Abstract
Innovation is to organizations what evolution is to organisms: it is how organizations adapt to environmental change and improve. Yet despite advances in our understanding of evolution, what drives innovation remains elusive. On the one hand, organizations invest heavily in systematic strategies to accelerate innovation. On the other, historical analysis and individual experience suggest that serendipity plays a significant role. To unify these perspectives, we analysed the mathematics of innovation as a search for designs across a universe of component building blocks. We tested our insights using data from language, gastronomy and technology. By measuring the number of makeable designs as we acquire components, we observed that the relative usefulness of different components can cross over time. When these crossovers are unanticipated, they appear to be the result of serendipity. But when we can predict crossovers in advance, they offer opportunities to strategically increase the growth of the product space.
Highlights
Innovation is to organizations what evolution is to organisms: it is how organizations adapt to environmental change and improve
At a micro-economic level, there is a perennial tension between a strategic approach, which views innovation as a rational process which can be measured and prescribed[11,12,13]; and a belief in serendipity and the intuition of extraordinary individuals[14,15,16]
We find that the relative usefulness of a component depends on how many other components have already been acquired
Summary
Innovation is to organizations what evolution is to organisms: it is how organizations adapt to environmental change and improve. By measuring the number of makeable designs as we acquire components, we observed that the relative usefulness of different components can cross over time When these crossovers are unanticipated, they appear to be the result of serendipity. The strategic approach is seen in firms like P&G and Unilever, which use process manuals and consumer research to maintain a reliable innovation factory[17], and Zara, which systematically scales new products up and down based on real-time sales data. The role of vision and intuition tend to be underreported: a study of 33 major discoveries in biochemistry “in which serendipity played a crucial role” concluded that “when it comes to ‘chance’ factors, few scientists ‘tell it like it was’”19, 20 To unify these two perspectives and understand what drives innovation, in this Article we do four things. When we can forecast crossovers in advance, they provide an opportunity to strategically increase the growth of our product space
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