The purpose of this research was to discover how a process for idea and conceptdevelopment- based microfoundations of problems appears in order to develop radicalinnovation. In other words, how specific and valuable problems can be identified andformulated in order to facilitate the idea and concept development phase. In order to executethe purpose this research relied on an inductive case study, where the case organization wasselected based on their innovative capabilities and their successful and award winningprojects. The case study, in turn, was performed through a multiple project study where 26interviews were performed and analyzed. Further, observations and workshops wereperformed, and documented material was analyzed in order to confirm the results andcomplement the analysis. The result shows that in order to develop radical ideas and conceptsand create long term value it can be essential to find, formulate and solve specific problems.The result is presented in a process, which consists of the overall phases, problem mapping,problem creation and problem solving. These phases have in turn been divided into moredetailed phases as insight collection, problem finding, problem formulating, idea screening,idea refining and concept development. Prior literature emphasizes the importance of radicalinnovation but does not explain in detail how radical ideas and concepts are created. Ourresult extends the prior literature by declaring how microfoundations of problems cangenerate radical ideas and concepts. In contrast to the normative frameworks on a moregeneric level given in the prior literature, we add a new dimension for the development ofradical idea and concept development and describe in detail how it is created. The managerialimplications are that the criteria and extension of the phases have to be adapted to eachspecific situation. However, our process presents the essential criteria to be considered inorder to create radical innovation. What to do, how to do it and the desired output of eachphase is described to help managing the process regardless of dimension of the radicalinnovation.