| **Level of Innovation** | **Definition** | **Core Challenge** | **Key Insight / Strategy** | | ----------------------------- | -------------------------------------------------------------------------------------------- | ----------------------------------------------------- | ---------------------------------------------------------------------------- | | **Informative / Incremental** | Small improvements to existing products or processes; enhances but doesn’t change the system | Diminishing returns; tunnel vision on current success | Balance short-term gains with long-term shifts in customer needs | | **Transformative** | Significant change within existing or adjacent frameworks; a pivot or redefinition | Human resistance to change; skepticism and inertia | Anticipate resistance, build trust, and guide stakeholders toward adoption | | **Formative / Radical** | Creation of entirely new markets or categories; reshapes customer behavior | Customers appear indifferent due to unfamiliarity | Detect hidden “nonindifference,” educate the market, reveal unmet deep needs | ## Informative / Incremental Small-scale improvements or extensions of an existing product or process that enhance what already exists without changing the overall system. *Example: a railroad company upgrading its trains for better speed or efficiency – the core service (rail transport) remains the same.* Incremental innovations usually face **the challenge of diminishing returns**; as an industry matures, each additional improvement yields less benefit. Businesses fixated on their current successful products often miss shifts in authentic demand because they are too focused on incremental tweaks. --> balance short-term improvements with awareness of longer-term changes in customer needs ## Transformative a significant change in how a company or customers operate, *but within an adjacent or existing framework* the realm of company-wide change or pivot. *Example: a railroad company expanding into air freight or logistics – it transforms assumptions about the business but still serves the transportation market.* Transformative innovation encounters the *human resistance to change*. Even if an innovation addresses a real need, people may resist adopting it due to psychological barriers or habit. Innovators leading transformative changes must anticipate this and find ways to mitigate fears and convince stakeholders to embrace new ways. Authentic demand in this context often exists, but unlocking it requires overcoming inertia and skepticism. ## Formative / Radical the creation of an entirely new category or market – introducing something fundamentally novel that reshapes behavior. It “forms” a new situation for the customer. *Example: the advent of large-scale data management systems by companies like IBM, which created a market where none existed before.* [[伟大的科技发明创造以前不存在的需求]] the most challenging because customers might not understand the new solution initially, appearing indifferent or confused the key: to detect the underlying **“nonindifference”** in what looks like indifference (“the underlying nonindifference masquerading as indifference”) --> even if customers aren’t asking for anything, there may be unmet “deep needs” lying dormant discern the hidden needs (the subtle signals of authentic demand) and educate the market --> to show people a new “must-have” they hadn’t imagined. Result: Once customers experience the new solution, if it truly hits on a deep hunger, they will realize they *cannot go back* to the old way