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Breakthrough Innovation – What Are They, and How Do You Create One?

Jesse Nieminen

We’ve recently been breaking down the different types of innovations and explaining their differences in a series of posts on our blog.

This time, we’re looking at breakthrough innovation.

It’s a commonly used term, and just like most other innovation terminology, there doesn’t seem to be a clear consensus on what the word means. Still, more and more startups and corporations alike are chasing after it.

So, in this post, we’ll look into what breakthrough innovation actually is, why it is important, and how to actually create one.

A Breakthrough

Table of contents

What is breakthrough innovation.

  • Why is it important?

Reusable rockets

  • 1. Identify the right opportunity
  • 2. Build the key innovation
  • 3. Scale to reach breakthrough impact

As mentioned, the definitions we’ve seen for breakthrough innovation are quite diverse. For example, some use it as a synonym for disruptive innovation , where others refer to it as a specific significant technological advance that makes a large impact on the efficiency or cost of a given product, service, or process.

However, what virtually all of these definitions have in common is that breakthrough innovation is considered to be something that fundamentally changes the dynamics of a given industry or market.

Breakthrough innovation fundamentally changes the dynamics of a given industry or market

Breakthrough innovation defined

Sure, it’s usually based on a bigger radical or disruptive innovation but must almost always be combined with a number of smaller, incremental and sustaining innovations to live up to its full potential to reshape entire markets and industries.

But more on that later, let's first try to get a better idea of why they are now more important than ever.

Why do breakthrough innovations matter?

In our current age of innovation , there are more emergent technology-based “innovation platforms” than ever before.

The impact of breakthrough innovations for the economy

Source:   ARK Invest , used with permission.

Combined with easy access to information and capital, as well as our increased understanding of new business models and technology-enabled organizations, the ground is ripe for breakthrough innovation to reshape most industries.

Thus, most industries are likely to be impacted by breakthrough innovation in the next couple of decades, and when it comes to innovation, offence is the best defence.

When it comes to innovation, offence is the best defence

However, the interesting part here is that while there have certainly been big winners that pioneered many of the technologies mentioned in the chart above, a huge part of the economic value actually comes from the compounding effect of these big, disruptive innovation platforms being applied to reshape specific industries and markets.

In other words, breakthrough innovation.

Breakthrough innovation is usually comprised of multiple individual innovation

So, as explained, the key to understanding breakthrough innovation is that it’s not just one innovation. It’s actually the combination of many innovations to tackle a specific challenge or opportunity.

The reason for this being the case is that it often isn’t possible to solve a truly meaningful problem without combining a number of novel ideas or approaches.

And even when it is, you should still aim to come up with additional innovations that help build your competitive advantage.

For example, having a technological advantage based on a specific innovation is great, but if you combine that with a novel business model and a number of process innovations, you can achieve a much bigger and more sustainable competitive advantage.

If you’re familiar with value innovation from the Blue Ocean Strategy, or the Ten Types of Innovation , this is the phenomenon that both of these great frameworks are actually built upon, even if they approach it from slightly different angles.

Examples of breakthrough innovation

To shed more light into what breakthrough innovation looks like in practice, let’s dive in and look at a couple of examples in more detail:

Airbnb is a classic example of disruptive innovation . The service started off in the very low-end of the travel and hospitality market by just renting out air mattresses for the night, and eventually climbing up-market to eventually surpass all traditional hotel chains.

Their peer-to-peer service couldn’t compete with the big hotel chains in terms of amenities or many of the other characteristics hotel guests are accustomed to, but they are able to offer a more personal experience better able to showcase the local culture instead, and at a more affordable price.

However, that disruptive core business model innovation is only a part of the story.

In addition to redefining what an authentic travel experience can be like, they also gradually made the whole customer experience incredibly smooth end-to-end, far surpassing the traditional competition.

Also, as the whole concept of staying with a complete stranger is fundamentally slightly intimidating for many, they had to build in many novel mechanisms for ensuring trust between the parties.

What’s more, Airbnb requires a critical mass of both guests and hosts to function properly. This is the part where most companies that are looking to build a platform business actually fail. However, in addition to having a great service experience at just the right time for their market, Airbnb was able to overcome the challenge by figuring out and using dozens and dozens of clever marketing innovations to ultimately gain traction, such as their Craigslist integration .

While certainly not disruptive in themselves, the aforementioned innovations all played a significant part in the breakthrough success that Airbnb has been able to achieve.

One of the most celebrated advances of the last decade was the rise of a new wave of commercial space companies, such as SpaceX, Blue Origin and Virgin Galactic.

The biggest, and certainly visually most stunning innovations in this sector has been the ability to land and reuse rockets that have been to orbit.

This technology will continue to dramatically decrease the costs of space launches, which is one of the big reasons for a number of new space related technologies and businesses, such as Starlink , becoming feasible.

While reusable rockets are quite widely considered to be a breakthrough innovation, it’s actually not a single innovation. To make them a reality, these companies actually had to come up with quite a few new technologies and innovations.

Even the list of the most notable technologies SpaceX developed for this purpose is quite lengthy, and most of the mentioned technologies are actually “systems”, which means that they can be comprised of even more novel technology.

As electric vehicles have gradually started to have a more noticeable impact on the car market, mostly thanks to Tesla, the somewhat academic debate about what kind of innovation the company actually does has picked up in the last couple of years.

Tesla is often cited as being a disruptive innovation for the incumbent automakers. However, Clayton Christensen and his followers have argued that Tesla isn’t actually disruptive but sustaining innovation. Still others have claimed the company to be a prime example of radical innovation. This article by Jay Gerhart does a great job of explaining these different points of view.

Elon Musk on Twitter

I would personally argue that academic details aside, most of these arguments are actually valid, they all simply look at the company from their own points of view.

Looking purely at the core technologies of Tesla’s vehicles, both electric motors and lithium-ion batteries have been around for quite some time and an argument can be made that even though Tesla has clearly refined these technologies, the innovations have been incremental in nature.

However, you could also argue that the way they’ve put together these innovations and constantly and rapidly kept improving them so that they’ve been able to challenge and surpass internal combustion engine cars in many ways is certainly radical innovation, not to mention some of the advances they’ve made in self-driving technology.

Tesla’s full self-driving technology does also have quite a lot of potential to become a disruptive innovation for many branches of the transportation industry.

Tesla is an example of breakthrough innovation

If, on the other hand, you look at Tesla vehicles as just a part of the overall market for new cars, Teslas are indeed sustaining innovation since they are competing in the high-end segment using basically the same value drivers as the existing competitors, such as luxury, safety, and performance.

However, their vertically integrated business model, combined with the reduced need for maintenance of electric vehicles is certainly disruptive for car dealers and service stations since it threatens to make their existing business models completely redundant over time.

Putting it all together, Tesla has innovated on so many fronts, and in so many different ways that it just doesn’t fit in neatly with most of the innovation theory. The way we see it, this is a textbook example of how breakthrough innovation actually comes about.

As proof of their innovations being a breakthrough for the industry, Tesla’s electric vehicles have actually surpassed the unit sales of their rivals in the segments they're competing in, which has forced the rest of the automotive industry to follow. Now virtually every large automaker is working on their own electric vehicles, and some, such as Volkswagen , are already betting the future of their companies on it.

How to create breakthrough innovations?

Now that you hopefully have a better idea of what breakthrough innovation is, the obvious remaining question is how to make it happen.

Based on our experience of studying the phenomenon closely and on working on the topic, I’d break the process down to three basic steps.

Of course, none of these is necessarily straightforward or easy to implement. Still, they’ll hopefully provide you with a basic understanding of what it takes.

Lifecycle of a breakthrough innovation

1. Identify the right problem or opportunity

Every breakthrough innovation starts either from solving an existing problem in the market, or by tackling a business opportunity in a fundamentally different way.

Breakthroughs are often enabled by significant advances in technology, such as the proliferation of lithium-ion batteries in laptops made the first Teslas feasible but can also be simply based on unmet needs of the market, such as Airbnb.

Either way, the problem or opportunity has to be big enough so that an innovation could lead to a proper breakthrough, and your approach to address it has be contrarian enough to really transform the way things have been previously done.

As with innovation in general, it’s notoriously difficult to really evaluate innovative ideas in the early stages. However, if you’re really shooting for breakthrough innovation, a good rule of thumb is that people need to think of your plan as crazy, or at least very overambitious.

This is certainly true for all of the examples mentioned above. For example, almost all prominent investors thought Airbnb was a terrible idea, and Elon Musk has stated that “Starting a car company is idiotic and an electric car company is idiocy squared”.

"Starting a car company is idiotic and an electric car company is idiocy squared." - Elon Musk

If you don’t already have a technology advantage, it’s probably better to try to find unmet needs from the market. Even though it doesn't sound all that glamorous, and might sometimes not lead to as big of a competitive advantage, you are more likely to succeed by focusing on the market, as opposed to researching and developing new technology.

A great way to come up with such innovations is to use a systematic approach like the “Jobs to Be Done” framework (JTBD). JTBD help you look at existing markets differently and focus on what really matters.

2. Address the opportunity with a key innovation

Once you’ve identified an appropriate problem or opportunity, the next step is simply to address that with a key innovation.

This innovation will then be the backbone and the platform on which you can then build your business on.

For example, for Tesla that is an electric drivetrain, and for Airbnb it’s the online platform that enables peer-to-peer accommodation and travel experiences.

While I wouldn’t necessarily call Viima a breakthrough innovation just yet, we’re certainly aiming to become one. Without going into too much detail, our innovation management software is simply better suited for the needs of modern innovators, or those who aspire to become one, than the competition and is also significantly more affordable thanks to our low-cost business model.

That approach of innovation actually enabling more value at a lower cost, generally referred to as value innovation,  is a great framework to use for this part of the process.

The value innovation framework

3. Scale the innovation to breakthrough impact

Innovations, no matter how great, never become overnight successes. It always takes years of relentless focus on building and scaling a business around the innovation before it leads to breakthrough impact.

What's more, as scaling such a breakthrough usually involves a lot of "firsts", nearly all breakthrough innovations require supporting innovations to get to scale.

The lightbulb needed an electric grid to become mainstream and illuminate entire cities. Personal computers really took off only after operating systems with graphical user interfaces made them viable for the masses. The list goes on, but you probably get the point.

Nearly all innovations require additional, supporting innovations to lead to impact that can truly be called a breakthrough

Some companies like Tesla choose to take care of those supporting innovations themselves but depending on the situation that isn’t always necessary.

You could also choose to do whatever you can to enable others to build on top of your innovation. This can lead to a stronger network that not only helps you achieve breakthrough impact faster, but also serves as a great way to protect the business from competition later on. This is, for example, what made Android the other big smartphone platform.

Since this is the part where you’re really shaping the eventual business and operating models, it is also the phase where you can still try to build a bigger moat and more sustainable competitive advantage for your business with additional innovations, which is where the Ten types of innovation framework can likely come in handy.

Ten Types of Innovation

While creating a breakthrough innovation is quite simple on paper, it’s anything but in real life! Breakthrough innovation isn’t for the faint of heart.

To be clear, if you’re new to innovation, we don’t generally recommend you to just get to work on building the next big breakthrough innovation.

If your management or investors don’t fully understand how difficult breakthrough innovation is and how it is often likely to take quite some time before you see significant progress, the odds are your innovation projects won’t survive, even if you had what it takes to pull them off.

Thus, unless your back is against the wall, it might be better to start off with something a bit simpler where you can build your organization and your innovation program , rehearse your skills, refine the processes and prove that you’re able to get a positive return for their investments in innovation, then move on to pursuing the breakthroughs.

If you’re looking to understand the different kinds of innovation better, as well as plan your approach for using them, I’d recommend you to take a look at our guide on the topic.

Types of Innovation Featured Image

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Breakthrough innovation and platform leadership: a case of super app from India

  • Published: 02 September 2022
  • Volume 17 , pages 229–238, ( 2022 )

Cite this article

  • Kirankumar S. Momaya   ORCID: orcid.org/0000-0002-7658-2006 1  

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Leveraging select factor advantages, several firms of Indian origin (FIOs) are doing quite well in emerging industries, including rapidly growing segments such as apps and digital platforms (DPs). Yet, gaps between apps by FIOs and super apps in China and other countries are quite vast on multiple dimensions. The entry of ‘large industrial houses of India’, with diverse capabilities across member companies, in relevant segments can help evolve innovation platforms. Particularly, it can help catch-up on critical capabilities related to management of technology and innovation (MoT) that demand deep talent and finance pools. In this short case study, efforts are made to clarify the context and dilemmas faced by top leaders of a firm, synthesized for a chief technology officer (CTO). The case provides an exciting opening context for learners of management and strategy, particularly experienced executives, as well as top leaders in firms, governments and bureaucracy. It also has a section summarizing high importance dilemmas for researchers and academicians to undertake exciting studies.

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breakthrough innovation case study

Source: Securities report by Bank of America

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Not applicable for this case study.

The name of the CTO and the firm has been anonymised at request of the firm.

Dr. K. S. Momaya developed this case solely to provide material for class discussion. The author does not intend to illustrate either an effective or less effective handling of a managerial situation, actors or processes. The author has disguised certain names and other identity information of individual or firms to protect confidentiality.

This material may not be transferred, photocopied, digitized, or otherwise reproduced in any form or by any means without the written permission of the copyright holder.

Copyright @ 2022, Kirankumar S. Momaya, SJMSOM, IIT BombayVer. 522.

Related roles such as chief innovation/information officer (CIvO/CIO), chief digital officer or vice president (Technology/products/platforms/digital/R&DDE) are also used in different proactive firms.

Our definition of technological platforms includes innovation or hybrid platforms, where technology development is orchestrated by the flagship firm(s) (Momaya et al., 2013 ).

Such flagship firms may be defined as a focal firm (e.g. in a value chain or value network) that has capabilities to shape evolution of the industry value system (IVS, Momaya, 2001 ) or network due to high level capabilities (incl. technological innovation, collaboration,..) on value curve (e.g. Umamaheswari et al., 2008). Such firms emerged to be a critical success factor in an emerging industries in a study (e.g. Momaya, 2011 ).

The ideas is to help learners identify and select better companies for higher comparability in benchmarking exercises. Only pointer to companies are given; you need to do homework on analysing their journeys.

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Acknowledgements

I acknowledge constructive comments from reviewers. We thank participants of ‘Çompetitiveness Awareness Workshops’ and ‘Paper Development Workshops’ at IITs and Glogift conferences for questions and comments. I thank Shailesh J. Mehta School of Management, IIT Bombay for the research infrastructure. I appreciate support from members of Group on Competitiveness (GoC), particularly Shivakumar M., Padmanav Adhikari, Pranusha Manthri and Sneha Bhat with data collection or pilot testing of draft caselets. Partial financial support from Wadhwani Foundation through Industrial Research and Consultancy Centre (IRCC), IITB for data collection part. and interactions at the Society for Innovation and Entrepreneurship (SINE), IIT Bombay are acknowledged.

The author did not receive financial support from any organization for the submitted case.

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figure a

Appendix A1: Working definitions of key terms

Corporate flexibility.

Capabilities of a business corporation (can be an industrial house, trading house {e.g. sogo sosha}, or orchestrator through financial linkages {e.g. Keiretsu, Chaebol,…}, or even state owned enterprises (SOEs {e.g. in China}) to leverage diverse capabilities (e.g. products to services, manufacturing to financial, software to hardware).

Digital platforms : A building block, providing an essential function to a technological system—which acts as a foundation upon which other firms can develop complementary products, technologies or services. DPs can bring together two or more types of firms, SBUs, organisations or market actors and can scale-up rapidly, if able to leverage network effects (Adapted from Gawer et al. 2002, Cusumano et al., 2020 ).

Digital platform capability : Firms ability to make connections with other firms using online platforms and orchestrate all the different resources and activities at a large scale during the process to enhance competitiveness, ideally international competitiveness on carefully selected factors of high relevance for a given context (Adapted from Shi et al. 2020, Momaya 2019).

Platform Owner : Platform owners are the focal ecosystem actors, who are responsible for the platform’s architecture and facilitate access and value creation through governance mechanisms.

International competitiveness

International competitiveness of a firm can be defined as the capability of a firm to design, engineer, produce, service a product or service or undertake above or other activities of choice on industry value system much better than competitors on relevant factors of competitiveness (Momaya, 2001 ). Above activities may be undertaken in one or multiple countries, but the relative level of international competitiveness may be evaluated on criteria such as net foreign exchange earnings (absolute, as well as percentage of net sales).

In context of platform firms, the relevant activities that help scale-up the platform in domestic and international markets can be of higher focus.

Organisational fitness

Organisational fitness is a concept that transcends traditional profitability measures by including an organisations dynamic capabilities to be innovative for continuous organistional survival and prosperity. Organisational fitness can be measured in two ways (adapted from Leibold, 2002):

Internally: looking within the organisation

By its ability to self-organize internally quickly and effectively in the face of change. This ability ranges from (1) inefective self organising that freezes in a place, through (2) an ability to keep pace with today’s rapid rate of change but not to lead this change, and culminates in (3) an ability to reorganize much faster than others.

Externally: looking externally.

By adaptation an entity exhibits within its changing context…

Appendix A2: Emerging issues of high importance

While emerging countries take baby steps on challenge levels such as SuperApps, there are several emerging issues and topics for studies where huge gaps in knowledge exist and provide high-potential for studies of different type—from micro-studies to Ph.D. level projects. We cluster issues under following heads: Macro, meso to micro level. Only more relevant micro-level issues were discussed in main part; macro-level and meso-level issues are discussed here.

Macro-level:

Excessive dominance by ‘Big Tech’ have created different approaches to ‘rein in’ by big tech countries. For instance, the countries in the European Union tried to protect emerging and local firms through tech regulations such as data privacy. Such regulation could have created baclout for tech giants such as Meta Platforms Inc. thousands of other firms that rely on free flow of information across the Atlantic (Bloomberg, 2022 ). The EU and the US tried to break the deadlock through a new data transfer pact. China has different approach to rein in tech gaints such as Alibaba and Tencent, when it seemed that imbalances were happening. Many emerging countries in other continents have less clarity on approach that can work for them.

Since regulation can create major obstacles for so called super apps, some companies may have chosen to adapt strategies such as “Hidden Champions” (Simon, 201X), a concious strategy adapted by many companies across countries. Since, super app often creates a notion that the firm is attempting to create oligopolies, even the big-tech companies having apps that come close to what super apps are supposed to deliver have consciously shied away from calling their apps super apps. Since, there are hardly any firms of Indian origin (FIOs) that have such technologies or other key competitiveness assets (Momaya, 2001 ) and the landscape in India is hyper-competitive and hence more VUCA, even most capable FIO or even industrial house should be willing to take toughest challenges to emerge a domestic winner, where real strings are in hands of less visible players. Who are such players keen on India and what are their game plans, capabilities and cooperative strategies (e.g. Momaya, 2011 ) can provide some exciting topics for studies.

Industrial houses such as Tata’s have firms with diverse capabilities across several manufacturing and services industries. Some of them have high or growing international competitiveness (e.g. TCS,……or Tata motors, Tata Steel). While earlier notions of corporate flexibility where mostly focused on synergies of conglomerate (e.g. based on financial criteria, cross-holding,…), adventures across industry boundaries by tech giants (e.g. from the USA) indicate potential of gaining competitiveness in even polar industries. For instance, starting from a book store and expanding to be an e-com giant, Amazon has been entering and disrupting diverse industries incl. in hardware (e.g. electronics) to space. Their counterpart such as Flipkart many have capabilities, but may not have been able to consider such less-related diversification for several reasons. What are such reasons constraining advances on hardware products (can be from retaining, servicing,…to getting contract manufactured abroad) for FIOs? For instance, IH such as RIL entered in hardware through pilots such as LYF (which became a top selling brand of mobile phones for some time in India), but seems to have stagnated prematurely. Can more experienced His such as Tata can go longer distances with planned SuperApp TataNeu? What capabilities across different businesses may create synergies that can be leveraged for international competitiveness of Neu?

Appendix A3: Limitations and topics for exploration and adventure

Like most mini-cases of this nature, this case also has limitations. Some of the limitations may also open up opportunities as topics for exploration and adventure. Here are just few high potential examples of the topics.

Focus of the discussion above was on enablers of competitiveness mostly at ‘Firm level’ or ‘Industrial house level’ that can facilitate BO or CU for innovation platforms. In some contexts, select dimensions of competitiveness at ‘Industry level’ or ‘Cluster level’ or ‘ecosystem level’ (including supply chains, industry value systems {e.g. GVC}) may become important. Advanced countries such as Japan often have higher maturity of perspectives on industrial competitiveness. For instance, Li, Ishii and Kameoka (2001) proposed a conceptual framework of cooperation and competition (including foundations and indicator system). They mentioned that while technology could be emulated and overtaken, quality cooperation interwined in sophisticated relational networking of information, knowledge, materials and organizations can provide better knowledge-based sustainable advantage. Such perspectives may be difficult to implement in Indian contexts, but ‘Early Steps in relevant direction’ may be important to evolve “Cooperative Strategies” (e.g. Momaya, 2009 ) for sustainable enterprises, cities and clusters.

Break-out or catch-up on journey towards innovation platform (can be from products or transaction platforms) for EMNEs may benefit from concepts such as ‘platform overthrow’ (e.g. Thomas et al., 2021 ). Probability of platform overthrow seems better in transaction platforms. However, bigger opportunities for research may be in finding drivers of overthrow in innovation platforms, where gaps in capabilities of EMNEs and hence opportunities for improvement (OFIs) are bigger.

Founders, intrapreneurs capable of transforming self, teams and ventures are emerging as major driver of competitiveness of firms and industrial houses. For instance, Digital technologies have swept the world and some proponents of ‘Digital Transformation’ (e.g. Westerman et al., 2014 ) have highlighted that even large companies in traditional industries—from finance, manufacturing to pharmaceuticals—are trying to gain strategic advantage through digital. A critical success factor identified was “leaders capable of managing how of the transformation”. What can be early indicators of leaders with such capabilities?

Some Indian experts have highlighted the trinity of Jandhan-Aadhar-Mobile (popularly called JAM), as some of the most transformative digital platforms with massive impact on way payments can be processed. For instance, many believe that Unified Payments Interface (UPI) created by the National Payments Corporation of India (NPCI) as the most disruptive payments platform in the world (Balakrishnan, 2022 ). While it certainly disrupted growing businesses such as international card companies, there is a need to think about next levels of transformative digital payments systems and ecosystems that can be world class and contribute significantly to competitiveness of MSMEs and other firms and organisations. What cooperative strategies can help evolve such systems and competitiveness can provide some exciting topics for studies?

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Momaya, K.S. Breakthrough innovation and platform leadership: a case of super app from India. JGBC 17 , 229–238 (2022). https://doi.org/10.1007/s42943-022-00059-7

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Former Senior Innovation Director David Gram joined CiMi.CON Evolution to hold a case study with the title “Breakthrough innovation through Intrapreneurship: Inventing the future of play at LEGO”. Throughout his career David has been working on breakthrough innovation development and how to build-in agility and change readiness into large organizations. His experience comes both from running his own businesses and from working with radical innovation as an internal change agent in several large global organizations such as Scandinavian Airlines and The LEGO Group. As Chef of Innovation at Scandinavian Airlines, he led the development and implementation of a new agile product development process including new approaches to project management, technology scouting and idea incubation, strengthening the innovation culture in the company. At the LEGO Group he is heading up a team of designers, business developers and project managers tasked with inventing the future of play. With a start-up mentality and an entrepreneurial mindset they are driving new and radical business initiatives from early concept development through pilot testing to growth and full global scaling. David addressed the following questions during his presentation:

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During times of uncertainty, one thing doesn’t change—your responsibility to provide value to your customers. Learn to build an innovative, resilient organization that can beat the odds amid difficult circumstances. In this three-day course, you’ll acquire the tools and frameworks you need to drive increased revenue for existing products, services, and customers, while simultaneously building new lines of business that position your organization for sustainable growth.

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Climate change. COVID-19. Digital transformation. In moments of global disruption, it is more critical than ever to understand how to dramatically boost the value your business provides to consumers. In this course, you’ll acquire proven methodologies for adapting your current product and services strategies to create more robust, resilient models and future-proof your innovation efforts. Going beyond theory, you’ll learn a 5-Level Digital Transformation Framework, 3-Step Experience Centerlining Process, and other actionable approaches, and leave primed to utilize the latest technologies to build better customer experiences and a significantly more innovative organization.    Led by innovation and design-thinking experts, Breakthrough Innovation: Creating Value in Times of Global Uncertainty features case study discussions, interactive lectures, and hands-on exercises, including an organizational self-assessment that will help you tailor your learning for your unique needs. Working alongside global peers, you will examine the five forces that shape the economic impact of digital technologies, discover how to quantify innovation, and learn how to invest for innovation in the medium- and long-term—including during periods of disruption.

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  • Develop robust and resilient business strategies amid global uncertainty and rapid cultural change
  • Leverage the power and potential of digital technologies—in particular, AI/machine learning, IoT, and robotics—to drive business transformation and create value
  • Apply advanced Design-Thinking techniques to create breakthrough innovations
  • Conceive new user experiences in areas where there is no prior solution to leverage
  • Overcome organizational obstacles and gain the traction to drive implementation
  • Build a business that fosters mutually beneficial partnerships to create robust ecosystems, develop new products, and enhance the user experience

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This course runs 9:00am-5:00pm EDT each day.

  • Session 1: The New Strategic Imperative
  • Session 2: How Advanced Technologies, COVID, and Climate Change Impact Strategy
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  • Session 4: Quantified Innovation 
  • Session 5: Experience Centerlining: Creating-High Value Customer Experiences
  • Session 6: K-Matrix White-Space Innovation
  • Session 7: Organizational Ambidexterity and Acuity
  • Session 8: Finding New Opportunities 
  • Session 9: Creating New Combinations & Capturing Value
  • Session 10:  Building a Robust and Resilient Business
  • Session 11: Group Project Workshop
  • Session 12: Closing Session

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  • Profile of Blade Kotelly, MIT Industrial Liaison Program
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  • Engineering managers who are looking for innovative solutions for organizational challenges.  
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  • Entrepreneur s who want to capitalize on disruption and the latest technological advancements. 
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Breakthrough Innovation: Conquering Ideation Challenges

Creative

BT & DTS EXECUTIVE UPDATE VOL. 22, NO. 8   

We are entering an era that will demand unheralded levels of creativity because companies will need to constantly innovate and reinvent themselves to succeed in their search for growth and margins. The portion of revenues from breakthrough innovation 1  is expected to grow four times faster than that from incremental innovation , according to a recent Arthur D. Little (ADL) survey of large organizations worldwide. Consequently, there will be increasing pressure on companies to generate a steady stream of high-quality ideas to deliver top- and bottom-line growth. (For further details on the survey, see Appendix.)

As we explore in this Executive Update , some leading companies are rising to the occasion by launching time-limited ideation challenges for key strategic issues and then instituting a dedicated process to enrich and select winning ideas. To sup­port this initiative, senior leaders must devote a significant amount of time to ideation and be fully involved from start to finish in the ideation process. Lastly, innovation leaders must prevent excessive “infant mortality” of radical ideas and ringfence resources to maintain a balanced R&D portfolio.

Why Is Managing Ideas So Important?

This situation probably sounds familiar — your company brainstorms or applies other methodologies to generate a vast quantity of ideas; however, this process doesn’t seem to translate into a healthy, balanced portfolio of R&D projects. Certainly, there is an inherent ”creativity” among your people and a strategy is in place, but somehow the “killer ideas” just don’t seem to emerge. Getting this stage right is important for several reasons:

  • Costs will incrementally rise. Ideas are initially free, but as time passes the sunk cost grows and grows. Getting the early stages right is important; otherwise, you waste money on failed or misaligned developments.  
  • Ideation is difficult. There is a reason we call ideation the “fuzzy front end”; it is much more nebulous than the downstream development processes. Risk is harder to manage because uncertainty is at its highest and outcomes are unpredictable.  
  • Putting the groundwork in place to exploit ideas requires drive, ambition, and vision. These goal-setting characteristics help mobilize the significant cross-functional and cross-divisional support required for success.  

Ideation Challenges

Innovation ranges from new, radical business models (e.g., Uber) to low-technology marketing changes (e.g., Absolut honey-flavored vodka). The focus of this Update is about the process for creating and managing ideas that require significant R&D before commercialization within technology-intensive industries. Let’s examine four main challenges within ideation and idea management.

Formulating Ideas in Alignment with Strategy

Companies need to generate good original ideas in line with their strategy. In general, there are three main sources of inspiration for ideas:

  • Customer requests for incremental improvements to existing products. The desire to please existing customers is noble, but these requests typically translate into very limited growth and will sometimes only maintain existing market shares in existing markets. In the modern world, don’t aim to stand still.  
  • Technology developments. R&D personnel typically unearth these developments, and they can be an important source of new growth. They often result from reserved technology “tinkering” time or partnerships with universities and can be important in demonstrating technical leadership.  
  • Ideas guided directly by strategy are typically acknowledged as the most valuable, destined to make the most significant contribution. These tend to come from insight into future market needs and are often based on relevant megatrends.  

It is important to strike the right balance between these three sources of inspiration. The last category offers the most value in the long run but is also the most challenging.

Managing Quality vs. Quantity

Many tools are available that can help generate a vast quantity of ideas. The real challenge is emerging from this process with sufficient good business opportunities — well-crafted and well-articulated — that align with the company strategy and are ready to enter the R&D development portfolio. Open innovation approaches, in particular, can suffer from the “quality vs. quantity” challenge as innovation portals often end up drowning under a vast quantity of submitted ideas framed around the perspective of the submitter rather than the strategic needs of the company. Assessment of these ideas and managing the resulting intellectual property minefield can often tie up significant resources.

Coping with the Fragility of Ideas

Ideas are fragile. Infant mortality (of the ideas) is to be expected, of course, and is even desirable since the pipeline should be loaded with an excess of ideas to promote competition. However, it is important that good ideas survive and escape an early death if their potential was not easily apparent due to the use of inappropriate assessment criteria.

Finding Breakthrough Ideas

Breakthrough innovation is difficult. Indeed, ADL’s survey shows that 88% of responding companies are dissatisfied with their breakthrough innovation performance. To maintain a balanced R&D development portfolio, it is important to have a source of new breakthrough opportunities that can integrate well into the portfolio. We often see idea portfolios that are far too heavily weighted toward incremental innovation. Creating breakthrough ideas requires looking further afield and tends to be more challenging. Although 80% of surveyed companies believe it is important or very important to look externally for ideas, only 39% are satisfied with their performance at this.

Case Studies

From the rich material that surveyed companies shared, we have identified some common challenges regarding ideation. Anonymized case studies are presented below.

Case Study 1: Grand Ideation Challenges

Company A is in the oil & gas industry sector and has a turnover well in excess of about US $50 billion. To gather ideas to tackle key targeted strategic and operational issues, it launched the following time-limited external challenges:

  • Back-office support. Tight deadlines have required Company A to develop a very robust “backroom” process and the capability to handle hundreds of submitted ideas in a short time frame. Every potential idea is subject to an assessment that results in rejection or enrichment of the initial idea.  
  • Customized assessment criteria. This process uses different assessment criteria for each business challenge. The review panels are composed of a fixed number of generalists who run the idea management process along with some specialists for each challenge.  
  • Online portal. There is a dedicated open innovation portal, where challenges are illustrated and the system tracks a number of key performance indicators on a dashboard for idea management: number of ideas, the review stage, evaluation and feedback, and so on. Company A has integrated LinkedIn with its innovation portal to make it possible to share ideas and insight discussions with a wider audience.  
  • Building insight. As well as a source of ideas in alignment with the strategy, one particularly novel outcome of the challenge approach has been the use of multiple internal and external contributions to generate broader and more general insights on challenge topics. Company A has captured and used these insights to structure feedback provided to idea generators as part of the idea-enrichment process.  

Case Study 2: Idea-Enrichment Process

Company B is in the chemicals industry with a revenue of around $10 billion. As Figure 1 illustrates, this company employs a multistage process for ideation that focuses on identifying the correct challenges to pursue and then connecting with ideators (including using “grand” challenges, explained in the next section) to seek potential opportunities. The main focus is high value-add for modest effort.

The later stages of this process are designed to enrich and select ideas. This is performed using a small four- to five-person idea committee, which is cross-functional and encompasses multiple business units to enable cross-fertilization. Subject matter experts are sometimes asked to add comments and integrate ideas. Business units get visibility of ideas before the stage gate project-planning stage and appoint a project leader and steer­ing committee. The steering committee is responsible for approving that the project is ready to begin by validating the project plan, resources, and deliverables. Finally, lower uncertainty incremental ideas can be fast-tracked through the process to speed the route to development.  

breakthrough innovation case study

Insights into Best Practice

Typically, companies that face ideation challenges have developed a strategy and have the required resources in place. However, the problem is often with the processes and, sometimes, the organizational structure. The following four best practices can help address these challenges:

  • Launch “grand” challenges. Launch time-limited ideation challenges that align with company strategy. Each challenge should run for a limited duration (typically a few months) and be advertised to a range of internal and external sources of new ideas. This might involve a Web portal and announcements at research seminars, conferences, and other meetings to raise awareness. To get a valuable response, it is essential not only to ask the right questions but also to ensure that you frame and word them correctly. The approach described in Case Study 1 catalyzes idea generation in one area and helps ensure that the submitted ideas align with strategy. However, it requires a significant cross-functional backroom effort to assess challenges, consider synergies, enrich ideas, and provide feedback to idea creators. Internal contributors should be asked to comment on submitted ideas as well as on the topic in general. A key benefit of this approach is gathering and aggregating insight from a diverse range of sources to build a holistic understanding of the issue.  
  • Allocate resources for idea enrichment. Many tools for idea generation have been developed over the years and most include a selection stage. However, only relying on generating sufficient raw ideas and then hunting down the proverbial needle in a haystack is an inefficient approach. In contrast, top innovators should view the post-creation management of ideas as a distinct enrichment process in which complementary ideas can be combined or rejected ideas can shed light on those taken forward. Case Study 2 shows the implementation of a multistage process to gradually review, enrich, and select ideas — with each selection gate opening the door to increasing resources for investigation:  
  • The first review uses qualitative, business-driven criteria and leads to a commitment of minimal resources for investigation into major showstoppers. This will typically involve a few person-hours of effort per project as the key at this stage is to generate far more potentially high-value options than there are resources to develop.  
  • The second review uses a broader, cross-functional decision-making committee armed with better information, which potentially permits a more detailed exploration, typically with structured contributions from a multidisciplinary team to enrich and widen the solution space.  
  • By the final stage, surviving projects can be plotted on portfolio diagrams to give a holistic view of all projects ready for prioritization. Project proposals are prepared, and the first pivotal “go/reject/hold” decisions are made. Projects are selected to balance the portfolio of activities and will be allocated significant resources as they move into the implementation stage.  

In all of this, it is important to find an efficient solution because the workload can easily spiral out of control if good organization, reporting, and assessment mechanisms are not developed.

  • Engage senior leadership. As in so many aspects of innovation, senior engagement and support are key. Creating and enriching good ideas is one of the most challenging activities a company has to perform. Uncertainty and risk are high and often confidence is low, making it too easy to kill good ideas that could blossom. By way of example, one benchmark arranged monthly slots in a diary for ideation to secure VP attention. Another ensured senior business unit champions for every selected idea chartered for development. This provides visibility into the business units’ R&D activity and a steadying hand on the tiller.  
  • Use a different process for breakthrough ideas. You need to manage breakthrough ideas differently from incremental innovation. Breakthrough ideation requires the suspension of disbelief to prevent the rejection of imperfect ideas because they are not fully developed. In ADL’s survey , 60% of participants recognized modifying the ideation process as important or very important, but 75% had either not or only partially implemented the following:  
  • Modified selection criteria to manage increased risk and uncertainty and reduced knowledge  
  • Increased stages of enrichment (including chartered knowledge or competence building projects if required)  
  • Creation of separate organizational groups, if appropriate  
  • Development of a “radical” mindset; that is, flexible and open to opportunity without imposing unnecessary constraints  

Many companies are unsatisfied with their innovation efforts and part of this is undoubtedly due to challenges around ideation and idea management. The required contribution of breakthrough innovation is ever-increasing, adding to this pressure. However, it is clear that some companies have developed strong processes and are reaping the rewards. The best practices outlined in this Update can help.

Ask yourself:

  • Do you know your key strategic challenges? What is stopping you from launching a 100-day targeted challenge?  
  • How well do you enrich ideas? Do you just pick and choose, or do you learn from the losers as well?  
  • Does your senior leadership team have regular slots in the diary for ideation to support and engage in the ideation process? If not, why not?  
  • Do you have separate processes for radical ideas?  

The good news is that there are a clear set of processes and best practices that your company can implement to greatly enhance the management of ideation. These practices generally don’t require extensive organizational change. What you do need, of course, is the will to change.

In 2013, Arthur D. Little completed its 8th “ Global Innovation Excellence Survey ” (GIES), a cross-industry survey of trends and best practices in innovation management. Drawing on more than 1,000 responses across the past two GIES surveys, we have shed new, quantitative light on the basic key question: what innovation management techniques achieve the best return on innovation investment?

In 2014-2015, ADL followed up with a study to gain more in-depth qualitative insight into emerging R&D management practices, developing 23 case studies with 15 companies identified as innovation leaders. These global participants have an average revenue of about $30 billion and are spread across a broad range of technology-intensive industries (including medical devices, pharma, consumer goods, specialty chemicals, food and beverage, oil and gas, and industrial equipment). The firms are evenly split between those headquartered in the US and Europe.

In 2019, ADL integrated these best practices into the “ Global Innovation Excellence Benchmark ,” which now specifically includes assessments of ecosystem management, Agile, breakthrough innovation, and digitally driven innovation.

1  For more on breakthrough innovation, see “ The Breakthrough Incubator: A Radical Model for Innovative New Business ” and watch the Cutter Consortium webinar “ How to Innovate Innovation: Creating New Stepout Businesses .”

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breakthrough innovation case study

Benchmarks & Case Studies

Breakthrough Ideation Model

This case study tells the story of an industrial company through its innovation journey from a traditional, product-centered process to an innovative model capable of generating 2% of the company’s revenue. The model was built based on three pillars – the ideation process, screening standards and open ideation platform.

The company

A player in the food industry for several decades, the company in question combines tradition and rigor with a focus on innovation as a formula for success for its long-term growth.

Spread around the world, the company’s products are part of the daily lives of consumers. In addition to the best ingredients, texture, and flavor, each product reflects the experience, dedication and knowledge of many people, generations and teams, as well as their desire to innovate, to be at the forefront of technology and to support sustainable development.

However, the innovation process was product-centered and there was a need to broaden the scope.

The challenge

The Breakthrough Ideation project started after a two-year journey of continuous improvement within the production, logistics and maintenance areas.

In the diagnosis phase, the innovation process was analyzed and the multifunctional team realized that despite the effort to innovate, the innovation was informal and narrow (product-centered). Moreover, there was the absence of an idea generation process and a gap between successfully approved ideas and the New Product Development (NPD) funnel.

With this opportunity in mind, the purpose of the project was to establish a strong process and define the right governance for innovation as a core growth driver.

The approach

The first step was to clarify the essence and different approaches to Ideation and New Product Development. On one side, ideation targets medium/long-term disruptions in business models, services, products, equipment and technology. On the other side, the new product development materializes in short-term projects created by the internal team to deliver new products to the market.

Cause-effect diagram

Ideation vs. NPD

The ideation model was built based on three improvement pillars:

  • Development of a company-wide and strategy-linked ideation process
  • Implementation of a screening process for idea prioritization and assessment
  • Development of an open ideation platform with an external pool of contributors (suppliers, customers, clients and field experts)

Ideation System

Since the target was to establish the innovation process as a growth driver, it was decided that the ideation resources would directly report to the board. This team would act as project managers in the development of ideas with multifunctional teams with people from inside the company as well as tech and science actors, customers and suppliers.

Cause-effect diagram

Governance model

The next step was to define the sequence of activities needed to reach a pool of rich and fruitful ideas that would start with the business strategy and insight integration as well as idea creation, filtering, prioritization and development. This was time bounded in the annual calendar of activities with five key moments:

  • Strategy communication and deployment to innovation team
  • Trends presentation
  • Ideation forum
  • Follow-up session of ideation projects
  • Final presentation and project selection

Cause-effect diagram

Annual ideation calendar

Open ideation platform

The open ideation platform is a place where the ‘community’ can present, vote and discuss their ideas. The platform works with upvoting where each person can like and complement others’ ideas leading the most liked ideas to get higher scores and therefore higher visibility.

In this case, two platforms were created – an internal platform to challenge internal stakeholders to ideate around specific topics and open platforms to collect the best ideas from players all over the world.

Cause-effect diagram

Open ideation contributors mapping

Apart from the open ideation outputs, the thought inputs come from multiple sources:

  • Improvement cycles (PDCA) from teams in all tiers of the organization
  • Consumer/market/customer service lines that are integrated by the marketing team as well as business intelligence analysis
  • Brainstorming sessions by the ideation team
  • Complaints sorted by the quality department

Idea generation process

The idea generation process starts within the organization with analysis of thoughts captured from multiple sources and is followed by brainstorming sessions.

After mapping all the insights, they are combined in clusters marking the starting point for the idea creation stage which is based in clearly defined guidelines.

This process happens during the ideation forum sessions with standard agendas and protocols.

Cause-effect diagram

Ideation process with milestones, deliverables and tools

Idea screening process

At this stage, the team should detail the ideas that have emerged using the ‘Idea Card’. The card allows a simple and visual way to understand the different ideas summarized with the main points – a brief description of the idea, implementation requirements and estimates of benefits, investment and time-to-market.

The systematized description facilitates the comparison of ideas for the selection of those that should continue in the process.

Cause-effect diagram

For the selected ideas, it is necessary to carry out an evaluation of their potential considering:

  • Necessary investment – quantify the cost-benefit analysis of the different items
  • Estimated benefits – define in more detail than in the ‘Idea Card’ what the gains with the implementation can be
  • Risk management – use the tool to classify and quantify the associated risks and the impact they may have

Cause-effect diagram

Economic potential analysis of executing the idea

The last step would be the handover to the project implementation team and the joint creation of the project initiation A3.

Achievements

In the first year of implementation, eight ideas were selected and developed, and two innovative concepts were moved to the project development funnel. The revenue generated by the innovation process accounted for 2.2% of annual revenue and was the first step towards the inorganic growth of the company.

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Management Decision

ISSN : 0025-1747

Article publication date: 21 November 2023

Issue publication date: 22 January 2024

This paper aims to reveal how different types of events and top management teams' (TMTs’) cognitive frames affect the generation of breakthrough innovations.

Design/methodology/approach

Drawing on the event system theory and upper echelon theory, this study chose a Chinese manufacturing enterprise as the case firm and conducted an exploratory single-case study to unpack how breakthrough innovation generates over time.

By conducting the in-depth case analysis, the study revealed that firms do not produce breakthrough innovation in the catch-up stage and parallel-running stage but achieve it in the leading stage. It also indicated that when facing proactive events in the catch-up stage, TMTs often adopt a contracted lens, being manifested as consistency orientation, less elastic organizational identity and narrower competitive boundaries. In addition, they tend to adopt a contracted lens when facing reactive and proactive events in the parallel-running stage. In the face of reactive and proactive events in the leading stage, they are more inclined to adopt an expanded lens, being manifested as a coexistence orientation, more elastic organizational identity and wider competitive boundaries.

Originality/value

First, by untangling how TMT's cognitive frame functions in breakthrough innovations, this paper provides a micro-foundation for producing breakthrough innovations and deepens the understanding of upper echelon theory by considering the cognitive dimension of TMTs. Second, by teasing out several typical events experienced by the firm, this paper is the first attempt to reveal how events affect the generation of breakthrough innovation. Third, the work extends the application of the event system theory in technological innovation. It also provides insightful implications for promoting breakthrough innovations by considering the role of proactive and reactive events a firm experiences and TMT's perceptions.

  • Top management teams (TMTs)
  • Cognitive frame
  • Breakthrough innovation
  • Event system theory

Acknowledgements

The authors show great thanks for comments from two reviewers at the 17th International Symposium on Global Manufacturing and China and from two anonymous reviewers and the Editor Randolph-Seng, Brandon.

Funding: This work was supported by the National Natural Science Foundation of China (Grant number: 71872027, 72172024).

Yang, X. and Shao, Y. (2024), "TMT's cognitive frame and breakthrough innovation", Management Decision , Vol. 62 No. 1, pp. 50-87. https://doi.org/10.1108/MD-07-2022-1014

Emerald Publishing Limited

Copyright © 2023, Emerald Publishing Limited

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HANNAH BATES: Welcome to HBR on Leadership , case studies and conversations with the world’s top business and management experts, hand-selected to help you unlock the best in those around you. If you’re  , you’ll need some very specific leadership skills. Do you know what they are? Harvard Business School professor Linda Hill says that leaders who shepherd innovation can’t rely on formal authority. Instead, they need to understand how to get people to co-create with them.  Hill studies leadership and innovation, and she says leaders who are great at leading innovative projects understand how to keep their teams committed to a project for the long run. In this episode you’ll learn how to do that using the ABC’s of innovation leadership. That’s A for architect – which is knowing how to assemble the right team. B for bridger – connecting with outside talent and resources. And C for catalyst – getting things done. This episode originally aired as part of the HBR Quick Study video series in September 2022. Here it is.

LINDA A. HILL: We know that one of the key reasons why organizations aren’t able to innovate organizations aren’t as agile as they need to be is they don’t have the kind of leadership they need. If you came to the Harvard Business School 100 years ago, great leadership was really about setting direction and making sure that people went in that direction. How do you come up with strategy?

When I came almost 40 years ago, we moved a bit from strategy to, really, vision. So people like John Kotter and Warren Bennis helped us understand that people needed to have a bigger ambition than just the strategy. What’s the vision? Where are we going and why?

What I’ve come to see as I’ve begun to do research in the 2000s– yes, you still need to be a visionary. But guess what? Because innovation has become ever more important, that means, really, moving from vision to shaping culture and capabilities.

You have to move from focusing on, OK, what’s my vision and how do I communicate and get people to follow me to the future? Instead, leading innovation is about getting people to co-create that future with you. And co-creation requires a different kind of leadership.

If you want to lead an organization and build an organization that can innovate at scale with speed, really, leaders have three functions they have to fulfill. The ABCs of leadership– A, you must be an architect, B, you must be a bridger, and C, you must be a catalyst.

The first role is the role of architect– building the culture and capabilities necessary for a group of people to be able to collaborate, experiment, and learn. Innovative work is not about an individual having an aha moment. It’s really about a collaboration of individuals with diverse expertise, diverse points of view and experiences, who figure out, again, how to collaborate, how to experiment and learn together with some speed– what we call collective genius.

The idea here is that everyone in your organization has a slice of genius. Everyone has talents, everyone has passions. Your role as a leader is to unleash the diverse slices of genius in your organization and then leverage and harness them for the collective good. How do you get everyone in the organization to understand that they need to work on not just what they should be doing, but what they could be doing?

The second is B, or bridger. We have to go outside the organization to get access to talent and tools. You need to be able to bridge, because you do not have the talent and tools you need inside your organization to innovate at speed or at scale. Just don’t. Particularly now that digital is such a big piece of it, you are always, you and your organizations, are really embedded in a web of interdependencies.

And that means trying to innovate across boundaries. So we see many organizations building

out new units or asking leaders to lead units in which they really are serving as the bridge between the outside of the organization and the inside.

We’ve been studying leaders who run innovation labs, corporate accelerators– even organizations that were digital first are finding that they need to partner with other digital first companies to get access to the cloud, right? Because other organizations might be better at it than they are better at it, and they need to focus on other things that are their core capabilities.

And then the third is catalyst. And this is when you’re trying to accelerate co-creation throughout the entire ecosystem. And there can be a couple of reasons for why you want to do that. One may be that for you to do what you want to do inside your organization, you need other people, other organizations to be able to innovate, because they got to create something that you need to fulfill your purpose.

The other is, fundamentally, because you’re trying to just create more capability in the whole ecosystem. Because when you lift the whole, everyone gets lifted. It’s when your ambition is much, much greater than your organization and you’re maybe trying to change a country, or the prospects of a whole continent. So you have to get the whole ecosystem active and co-creating if you want to do that kind of thing.

An example would be if you want to be as secure yourself in your own internet service, then if you can help your clients be more secure, have more cybersecurity, that helps you as well. So that’s an instance of being a catalyst. But when you’re actually doing the act of working across, that is where you’re being a bridger. So these three roles are very interconnected.

We’ve been studying the leader who runs the trials for Pfizer. It turns out that Pfizer can only innovate and be as agile as it needs to be if, in fact, their vendors are agile and able to innovate. So we have leaders there who are working across with vendors and turning those vendors into partners, where, in fact, we have a real connection.

We do trust each other. We do know how to influence each other. We are willing to make mutual commitments. Because only when we have that deep connection are we willing to do the hard work together necessary to actually do something like run those trials in 266 days and make the impossible, possible.

Now, what you see– again, the catalyst role of that same leader– is working to put together consortia of people who are in the pharmaceutical industries to go back and think about, what are some new standards we want to set? And talk with regulators about now that we know what’s possible, will allow us to bring hope to patients even faster if we work across the industry to raise all of our capacity to do more innovative work. So what we see is organizations have to go outside to get what they need.

What they’re really all about is learning how to exercise influence when you don’t have formal authority. We’ve got to let go of formal authority as our source of influence and power. Instead, we’re using, if you will, being able to shape culture and capabilities, being able to forge connections between diverse parties, real connections where we actually have mutual trust, mutual influence, and mutual commitment.

Don’t rely so much on your formal authority as a way of influencing people. It’s not very useful, because with formal authority, if you’re using that as your source of power, maybe you can control people, but you’re not building their commitment. And you need commitment if you want to have people take the risks associated with trying to do something new and useful, particularly a breakthrough kind of innovation.

You don’t use formal authority as a way to get things done, because you cannot tell people to innovate. You can only invite them. It is a voluntary act.

HANNAH BATES: That was Harvard Business School professor Linda Hill on the HBR Quick Study video series. Hill is the author of the book Collective Genius: The Art and Practice of Leading Innovation . We’ll be back next Wednesday with another hand-picked conversation about leadership from the Harvard Business Review. If you found this episode helpful, share it with your friends and colleagues, and follow our show on Apple Podcasts, Spotify, or wherever you get your podcasts. While you’re there, be sure to leave us a review. We’re a production of the Harvard Business Review. If you want more podcasts, articles, case studies, books, and videos like this, find it all at HBR dot org. This episode was produced by Scott LaPierre, Anne Saini, and me, Hannah Bates. Ian Fox is our editor. Video by Dave DiIulio, and Elie Honein, Animation by Alex Belser. Music by Coma Media. Special thanks to Maureen Hoch, Adi Ignatius, Ramsey Khabbaz, Nicole Smith, Anne Bartholomew, and you – our listener. See you next week.

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Where Good Technologies Come From: Case Studies in American Innovation

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Driving directions from your iPhone. The cancer treatments that save countless lives. The seed hybrids that have slashed global hunger. A Skype conversation while flying on a Virgin Airlines jet across the continent in just five hours. Where did these everyday miracles come from?

As soon as the question is asked we know to suspect that the answer is not as simple as Apple, Amgen, or General Electric. We might recall something about microchips and the Space Race, or know that the National Institutes of Health funds research into new drugs and treatments.

But most of us remain unaware of the American government's support for technology and innovation. Our gratitude at being able to video chat with our children from halfway around the world (if we feel gratitude at all) is directed at Apple, not the Defense Department. When our mother's Neupogen works to fight her cancer, we thank Amgen, not NIH or NSF.

In a groundbreaking new report, titled Where Good Technologies Come From: Case Studies in American Innovation , Breakthrough set out to understand the depth and breadth of state-led innovation. So where do good technologies come from? One answer is visionary presidents. From George Washington to George W. Bush, under presidents both Republican and Democrat, the unbroken history of American innovation is one of active partnership between public and private sectors. Washington helped deliver interchangeable parts, which revolutionized manufacturing. Lincoln, the railroads and agricultural centers at land grant colleges. Eisenhower, interstate highways and nuclear power; Kennedy, microchips. But some of America's most important technologies came out of programs that spanned multiple presidents, as in the case of medical and biotechnology research; President Richard Nixon launched the quest to cure cancer in 1971, while funding for the National Institutes of Health tripled under Presidents Bill Clinton and George W. Bush. Another answer is war. Interchangeable parts were developed at public armories, originally for rifles. One hundred and fifty years later, microchips, computing, and the Internet were created to guide rockets and communicate during nuclear war; today those technologies power our laptops and smartphones.

But outside of war, the United States has made decades-long investments in medicine, transportation, energy, and agriculture that resulted in blockbuster drugs, railroads and aviation, new energy technologies, and food surpluses. America's brilliant inventors and firms played a critical role, but it is the partnerships between the state and private firms that delivered the world-changing technologies that we take for granted today. The Origins of the iPhone There may be no better example of the invisible hand of government than the iPhone. Launched in 2007, the iPhone brought many of the now familiar capabilities of the iPod together with other communications and information technologies made possible by federal funding:

  • The microchips powering the iPhone owe their emergence to the U.S. military and space programs, which constituted almost the entire early market for the breakthrough technology in the 1960s, buying enough of the initially costly chips to drive down their price by a factor of 50 in a few short years.
  • The early foundation of cellular communication lies in radiotelephony capabilities progressively advanced throughout the 20th century with support from the U.S. military.
  • The technologies underpinning the Internet were developed and funded by the Defense Department's Advanced Research Projects Agency in the 1960s and 70s.
  • GPS was originally created and deployed by the military's NAVSTAR satellite program in the 1980s and 90s.
  • Even the revolutionary multitouch screen that provides the iPhone's intuitive interface was first developed by University of Delaware researchers supported by grants and fellowships provided by the National Science Foundation and the CIA.

The History of American Innovation The iPhone is emblematic of the public-private partnerships that have driven America's technological leadership. Historically, this partnership has taken two general forms. First, the government has long acted as an early funder of key basic science and applied research and development. So it was in agriculture, when the government created new land-grant colleges and expanded funding for agricultural science, leading to the development of new and better crops. In medicine, many of today's blockbuster drugs can trace their existence to funding from the National Science Foundation (NSF) and the National Institutes of Health (NIH). In addition to providing robust funding for new scientific discovery and technological advancement, the government has also routinely helped develop new industries by acting as an early and demanding customer for innovative, high-risk technologies that the private sector was unable or unwilling to fund. Military procurement during and after World War I helped America catch up to its European rivals in aerospace technology and was key to the emergence of the modern aviation industry. Decades later, the modern semiconductor and computer industries were created with the help of government procurement for military and space applications. The case studies herein also demonstrate that when this vital partnership between the public and private sector is severed, so too is American economic leadership. Once a global leader in wind and solar energy technology, the United States faltered and never fully recovered as public support ceased and other governments - Denmark, Germany, and Japan - increased their investments and stepped in to assume the mantle of leadership in the emerging sectors. U.S. leadership in semiconductors was also imperiled for a time, only to be restored through renewed public-private collaboration sponsored by President Ronald Reagan's Department of Defense and a consortium of the industry's leading figures. From hybrid crops to blockbuster drugs, nuclear power to wind power, and microchips to the Internet, this report compiles a series of Case Studies in American Innovation that detail the role this key public-private partnership has played throughout more than two centuries of successful American innovation.

Download the full report Where Good Technologies Come From here. See Also:

  • Presentation: Where Good Technologies Come From [.pptx] , delivered by Jesse Jenkins (Director of Energy and Climate Policy, Breakthrough Institute) and Daniel Sarewitz (Director, Center for Science, Policy, and Outcomes, ASU; Breakthrough Institute Senior Fellow) at the Energy Innovation 2010 conference, December 15, 2010.

Devon Photo 122018 2

Devon works for Google's Global Energy Market team. He was a Project Director at Breakthrough, 2009-2012.

Jesse Jenkins Headshot

Jesse Jenkins is a postdoctoral Environmental Fellow at the Harvard Kennedy School. He was previously the Director of Energy and Climate Policy at Breakthrough.

Yael Borofsky Headshot

Yael is a PhD candidate at ETH Zurich. She was previously Project Director and Associate Editor of the Breakthrough Journal.

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How Dyson's Innovation Became Its Key To Success

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One of the leading British technology firms,  Dyson Limited,  offers innovative, modern, and highly functional home and office products, ranging from vacuum cleaners, air purifiers, and heaters to hand dryers, hairdryers, and fans.

Such has been the company's remarkable growth in 3 decades, ever since 1991, that it is now among the crème de la crème in the consumer discretionary products industry. Yes, that’s right!

Here are some stats, highlighting Dyson’s prowess and stature as one of the leading companies in the world:

  • Revenue of £5.2 billion in 2021
  • Profit of $1.5 billion in 2021
  • Number of Dyson employees: 14000+ in 2021
  • Dyson machines are present in more than 65 countries
  • Invests about $10 million per week in product development
  • Set to invest $3.7 billion to double product range by 2025

The ubiquity and reputation of the company's products are such that they are renowned, revered, and demanded around the globe.

Let’s now delve deep into Dyson’s history to understand how it all began with a simple idea and how it continued to climb in the corporate world.

So, without any further ado, let’s get started!

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The Dyson Innovation Strategy Journey 

Dyson Limited is the brainchild of James Dyson, who started the company on his own without any formal degree or background in business. His journey from barrows to #60 on the  Bloomberg Billionaires Index  with a net worth of $26.2 billion leaves little to the imagination. 

Before we dive deeper into the company that continues to set the bar higher and leave people awestruck with its futuristic and impressive products, including cordless and bagless vacuum cleaners to bladeless fans, let’s understand the force powering it ahead: James Dyson.

James Dyson: The One Man Army

Born in 1947 in the town of Cromer, Norfolk, on the east coast of England to a family of academics and creatives, James Dyson first studied in a boarding school known as Gresham’s School in Holt, where he was immersed in arts and languages. 

Then he decided to pursue liberal arts at the Byam Shaw School of Art for a year, followed by the Royal College of Art (RCA), where he studied interior designing and furniture design for four years. Subsequently, he stumbled upon engineering and was fascinated with how it can be leveraged to make things work better. 

The Dyson Sea Truck

At RCA, Dyson began working with a British entrepreneur, Jeremy Fry, to build a landing aircraft. This is where he learned to engineer and develop a product from scratch. 

dyson sea truck

James Dyson's Rotork Sea Truck

Together, they designed and developed the Dyson Sea Truck – an amphibious high-speed landing craft with a smooth fiberglass hull. Dyson even used the design as his thesis project in 1970, and once he graduated with his degree in interior designing, he was hired to sell Sea Trucks at Rotork Controls Ltd, the company headed by Fry.

The Sea Trucks were undoubtedly a success as they were selling over 200 boats per year, and their customers included Scottish lairds who used them to transport goods and even the Egyptian army, which deployed them in the war with Israel in 1973.

The Dyson Wheelbarrow Paving The Way For Something Big

During his sprees at renovating and repairing his three-hundred-year-old farmhouse in the Cotswolds, Dyson found himself spending quite a bit of time with a wheelbarrow. He soon discovered the faults in the equipment and realized how unstable and crummy it was, with its rubber wheel sinking into the ground, puncturing, and leaving marks and the shallow and wide metal trough sloping the contents.

dyson wheelbarrow

James Dyson's Ballbarrow

Dyson soon came up with a solution to design a deep molded-plastic trough and replace the barrow with a ball instead of the wheel called Ballbarrow. 

It would be an understatement to say that it was a success in the U.K. as, within a year, the Ballbarrow had taken more than half of the wheelbarrow’s market and was selling around  45000 units  in a year. However, before he got the chance to enter the much bigger U.S. market, his idea was emulated by someone else – stolen by an ex-employee and shared with a Chicago-based company, according to Dyson.

However, Dyson was not dismayed by his misfortune, and instead of being crushed and starting a litigation war, he moved forward to the idea that put him on the world map: a bagless vacuum cleaner. 

Key Takeaway 1: Be Inquisitive, Be Hungry, Be On The Lookout For Opportunities

Making things work better and solving problems has been at the very heart of Dyson from the beginning. Once Dyson found out the ideal match of design and engineering, he got to work and began solving real-world problems.

He helped design and develop a boat named Sea Truck which was used for transportation and military use. Then he took on the task of redesigning the wheelbarrow as he simply could not ignore the problems he faced while using it. His invention: the “Ballbarrow,” became a huge success and propelled him to fame. But even before he had the chance to capitalize on it, the idea was stolen.

What did Dyson do when crushed with misfortune? He moved forward to the next idea and project.

The Most Iconic Innovation Of The 20th Century: Dyson Vacuum

Dyson’s frustrating experience with malfunctioning and breaking down of his Hoover vacuum cleaner while using it at home made him realize its shortcoming. Being the inquisitive individual that he was, he took it upon himself to find the root of the problem and took it apart, layer by layer. He soon understood the problem: The accumulated dust clogged the pores, making it lose suction power, restricting the airflow and, in turn, reducing the effectiveness of the vacuum.

The idea popped into Dyson’s head when he saw a sawmill that used a 30-foot-high conical centrifuge that could spin and remove dust out of the air. He knew that the same technology could be shrunk down and used in the vacuum cleaner, eliminating the need for bags and ensuring they wouldn’t lose suction. 

Hence, he got to work. He learned more about how large industrial cyclones could remove sawdust and applied the concept in a vacuum cleaner. He replaced the bag in his vacuum cleaner with a cardboard cyclone, much to his amazement, as it worked well by gathering more dust and being more resistant to breakdowns.

dyson-vacuum-cyclone-sketches

Over a period of many years, he built over five thousand prototypes to perfect the design. It was a rough period for his family, and they were literally counting pennies. Not only did his wife had to get a job, but he was considered crazy.

dyson-vacuum-ball-sketches

However, he kept at it, and with iterative improvements and years of testing and tweaking, he finalized a prototype which he named “DC01” that used “Dual Cyclone” technology.

The Never-ending Challenges

Building a breakthrough appliance was one thing, but getting it on the market was a different ball game altogether – one for which Dyson wasn’t ready.

Dyson had thought that licensing the idea to form a company would be easy, and manufacturers would happily team up with him. His dreams of a vacuum revolution were cut short as he was rejected time and again by companies who saw his product as a threat to their established businesses. 

Starting from domestic companies and failing to get the desired results, he turned to explore opportunities overseas.

Initially, he bagged a deal with Amway, a U.S. based consumer products company, but it backed out at the end and released its own version of a dual-cyclone vacuum cleaner. Hoover, the top vacuum company in the U.K., refused to collaborate unless he gave up his rights to his invention. Electrolux, another well-known name in the consumer electronics industry, told him point-blank that it was not possible to sell vacuum cleaners without bags.

Dejected but unwilling to give up, Dyson kept looking for opportunities. 

In the mid-1980’s Dyson was finally able to manufacture and sell his vacuum cleaners by licensing to a Japanese Manufacturer, Apex, which released a pink-colored upright cyclonic vacuum cleaner called the G-Force in Japan, for a staggering price of $2000. 

dyson-apex-g-force-pink-vacuum

The expensive device became a status symbol in Japan to the point that everyone wanted to get their hands on it. The G-Force also won the 1991 International Design Fair in Japan, proving its worth.

Seeing the success of the G-Force, a Canadian company, Iona introduced the product in Canada with the name of Drytech. 

Establishing Dyson Limited

Having had some financial success and realizing that if he really wanted the technology out there, he’d have to steer the ropes himself, Dyson set up Dyson Appliances Limited in the U.K. in 1991. It wasn’t easy as he reportedly took a loan of approximately $850,000 by putting his home as collateral and invested his life savings in order to breathe life into his vision. 

Not only did he establish a factory but also a research center as it was important to him, right from the beginning to come up with new ways of building better products.

He launched a vacuum cleaner, the Dual Cyclone DC01, in 1993 that he designed and developed all on his own at a price of $399. While it was no doubt costly to the extent that retailers were hesitant to carry it in their stores, within two years, it was outselling Hoover and began capturing market share rapidly. 

dyson-dual-cyclone-vacuum

James Dyson with the DC01

Contrary to the opinion of the majority, people were fascinated with this innovative new technology, clear and minimalistic design, and the fact that it allowed them to see how the junk buildup as the vacuum cleaner sucks it. 

To attract people towards its unique product and get people talking, Dyson ran an advertising campaign on T.V. highlighting that Dyson’s vacuum cleaners did not require any bags, unlike its competitors. The slogan “Say goodbye to the bag” worked its magic, and Dyson Dual Cyclone quickly became a hot-selling product in the U.K. and even garnered attention worldwide. 

In 1999, Hoover U.K launched its own version of a bagless vacuum cleaner. Dyson sued them for patent infringement, forcing them to stop. However, various brands worldwide had by then began producing their own versions of the bagless vacuum cleaner, and Dyson, who could have rightfully sued them, all choose not to do. According to him, it would simply divert his focus and achieve little.

Key Takeaway 2: Sell A Solution & Customers Will Come Flocking To You

When Dyson experienced firsthand the shortcomings of his Hoover vacuum cleaner, he took it upon himself. He understood the pain points and the reasons behind the poor performance of the vacuum cleaner, and then he got to work.

Over the years, he worked on 5126 prototypes before he finalized the Dyson vacuum. He failed time and again but improved iteratively and persisted—the end result: a state-of-the-art vacuum cleaner. 

Having built a product, he was rejected by both domestic and foreign companies, but he didn’t give up. He finally partnered up with a Japanese company, Apex, and later on set up his own company as he realized that to really kickstart the vacuum revolution, he has to lead himself. By risking everything he had, he established his own company and captured the market share within years by prioritizing product quality above anything else, marketing smartly, and focusing on what truly matters.

Expanding In New Markets & Launching A New Product

Whilst Dyson focused on the UK, he licensed the vacuum cleaner technology to Fantom technologies in North America from 1996-2001. After that, he decided to handle the reins himself.

At the same time, Dyson decided that running the company consumed the majority of his time, and it would be in the interest of both him and the company that he focuses primarily on design, innovation, and engineering. Thus, he brought Martin McCourt as the CEO and resorted himself to what he was most passionate about making things work better.

McCourt led the successful launch of Dyson in the US and established an efficient manufacturing arm of the company to cater to the growing demand. He helped Dyson gain popularity in the US and managed to strike deals with retailers to sell Dyson's vacuum cleaners.

Best Buy was the first local retailer that came on board, presumably because the manager there tried the vacuum cleaner himself and, upon witnessing its superior functionality and usability, pushed to start selling it. Within a year, Best Buy was selling the vacuum cleaner way ahead of its projects, and customers began loving it. Hence, all the other top retailers, including Target and Home Depot, followed suit and joined hands with Dyson.

Expanding The Product Line

Dyson, meanwhile, had gone back to the drawing board in order to enhance the quality of the vacuum cleaner and work on new products. It was only a matter of time before Dyson ventured into other home appliances, starting with the washing machine.

He wanted to develop a washing machine with superior cleaning power. It is said that the engineers at Dyson found out that a traditional washing machine takes 2 hours to remove as much dirt as hand washing can remove in just 15 minutes. That made them ponder that is the washing machine even facilitating people.

dyson-washing-machine

It led to a new type of washing machine – the ContraRotator also referred to as the double-drum Dyson washer. It had two drums rotating in opposite directions to simulate hand washing. Not only was the machine more energy-efficient, but it was also more effective as it flexed the fabric of the clothes and expelled the dirt, and could handle larger loads. Plus, the washing machine was adorned with unique and bright colors, making it stand out from the other washing machines.

It was launched in 2000 and priced at $1,300 (£1,000) – double the cost of competitors' products. While it did have positive reviews, it failed to capture the market and become the go-to washing appliance of customers. The Contrarotator was followed up by "Flowcheck" and "Allergy" models.

The Dyson washing machine failed to become a commercial success and was eventually discontinued a few years later.

Dyson considered it an "educative failure" and kept on encouraging his employees to be bold and take risks. Inventing is the key, and that is why Dyson earmarks approximately  15 percent of the company's annual revenue for R&D .

Off To Malaysia

Until 2002, Dyson products were manufactured in Malmesbury, Wiltshire. However, due to a number of reasons, including high costs of production and the limited space in the UK, Dyson transferred production to Malaysia.

The company faced a huge backlash as many people were made redundant in the UK, and labor unions and the government were not happy, but it followed through with the plan.

Having re-located the manufacturing arm to Malaysia, Dyson kept the headquarters in Malmesbury, UK. The cost savings enabled Dyson to invest more in research and development and continue to innovate with new products. 

In 2004, Dyson and Meiban Group Ltd formed a joint Meiban-Dyson Laundry Manufacturing Plant in Malaysia. In 2007, Dyson partnered up with VS Industry Bhd (VSI) to boost its supply chain as VSI had expertise in everything, from sourcing and manufacturing to distribution. This helped Dyson supply high-quality finished products to its customers around the globe. 

Chapter 3 Takeaway: Keep Experimenting & Exploring New Options

Upon realizing that running the company was consuming most of his time and it was in the interest of everyone that he focuses on innovation, Dyson brought over a CEO, who strengthened the production side of the business and helped expand in the US by partnering up with retailers. 

Meanwhile, Dyson did what he does best: solve problems. Upon finding out that washing machines don't do a good enough job of cleaning the clothes, Dyson developed and launched a washing machine – the Contrarotator. While it got glowing reviews, it failed to be a commercial success. The company learned from this failure and did not back down from taking risks.

The company made a strategic decision to relocate the production to Malaysia due to lower costs and unavailability of space. While Dyson received a huge backlash, the company stuck to its strategy and yielded positive results in the form of cost savings.

Dyson: The Apple Of Consumer Discretionary Electronic Products

With an obsessive eye for precise engineering, aesthetic industrial design, and state-of-the-art technology, Dyson has made its mark in a market of top-of-the-line household and business appliances. In the process, it has proved that premium-quality consumer gadgets can make companies money if they do it well.

That's not all. Dyson is shrouded in secrecy. The company is not public, employees are tight-lipped, several projects are undergoing at one time, and one look at Dyson's headquarters where prototypes are shielded, access is extremely limited, and machinery is obscured from view will have you believing that you are in a whole new world.

Dyson has, over the years, released an extensive range of products, including vacuum cleaners, washing machines, fans, heaters, lights, hand dryers, and air purifiers, among others. 

Let's now take a look at some of Dyson's products:

Cordless Vacuum Cleaner

In 2006, Dyson put on the market its first-ever cordless vacuum cleaner, the DC16. It had the same cyclone technology and upright styling except that it did not have to be plugged in to use. 

This was a bold move by the company as, according to analysts’ predictions, it was going to negatively impact the sales of the company's main product – corded vacuum cleaner – which accounted for the majority of the sales at the time.

dyson-cordless-vacuum

Over the course of time, new models were launched, including DC30, DC44, and DC59, among others with more power, better performance, enhanced features for various markets. 

Such has been the success of Dyson's cordless vacuum cleaners that the company ended the production of corded vacuum cleaners in 2018 to solely focus on the cordless ones.

Robotic Vacuum Cleaner

While Dyson continued to do well with its core offerings, it kept on innovating to develop new products. One such product was Dyson's first robotic vacuum cleaner, the DC06, which was introduced in 2005.

This unique tech appliance had the ability to 'learn' the room according to Dyson and clean accordingly. From differentiating between objects, such as furniture and walls, and living beings, such as humans and pets, thanks to its sensors and software, the robot vacuum cleaner was set to revolutionize cleaning. 

Unfortunately, that plan didn't come into motion as the robotic vacuum cleaner never really could make it commercially and remained an in-house project.

dyson-360-eye-robot

In 2015, however, Dyson 360 Eye™ Robot was launched after years of experimentation. It could clean the house without anyone having to steer it. Yes, that's right!

Airblade Hand Dryer

Dyson's Airblade Hand Dryer launched in 2006 was a success and helped Dyson gain a strong foothold in the commercial appliance market. Gone were the days of traditional hand dryers doing a lackluster job as soon as the sleek and elegant Dyson Airblade made its way in the market.

dyson-airblade-hand-dryer

Built to be installed in workplaces and public washrooms, the Airblade used Dyson's digital motor to power a stream of air at rapid speed to dry the hands within 10-14 seconds. Plus, it used a HEPA filter to eliminate bacteria from the air, cleaning the hands hygienically. Moreover, it costs less to run and is eco-friendly.

It was acknowledged and accredited as the first-ever hygienic hand dryer. Newer versions of the Airblade have continued to roll in and perform exceedingly well in the marketplace.

Air Multiplier Bladeless Fans 

In 2009, the Dyson Air Multiplier – an electric fan with no blades – was announced, and it soon garnered attention worldwide. After all, people had had enough of the visible blades and grilles that accumulated nothing but dust.

dyson-air-multiplier

Not only was the Dyson Air Multiplier safe, stable, and sturdy, but also easy to clean, offering precise control and smooth oscillation to provide uninterrupted airflow.

Ever since the original release of Air Multiplier, Dyson has kept on improving the product and added new features. From cooling fans to the electrical heater and infrared control to Jet Focus offering different streams of air, Dyson Air Multiplier has seen numerous upgrades. 

Building on the same Air Multiplier technology and augmenting its offerings, Dyson announced Dyson Hot  fan heater  in 2011, Air Multiplier Humidifier in 2015, and Dyson Pure Cool air purifier in 2016. 

Continuing to diversify its product line, Dyson launched LED lamps named "CSYS" in 2015 with heat pipe technology. The goal was to end problems caused by poor lighting, such as eyestrain and headaches, and decreased productivity, while enhancing the ambiance with optimal lighting. 

In 2018, Dyson launched the "Lightcycle" with enhanced smart capabilities that enabled Bluetooth connectivity and provided users with the freedom to adjust the lighting however they want.

In addition to the LED lamps, a.k.a task lights, suspended lights, Dyson Cu-beam, were also added to the portfolio. 

Dyson entered the beauty and haircare market in 2016 as it released a high-end hair dryer, Dyson Supersonic handheld hairdryer. Even though it was priced high, it managed to become the best-selling hairdryer in the UK in 2017.

Other models, including the Airwrap styler, which can style wet hair, and Corrale a cordless hair straightener, were also launched in 2018 and 2020, respectively. 

Safe to say, Dyson is not standing still. It is ever-evolving and continuing to invest heavily in R&D and looking into innovative new technologies such as battery technology, machine learning, and artificial intelligence to keep on creating new products that can thrive in new markets.

Chapter 4 Takeaway: Diversify To Stay Ahead

Even though Dyson’s vacuum cleaners were doing extremely well and the company was leading in the market, Dyson kept on investing in improving its main product: vacuum cleaners.

Launching the cordless vacuum cleaner even though it was going to negatively impact its main product - corded vacuum cleaner - is an example of Dyson staying ahead of the curve without being afraid of the consequences. Similarly, the years-long robotic vacuum cleaner project, which did not work out well initially, helped Dyson prepare for a future in which smart appliances were going to rule.

Similarly, Dyson continued to diversify by launching more premium-quality household and business appliances. From the dryers and fans to the lighting and haircare, all helped the company to grow. 

The Dyson Business Model

Defying conventional wisdom and against all odds, the company has managed to carve out its own market and established its brand by breathing new life into the home and office appliance market with cutting-edge technological devices that are near perfect.

Invest In R&D

Dyson firmly believes that it takes real ingenuity to find a better way of doing things and solving real-world problems. Hence, it puts its money where its mouth is by continuing to heavily invest in research. It is estimated that Dyson invests around 15-20% of its annual revenue in R&D.

From establishing and running research and development labs to its extensive team of scientists, engineers, and specialists across the UK, Singapore, and the US pioneering new technologies, Dyson goes the extra mile to constantly find ways of making things work better and push boundaries. 

The company is committed to refining and improving products, making them smarter, stronger, quieter, long-lasting, and eco-friendly.

Patent Vigorously

Currently, Dyson has around 6000 granted and pending patents as well as registered designs. Let this sink in for a moment.

Patenting aggressively is essential for Dyson’s success. After all, you can’t expect a company to invest billions of dollars as well as time and energy in R&D only to later find out that its invention is copied by someone else.

Dyson considers patenting to be crucial as it encouraging innovation and brings forward more genuinely unique and creative ideas.

Following are a few of the many patent infringement lawsuits involving Dyson:

  • Sued Amway in 1985 for copyright infringement of the Dyson dual cyclone technology, and the lawsuit was settled with both companies becoming joint licensees.
  • Sued Hoover UK for patent infringement in 1999 and won the case. Hoover was ordered to pay $4.2 million to Dyson in 2002 as the court found that the Hoover vacuums were a blatant copy of Dyson’s design.
  • Sued Qualtex in 2006 for copyright and unregistered design right infringement for copying the design of Dyson’s products spare parts and won the case.
  • Took legal action against Vax, a brand that manufactures electrical goods and cleaning products, in 2010 for infringement of its vacuum cleaner design. The court decided in favor of Vax.
  • Sued Samsung Electronics in 2013 over copying Dyson’s steering technology. Dyson eventually dropped the case and was then countersued by Samsung.

Differentiate With The Best Products

There’s one thing that Dyson never compromises upon the product quality. At Dyson, engineering leads the design; functionality and usability are at the forefront. The company goes to extreme lengths to make sure it offers unique products of the highest quality that add value to people’s daily lives. 

From inventing new technologies such as Dyson Digital Motor and Root Cyclone Technology to deliver the best end-product that’s not only sleek and elegant but also highly functional and user-friendly, Dyson stands out and hooks customers.

Charge A Premium Price

Dyson’s products don’t come cheap. Everyone knows that and still buys them. Since the beginning, even when Dyson’s competitors were engaged in price wars and selling cheap products in large volumes, Dyson priced its products highly. 

While the price point shocked many, it did work well for the company. Customers were willing to pay a high amount because they felt Dyson’s products offered high value and justified the price point. 

Key Takeaway 5: Invest, Patent, Differentiate, & Charge A Premium Price

Dyson has stuck to its guns throughout its 30 years in business. It invests a significant part of its annual revenue in R&D. Then, it patents any inventions to safeguard itself and never hesitates to go after those who go against it. 

Dyson prioritizes producing the best quality of products that stand out not only due to its features and functionality but also design and usability. It doesn’t shy away from charging a premium and avoid engaging in price wars. By doing what it does best, Dyson has carved out a name for itself and created brand affinity due to which customers know that they will be provided high value.

The Dyson Of Today

The Dyson we know today has been a work in progress for the best part of 3 decades. It hasn't stayed still and always seems to be on the go. Starting from the UK in the 1990s, Dyson expanded its business operations to Malaysia at the turn of the century. In 2013, Dyson launched a production plant in Singapore and invested heavily in it. 

In 2017, Dyson expanded to Chicago and established the US headquarters there. In 2017, Dyson expanded within the UK, and finally, in 2019, Dyson moved the company headquarters to Singapore as Asia was the fastest-growing market and accounted for almost 50% of the company sales. Plus, Dyson wanted to be in the heat of the battle and be proactive.

The Electric Car Project That Never Was

Being led by one of the world's leading entrepreneurs, Dyson never strays away from taking challenges head-on and raising the bar. In 2017, the company announced that it has been working on a battery-powered electric car, which will be launched in 2021. 

Dyson set up a budget of around $3 billion for the project, but later on, in 2019, it scraped the project after incurring heavy losses, saying that the electric cars were not commercially viable. However, it still continued to work on the battery technology and was quite hopeful that it will play an integral part in upcoming projects.

Tackling Tricky Waters In 2020

2020 was a year unlike another. Dyson had to let go of 600 people within the UK and 300 overseas as the Covid-19 pandemic led to a restructuring of the company. With consumer habits rapidly changing and the world going into lockdown, Dyson had to adapt to how it engaged with customers and catered to their demands. It did just that. Dyson depicted exceptional operational agility, leadership, innovation, and commitment to society when it joined forces with Cambridge-based science engineers TTP to produce ventilators in order to support the healthcare system.

dyson-ventilator-covent

Dyson invested around $24 million of its own money, and around 450 of its employees worked tirelessly around the clock to design and develop the ventilator – CoVent – in just 30 days as the UK government had placed an urgent order of 10,000 ventilators from the company. Given the supply disruptions and uncertainty during the height of the pandemic, Dyson's efforts were commendable. 

Although the ventilators were later no longer required, it highlighted the company's willingness to go above and beyond the call of duty to serve people. Dyson even looked into making the ventilators available to other countries, but legal and regulatory hurdles meant that it could not do that.

At the same time, Dyson also launched the air purifier – Dyson Pure Humidify+Cool – in the US. It was engineered to purify the air indoors and ensure health and hygiene. 

Key Takeaway 6: Stay On The Move & Stand Up For What Matters

From the Uk to Malaysia, Singapore, and the US, Dyson re-located and established its presence wherever needed. Moving the headquarters of the company to Asia was not easy, but Dyson did what was necessary. It understood the importance of being in Asia, where the majority of its customers were and which was fastly evolving and adopting technology.

In the quest to continuously innovate, Dyson took on the challenging task of making electric vehicles but had to later scrap the project after incurring heavy losses. However, all was not lost as the company developed its battery technology which will give it a competitive advantage in the future.

In 2020, when the company faced impending doom, and the government came calling for help, Dyson stepped forward and left no stone unturned. By developing ventilators on short notice, it depicted its resolve and ability to do things that it has never done before by moving quickly, failing, learning on the go, and in turn, solving problems.

Why is Dyson so Successful?

Growth by numbers.

Following are the five key strategic takeaways from the 3 decade long journey of Dyson:

Figure out a problem and solve it

Be it the wheelbarrows that sunk in the ground and left marks or the vacuum with bags that got clogged and failed to do the one purpose it was made for - suck and store debris - Dyson figured out the problems first and then worked on a solution.

By addressing the pain points of people and coming with an effective solution that catered to the issues just like the Dyson vacuum did, Dyson proved that if you provide value to customers, they'll pay you a premium. 

Persevere in the face of adversity

Whoever you are, whatever you do, and wherever you are located, you are bound to face challenges. From being rejected by numerous companies who didn't agree to partner up with Dyson to competitors trying to steal the technology and discredit him, Dyson faced an array of challenges. But he kept at it. Dyson persevered and achieved success because it wasn't the end result that it was after, but the process it lay emphasis on.

Innovate as your life depends on its

Dyson truly understands how essential it is to prepare for the future. Be it establishing research centers, investing billions of dollars in R&D, hiring skilled people, or encouraging people to be creative, Dyson has done it all in its quest to innovate.

The company realizes that without innovation, it cannot survive, let alone thrive. Hence, it goes the extra mile to continuously develop new products and find better ways of doing things. 

Diversifying the products portfolio, expanding to newer markets, and experimenting and exploring new options to provide more value to customers are some of the things that Dyson continuously does.

Fail Forward

Dyson failed 5126 times to be exact, before finalizing a vacuum cleaner prototype. The washing machine had to be discontinued. The robotic vacuum cleaner project didn't really pay off. The electric car project had to be scrapped. The ventilators the company produced amounted to nothing.

These are just a few of the failures, but they could have easily dismantled any other company. Dyson learns from failures and makes progress by deriving valuable lessons from them. It highlights the importance of taking risks, being bold, and not afraid of failing. After all, it's just another opportunity to make things better.

Formulate a business strategy and stick to it

Hire amazing people, invest, patent, produce quality products, charge a premium - repeat. Dyson works in a specific way, and that's why it has remained consistent in delighting its customers. Regardless of the distractions, Dyson remains focused on its mission of making things work better, and it has paid off for the company handsomely.

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Philips LumiGuide, the “3D human GPS powered by light”, paves the way for radiation-free minimally-invasive surgery

Feb 22, 2024 | 3 minute read

More than 100 years since the X-ray was discovered, Philips introduces a breakthrough innovation to the world of healthcare imaging. LumiGuide , powered by Fiber Optic RealShape (FORS) technology, enables doctors to navigate through blood vessels using light, instead of X-ray. “It’s one of the most exciting changes that we’ve seen with imaging certainly throughout my career,” said Andres Schanzer, Vascular Surgeon, at UMass Memorial Medical Center, Worcester, MA, USA. Following the limited-edition release of the FORS technology, LumiGuide, our new solution powered by FORS, was used for the first time, late 2023, to treat patients in Maastricht University Medical Center in the Netherlands, closely followed by the University of Alabama at Birmingham in the USA. Developed in close collaboration with clinical partners, LumiGuide is made available, in first instance, to major Aortic Centers of Excellence that perform complex aortic repairs in the USA and Europe.

LumiGuide

LumiGuide

By clicking on the link, you will be leaving the official Royal Philips ("Philips") website. Any links to third-party websites that may appear on this site are provided only for your convenience and in no way represent any affiliation or endorsement of the information provided on those linked websites. Philips makes no representations or warranties of any kind with regard to any third-party websites or the information contained therein.

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  1. Breakthrough innovations and where to find them

    1. Introduction Breakthrough or radical innovations are generally regarded as ruptures along specific technological trajectories, possibly leading to shifts or transformations in the prevailing technological paradigm ( Dosi, 1982 ).

  2. Developing breakthrough innovation capabilities in university

    1. Introduction Emerging technologies of the Fourth Industrial Revolution (4IR) are effectuating significant transformation across various spheres. It is reshaping business strategies, pedagogical approaches in academia, social interactions and even the very future of work ( Schwab, 2017; Xu et al., 2018 ).

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    Airbnb Reusable rockets Tesla How to create one? 1. Identify the right opportunity 2. Build the key innovation 3. Scale to reach breakthrough impact Conclusion What is breakthrough innovation? As mentioned, the definitions we've seen for breakthrough innovation are quite diverse.

  6. Breakthrough innovation and platform leadership: a case of super app

    In this short case study, efforts are made to clarify the context and dilemmas faced by top leaders of a firm, synthesized for a chief technology officer (CTO). The case provides an exciting opening context for learners of management and strategy, particularly experienced executives, as well as top leaders in firms, governments and bureaucracy.

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  12. Incremental vs. Breakthrough Innovation: The Role of Technology

    Jong-Min Oh , Han Xia Published Online: 20 May 2020 https://doi.org/10.1287/mnsc.2019.3507 Abstract We show that technology spillovers shift the composition of corporate research and development by promoting innovation based on the exploitation of existing knowledge while disincentivizing innovation that explores new areas and breaks new ground.

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  14. Breakthrough Innovation: Conquering Ideation Challenges

    By Ben Thuriaux, Frederik van Oene Posted May 1, 2019 | Leadership | BT & DTS EXECUTIVE UPDATE VOL. 22, NO. 8 We are entering an era that will demand unheralded levels of creativity because companies will need to constantly innovate and reinvent themselves to succeed in their search for growth and margins.

  15. Breakthrough potential of emerging research topics based on citation

    A hybrid method to trace technology evolution pathways: a case study of 3D printing. Scientometrics 2017; 111: 185-204. Crossref. Google Scholar. 101. Min C, Ding Y, Li J, et al. Innovation or imitation: the diffusion of citations. J ... Breakthrough innovation; breakthrough potential; citation curve; citation diffusion; knowledge base ...

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