Overcoming the Innovation Barrier: A Search-Selection Model of Breakthrough Innovation in Large Firms

Simon J. Ford (), Simone Ferriani and David R. Probert
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Simon J. Ford: University of Cambridge
Simone Ferriani: University of Bologna
David R. Probert: University of Cambridge

Chapter Chapter 4 in Strategy and Communication for Innovation, 2013, pp 41-61 from Springer

Abstract: Abstract Breakthrough innovations are important to the firm. They enable firms to challenge the existing technological order and shape new paths, allowing them to engage in corporate reinvention, growth and new business development. They represent rare, valuable and inimitable sources of competitive advantage for firms. Yet most established firms have too many obligations and too much to lose to justify the obvious risks of chasing radical possibilities. There are a number of causes for this risk averseness: under-investment in radical innovation, falling into competency traps, being constrained by core rigidities, and remaining overly committed to their main customers. Drawing on previous research in the field, we suggest that two fundamental enabling conditions can be identified for an established firm wishing to engage in breakthrough innovation. First, it must create an environment conducive to idea generation. Second, it must have the fortitude and risk tolerance to persevere and allow the most promising ideas to have a fair chance to succeed. Focusing on the latter topic, three types of organizational selection regimes are highlighted that have proven particularly effective to this purpose. These regimes are characterized as (1) individual driven, (2) lead user driven, and (3) application domain driven, with illustrative case examples provided from BAE Systems, Rolls-Royce and ARM respectively. While there is no single best way through which breakthrough innovation can be successfully pursued, given the multifaceted nature of the environment we suggest that the domain driven approach is the one that is most likely to be conducive to successful breakthrough innovations. High technology domains are subject to incredible uncertainty and offer some of the richest opportunities for experience based learning. In such settings the use of variegated feedback from multiple facets of the application environment may serve as superior selection mechanisms to the judgment of corporate headquarters.

Keywords: Large Firm; Incumbent Firm; Established Firm; Linear Friction Welding; Lead User (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-642-41479-4_4

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DOI: 10.1007/978-3-642-41479-4_4

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