two complementary perspectives: the organizational perspective and the competitive economic perspective. From the organizational perspective, radical innovation involves a break with existing competencies—when new technology or new solutions require skills the organization does not possess. From the competitive economic perspective, innovation is radical when it makes existing products uncompetitive.
This distinction contributed to a more precise understanding of why established organizations often struggle with radical innovation, and why new entrants may have structural advantages—not because they are smarter, but because they are not constrained by historical investments and established routines.
Radical and Incremental Innovation – Two Fundamentally Different Forms of Change
The distinction between radical and incremental innovation is one of the most central—and at the same time most misunderstood—concepts in innovation research. The difference is not simply about the degree of novelty, but about how innovation affects an organization’s knowledge base, competitive position, and ability to act.
Incremental Innovation
refers to improvements that build on existing products, services, processes, or technologies. Such innovations strengthen the knowledge and capabilities the organization already possesses. They often involve lower risk, are easier to plan, and fit well within established management and reward systems. For established organizations, incremental innovation therefore appears both rational and desirable. Examples may include gradual improvements in performance, cost efficiency, or ease of use within an established business model.
Radical Innovation
In contrast, radical innovation represents a break with existing knowledge and established ways of doing things. It requires new skills, new organizational structures, and often new business models. From an organizational perspective, radical innovation involves what Afuah describes as competence-destroying change: previous experience and routines lose their value and, in some cases, may become a direct barrier to further development. Radical innovation is therefore far more challenging to manage within established structures.
Research shows that there is no simple relationship between an organization’s size and its ability to innovate. Instead, the outcome depends largely on the type of innovation involved. Established organizations often have structural and financial incentives to prioritize incremental innovation because it protects and develops existing revenue streams. Radical innovation, by contrast, may be perceived as a threat, particularly when it carries the risk of cannibalizing existing products or services.
New and smaller companies are often freer to pursue radical innovation—not because they necessarily have better ideas, but because they have less to lose. In such cases, the absence of established structures and investments can be an advantage rather than a weakness.
The distinction between radical and incremental innovation therefore highlights a fundamental tension in innovation management: what makes an organization efficient today may make it less capable of succeeding tomorrow. Understanding this tension—and being able to navigate it—is a core capability for leaders seeking to create lasting value.
Key Academic Perspectives in the Innovation Program
The Innovation Program is not based on a single unified theory, but on several complementary academic perspectives. Each of the key works represents a distinct perspective on innovation—what it is, how it emerges, and why it succeeds or fails.
Case Studies
The cases and examples used in Module II primarily served as analytical mirrors. They illustrated how innovation always unfolds within specific organizational and market contexts. Discussions of technological cannibalization, market uncertainty, and organizational inertia made it clear that even successful organizations often become victims of their own success.
Particular attention was given to the challenges surrounding internal innovation projects in large organizations: how new initiatives are often constrained by existing performance metrics, profitability requirements, and management models. This provided a natural transition to later discussions of incubators, corporate venturing, and alternative organizational structures.
Reflections and Discussion:
Reflection and discussion were not simply additions to the teaching in Module II—they were at its very core. Participants were continually challenged to consider their own role in innovation processes. Where is the line between rational management and necessary risk-taking? When does loyalty to existing business models become an obstacle to future value creation?
The discussions also revealed an important tension between leadership and entrepreneurship. Innovation requires freedom, but freedom without direction rarely produces results. Innovation leadership was therefore presented as a balancing act between control and trust—a theme that would become even more prominent through encounters with American innovation environments later in the program.
International Perspectives
Module II deliberately built toward an international perspective. Through the literature, lectures, and preparations for the study program in California, it became clear that many of the challenges associated with innovation are universal. At the same time, context clearly matters: access to capital, attitudes toward risk, and the pace of decision-making vary significantly across countries and markets.
This perspective served as a necessary corrective to both Norwegian complacency and uncritical Silicon Valley romanticism. Innovation cannot simply be copied—it must be adapted to institutional and cultural frameworks.
Insights Carried Forward in the Program
The most valuable takeaway from Module II was not any individual model, but a sharper analytical perspective. The ability to identify the type of innovation involved, the structural barriers that exist, and the organizational changes required became a recurring theme throughout the rest of the program.
This insight became particularly important in the project work and in preparing for San Francisco, where theory would meet practice in its most concentrated form.
Relevance Today
Viewed from today’s perspective, Module II remains strikingly relevant. Many of the same challenges continue to shape both the private and public sectors: established organizations struggle with radical change, while new entrants challenge existing structures through technology and new business models. Digitalization, artificial intelligence, and the platform economy have not made innovation easier—only more demanding.
Module II provides a language for understanding why the ability to execute is often the real bottleneck in innovation. The challenge is rarely a lack of knowledge or capital, but rather the ability to change structures, incentives, and mental models.
From Studies and Seminars to Today’s Knowledge Universe
The studies, seminars, and study trips documented on this page are part of the knowledge foundation behind The Invisible Capital. Topics such as customers, technology, innovation, digitalization, and value creation have shaped this journey over several decades—while these fields have continued to evolve.
At The Invisible Capital, we therefore continue exploring these questions through dedicated knowledge series. Here, earlier theories, research, and experiences are connected with more recent knowledge, emerging technologies, and the challenges facing people and organizations today.
Innovation
Innovation is not just about new ideas. Value is created when knowledge, technology, and ideas are developed into products, services, processes, organizational models, and business models that are actually put into use. The Innovation series spans from Schumpeter to modern innovation research and explores incremental, radical, disruptive, open, and user-driven innovation, among other approaches.
→ Explore the Innovation Series
The Customer
The customer is not simply the recipient of what an organization produces. In a competitive market, the customer plays a decisive role in determining whether an organization actually succeeds in creating value. The Customer series explores customer orientation, customer insight, customer experience, satisfaction, loyalty, trust, and human interactions in greater depth.
→ Explore the Customer Series
Value Creation
What does it really mean to create value—and who creates it? The Value Creation series spans from economic theory and leading researchers to a broader understanding of how people, expertise, institutions, businesses, and the public sector contribute to value creation.
→ Explore the Value Creation Series
Digitalization
Digitalization has evolved from individual technologies into a fundamental part of how organizations operate and create value. The Digitalization from A to Z series traces this evolution through the internet, the web, e-commerce, search, UX, social media, mobile, omnichannel, cloud, data, platforms, and digital transformation—leading to today’s AI First development.
→ Explore the Digitalization from A to Z Series
Artificial Intelligence
Artificial intelligence represents the next chapter in digital development. In our dedicated AI knowledge universe, we explore how artificial intelligence works, how AI finds and uses information, how it evaluates sources and websites, and what these developments could mean for people, organizations, and value creation.
→ Explore the Articles on Artificial Intelligence
Recommended Reading
Sustainable Innovation
A book about how innovation can be developed over the long term through collaboration, organizational culture, and sustainable thinking. Andrew Hargadon explores how organizations build environments that foster continuous learning, creativity, and innovation over time.
