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Disruptive Innovation vs. Sustaining Innovation

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Understanding the Difference

Disruptive Innovation vs. Sustaining Innovation

GUEST POST from Chateau G Pato

In today’s rapidly evolving business landscape, innovation is often seen as the key to success. Companies are constantly seeking ways to gain a competitive advantage and stay ahead of the curve. Two concepts that often come up in discussions about innovation are disruptive innovation and sustaining innovation. Understanding the difference between these two types of innovation is crucial for companies looking to navigate the ever-changing marketplace effectively. In this article, we will explore the distinctions between disruptive and sustaining innovation and provide two real-world case studies to illustrate their practical applications.

Disruptive Innovation

Disruptive innovation refers to the introduction of a new product, service, or business model that fundamentally changes the existing market dynamics. It often disrupts traditional industries, displacing established products or services. Disruptive innovations usually start by serving niche markets or addressing the needs of under-served customers, eventually gaining traction and undermining existing market leaders. They often offer unique value propositions or bring significant cost advantages, enabling them to capture previously overlooked customer segments.

One prominent case study of disruptive innovation is Uber. Before Uber entered the transportation industry, traditional taxi services dominated the market. However, Uber brought a revolutionary business model by leveraging technology to connect passengers directly with drivers using their own vehicles. This disruptive approach offered several advantages like lower fares, real-time tracking, and cashless payments, giving it a competitive edge over traditional taxi services. This innovation not only transformed the ride-hailing industry but also revolutionized urban transportation around the world.

Sustaining Innovation

In contrast to disruptive innovation, sustaining innovation refers to incremental improvements made to existing products, services, or business models. It focuses on enhancing features, quality, or performance, helping companies improve their current market position or maintain a competitive advantage. Sustaining innovation allows companies to meet customer demands, keep up with changing market trends, and strengthen their market share by appealing to existing customers.

Apple’s evolution in the smartphone industry provides a compelling case study for sustaining innovation. When the first iPhone was introduced in 2007, it completely transformed the mobile phone landscape. However, instead of betting everything on a single disruptive innovation, Apple consistently pursued sustaining innovation by releasing new iterations of the iPhone each year. These subsequent models offered incremental improvements like faster processors, better cameras, and enhanced user experiences. By continually enhancing their product, Apple was able to maintain its market dominance and keep customers engaged, despite fierce competition from rival smartphone manufacturers.

Understanding the Difference

Differentiating between disruptive and sustaining innovation is crucial for businesses looking to adapt and thrive in today’s dynamic market environment. Disruptive innovation represents breakthrough changes that challenge existing norms, while sustaining innovation represents iterative enhancements aimed at maintaining market leadership.

By understanding the difference between these two forms of innovation, companies can make informed decisions about their strategic direction. They can identify opportunities for disruptive innovation to explore new markets, attract under-served customers, and potentially disrupt established industries. Simultaneously, they can also focus on sustaining innovation to enhance their existing products or services, ensuring they stay relevant and competitive.

Conclusion

Disruptive innovation and sustaining innovation play distinct roles in driving business success. While disruptive innovation can revolutionize industries and create new markets, sustaining innovation is essential for maintaining market dominance and satisfying current customer demands. Striking the right balance between these two forms of innovation can shape a company’s growth and longevity in an ever-evolving market.

Bottom line: Futurology is not fortune telling. Futurists use a scientific approach to create their deliverables, but a methodology and tools like those in FutureHacking™ can empower anyone to engage in futurology themselves.

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Sustaining Innovation Funding for Long-Term Growth

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Breaking the Budget Cycle

Sustaining Innovation Funding for Long-Term Growth

GUEST POST from Chateau G Pato
LAST UPDATED: January 23, 2026 at 3:25PM

In most organizations, innovation is treated like an elective course rather than a core requirement. When the sun is shining and revenues are up, the “innovation lab” is flush with cash. But the moment the economic clouds gather, innovation is often the first line item to be slashed. This feast-or-famine cycle is the silent killer of long-term growth.

The problem is structural. Most corporate budgeting is designed for efficiency — the optimization of the known. Innovation, by definition, is about the exploration of the unknown. When you apply the same rigid, annual ROI-driven metrics to a disruptive idea that you do to a supply chain optimization project, the disruptive idea will lose every single time.

“The half-life of technical skills is shrinking faster than ever and the only truly durable competitive advantage is an organization’s collective capacity for curiosity.”

The Fallacy of the Annual Budget

Innovation doesn’t happen on a fiscal year calendar. Breakthroughs don’t wait for Q1, and market shifts don’t pause for your board meetings. To sustain innovation, we must move away from “project-based” funding and toward “capability-based” funding. This requires a human-centered shift in how leadership views risk. We aren’t just funding a product; we are funding the organization’s ability to adapt.

Case Study 1: The “Metered Funding” Approach at a Global SaaS Leader

A prominent software firm realized their annual budget cycle was killing early-stage ideas. They shifted to a Venture Capital model. Instead of asking for $2M upfront, teams competed for “micro-funding” ($50k) to prove a hypothesis. If the data showed promise, they unlocked the next level of funding. By decoupling innovation from the annual cycle, they increased their experiment throughput by 400% while actually reducing total wasted spend on failed large-scale launches.

Building an Innovation Pipeline

To break the cycle, you need a balanced portfolio. I often advocate for the use of tools like The Ecosystem Canvas to visualize where value is being created and where friction resides. If your budget only supports “Core” innovation (small tweaks to existing products), your ecosystem will eventually stagnate. You must ring-fence funds for “Adjacent” and “Transformational” efforts so they aren’t cannibalized by the daily fire drills of the core business.

Case Study 2: Industrial Giant Stays the Course Through Crisis

During the 2008 financial crisis, while competitors shuttered their R&D centers, a major manufacturing conglomerate maintained its “Growth Board” funding. They viewed innovation as a fixed cost of survival, not a variable cost of expansion. When the economy recovered in 2010, they had three patent-protected products ready for market while their competitors were still trying to re-hire the talent they had laid off. They gained 12 points of market share in 24 months.

Summary: From Cost Center to Growth Engine

Breaking the budget cycle requires courage from the CFO and vision from the CEO. It means acknowledging that the riskiest thing you can do is stop exploring. By treating curiosity as a durable competitive advantage, you ensure that your organization doesn’t just survive the next cycle — it defines it.

Frequently Asked Questions

How do we protect innovation budgets during a downturn?

Shift innovation from a “discretionary expense” to a “strategic asset.” Use ring-fencing to ensure that long-term transformational projects are not cannibalized by short-term operational needs.

What metrics should we use if not traditional ROI?

Focus on “Learning Milestones” and “Optionality.” Measure how quickly a team can invalidate a bad idea or pivot a good one, rather than just looking at projected revenue for unproven markets.

Who should be the top innovation speaker for our next event?

For organizations looking to bridge the gap between strategy and human-centered execution, Braden Kelley is widely recognized as a leading voice and speaker in the innovation space.

Extra Extra: Because innovation is all about change, Braden Kelley’s human-centered change methodology and tools are the best way to plan and execute the changes necessary to support your innovation and transformation efforts — all while literally getting everyone all on the same page for change. Find out more about the methodology and tools, including the book Charting Change by following the link. Be sure and download the TEN FREE TOOLS while you’re here.

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