Know more how to Balancing incremental and radical innovation by using this guide

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Thanks to the internet, the marketing landscape is rapidly changing and evolving. Prior to the advent of the internet, changes in marketing used take months, if not years. However, now it happens within days, sometimes even in minutes. Hence, as a digital agency, it is imperative you are aware of the marketplace trends and take measures to stay ahead of these trends by using the right technologies and resources to meet the changing customer needs.

Making Innovation Your Cornerstone

While innovation is important for a digital agency to survive and thrive, it is necessary you distinguish between incremental and radical innovation. Also, you need to have a fine balance between the two types of innovation so that you can meet your customers’ needs and also use your resources optimally.

Balancing incremental and radical innovation for your digital agency

As a digital agency, your talent is your competitive edge. It is necessary to create an environment where your staff can flourish and bring out the best in them. This means nurturing their capabilities, energy and creativity. This is why it is necessary to find the perfect harmony between incremental and radical innovation.

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Understanding Incremental Innovation

A digital agency cannot rest on its laurels. It is important that you make your existing services more competitive. This can be done by improving its features and perhaps reducing its costs using a variety of measures. This type of innovation is known as incremental innovation and more often than not, organizations opt for it as it involves low risks and level of uncertainty. Usually, you cannot go wrong with incremental innovation.

Gmail is a good example of incremental innovation. It is the most popular email service and there is a reason for it. When Google launched Gmail, it came with few features. However, people used it because it delivered emails quickly without subjecting users to a flurry of ads. As the popularity of Gmail grew, Google added more features, thereby improving it and making the experience better for users.

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Google has used the same concepts for its other products, like Chrome, the internet browser and Google Maps. The technology giant excels in introducing simple products into the market and then works to improve their features. This has proved to be a successful model of incremental innovation.

However, don’t depend solely on incremental innovation to market your services, as a digital agency. It can backfire. Take the example of Kodak, the leader in photography. It used only incremental innovation to improve traditional film. However, Kodak lost it when radical innovation came into the photography marketplace and changed the way people clicked and stored photographs. So, Kodak became superfluous. Had Kodak also invested time and effort in radical innovation, it would have still been a contender in the photography industry.

What is Radical Innovation?

Whether you are digital agency handling small or big accounts, it is important you spend time exploring new technologies. This can be risky and result in uncertainty, but if you find the right technology, it can prove to be extremely beneficial.

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As strange as it may sound, radical innovation depends on incremental innovation to a certain extent. It uses the refinements and modifications in technologies to come up with something new, unique and different. However, this method of innovation has a fair amount of risk associated with it and that is why smaller organizations and start-ups tend to be more active in radical innovation.

The good news with radical innovation is that your digital agency will not have to compete with other agencies for market share. You can create your own niche market, and you will be amazed at the return on investment. Take the example of Uber. It has created its own market and caters to certain segment that other taxi services do not cater to. Typically, the pay off for radical innovation is much more than what you would get with incremental innovation.

However, you have to realize that radical innovation is a lengthy process and may have set backs. It requires an informal approach and your model should be flexible as it is steeped in uncertainties. Once the uncertainties have been dealt with or minimized, the model can become more formal and can be viewed from a business perspective.

Balancing Incremental and Radical Innovation

Your digital agency needs to find the right balance between incremental and radical innovation. You can do this by dividing your in-house resources into two. Make sure your projects related to radical innovation compete with other radical innovation projects rather than incremental innovation projects.

This means you need to lay emphasis on product development if you want to ensure your radical innovation offers results. The amount of support you offer product development will be proportionate to the results. However, most digital agencies are averse to risk. They rather improve existing services to meet their business goals than opt for a new product or service development. If you put aside the risks involved, you will be more successful with radical innovation. While it may not always offer the results you seek, it will definitely create a positive impact on your business and thereby your clients.

Here are some things that you can do to balance incremental and radical innovation in your digital agency:

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Be Ambidextrous

As a leader, you are capable of using creativity and imagination with business analysis. That is how leaders functions. However, in most businesses, including digital agencies, business analysis is separate from creativity and imagination. Basically, this means that you will have a team that will come up with creative ideas and then you will have another team that will analyze the creative ideas from a commercial point of view. Invariably, the creative ideas will be shot down as the commercial experts will not view them favorably. So, to avoid this from happening, create a team that brings together creative and analytical skills.

Using “both sides of the brain” that you have in your organization will ensure that a concept is taken from the drawing board to the testing phase and finally to the scaling phase. This way, the creatively inclined staff will have more freedom and leeway to come up with radical innovations, and see it through all the way rather than having their innovations shot down because analysts do not find them commercial feasible.

This teamwork will come to good stead and allow you balance both innovations without creating a bump in the path of the innovations.

Use the 70-20-10 Model

Studies by researchers have shown that when a company strikes the right balance between exploration and exploitation, it is ensures success. Divide your agency budget in such a manner that 70 per cent is dedicated to incremental innovation. This way, you will be able to offer more value to clients and ensure client satisfaction. So, since incremental innovations rarely fail, you know your agency is safe.

Out of the remaining 30 per cent, allocate 10 per cent to projects that are close to incremental innovation and the remaining 20 per cent to radical innovation projects. This way, when your risks are dispersed between incremental, adjacent and radical initiatives, your agency will have better performance. Your short-term goals will be taken care of and your long-term bets will be hedged.

This model is commonly used in digital marketing and can be a boon for digital agencies. The 70-10-20 rule is used for social media campaigns and for content marketing. This rule helps you react to new market trends and developments to leave your competition behind. It helps you optimize the most effective tools to ensure you offer stellar service to your clients.

You can use this rule to divide your spending or output so that you can identify the areas of priority. That way, you can allocate the budget these areas require.

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The 70-10-20 model is also known as Google model as that is what Google uses. In fact, Larry Page has gone on records to state that this model is what the technology giant uses and all its breakthrough and innovative products come from the 20 per cent allocation of funds to radical innovation projects. So, if Google can succeed using this simple model of exploration and exploitation, your digital agency can also practice and realize the efforts in the short- and long-term.

Use the Right Technology

To spur innovation, you need the right technology. As a digital agency, you should be using technology to work smarter. Hence, take a look at the technology that you use to offer your clients the services they require.

For instance, you can use TribeLocal, a web-based local SEO platform, to offer your clients stellar local SEO and marketing services. This technology can help in incremental innovation of your local SEO and digital marketing services. It allows you to not only get your clients listed in 100+ local, niche and national directories, you can even integrate it with your clients’ Google My Business listings to find out how their target audience find them on Google and what steps they take after finding the listing. By analyzing this data, you can then improve local SEO and then generate whitelabel reports to show your clients tangible results.

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TribeLocal allows your agency to respond to reviews on behalf of your clients and this helps in online reputation management. It also reduces the cost of local SEO by giving you access to key metrics through a single dashboard while also ensuring you can access business directories, perform local SEO analysis, check and monitor local search engine rankings and respond to reviews irrespective of the publisher. In addition, you also get a local SEO expert to help you out.

Using the right technology helps you in continuous improvement, ensures optimal utilization of resources, allows you to offer higher quality services to clients and provides greater strategic value. This, in turn, leads to enhanced customer satisfaction and better rate of customer retention.

Technology plays a major role in both incremental and radical innovation. Hence, you should ensure you have the right technology to support your talent so that they can improve, create and innovate without being hindered.

Test and Launch or Launch and Learn?

As a digital agency, being aware of the market trends and knowing the target audience and their needs is important. It is only then that you can create a local SEO campaign to ensure you can cater to that audience. While market research is important as it helps you get to know your target audience, launching a new service or tool will help whether it is an incremental innovation or radical innovation.

Typically, if you are improving an existing service or tool, testing and launching is the way forward. You can simulate the market conditions and then try to eliminate the bugs. Thereafter, you are ready to market the product to existing and prospective clients. This is because your target audience will be already familiar with similar services and tools and will not need to be educated. Rather, you will have to prove to them that they will benefit in some way by using the new, improved service or tool. However, if your agency has a brand new product, you will not be able to test it as it has never been used before. Hence, testing and launching is not the way forward for radical innovation.

For a radical innovation product, opt for launching and learning. Since it is a brand new service or tool being introduced by your digital agency, it is important you educate your target audience. The new service or tool has to gain acceptance in the market and when a business is unfamiliar with a new product, it has to be educated. It is only after you do this will you be able to create a niche market for the service or tool. In fact, launching and learn is the mantra used by the digital industry and it has been successful so far.


Innovation is necessary in a digital agency. It helps you improve your existing services and tools and also allows you to come up with new services and tools to ensure your clients enjoy the maximum benefits. However, finding the right balance between incremental and radical innovation is important.

We suspect that’s because ideas are only the seeds of innovation. Put good ideas in a bad company and they die. That’s why so many acquisitions of innovative companies fail: new ideas get buried in the acquirer’s bureaucracy and creative people from the acquired company get frustrated.

Innovation is a complex process. Companies need to create an innovation system that includes all five of the factors we identified. But innovation can’t be a purely logical, left-brain enterprise. Companies that cultivate both kinds of thinking—left brain and right brain, creative and commercial—to inform their innovation initiatives are likely to outstrip their competitors in creating great new offerings.

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