HOW

BREAKTHROUGHS
HAPPEN
The Surprising Truth About
How Companies Innovate
ANDREW HARGADON
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

MAIN IDEA
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.

1. The strategy of technology brokering
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.
Every technology, no matter how simple or complex, will be an
arrangement of three different elements which combine to
achieve a specific objective:
The three essential elements of every technology
1 2 3 result from contract research was applied to another project, or if
Skilled people Ideas Objects
Those who know Ideas about how The physical
how to use the that technology can hardware and
technology actually be used software which are
competently. beneficially. tangible and fixed.
For example, the telegraph was first available in 1774, but it was
not until the Morse code was developed in 1837 that a group of
people, the telegraph operators, became involved. From there,
the technology of the telegraph continued to evolve as other
people (like Thomas Edison) developed new ideas for sending
signals faster and more effectively. Eventually, the fiber optic
networks of today would emerge from the people, ideas and
objects which had been gathered around the telegraph.
Breakthrough innovations occur when the networks around
different technologies form new relationships with each other.
These sometimes sudden shifts from one type of technology to
another are called “phase transitions” in physics. Each phase
transition or even moving from one generation of a technology to
the next can throw up all kinds of commercial opportunities. From
this perspective, inventors aren’t more creative than the rest of
us – inventors are just better connected. They span more
networks than the average person, giving them a head start in
forming new relationships and associations between one
technology and the next. And similarly, technology brokers get to
be that way not because they do original things but because they
find new ways to make connections between the network of one
technology and another.
To be more specific:
■ Technology brokering involves bridging distant worlds to
make new combinations of technologies – rather than coming
up with completely new and original technologies from thin air.
■ Technology brokering relies more on exploiting the past and
less on breaking free from the past – than is conventionally
assumed about innovation.
■ Technology brokering doesn’t attempt to come up with novel
advances – but instead focuses on combining existing
technologies in new ways that will spark a revolution.
■ Technology brokering involves building new communities
around those new technologies – rather than attempting to
rebel against the existing social order. Technology brokers
never try and go it alone.
How Breakthroughs Happen - Page 2
Some of history’s most celebrated idea factories have actually
been organized along the lines of technology brokerages. A few
of the most well-known examples include:
Example #1 – Thomas Edison’s Menlo Park
Set up by Thomas Edison in 1876 (and taking its name from its
location), the Menlo Park lab consisted of a single work room 100
feet long and 30 feet wide. On benches which ran the length of
the room, up to 14 engineers conducted experiments to develop
new technologies. Edison’s engineers were doing work for the
telegraph, electric light, railroad and mining industries
simultaneously. All of these experiments were conducted
openly, with all the engineers contributing ideas for all the
experiments under way rather than just their own.
“Edison quietly blurred the line between the experiments he did
for others and those he did for himself. Who was to know if a
experimental equipment built for one customer was used in the
work of another?”
– Andre Millard, author,
Edison and the Business of Innovation
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
one field and inserted the idea into a completely different
industry. Edison would then form a new company to
commercialize whichever technologies looked the most
promising.
“All the while, Edison and others worked hard to perpetuate the
myth of the lone genius building something out of nothing.
Onstage, Edison abandoned the past in his search for the future.
Backstage, he worked hard to create that future from the best
pieces of the past that he could find and use. Pursuing a strategy
of technology brokering, Edison bridged old worlds and built new
ones around the innovations that he saw as a result. What set
Edison’s laboratory apart was not the ability to shut itself off from
the rest of the world, to create something from nothing, to think
outside the box. Exactly the opposite: It was the ability to connect
that made the lab so innovative. Edison was able to continuously
innovate because he knew how to exploit the networked
landscape of his time.”
– Andrew Hargadon
To illustrate Edison’s genius, the incandescent lightbulb was
actually patented in 1845 by John W. Starr, twenty years before
Edison famously “invented” it. Edison’s original patent
application was rejected by the U.S. Patent Office. Yet Edison
had generated so much publicity in his search for the ideal
material for the filament of the light bulb that most people just
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
generate PR rather than any innate creative talent. Another part
of Edison’s success came as a direct result of the fact he
straddled so many different fields of business that Edison was
able to take ideas from one industry and apply them in another.
Thomas Edison’s impressive track record in generating
innovations came as a result of his building an organization – the
Menlo Park lab – which was specifically designed for creativity
and speed. The organization was able to generate continuous
innovations because Edison and his closest collaborators
purpose built it that way.

Example #2 – Henry Ford’s Highland Park Factory
Famed as the birthplace of the mass production line, Henry Ford
built a new factory at Highland Park to assemble the Model T.
The fact that Henry Ford is today considered an industrial
success story illustrates how successful the new factory was.
What was interesting, however, was that Ford actually didn’t
“invent” anything. What he did was to bring a number of existing
technologies together in a way no one else had done before.
The four key technologies Ford combined were:
1. Interchangeable parts – which became possible because of
the availability of metal working tools like lathes and milling
machines. By using interchangeable parts, Ford was not
reliant on skilled tradespeople but could teach non-skilled
workers how to manufacture parts and assemble cars.
2. Continuous work flow – which meant reorganizing the
production processes in the order in which they logically
occurred. Other car manufacturers of that era moved the
people around the work. Ford reversed that approach,
moving the work to the people.
3. The assembly line – where each worker had one simple task
to do before the piece of work moved on to the next person.
Ford’s inspiration for this was a meatpackers line where
whole pigs and cows were “disassembled” into cuts.
4. The electric motor – which meant small electric motors could
be utilized to assist the workers. This was far more efficient
than having a central steam engine which drove belts and
shafts to provide power for work machinery. In addition,
because the new factory was designed around electric
motors, overhead cranes and conveyors could be used in
place of the space normally taken up by shafts and belts.
They key point is Henry Ford didn’t actually invent any of these
four key technologies. They were all in use in other fields of
business. Ford’s successes derived from the fact he was the first
automaker to grasp the potential of these technologies and bring
them together. As a result, production of the Model T rose from
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
Motor Company was able to achieve a 46-percent market share
on the strength of its manufacturing efficiency. And, at its peak,
the Highland Park factory was very impressive, with iron ore,
wood and coal flowing into the factory at one end and brand new
Model T’s coming out the other end.
“I invented nothing new. I simply assembled into a car the
discoveries of other men behind whom were centuries of work.
Had I worked fifty or ten or even five years before, I would have
failed. So it is with every new thing. Progress happens when all
the factors that make for it are ready, and then it is inevitable. To
teach that a comparatively few men are responsible for the
greatest forward steps of mankind is the worst kind of
nonsense.”
– Henry Ford
“The Ford Motor Company succeeded by bridging a wide range
of industries and building from the pieces of those different
worlds an organization that combined the best people, ideas and
objects it could find to build a car. Ford’s system was
revolutionary in its impact on the automobile industry, on
manufacturing, and on society, but it was revolutionary because
its origins drew on existing technologies.”
– Andrew Hargadon
How Breakthroughs Happen - Page 3
Example #3 – Design Continuum
Based in Newton, Massachusetts, this company is a design firm
which was founded in 1983. The company provides product
design services for a wide range of clients and has developed
award-winning products for more than 100 industries including
computers, office equipment, communication systems,
consumer electronics, appliances, consumer nondurable goods,
sporting goods, industrial products, medical instrumentation and
health care products.
When Reebok was attempting to respond to the release of rival
Nike’s new air technology, it approached Design Continuum for
help. The company came up with the concept of putting an
inflatable splint into the shoe to provide better ankle support for
runners. This splint-in-a-shoe idea was suggested by a member
of the Design Continuum team who had worked on hospital
equipment previously. Other designers added the ideas of
coming up with little pumps, tubing and valves which ultimately
would make Reebok’s new running shoe, marketed as the
Reebok Pump, a huge success.
“It’s one thing to know of a technology; it’s something different to
know how to apply it, what else it can do, and how to adapt it to
new settings. Thus, Design Continuum’s engineers could come
up with the Reebok Pump because they had seen many of the
components in vastly different uses. With this prior experience –
from their vantage point spanning multiple industries and
markets – they were able to design a revolutionary sneaker and
do it faster than anyone expected. Beginning with the green light
from Reebok, it took only six months to design the shoe and
another six months to ramp up for its manufacture. The maker of
the IV bags that Design Continuum had worked with before
became a supplier of the inflatable inserts. The whole project
cost less than $250,000. In the year that the Reebok Pump shoe
was introduced to the market, it accounted for over $1 billion in
revenue in the highly competitive athletic shoe market and
gained wide praise in the business press for its creativity.”
– Andrew Hargadon
“We enjoy working in diverse industries, and it brings great
benefits to our clients. We design medical products, both direct
patient care devices and also diagnostic instruments. We design
quite a bit of office equipment, with an emphasis on totally new
forms of display and interface. We also have a tradition of
designing ‘home life’ products, ranging from windows to faucets
to appliances, but even in a traditional product category we can
provide innovation, if it is appropriate. Making new products, and
applying new technologies, is only worthwhile if they are the right
products. Sometimes, a technology, brought in from the most
unlikely source, can revolutionize a product. However, that
technology must be integrated in ways that serve users rather
than burden them.”
– Gian Zaccai, CEO, Design Continuum
“Research and development efforts look like races into the
future. All the while, however, some of the most profound
technological revolutions will be found not in front of rivals, but to
the side, in other worlds where potentially valuable but unknown
technologies have already emerged. Those who are too focused
on inventing the future, like those who are too focused on holding
on to the past, will miss the many valuable clues they pass along
the way.”
– Andrew Hargadon

2. The importance of networks for technology brokering
To increase your opportunities to come up with new ideas
through a technology brokering strategy, there are three things
you can do:
1 2 3 innovation.”
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.
Diversify
1 Become more of a generalist rather than specializing.
The process of innovation has an interesting social aspect which
is almost playful. There are many examples of innovations which
were discovered by accident. Technology brokering is an
attempt to deliberately trigger those fortunate accidents, as
logically, innovation is more likely to happen when one dabbles in
a number of fields rather than focusing intensively in one area of
specialization.
To increase the odds of being able to come up with an innovation
of your own:
1. Build a large number of weak ties to different communities
rather than just a few strong links – because that enhances
the number of new people, objects and ideas you come into
contact with. Many lines of business become their own
closed communities, where people get immersed in their
subject but have little appreciation of external developments.
That’s bad if you’re trying to innovate by taking successful
ideas from one field and inject them into another. You’ll get
many more ideas if you go the opposite route instead. Get
actively involved in a variety of fields, so the cross-fertilization
effect can occur naturally as a result of your normal
interactions.
2. Prepare mentally beforehand to exploit the opportunities for
innovation which arise – so they don’t slip through your
fingers unappreciated. A good innovator brings different
groups together in such a way that harnesses the resources
of both advantageously. This will only happen more
consistently if you’re watching for these opportunities and if
you’re prepared to move on them. Many of history’s great
innovators (like Thomas Edison, for example) have been
brokers between different industries and have moved freely
between them. They have excelled because they were
prepared to move. You need to be similarly prepared to
man ag e you r in no vati v e i nsigh t s wit h c a re an d
understanding.
“Knowledge can make you wise in some ways, but it can make
you a blindfolded fool in others.”
– Robertson Davies, novelist
How Breakthroughs Happen - Page 4
“By moving among worlds, technology brokering firms increase
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
pasteurization, we owe the wonderful insight that ‘In the field of
observation, chance favors only the prepared mind’. This insight,
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
– Andrew Hargadon
Network
2
Learn how to think differently by interacting with people.
Most organizations suffer from two problems when it comes to
developing innovations:
1. A competency trap – where people get so caught up
concentrating on what they know that they actually ignore
new opportunities which lie just outside those boundaries.
2. A perception block – where their own core competencies
shape and influence how these people view the outside
world.
To overcome these problems, innovators attempt to become
bridges between many different fields of excellence by:
■ Offsetting the resources of the established order – by
harnessing the established infrastructure of other mature
industries in the new innovation rather than attempting to
attract sufficient resources to build a start-up.
■ Favoring breadth over depth – that is, by deliberately having a
foot in as many fields as possible and keeping a flexible
mind-set willing to try new ideas and new combinations.
■ Being willing to actually get your hands dirty – and take a
hands-on approach rather than confining everything to the
theoretical. People with hands-on experience in a field
understand the nuances and pressures in ways that outsiders
can only guess at. Getting involved helps one see old
knowledge in new ways.
■ Bringing the outside world in – through hiring people from
outside the industry, by hiring new consultants or by inviting
people outside the industry to come and give lectures. All of
these actions inject new ideas into an organization.
■ Deliberately attempting to take the best a technology has to
offer without incorporating all the baggage as well – by
adopting new ideas without the people who have experience.
Sometimes, doing this can free the creative process of the
inbuilt prejudices which others labor under. In addition, doing
this frees you from people who owe their jobs to doing things
one specific way.
“Bridging activities bring the people of organizations into contact
with problems and resources of many different worlds. In the
pursuit of innovation, bridging works because of the broad links
to possible resources that become available to organizations,
not because of the depth of any one connection. Technology
brokering requires many simultaneous bridging activities
because these activities both represent and create the open
minds necessary to see new connections and new possibilities.”
– Andrew Hargadon

Build
3 Develop a community around new innovations.
“The paradox inherent in the innovation process is that
innovation needs wide-ranging ties across distant worlds to
generate the innovative ideas in the first place, yet they also
need strong, focused ties to build communities around emerging
innovations. Firms must commit resources to both. The answer
is not to resolve the paradox, but rather to appreciate what each
seemingly conflicting goal provides the organization. Bridging
brings the people, ideas, and objects of distant worlds into the
organization and into new combinations. The next step is to build
new worlds around those combinations.”
– Andrew Hargadon
While the essence of technology brokering is to span a number
of fields and move good ideas from one field to another where
they have never before been used, nothing much will actually
happen unless a community is built around those new
innovations. This is the reason why some inventors (like Thomas
Edison and Henry Ford) were so successful whereas their
contemporaries with equally creative insights were not.
Building a community of suppliers, investors, engineers,
manufacturers and others around a new technology will provide
two main advantages:
1. This community will focus the collaborative effort to turn the
idea from something interesting into something useful.
Since most innovations shake up the established order, they
usually start out as deviant ideas. As more people join the
community, these ideas then evolve into something that can
be used to do more than simply make a statement of
nonconformity. The larger the community grows, the greater
the pressure becomes for the idea to evolve into a format
which will appeal to the mainstream.
2. Over time, a good breakthrough innovation, supported by a
vibrant community, will trigger a revolution in established
industries that can be far-reaching.
At first, a community will provide the collective support
needed to go against the established way of doing things.
More importantly, however, as more people become
involved, they will each add their own ideas and skill, helping
the innovation to evolve further and move off into many
different directions. A vibrant user community will provide a
broad pool of ideas as well as people who will believe
something worthwhile will emerge. A community provides
legitimacy for a new technology. It also generates the
requisite “feedback loops” to spur further refinement and
development of the idea. For example, as one part of the
community gets better at manufacturing a technology,
another part will be busily figuring out how to exploit those
gains. That increase in demand, in turn, will encourage the
manufacturing specialists to seek still more gains in
productivity. And, as the cycle repeats itself again and again,
the emerging innovation will move from being a
laboratory-only phenomena into something ordinary
consumers can use. Then, as commercial opportunities
beckon, more and more people will look to join the
community. Very often, this will then result in a cluster of firms
being established, each dedicated to fine-tuning and
enhancing one specific part of the new technology.
How Breakthroughs Happen - Page 5
So how, exactly, do technology brokers go about building these
communities around their new innovations? This is quite a
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
beyond the direct control of IBM. And yet, if IBM had attempted to
make its PC architecture closed and proprietary (as Apple did),
the community would have been far smaller.
To build communities around innovations, technology brokers:
■ First try and build a strong partnership before attempting to
build a community. – For example, Bill Gates and Paul Allan
founded Microsoft in just the same way as Steve Jobs and
Steve Wozniak came together to build Apple Computer. Most
communities start out as partnerships or collectives and then
grow from there.
■ Allow enough time and energy for connections to come to the
surface – because most people won’t know in advance what
skills and experience will ultimately be required.
■ Encourage short-term networks to come and go at will –
because that all helps in figuring out what’s needed and
what’s not. Over time, the key networks will strengthen
whereas those on the periphery will die a natural death. Each
new network will add connections to other communities which
may prove useful at some point in the future.
■ Key breaking larger groups down into smaller subsets – so
everyone will have the chance to make a hands-on
contribution. By fragmenting the larger group, everyone stays
actively engaged in their main area of interest rather than
being dragged off into side issues.
■ Realize that nothing lasts forever – and therefore technology
brokers are always looking for ways to dismantle collectives
that have outlived their usefulness. This ongoing survival of
the fittest means the groups which survive are strong and
robust rather than weak and inconsequential.
“When innovation is seen as the work of heroic individuals
throwing off the oppressive chains of established society, we’re
in for trouble. Too many times, entrepreneurs have attempted to
walk in the footsteps of Edison, Ford or whoever – determined to
be as boldly individualistic as history tells us these lone geniuses
were. But they weren’t. What set them apart, and what sets apart
technology brokers, is the recognition that innovation requires
not just a new idea (built from combinations of old ones) but also
the collective effort necessary to make the new idea work
against the doubt and uncertainty of the process. The world will
not beat a path to your door. Instead, innovation requires building
a community of like-minded and wholly committed individuals
who see their shared future in the success of the emerging
technologies and industries.”
– Andrew Hargadon
“The reason collectives often tolerate the anointing of a single
‘great’ individual – whether it be Thomas Edison, Henry Ford,
Steve Jobs, Bill Gates, or any others from the list – is that it pays.
It pays to have a single name and date associated with any idea
because that proves evidence, in the court of public opinion, of
who ‘owns’ the idea. And it pays by providing legitimacy and
celebrity to a particular few individuals in the struggle for new
investors and suppliers, or in the race to have their new invention
become the new standard.”
– Andrew Hargadon

3. How to implement technology brokering in your firm
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.
Emulate
1 Many technology brokers encourage their employees to think
Become a technology broker.
The first strategic alternative is to organize your firm around the
processes of technology brokering. A number of companies are
doing this, including Design Continuum and IDEO. Loads of
other firms have attempted to do the same but with less success.
The demand to be constantly innovative and creative can be
challenging.
Generally speaking, to succeed as a full-time technology broker,
a firm must have three elements right:
1. The right organizational structure.
Bureaucracy kills original thinking. Therefore, most of
history’s greatest technology brokers have a very fluid
organizational structure which bends to meet the needs of
new projects. For example, IDEO has project managers who
work alongside designers and engineers to develop a
product and then the team is disbanded. Over time, everyone
gets to know who the best people are, even in the absence of
formal titles or other trappings. By having teams form around
projects and then disband afterwards, the developers can
draw on the background experience of anyone in the
company. Further, this also helps everyone get exposed to a
wide variety of technical challenges.
2. Work practices that will support innovation.
Technology brokers are working with raw ideas, so they need
to become competent at four different work practices:
■ Capturing good ideas – by observing users, by looking at
the technologies of the past and by playing with ideas
themselves, mentally or in person.
■ Keeping good ideas alive – either by embedding the ideas
in tangible objects or by creating an organizational
knowledge management system which spreads
information throughout the entire organization.
■ Finding new uses for old ideas – by using analogies and
similarities between the present challenge and things that
were used in other applications.
■ Putting promising ideas to the test – which means
embedding a new idea into a real service, product,
process or business model that can then be tested and
evaluated in more detail.
How Breakthroughs Happen - Page 6
3. An appropriate corporate culture.
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
suggested it. There is a shared sense of mission as everyone
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
knows that’s impressive but how well they can use that
knowledge.
In practice, becoming a technology brokerage is a challenge. It’s
almost a chicken-and-egg dilemma. You have to bring together a
group of people who have experience across a wide range of
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.
like independent technology brokers themselves. In other words,
the successful companies create an internal marketplace for
ideas and originality. They value most highly the people who can
bring in new ideas from the outside, or who can borrow the best
ideas from unrelated areas. They are the complete opposite of
the traditional “not-invented-here” syndrome. Technology
b roke r s a r e or gani ze d a rou nd t he c once p t o f
“nothing-is-invented-here”.
“A dedicated technology brokering strategy bridges small
worlds, exploiting a position between worlds to combine existing
objects, ideas and people in new ways that promise new
ventures, and building the necessary communities around these
new ventures that will ensure their success. Such a strategy
works because these firms are continuously moving into new
w orld s. T hi s in no v atio n s trate g y , tog eth e r w ith their
organizational structures and work practices, creates an internal
marketplace of ideas and a culture of wisdom where new ideas
and artifacts can move around freely and each person’s
contributions can quickly take on new value for each new
problem the organization faces. Technology brokering without
these structures, practices and culture won’t work any more than
these structures, practices and culture will work without moving
among multiple worlds. Although such technology brokers are
rare, there is much they can teach us about how they have linked
their innovation strategies to their structure, work practices and
culture.”
– Andrew Hargadon
“Working with companies in such dissimilar industries as
medical instruments, furniture, toys and computers has given us
a broad view of the latest technologies available and has taught
us how to do quality product development and how to do it
quickly and efficiently.”
– David Kelly, founder and chairman, IDEO
“Many technology brokering firms get their start by bringing one
set of technologies into new worlds. Over time, learning from
these new worlds added to their knowledge stocks about
different people, ideas and objects.”
– Andrew Hargadon
“To invent, you need a good imagination and a pile of junk.”
– Thomas Edison

Form groups
2 Set up internal teams which can span your organization.
The second way companies can gain the benefits of technology
brokering is by forming an internal business unit which is
dedicated to bridging different worlds and building recombinant
innovations. In practice, this usually means having the staff from
the technology brokering unit act as consultants to the other
operating business units.
Many companies have set up internal technology brokers with
varying degrees of success. For example:
■ Xerox established the Palo Alto Research Center (PARC) to
develop new technologies for the emerging digital revolution
in the late 1960s. PARC became famous for developing an
array of new technologies – the first personal computer, the
first graphical user interface, the first computer mouse,
Ethernet, client/server architecture, laser printing and many
of the basic protocols of the Internet. Yet Xerox itself was
unable to actually commercialize any of these technologies.
Instead, they were all taken to the market by other companies
who were able to build a community around each new
technology.
■ Minnesota Mining and Manufacture, 3M, is famous for
encouraging its staff to spend 15-percent of their time working
on their own innovations. In 1983, 3M established what it
called the Optical Technology Center to find and develop new
markets for its microreplication technology – a new
technology which enhanced the efficiency of projected light.
This new business unit became active in brokering its
technology across 3M. The Optical engineers worked
alongside engineers from other business units to make
microreplication work in additional applications and markets.
For example, 3M developed a film which enhanced the light
output of LCD screens from notebook computers thereby
extending the battery life of these machines. The technology
was also applied to high precision sanding jobs and many
other applications. Within fifteen years of being formed, the
Optical Technology Center had accounted for more than $1
billion in additional revenue for 3M.
This illustrates there is a right way and a wrong way to use an
internal technology broker. In broad brush terms, an internal
technology broker will prosper and thrive under the same
conditions which enable an external technology broker to
succeed.
To make an internal technology broker work:
■ Set up the unit with the same internal structure, work practices
and culture which the successful technology brokers use.
■ Measure the success of the internal brokerage unit solely by
the amount of additional revenue generated – and not by the
number of patents won or even by the fact other companies
commercialize the technologies developed.
■ Fund the internal unit from the budgets of the business units it
helps – rather than from a corporate R&D fund. Create direct
links between costs and benefits. This will emphasize the fact
the internal technology brokerage unit is expected to
emphasize recombining the company’s existing ideas,
objects and benefits in new and innovative ways rather than
inventing completely new technologies. It will also force the
brokerage unit to be aggressive in seeking funding.
How Breakthroughs Happen - Page 7
■ Encourage the internal technology broker to share best
practices within the corporation as well – so that any
performance gains which are achieved in one business
process somewhere in the company will be duplicated
elsewhere.
■ Encourage the internal technology broker unit to make
mistakes – because that’s all part of the learning process.
Keep the focus of each unit sharp. – Let the internal
■
technology broker build bridges while the operating units or
divisions focus on improving what they are already doing.
■ Increase diversity – by letting the internal unit work with clients
outside the organization and possibly even in completely new
fields. Not only will that broaden their network but it will also be
fun and stimulating for the designers.
“From a perspective of recombinant innovation, large firms often
have vast amounts of untapped potential. But the trick remains
recognizing these opportunities for recombination. It is all a
matter of getting the right knowledge into the right hands at the
right time. Trying to bring everyone together, in person or in
databases, is not the answer. People need to focus on their
work. What’s needed are internal technology brokers.
Technology brokers don’t invent. Internal technology brokers,
like their counterparts in the wild, are more interested in
redistributing the future that is already here. For them, the action
is on the factory floor, in the engineering war rooms, and with the
marketing groups of the different divisions, because that’s where
the new ideas, the new products and processes, and the new
understandings about markets are being honed.”
– Andrew Hargadon
“How can one tell the difference between research labs and
internal technology brokers? The most important difference
involves where the learning takes place. Does it come from basic
science or from the field? Are the answers commercially
valuable today or five years from now, assuming another round
of research funding? Both kinds of research are necessary, but
it’s important not to confuse the two. One is a process of
invention, of science feeding technology. The other is a process
of recombination, of the best (and sometimes worst) practices of
one division feeding others.”
– Andrew Hargadon
“Internal technology brokers will thrive under the same
conditions as external ones: where there are many small worlds
in which ideas, objects and people emerge and develop and
across which there is little interaction.”
– Andrew Hargadon
“The value of creating internal technology brokers comes from
separating out the tasks of bridging the organization’s internal
boundaries and of building new networks to support potentially
innovative new ventures. There’s little place for these tasks
within divisions because success hinges on crossing (even
tearing down) the barriers between divisions. Internal
technology brokers can focus on bridging and building
innovation networks; the rest of the organization can focus on
improving what they already do well.”
– Andrew Hargadon
“It’s unrealistic to expect that the same people who can compete
so ruthlessly in the market will turn around and blithely give it all
away to others inside the firm.”
– Andrew Hargadon

Export
3 Seize opportunities to sell your technology to others.
From time to time, organizations can have a one-time
opportunity to move their technologies from one world into
another. These opportunities can arise suddenly as different
markets converge and then disappear or recede just as rapidly.
Or these opportunities can come about as the by-product of
other projects – where a new technology fails to deliver on what
was planned but has potentially lucrative side effects which were
totally unanticipated.
For example:
■ 3M’s Post-It notes were developed when a poorly performing
adhesive found a completely different use from that first
envisioned.
■ Viagra was first developed as a cardiovascular medicine
which failed its clinical trials. It was only when patients showed
a reluctance to return their unused samples that Pfizer even
became aware of Viagra’s other side effects and potential
uses.
■ Duco, the color sprayable lacquer that is used to paint
automobiles, was only developed by DuPont’s engineers
when they accidentally left a sample of a new photographic
film they were developing to harden over a weekend. The new
material was no good as a film but it turned out to ideal for
painting cars with a durable finish.
The problem is many of these new opportunities will initially look
like threats to the organization’s conventional way of doing
business. Or they will occur on the periphery of the business
sometimes through chance meetings of engineers and
managers. For these and other reasons, many of these
opportunities to do a little one-time technology brokering go
unexploited.
To better take advantage of these one-time opportunities,
organizations should do three things:
1. Build a robust internal structure – which will facilitate the
connection of the person with a new idea and someone in the
organization who can support the next stage of development
of the idea. Build internal links. Make it possible for talented
people to get the ear of those who can provide whatever
organizational support will be required. How this is done will
vary from one organization to another, but you have to make
it possible for those with creative ideas to connect with those
who have sufficient organizational clout to use the idea.
2. Be prepared to help build an external community around new
technologies – which may involve activities like developing
new products and services, getting others to commit, signing
up joint partners or cultivating ties to additional organizations
and groups. These types of activities create the environment
in which the new idea can flourish and take on a life of its own.
Smart organizations will come up effective ways to build
these external links to others in the marketplace quickly and
decisively. Not only does this enhance the development of
the new idea itself, but it will also discourage others from
attempting to come up with competing alternatives.
How Breakthroughs Happen - Page 8
3. Be willing to create an independent business venture – so the
new technology can chart its own strategic course free of any
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
promises will have to be dropped. This is easier if the
technology is placed into its own corporate vehicle. Doing
this will also let the technology’s developers develop their
own external networks, uninfluenced by old ties or traditional
considerations.
“The benefits of recombinant innovation are available to
everyone. Technology brokers have simply developed
strategies that routinely put them in the position of connecting the
technologies of one world with the needs of another, and work
practices that make it possible to bridge these worlds and to build
new and innovative combinations from the elements they come
across. These firms offer us specific lessons about a process
that, in most firms, is too rare and fleeting to get a good look at.
We can use those lessons, though, to see what it takes to
prepare for those rare, but no less critical, opportunities for
innovation in more traditional firms.”
– Andrew Hargadon
“The premise is simple: breakthrough innovations come by
recombining the people, ideas and objects of past technologies.
The implication, recalling William Gibson, is that the future is
already here – it’s just unevenly distributed. Technology
brokering provides organizations with the means to exploit
opportunities for recombinant innovation that this uneven
distribution creates. The challenge for managers is to put in
place the organizational capabilities to bridge distant worlds, in
which lie potentially valuable resources, and to build the new
worlds in which new combinations will thrive.”
– Andrew Hargadon
“The challenge for managers is to simultaneously encourage
doubt and dedication. Doubt in the small worlds of today, and
dedication to building new ones in their place. Managers need to
find a way to embrace the past because it provides the raw
materials for building the future and yet, at the same time, to see
beyond the ties that bind together old and obsolete ways of doing
things.”
– Andrew Hargadon
“Elements of the telegraph, the telephone, mass production, the
transistor, and the computer – to name but a few – were in use
long before the revolutions they spaw ned. For these
breakthroughs to happen, someone somewhere had to make
connections nobody else had made before. The very existence
of these technologies made them revolutionary when they were
introduced elsewhere, but their very existence also made it
difficult for those most familiar with them to take them apart and
put them together in new ways. The same people, ideas and
objects that spawned a generation of revolutions become the
ones to suppress the next. It may take genius to see the potential
for breakthrough innovations across a fragmented landscape,
but that genius depends more on the network of past wanderings
that allows one to see across worlds than on any inherent
talents.”
– Andrew Hargadon