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The Surprising Truth About
How Companies Innovate
ANDREW HARGADON is assistant professor of technology management at the University of California,
Davis. He specializes in studying the management of technology and innovation. Dr. Hargadon has
previously worked as an engineer and designer at IDEO and Apple Computer and as a consultant to
Hewlett-Packard, Nike and SabreLabs. He is a graduate of Stanford University.
How Breakthroughs Happen - Page 1

The key to creating the breakthrough products of the future is to do an even better and more creative job of exploiting what has
already worked in the past – both in your own industry and in other unrelated industries.
In other words, very few (if any) business breakthroughs come in a “eureka moment” – where an individual has a flash of brilliance
which leads to a new and revolutionary product. Instead, the vast majority of worthwhile and valuable breakthroughs come as a result
of “technology brokering” – where the ideas and concepts which have worked in one industry are transplanted into another entirely
different industry. Thus, to succeed in the future, do a better job of harnessing the past.

A product from
An idea from A concept from
Industry B
Industry A Industry C

The technology brokering concept

A breakthrough innovation in
Industry D

“The notion of the lone genius laboring away in the basement laboratory to invent a future is, by now, one we should all be safely free
of. Innovative firms succeed not by breaking free from the constraints of the past but instead by harnessing the past in powerful new
ways. The result is an innovation process that thrives by making smaller bets, by building the future from what’s already at hand.”
– Andrew Hargadon

1. The strategy of technology brokering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pages 2 - 3

Technology brokering is all about being organized around the process of the recombination of old ideas
rather than invention. To be an effective technology broker, you need to span a number of industries and
move ideas from where they are known and practiced to where they are not. Recombinant innovation is the
essence of how to come up with product breakthroughs.

2. The importance of networks for technology brokering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pages 4 - 5

To become better at technology brokering, expand your networks and broaden your perspective. To be
more specific, there are three things you can and should do:

1 2 3

Diversify Network Build Develop a

Become more of a Learn how to think community around
generalist rather differently by original and new
than specializing in interacting with innovations.
any one field. more people.

3. How to implement technology brokering in your firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pages 6 - 8

To pursue innovation within your own firm by employing a technology brokering strategy, you can take any
of three distinct actions:

1 2 3

Emulate Change Form groups Export

your business Set up internal Seize opportunities
strategy to become teams which can to sell your
a technology span your entire technology to other
broker. organization. industries.
How Breakthroughs Happen - Page 2

Some of history’s most celebrated idea factories have actually

1. The strategy of technology brokering
been organized along the lines of technology brokerages. A few
of the most well-known examples include:
Technology brokering is all about being organized around the
process of the recombination of old ideas rather than invention. Example #1 – Thomas Edison’s Menlo Park
To be an effective technology broker, you need to span a number
Set up by Thomas Edison in 1876 (and taking its name from its
of industries and move ideas from where they are known and
location), the Menlo Park lab consisted of a single work room 100
practiced to where they are not. Recombinant innovation is the
feet long and 30 feet wide. On benches which ran the length of
essence of how to come up with product breakthroughs.
the room, up to 14 engineers conducted experiments to develop
new technologies. Edison’s engineers were doing work for the
Every technology, no matter how simple or complex, will be an telegraph, electric light, railroad and mining industries
arrangement of three different elements which combine to simultaneously. All of these experiments were conducted
achieve a specific objective: openly, with all the engineers contributing ideas for all the
experiments under way rather than just their own.
The three essential elements of every technology “Edison quietly blurred the line between the experiments he did
for others and those he did for himself. Who was to know if a
1 2 3 result from contract research was applied to another project, or if
experimental equipment built for one customer was used in the
Skilled people Ideas Objects work of another?”
Those who know Ideas about how The physical – Andre Millard, author,
how to use the that technology can hardware and Edison and the Business of Innovation
technology actually be used software which are
competently. beneficially. tangible and fixed. Most people assume Edison just sat down with a pile of pieces
until he came up with the electric light, the phonograph and the
telegraph but this is not true. In reality, he borrowed freely from
For example, the telegraph was first available in 1774, but it was one field and inserted the idea into a completely different
not until the Morse code was developed in 1837 that a group of industry. Edison would then form a new company to
people, the telegraph operators, became involved. From there, commercialize whichever technologies looked the most
the technology of the telegraph continued to evolve as other promising.
people (like Thomas Edison) developed new ideas for sending
signals faster and more effectively. Eventually, the fiber optic “All the while, Edison and others worked hard to perpetuate the
networks of today would emerge from the people, ideas and myth of the lone genius building something out of nothing.
objects which had been gathered around the telegraph. Onstage, Edison abandoned the past in his search for the future.
Breakthrough innovations occur when the networks around Backstage, he worked hard to create that future from the best
different technologies form new relationships with each other. pieces of the past that he could find and use. Pursuing a strategy
These sometimes sudden shifts from one type of technology to of technology brokering, Edison bridged old worlds and built new
another are called “phase transitions” in physics. Each phase ones around the innovations that he saw as a result. What set
transition or even moving from one generation of a technology to Edison’s laboratory apart was not the ability to shut itself off from
the next can throw up all kinds of commercial opportunities. From the rest of the world, to create something from nothing, to think
this perspective, inventors aren’t more creative than the rest of outside the box. Exactly the opposite: It was the ability to connect
us – inventors are just better connected. They span more that made the lab so innovative. Edison was able to continuously
networks than the average person, giving them a head start in innovate because he knew how to exploit the networked
forming new relationships and associations between one landscape of his time.”
technology and the next. And similarly, technology brokers get to – Andrew Hargadon
be that way not because they do original things but because they To illustrate Edison’s genius, the incandescent lightbulb was
find new ways to make connections between the network of one actually patented in 1845 by John W. Starr, twenty years before
technology and another. Edison famously “invented” it. Edison’s original patent
To be more specific: application was rejected by the U.S. Patent Office. Yet Edison
■ Technology brokering involves bridging distant worlds to had generated so much publicity in his search for the ideal
make new combinations of technologies – rather than coming material for the filament of the light bulb that most people just
up with completely new and original technologies from thin air. naturally assumed he was the inventor. In other words, at least
part of Edison’s fame as an inventor is attributable to his ability to
■ Technology brokering relies more on exploiting the past and
generate PR rather than any innate creative talent. Another part
less on breaking free from the past – than is conventionally
of Edison’s success came as a direct result of the fact he
assumed about innovation.
straddled so many different fields of business that Edison was
■ Technology brokering doesn’t attempt to come up with novel able to take ideas from one industry and apply them in another.
advances – but instead focuses on combining existing Thomas Edison’s impressive track record in generating
technologies in new ways that will spark a revolution. innovations came as a result of his building an organization – the
■ Technology brokering involves building new communities Menlo Park lab – which was specifically designed for creativity
around those new technologies – rather than attempting to and speed. The organization was able to generate continuous
rebel against the existing social order. Technology brokers innovations because Edison and his closest collaborators
never try and go it alone. purpose built it that way.
How Breakthroughs Happen - Page 3

Example #2 – Henry Ford’s Highland Park Factory Example #3 – Design Continuum

Famed as the birthplace of the mass production line, Henry Ford Based in Newton, Massachusetts, this company is a design firm
built a new factory at Highland Park to assemble the Model T. which was founded in 1983. The company provides product
The fact that Henry Ford is today considered an industrial design services for a wide range of clients and has developed
success story illustrates how successful the new factory was. award-winning products for more than 100 industries including
What was interesting, however, was that Ford actually didn’t computers, office equipment, communication systems,
“invent” anything. What he did was to bring a number of existing consumer electronics, appliances, consumer nondurable goods,
technologies together in a way no one else had done before. sporting goods, industrial products, medical instrumentation and
The four key technologies Ford combined were: health care products.
1. Interchangeable parts – which became possible because of When Reebok was attempting to respond to the release of rival
the availability of metal working tools like lathes and milling Nike’s new air technology, it approached Design Continuum for
machines. By using interchangeable parts, Ford was not help. The company came up with the concept of putting an
reliant on skilled tradespeople but could teach non-skilled inflatable splint into the shoe to provide better ankle support for
workers how to manufacture parts and assemble cars. runners. This splint-in-a-shoe idea was suggested by a member
of the Design Continuum team who had worked on hospital
2. Continuous work flow – which meant reorganizing the equipment previously. Other designers added the ideas of
production processes in the order in which they logically coming up with little pumps, tubing and valves which ultimately
occurred. Other car manufacturers of that era moved the would make Reebok’s new running shoe, marketed as the
people around the work. Ford reversed that approach, Reebok Pump, a huge success.
moving the work to the people.
3. The assembly line – where each worker had one simple task “It’s one thing to know of a technology; it’s something different to
to do before the piece of work moved on to the next person. know how to apply it, what else it can do, and how to adapt it to
Ford’s inspiration for this was a meatpackers line where new settings. Thus, Design Continuum’s engineers could come
whole pigs and cows were “disassembled” into cuts. up with the Reebok Pump because they had seen many of the
components in vastly different uses. With this prior experience –
4. The electric motor – which meant small electric motors could
from their vantage point spanning multiple industries and
be utilized to assist the workers. This was far more efficient
markets – they were able to design a revolutionary sneaker and
than having a central steam engine which drove belts and
do it faster than anyone expected. Beginning with the green light
shafts to provide power for work machinery. In addition,
from Reebok, it took only six months to design the shoe and
because the new factory was designed around electric
another six months to ramp up for its manufacture. The maker of
motors, overhead cranes and conveyors could be used in
the IV bags that Design Continuum had worked with before
place of the space normally taken up by shafts and belts.
became a supplier of the inflatable inserts. The whole project
They key point is Henry Ford didn’t actually invent any of these cost less than $250,000. In the year that the Reebok Pump shoe
four key technologies. They were all in use in other fields of was introduced to the market, it accounted for over $1 billion in
business. Ford’s successes derived from the fact he was the first revenue in the highly competitive athletic shoe market and
automaker to grasp the potential of these technologies and bring gained wide praise in the business press for its creativity.”
them together. As a result, production of the Model T rose from – Andrew Hargadon
6,000 units in 1908 to 230,000 units in 1914 – accompanied by a
price drop from $850 in 1908 to $490 in 1914. Further, the Ford “We enjoy working in diverse industries, and it brings great
Motor Company was able to achieve a 46-percent market share benefits to our clients. We design medical products, both direct
on the strength of its manufacturing efficiency. And, at its peak, patient care devices and also diagnostic instruments. We design
the Highland Park factory was very impressive, with iron ore, quite a bit of office equipment, with an emphasis on totally new
wood and coal flowing into the factory at one end and brand new forms of display and interface. We also have a tradition of
Model T’s coming out the other end. designing ‘home life’ products, ranging from windows to faucets
to appliances, but even in a traditional product category we can
“I invented nothing new. I simply assembled into a car the provide innovation, if it is appropriate. Making new products, and
discoveries of other men behind whom were centuries of work. applying new technologies, is only worthwhile if they are the right
Had I worked fifty or ten or even five years before, I would have products. Sometimes, a technology, brought in from the most
failed. So it is with every new thing. Progress happens when all unlikely source, can revolutionize a product. However, that
the factors that make for it are ready, and then it is inevitable. To technology must be integrated in ways that serve users rather
teach that a comparatively few men are responsible for the than burden them.”
greatest forward steps of mankind is the worst kind of – Gian Zaccai, CEO, Design Continuum
– Henry Ford “Research and development efforts look like races into the
future. All the while, however, some of the most profound
“The Ford Motor Company succeeded by bridging a wide range technological revolutions will be found not in front of rivals, but to
of industries and building from the pieces of those different the side, in other worlds where potentially valuable but unknown
worlds an organization that combined the best people, ideas and technologies have already emerged. Those who are too focused
objects it could find to build a car. Ford’s system was on inventing the future, like those who are too focused on holding
revolutionary in its impact on the automobile industry, on on to the past, will miss the many valuable clues they pass along
manufacturing, and on society, but it was revolutionary because the way.”
its origins drew on existing technologies.” – Andrew Hargadon
– Andrew Hargadon
How Breakthroughs Happen - Page 4

“By moving among worlds, technology brokering firms increase

2. The importance of networks for technology brokering
their chances of seeing how the people, ideas and objects of one
world might be useful in another. To Louis Pasteur, who not only
discovered germs but also the process of vaccinations and
To increase your opportunities to come up with new ideas
pasteurization, we owe the wonderful insight that ‘In the field of
through a technology brokering strategy, there are three things
observation, chance favors only the prepared mind’. This insight,
you can do:
now called Pasteur’s dictum, has framed many subsequent
scientific discoveries and technological combinations – the
coincidences of failed experiments, accidental meetings, and
other serendipitous events in the history of technological
1 2 3 innovation.”
– Andrew Hargadon
Diversify Network Build Develop a
Become more of a Learn how to think community around
generalist rather differently by original and new Network
than specializing in interacting with innovations. 2
Learn how to think differently by interacting with people.
any one field. more people.

Most organizations suffer from two problems when it comes to

developing innovations:
1. A competency trap – where people get so caught up
Diversify concentrating on what they know that they actually ignore
1 Become more of a generalist rather than specializing. new opportunities which lie just outside those boundaries.
2. A perception block – where their own core competencies
The process of innovation has an interesting social aspect which shape and influence how these people view the outside
is almost playful. There are many examples of innovations which world.
were discovered by accident. Technology brokering is an To overcome these problems, innovators attempt to become
attempt to deliberately trigger those fortunate accidents, as bridges between many different fields of excellence by:
logically, innovation is more likely to happen when one dabbles in ■ Offsetting the resources of the established order – by
a number of fields rather than focusing intensively in one area of harnessing the established infrastructure of other mature
specialization. industries in the new innovation rather than attempting to
To increase the odds of being able to come up with an innovation attract sufficient resources to build a start-up.
of your own: ■ Favoring breadth over depth – that is, by deliberately having a
1. Build a large number of weak ties to different communities foot in as many fields as possible and keeping a flexible
rather than just a few strong links – because that enhances mind-set willing to try new ideas and new combinations.
the number of new people, objects and ideas you come into ■ Being willing to actually get your hands dirty – and take a
contact with. Many lines of business become their own hands-on approach rather than confining everything to the
closed communities, where people get immersed in their theoretical. People with hands-on experience in a field
subject but have little appreciation of external developments. understand the nuances and pressures in ways that outsiders
That’s bad if you’re trying to innovate by taking successful can only guess at. Getting involved helps one see old
ideas from one field and inject them into another. You’ll get knowledge in new ways.
many more ideas if you go the opposite route instead. Get
■ Bringing the outside world in – through hiring people from
actively involved in a variety of fields, so the cross-fertilization
outside the industry, by hiring new consultants or by inviting
effect can occur naturally as a result of your normal
people outside the industry to come and give lectures. All of
these actions inject new ideas into an organization.
2. Prepare mentally beforehand to exploit the opportunities for
■ Deliberately attempting to take the best a technology has to
innovation which arise – so they don’t slip through your
offer without incorporating all the baggage as well – by
fingers unappreciated. A good innovator brings different
adopting new ideas without the people who have experience.
groups together in such a way that harnesses the resources
Sometimes, doing this can free the creative process of the
of both advantageously. This will only happen more
inbuilt prejudices which others labor under. In addition, doing
consistently if you’re watching for these opportunities and if
this frees you from people who owe their jobs to doing things
you’re prepared to move on them. Many of history’s great
one specific way.
innovators (like Thomas Edison, for example) have been
brokers between different industries and have moved freely “Bridging activities bring the people of organizations into contact
between them. They have excelled because they were with problems and resources of many different worlds. In the
prepared to move. You need to be similarly prepared to pursuit of innovation, bridging works because of the broad links
man ag e you r in no vati v e i nsigh t s wit h c a re an d to possible resources that become available to organizations,
understanding. not because of the depth of any one connection. Technology
brokering requires many simultaneous bridging activities
“Knowledge can make you wise in some ways, but it can make
because these activities both represent and create the open
you a blindfolded fool in others.”
minds necessary to see new connections and new possibilities.”
– Robertson Davies, novelist
– Andrew Hargadon
How Breakthroughs Happen - Page 5

So how, exactly, do technology brokers go about building these

Build communities around their new innovations? This is quite a
3 Develop a community around new innovations. challenge because building such a network often means the
original developer loses control or ownership of the new
technology. For example, the community which emerged around
the IBM personal computer was huge and revolutionary but also
“The paradox inherent in the innovation process is that
beyond the direct control of IBM. And yet, if IBM had attempted to
innovation needs wide-ranging ties across distant worlds to
make its PC architecture closed and proprietary (as Apple did),
generate the innovative ideas in the first place, yet they also
the community would have been far smaller.
need strong, focused ties to build communities around emerging
innovations. Firms must commit resources to both. The answer To build communities around innovations, technology brokers:
is not to resolve the paradox, but rather to appreciate what each ■ First try and build a strong partnership before attempting to
seemingly conflicting goal provides the organization. Bridging build a community. – For example, Bill Gates and Paul Allan
brings the people, ideas, and objects of distant worlds into the founded Microsoft in just the same way as Steve Jobs and
organization and into new combinations. The next step is to build Steve Wozniak came together to build Apple Computer. Most
new worlds around those combinations.” communities start out as partnerships or collectives and then
– Andrew Hargadon grow from there.
While the essence of technology brokering is to span a number ■ Allow enough time and energy for connections to come to the
of fields and move good ideas from one field to another where surface – because most people won’t know in advance what
they have never before been used, nothing much will actually skills and experience will ultimately be required.
happen unless a community is built around those new ■ Encourage short-term networks to come and go at will –
innovations. This is the reason why some inventors (like Thomas because that all helps in figuring out what’s needed and
Edison and Henry Ford) were so successful whereas their what’s not. Over time, the key networks will strengthen
contemporaries with equally creative insights were not. whereas those on the periphery will die a natural death. Each
Building a community of suppliers, investors, engineers, new network will add connections to other communities which
manufacturers and others around a new technology will provide may prove useful at some point in the future.
two main advantages: ■ Key breaking larger groups down into smaller subsets – so
1. This community will focus the collaborative effort to turn the everyone will have the chance to make a hands-on
idea from something interesting into something useful. contribution. By fragmenting the larger group, everyone stays
Since most innovations shake up the established order, they actively engaged in their main area of interest rather than
usually start out as deviant ideas. As more people join the being dragged off into side issues.
community, these ideas then evolve into something that can ■ Realize that nothing lasts forever – and therefore technology
be used to do more than simply make a statement of brokers are always looking for ways to dismantle collectives
nonconformity. The larger the community grows, the greater that have outlived their usefulness. This ongoing survival of
the pressure becomes for the idea to evolve into a format the fittest means the groups which survive are strong and
which will appeal to the mainstream. robust rather than weak and inconsequential.
2. Over time, a good breakthrough innovation, supported by a “When innovation is seen as the work of heroic individuals
vibrant community, will trigger a revolution in established throwing off the oppressive chains of established society, we’re
industries that can be far-reaching. in for trouble. Too many times, entrepreneurs have attempted to
At first, a community will provide the collective support walk in the footsteps of Edison, Ford or whoever – determined to
needed to go against the established way of doing things. be as boldly individualistic as history tells us these lone geniuses
More importantly, however, as more people become were. But they weren’t. What set them apart, and what sets apart
involved, they will each add their own ideas and skill, helping technology brokers, is the recognition that innovation requires
the innovation to evolve further and move off into many not just a new idea (built from combinations of old ones) but also
different directions. A vibrant user community will provide a the collective effort necessary to make the new idea work
broad pool of ideas as well as people who will believe against the doubt and uncertainty of the process. The world will
something worthwhile will emerge. A community provides not beat a path to your door. Instead, innovation requires building
legitimacy for a new technology. It also generates the a community of like-minded and wholly committed individuals
requisite “feedback loops” to spur further refinement and who see their shared future in the success of the emerging
development of the idea. For example, as one part of the technologies and industries.”
community gets better at manufacturing a technology, – Andrew Hargadon
another part will be busily figuring out how to exploit those
gains. That increase in demand, in turn, will encourage the “The reason collectives often tolerate the anointing of a single
manufacturing specialists to seek still more gains in ‘great’ individual – whether it be Thomas Edison, Henry Ford,
productivity. And, as the cycle repeats itself again and again, Steve Jobs, Bill Gates, or any others from the list – is that it pays.
the emerging innovation will move from being a It pays to have a single name and date associated with any idea
laboratory-only phenomena into something ordinary because that proves evidence, in the court of public opinion, of
consumers can use. Then, as commercial opportunities who ‘owns’ the idea. And it pays by providing legitimacy and
beckon, more and more people will look to join the celebrity to a particular few individuals in the struggle for new
community. Very often, this will then result in a cluster of firms investors and suppliers, or in the race to have their new invention
being established, each dedicated to fine-tuning and become the new standard.”
enhancing one specific part of the new technology. – Andrew Hargadon
How Breakthroughs Happen - Page 6

3. An appropriate corporate culture.

3. How to implement technology brokering in your firm
Corporate culture embodies all the shared rules that shape
how individuals act. Technology brokers have a culture
where the best idea always wins out, irrespective of who
To pursue innovation within your own firm by employing a
suggested it. There is a shared sense of mission as everyone
technology brokering strategy, you can take any of three distinct
contributes to whatever projects are going, regardless of
whether they will get credit for their contribution or not. In
these cultures, everyone seeks help from others without any
shame about admitting failure or embarrassment. The
culture of technology brokers can be summarized as a
culture of wisdom, where it’s not just what an individual
1 2 3
knows that’s impressive but how well they can use that
Emulate Change Form groups Export knowledge.
your business Set up internal Seize opportunities In practice, becoming a technology brokerage is a challenge. It’s
strategy to become teams which can to sell your almost a chicken-and-egg dilemma. You have to bring together a
a technology span your entire technology to other group of people who have experience across a wide range of
broker. organization. industries. industries and then encourage them to forget the way things are
normally done and look at their fields of interest with fresh eyes.
Not many people can achieve that and then sustain it for an
extended period of time.
1 Many technology brokers encourage their employees to think
Become a technology broker.
like independent technology brokers themselves. In other words,
the successful companies create an internal marketplace for
The first strategic alternative is to organize your firm around the ideas and originality. They value most highly the people who can
processes of technology brokering. A number of companies are bring in new ideas from the outside, or who can borrow the best
doing this, including Design Continuum and IDEO. Loads of ideas from unrelated areas. They are the complete opposite of
other firms have attempted to do the same but with less success. the traditional “not-invented-here” syndrome. Technology
The demand to be constantly innovative and creative can be b roke r s a r e or gani ze d a rou nd t he c once p t o f
challenging. “nothing-is-invented-here”.
Generally speaking, to succeed as a full-time technology broker, “A dedicated technology brokering strategy bridges small
a firm must have three elements right:
worlds, exploiting a position between worlds to combine existing
1. The right organizational structure. objects, ideas and people in new ways that promise new
Bureaucracy kills original thinking. Therefore, most of ventures, and building the necessary communities around these
history’s greatest technology brokers have a very fluid new ventures that will ensure their success. Such a strategy
organizational structure which bends to meet the needs of works because these firms are continuously moving into new
new projects. For example, IDEO has project managers who w orld s. T hi s in no v atio n s trate g y , tog eth e r w ith their
work alongside designers and engineers to develop a organizational structures and work practices, creates an internal
product and then the team is disbanded. Over time, everyone marketplace of ideas and a culture of wisdom where new ideas
gets to know who the best people are, even in the absence of and artifacts can move around freely and each person’s
formal titles or other trappings. By having teams form around contributions can quickly take on new value for each new
projects and then disband afterwards, the developers can problem the organization faces. Technology brokering without
draw on the background experience of anyone in the these structures, practices and culture won’t work any more than
company. Further, this also helps everyone get exposed to a these structures, practices and culture will work without moving
wide variety of technical challenges. among multiple worlds. Although such technology brokers are
2. Work practices that will support innovation. rare, there is much they can teach us about how they have linked
Technology brokers are working with raw ideas, so they need their innovation strategies to their structure, work practices and
to become competent at four different work practices: culture.”
– Andrew Hargadon
■ Capturing good ideas – by observing users, by looking at
the technologies of the past and by playing with ideas “Working with companies in such dissimilar industries as
themselves, mentally or in person. medical instruments, furniture, toys and computers has given us
■ Keeping good ideas alive – either by embedding the ideas a broad view of the latest technologies available and has taught
in tangible objects or by creating an organizational us how to do quality product development and how to do it
knowledge management system which spreads quickly and efficiently.”
information throughout the entire organization. – David Kelly, founder and chairman, IDEO
■ Finding new uses for old ideas – by using analogies and “Many technology brokering firms get their start by bringing one
similarities between the present challenge and things that set of technologies into new worlds. Over time, learning from
were used in other applications. these new worlds added to their knowledge stocks about
■ Putting promising ideas to the test – which means different people, ideas and objects.”
embedding a new idea into a real service, product, – Andrew Hargadon
process or business model that can then be tested and
evaluated in more detail. “To invent, you need a good imagination and a pile of junk.”
– Thomas Edison
How Breakthroughs Happen - Page 7

■ Encourage the internal technology broker to share best

Form groups practices within the corporation as well – so that any
2 Set up internal teams which can span your organization. performance gains which are achieved in one business
process somewhere in the company will be duplicated
The second way companies can gain the benefits of technology ■ Encourage the internal technology broker unit to make
brokering is by forming an internal business unit which is mistakes – because that’s all part of the learning process.
dedicated to bridging different worlds and building recombinant Keep the focus of each unit sharp. – Let the internal

innovations. In practice, this usually means having the staff from technology broker build bridges while the operating units or
the technology brokering unit act as consultants to the other divisions focus on improving what they are already doing.
operating business units.
■ Increase diversity – by letting the internal unit work with clients
Many companies have set up internal technology brokers with outside the organization and possibly even in completely new
varying degrees of success. For example:
fields. Not only will that broaden their network but it will also be
■ Xerox established the Palo Alto Research Center (PARC) to fun and stimulating for the designers.
develop new technologies for the emerging digital revolution
in the late 1960s. PARC became famous for developing an “From a perspective of recombinant innovation, large firms often
array of new technologies – the first personal computer, the have vast amounts of untapped potential. But the trick remains
first graphical user interface, the first computer mouse, recognizing these opportunities for recombination. It is all a
Ethernet, client/server architecture, laser printing and many matter of getting the right knowledge into the right hands at the
of the basic protocols of the Internet. Yet Xerox itself was right time. Trying to bring everyone together, in person or in
unable to actually commercialize any of these technologies. databases, is not the answer. People need to focus on their
Instead, they were all taken to the market by other companies work. What’s needed are internal technology brokers.
who were able to build a community around each new Technology brokers don’t invent. Internal technology brokers,
technology. like their counterparts in the wild, are more interested in
redistributing the future that is already here. For them, the action
■ Minnesota Mining and Manufacture, 3M, is famous for
is on the factory floor, in the engineering war rooms, and with the
encouraging its staff to spend 15-percent of their time working
marketing groups of the different divisions, because that’s where
on their own innovations. In 1983, 3M established what it
the new ideas, the new products and processes, and the new
called the Optical Technology Center to find and develop new
understandings about markets are being honed.”
markets for its microreplication technology – a new
– Andrew Hargadon
technology which enhanced the efficiency of projected light.
This new business unit became active in brokering its “How can one tell the difference between research labs and
technology across 3M. The Optical engineers worked internal technology brokers? The most important difference
alongside engineers from other business units to make involves where the learning takes place. Does it come from basic
microreplication work in additional applications and markets. science or from the field? Are the answers commercially
For example, 3M developed a film which enhanced the light valuable today or five years from now, assuming another round
output of LCD screens from notebook computers thereby of research funding? Both kinds of research are necessary, but
extending the battery life of these machines. The technology it’s important not to confuse the two. One is a process of
was also applied to high precision sanding jobs and many invention, of science feeding technology. The other is a process
other applications. Within fifteen years of being formed, the of recombination, of the best (and sometimes worst) practices of
Optical Technology Center had accounted for more than $1 one division feeding others.”
billion in additional revenue for 3M. – Andrew Hargadon
This illustrates there is a right way and a wrong way to use an
“Internal technology brokers will thrive under the same
internal technology broker. In broad brush terms, an internal
conditions as external ones: where there are many small worlds
technology broker will prosper and thrive under the same
in which ideas, objects and people emerge and develop and
conditions which enable an external technology broker to
across which there is little interaction.”
– Andrew Hargadon
To make an internal technology broker work:
■ Set up the unit with the same internal structure, work practices “The value of creating internal technology brokers comes from
and culture which the successful technology brokers use. separating out the tasks of bridging the organization’s internal
boundaries and of building new networks to support potentially
■ Measure the success of the internal brokerage unit solely by innovative new ventures. There’s little place for these tasks
the amount of additional revenue generated – and not by the within divisions because success hinges on crossing (even
number of patents won or even by the fact other companies tearing down) the barriers between divisions. Internal
commercialize the technologies developed. technology brokers can focus on bridging and building
■ Fund the internal unit from the budgets of the business units it innovation networks; the rest of the organization can focus on
helps – rather than from a corporate R&D fund. Create direct improving what they already do well.”
links between costs and benefits. This will emphasize the fact – Andrew Hargadon
the internal technology brokerage unit is expected to
emphasize recombining the company’s existing ideas, “It’s unrealistic to expect that the same people who can compete
objects and benefits in new and innovative ways rather than so ruthlessly in the market will turn around and blithely give it all
inventing completely new technologies. It will also force the away to others inside the firm.”
brokerage unit to be aggressive in seeking funding. – Andrew Hargadon
How Breakthroughs Happen - Page 8

3. Be willing to create an independent business venture – so the

Export new technology can chart its own strategic course free of any
3 Seize opportunities to sell your technology to others. historical baggage or impediments. To get development
funding, many new technologies try to be all things to all
people. To actually make progress, some of these initial
From time to time, organizations can have a one-time promises will have to be dropped. This is easier if the
opportunity to move their technologies from one world into technology is placed into its own corporate vehicle. Doing
another. These opportunities can arise suddenly as different this will also let the technology’s developers develop their
markets converge and then disappear or recede just as rapidly. own external networks, uninfluenced by old ties or traditional
Or these opportunities can come about as the by-product of considerations.
other projects – where a new technology fails to deliver on what
“The benefits of recombinant innovation are available to
was planned but has potentially lucrative side effects which were
everyone. Technology brokers have simply developed
totally unanticipated.
strategies that routinely put them in the position of connecting the
For example: technologies of one world with the needs of another, and work
■ 3M’s Post-It notes were developed when a poorly performing practices that make it possible to bridge these worlds and to build
adhesive found a completely different use from that first new and innovative combinations from the elements they come
envisioned. across. These firms offer us specific lessons about a process
■ Viagra was first developed as a cardiovascular medicine that, in most firms, is too rare and fleeting to get a good look at.
which failed its clinical trials. It was only when patients showed We can use those lessons, though, to see what it takes to
a reluctance to return their unused samples that Pfizer even prepare for those rare, but no less critical, opportunities for
became aware of Viagra’s other side effects and potential innovation in more traditional firms.”
uses. – Andrew Hargadon
■ Duco, the color sprayable lacquer that is used to paint “The premise is simple: breakthrough innovations come by
automobiles, was only developed by DuPont’s engineers recombining the people, ideas and objects of past technologies.
when they accidentally left a sample of a new photographic The implication, recalling William Gibson, is that the future is
film they were developing to harden over a weekend. The new already here – it’s just unevenly distributed. Technology
material was no good as a film but it turned out to ideal for brokering provides organizations with the means to exploit
painting cars with a durable finish. opportunities for recombinant innovation that this uneven
The problem is many of these new opportunities will initially look distribution creates. The challenge for managers is to put in
like threats to the organization’s conventional way of doing place the organizational capabilities to bridge distant worlds, in
business. Or they will occur on the periphery of the business which lie potentially valuable resources, and to build the new
sometimes through chance meetings of engineers and worlds in which new combinations will thrive.”
managers. For these and other reasons, many of these – Andrew Hargadon
opportunities to do a little one-time technology brokering go
“The challenge for managers is to simultaneously encourage
doubt and dedication. Doubt in the small worlds of today, and
To better take advantage of these one-time opportunities, dedication to building new ones in their place. Managers need to
organizations should do three things: find a way to embrace the past because it provides the raw
1. Build a robust internal structure – which will facilitate the materials for building the future and yet, at the same time, to see
connection of the person with a new idea and someone in the beyond the ties that bind together old and obsolete ways of doing
organization who can support the next stage of development things.”
of the idea. Build internal links. Make it possible for talented – Andrew Hargadon
people to get the ear of those who can provide whatever
“Elements of the telegraph, the telephone, mass production, the
organizational support will be required. How this is done will
transistor, and the computer – to name but a few – were in use
vary from one organization to another, but you have to make
long before the revolutions they spaw ned. For these
it possible for those with creative ideas to connect with those
breakthroughs to happen, someone somewhere had to make
who have sufficient organizational clout to use the idea.
connections nobody else had made before. The very existence
2. Be prepared to help build an external community around new of these technologies made them revolutionary when they were
technologies – which may involve activities like developing introduced elsewhere, but their very existence also made it
new products and services, getting others to commit, signing difficult for those most familiar with them to take them apart and
up joint partners or cultivating ties to additional organizations put them together in new ways. The same people, ideas and
and groups. These types of activities create the environment objects that spawned a generation of revolutions become the
in which the new idea can flourish and take on a life of its own. ones to suppress the next. It may take genius to see the potential
Smart organizations will come up effective ways to build for breakthrough innovations across a fragmented landscape,
these external links to others in the marketplace quickly and but that genius depends more on the network of past wanderings
decisively. Not only does this enhance the development of that allows one to see across worlds than on any inherent
the new idea itself, but it will also discourage others from talents.”
attempting to come up with competing alternatives. – Andrew Hargadon