Background

The history of technology tells us that discontinuous technological change is never far away and that for established firms it is only a matter of time before the skills and competences they have accumulated and advanced incrementally are challenged. Established firms need to remain competitive in the short-term through the exploitation of existing lines of business and incremental innovation, while simultaneously developing radical innovations for longer-term competitiveness.

However, established firms are challenged by the latter part of this equation, often failing to generate breakthrough innovations and be part of the next generation of innovation. A wide range of explanations have been suggested as to why, including such issues as under-investment in innovation, being constrained by existing competencies, cultural inertia, and remaining overly committed to their main customers. As a consequence of these constraints and others, only a very small percentage of established firms have managed to sustain long-term competitive advantages.

To investigate these challenges and ways in which firms can improve their capacity to generate breakthrough innovations, a two year research project was carried out by the IfM’s Centre for Technology Management (Link). This project was undertaken as part of the Innovation and Productivity Grand Challenge (www.ipgc.ac.uk) that was funded by the EPSRC and ESRC, and which involved collaboration with Cranfield University, Imperial College, University of Liverpool and Loughborough University.

Report

Organising for breakthrough innovation: Rejuvenating the established firm

The findings of this research are presented in an August 2011 report by Simon Ford and David Probert. The report provides companies with guidelines on how to improve their approach to the generation of radically different technologies. The authors describe the obstacles facing firms and their employees when attempting to make significant innovative breakthroughs.

Ways of overcoming these obstacles to innovation are explored, including structured, top-down approaches (corporate entrepreneurship) and more informal activities by entrepreneurial members of staff (intrapreneurship). Case studies of ARM, BAE Systems, BT, Philips and Qualcomm are included. These illustrate the challenges of putting such ideas into practice and the potential rewards of finding the right approach for a particular firm.

The report concludes with a number of key recommendations for firms pursuing breakthrough innovation. These include being patient during the development of breakthroughs, removing barriers that inhibit entrepreneurial behaviour, giving employees ownership of projects, using stage gate processes for monitoring the progress and quality of projects, and making use of external resources.

Printed copies of the report are available, please visit here for details.

For further information please contact Simon Ford E: sjf39@cam.ac.uk