Exploration vs Exploitation in Innovation

Here’s all you need to know about the capabilities of exploration and exploitation in innovation, as well as how they can drive the business vehicle to greater success.

What is exploration in innovation?

Exploration innovation is a capability that revolves around leaving the company’s comfort zone to investigate new markets, products, and business models. 

Whether it’s pioneering radical innovations or finding ways to engage with new demographics and markets doesn’t matter. Exploration supports the creative mindset needed to innovate while also removing the fear of failure, which can additionally facilitating a culture of experimentation.

Exploration in innovation also allows intrapreneurs to test ideas and kill bad ones early on while simultaneously learning from their mistakes. When used well, it can leverage success by looking at what others have done in new markets, as well as collaborations with other organizations or clients. 

The question is – who would you like to have as a part of your organization - And yet, this is exactly the route which business leaders would pay for, to have more of their employees take it since it inevitably builds character and endurance.

In short, then, exploration is about generating new innovations and testing ideas to determine whether they should be pursued. 

What is exploitation in innovation? 

In many ways, exploitation in innovation is a direct contrast to exploration, since it focuses on building on existing products and assets. It often relies on an incremental approach where the focus is on enhancement and efficiency. 

Given that an iterative approach is often required in innovation, many organizations  focus on exploitation - not least because it comes with reduced risk. Exploitation in innovation also relies on making data-driven decisions utilizing existing knowledge of the product and target audience.

Should your business target exploration or exploitation in innovation? 

In a word, both. 

It should already be clear that exploration creates a tolerance to risk but can redefine a business and allow it to enter new markets. Conversely, exploitation builds on existing successes and focuses on improved efficiency and scalability. 

The biggest barriers to innovation are cited as risk aversion and an inability to measure impact, but exploration can combat this issue. However, exploitation can be particularly useful for keeping existing audiences engaged. Likewise, the use of incremental innovations and iterations of existing products can also extend the lifespan of a product or service.

Exploitation innovation can be used to help solidify success while boosting productivity and efficiency while exploration helps organizations cope with changing market landscapes and expectations. Moreover, it builds a tolerance to uncertainty whereas exploitation remains especially focused on certainties.

Ultimately, both can improve the company’s bottom line, which is why neither should be ruled out. 

Upgrading innovation management through KICKBOX

Understanding the need for exploration and exploitation innovation is one thing, but adopting the right strategies to facilitate is another. KICKBOX by rready can turn innovation into a discipline while still encouraging exploration and creative mindsets. 

Crucially, the decentralized innovation management packages embrace company-wide innovation while actively supporting both exploration and exploitation in innovation.