Architectural innovation allows businesses to expand their customer base or reach new markets without inventing new technologies or products.
Architectural innovation gives businesses the power to expand their customer base or reach new markets without inventing new technologies or products. Every business is innovative in its own way.
While people tend to think that all innovation involves technological breakthroughs and exciting new products, most innovation involves the use of existing technologies. Here is what you should know about architectural innovation.
Architectural innovation was introduced by Professor Rebecca Henderson and Dean Kim Clark of Harvard Business School in 1990. It involves the reconfiguration of existing technologies to deliver more value to an existing market or target a new one.
With architectural innovation, you use the lessons and technologies from an existing product or service, break it down, and rebuild it for a new audience. It typically refers to innovations related to the architecture of a product without drastically changing the components or technologies. Companies change or modify the way that components link or connect but typically remain unchanged.
Architectural innovation is a concept that was introduced a little over 30 years ago. However, innovation has been the driving force behind the production of consumer goods and services for hundreds of years. Innovation experts typically separate innovation into two categories – incremental innovation and disruptive innovation.
Incremental innovation is the most used form of innovation. It uses existing technologies to deliver more value to customers within an existing market. Smartphone manufacturers use incremental innovation, releasing slightly improved versions of existing products each year.
Disruptive innovation involves the use of new technologies or products to disrupt or replace an existing market. The growth of Uber is an example of disruptive innovation, as the company disrupted the taxi industry with the introduction of its ride-hailing app.
Architectural innovation differs from these forms of innovation in several ways. As with incremental innovation, architectural innovation uses existing technologies. However, it can be applied in an existing market or a new one.
A comparable form of innovation is component innovation. It also involves the use of existing products or services marketed to a new customer base. However, instead of redesigning the architecture, companies redesign the components.
The main advantage of architectural innovation is that it comes with limited risks compared to other forms of innovation. As architectural innovation depends on existing technology, the costs are reduced. Companies are not researching and developing new technologies. They are finding ways to improve the architecture of existing components.
Making things lighter, smaller, or more user-friendly also provides a competitive advantage. Architectural innovation can lead to the development of products that capture a larger share of an existing market.
Moreover, it further provides a way to expand into new markets. Companies that produce products for a commercial market may redesign the architecture of existing items to target the general consumer market. This frequently occurs in manufacturing and information technology.
Products that were previously only available to large businesses eventually become more affordable and consumer-friendly. Examples include sewing machines, computers, and printers.
Architectural innovation has a couple of limitations. For example, at some point, redesigning the architecture of a product provides diminishing returns. You can only make something so much smaller or lighter without waiting for the next innovative breakthrough. To deal with the technological constraints, businesses may attempt to develop the disruptive technologies needed to continue improving the architecture of a product.
Component innovation relies on improvements to existing components, which may eventually allow for greater architectural innovation. Architectural innovation may also involve converting a product for distribution in a new market, which also presents a few challenges. The existing product may not immediately appeal to consumers in the new market. Consumers may also prefer the comfort of established brands.
Appealing to a new group of consumers often involves trial and error. Companies may need to modify their product or service several times to match the expectations of consumers in the new market.
Despite a few challenges, architectural innovation remains a highly efficient and potentially profitable business model. Many businesses have used this form of innovation to bring their products to a wider audience.
The development of multi-core processors is an example of architectural innovation. Computer chip manufacturers used existing technologies but improved the architecture of the design to combine the circuits of two or more processors. Multi-core processors are now the standard in the world of computing. Most smartphones released within the past two or three years now have at least a dual-core processor.
After the introduction of smartphones, companies raced to release sleeker, slimmer designs. Each advancement that allowed manufacturers to decrease the form factor of the phone is an example of architectural innovation.
Architectural innovation also helped desktop printers become a common household item. By the late 1980s, most offices had large commercial printers and photocopiers. However, the typical home office had a dot matrix printer.
Improving the architecture of printers allowed companies to make smaller, more affordable inkjet and laser printers. They were also able to incorporate other existing technologies, such as scanning and faxing.
Memory foam is another example of architectural innovation. The technology was developed by NASA and originally sold to the medical industry before becoming a popular fill material for pillows and mattresses.
Finding ways to change the architecture of something to appeal to a wider audience can make a product more profitable. However, before redesigning the architecture of a product, companies need to analyze the potential room for improvement and market sentiment.
First, determine whether the architecture of the product can support additional changes. Can you make the product smaller, lighter, or more convenient for consumers? If the architecture has room for improvement, analyze consumer interest in the product. Assess market sentiment to determine if consumers are ready for your product.
Lastly, it requires testing. After introducing a product to a new market, you may need to modify the design a few times before consumers show interest.
