The Truth About How Companies Innovate
Innovations take far less time than you might imagine when you get the right people to combine the right elements. Although numerous myths prevail about innovations, many of them are far from correct, according to Andrew Hargadon, the director of technology management programs at the Graduate School of Management at University of California, Davis. He points out that the great inventions of the past were not developed in secrecy, and were not created by a sole inventor. Instead, most of the great inventors, including Thomas Edison, Alexander Graham Bell and Steve Jobs, brought together the best elements of existing technologies to which their network connections gave them access.
Hargadon says these and most other great innovators use or used a process he calls "technology brokering" to invent. This process is based on recombining existing ideas, like Elvis Presley mixing country and western music with rhythm and blues to revolutionize rock and roll, or Henry Ford and his colleagues sparking the revolution of mass production by combining the machines, ideas and people developed in other industries.
Hargadon conducted an eight-year study of how innovation really happens, and identified three innovation strategies that work. These are:
- Technology brokering firms. Hargadon points out that Thomas Edison's Menlo Park research lab produced over 400 patents in just six years, including fundamental advances in telegraphy, telephony, phonographs, generators, mimeographs and light bulbs. The lab succeeded because of its connections to a range of markets and the ability to find new markets for the emerging technologies. Modern technology brokering firms similarly innovate by moving between markets and being the first to see how the existing ideas of one market can be converted into innovations in another.
- Technology brokering groups.Groups within larger firms can pursue dedicated technology brokering strategies to create novel solutions within any one division by learning about and combining the best ideas across the organization.
- Technology brokering projects. To exploit opportunities for technology brokering, firms must make major changes in the existing networks within and with their environment. GM created its Onstar venture to integrate cellular telephony into automobiles by building a focused team that connected divisions across GM and with outside technology and service providers.
How Breakthroughs Happen also focuses on the advantages that a strategy of technology brokering provides to experienced companies and entrepreneurs who are pursuing innovation. It also drives home the point that technologies are formed by tightly arranged combinations of people, ideas and objects, and describes how innovation is a process of taking apart and reassembling these elements in new combinations.
Ford Brings It All Together
To demonstrate the breakthroughs and the advancements that can be made when technologies that already exist are duplicated in another field, or reapplied to other industries, Hargadon provides a detailed look at how the Ford Motor Co. innovated the assembly production line by using the "disassembly" lines of the Chicago meatpackers as a model, and borrowed a system for casting iron parts from the Westinghouse Airbrake Co. Ford's engineers also adopted ideas and conveyor equipment that granaries and breweries had been using for more than a century to move materials around.
How Breakthroughs Happen also points out how many revolutionary innovations or discoveries come from not just a single "inventor," but are the result of two people working closely together, such as Steve Jobs and Steve Wozniak, or Bill Gates and Paul Allen. This concept even stretches back to Thomas Edison, whose vision and salesmanship was complemented by Charles Batchelor's mechanical skills.
To illustrate the importance of technology brokering in a modern organization, Hargadon uses numerous examples from the past and present to describe how brokers bridge otherwise disconnected worlds and the ways firms can exploit the lessons learned by others who have built networks that connect the people, objects and ideas from different worlds in the pursuit of innovation.
Why We Like This Book
How Breakthroughs Happen opens up the universe of possibilities that are available when the resources of different industries, firms and divisions are brought together and old ideas are applied in new ways. Hargadon's expert insights offer exciting tips about building new networks and recombinations. While examining successful breakthroughs and processes, Hargadon offers useful strategies that can help managers turn their firms into invention factories.