“Corporate innovators rely more on the transformation and recombination of existing ideas than on ‘Eureka moments’,” Andrew Hargadon told CIMS TMR in 2004. Then an assistant professor of technology management at the University of California, Davis, Hargadon was updating us on his research into the process he dubbed “technology brokering.”
Growing out of earlier CIMS-sponsored research on knowledge brokering, technology brokering had recently grabbed wide attention with the publication of his 2003 book, How Breakthroughs Happen (Harvard Business School Press). Since then, Hargadon has extended his research and in the process founded both the Center for Entrepreneurship and the Energy Efficiency Center at Davis. Both are instruments of his desire to make companies and universities more efficient in not only finding good ideas but in bringing them to the marketplace. He calls them “innovation ecosystems.”
Focus on Networks
Innovation programs like InnoCentive, NineSigma and others are essentially marketplaces for new ideas, Hargadon told Forbes.com (June 15). “Our premise is that although new ideas are necessary they are also relatively cheap. If you want more innovation, focus on getting people the networks they need to drive their best ideas forward.”
Hargadon’s research has demonstrated that the innovation process hinges more on the construction of new combinations of old ideas and new networks that can advance those ideas.
“Looking back,” he tells CIMS TMR, “most of the breakthroughs that we’ve come to know were in fact put together from existing technologies and ideas. That is, in large part, what made them successful. Inventors like Edison didn’t have to truly invent the light bulb. They simply had to improve on what was existing, and combine those with technologies and business models from the gas utilities and the telegraph industry, and put them together in a market offering.
“If you’re willing to accept that innovation is, in many ways, a network-building process of piecing together first the technologies, then the venture, and then ultimately the market, and connecting ideas with employees, and founders with investors, customers and suppliers, then the notion of advancing innovation is actually one of enabling those networks to be built, to come together more easily.
Hargadon observes that the university system is very good at supporting the generation of new ideas but less successful at supporting the networks that are necessary to get those ideas out into the public.
“What we did with, first, the Center for Entrepreneurship, and then more specifically with the Energy Efficiency Center, was recognize that if we could put together the core of the network that scientists would need to move their ideas forward in the first 12–18 months, then we could go a long way in helping those scientists to realize the commercial potential of their work. At the same time, we would be connecting them with the right people and the right institutions to help them continue through the commercialization process.
Energy Efficiency Center
Hargadon founded UC Davis’s Energy Efficiency Center (EEC) in 2006 and subsequently developed collaborations with the major California utilities, the public utility commission, and major customers for energy efficiency technology like Wal-Mart and Chevron Energy Solutions.
“We’ve created an ecosystem into which we can introduce scientists and their ideas, and quickly determine whether there’s potential behind them and what partnerships they need, and introduce them to the right people — angel investors, VCs, energy entrepreneurs, foundations and the like.”
One outcome to date: A low-energy LED lamp that UC Davis designed and EEC sponsor Chevron says it will use inside its plants. “I think what Davis is doing is unique in a coupleof areas, Chevron CTO James McDonald told Fast Company (May 2009). Its strong focus on commercialization resonates with us from a business perspective.”
Build Your Own
Want to build your own innovation ecosystem — around, say, Raleigh, North Carolina? The first step, advises Hargadon, is to focus attention on designing the network itself. “That means recognizing that everyone who participates needs to get something out of it — it’s not charity work. You need to recognize that each of those participants — the valuable elements of the ecosystem — are there voluntarily, and in many cases expecting profits. What is it that each of the elements needs, and how can you create a network in which those needs are provided for?
“Under the right conditions, people will assemble themselves. So we get our Rolodexes out, we idetify the key players and we consider what we can do to let them self-assemble. In North Carolina, for instance, you’ve got Duke Power, which is pushing aggressively forward on new energy technologies; you’ve got Florida Power and Light close by which is investing heavily in solar; you’ve got the utility commissions; and you’ve got a lot of great researchers. Actually list those elements and ask, for each one: ‘What are they looking for? What do they want?’
“You know, for example, that there’s a good investor community there and you know they want deal flow — they want to see the good ideas that are coming down the line. So, if there’s a way you can create a system or a situation in which they get exposure to those ideas early, that will inform their decisionmaking.
“You also know those investors are always looking for manpower. And there are graduating scientists in the energy sector who will go to work for those companies. So you create the conditions in whichthey see value in participating. What do the investors bring? They bring a great wealth of experience. They also bring investment capital.
“The utilities bring, obviously, a lot of clout in terms of the decisions they make and the technologies they roll out. It certainly doesn’t hurt to have the investors and the utilities interacting, almost incidentally, around this program, because they learn a lot from each other about what the other is looking for.
“What you’re really doing when you’re creating those conditions for self-assembling is trying to understand how you can put together a set of people who collectively bring something of value that the others can take away.”
In his entrepreneurship courses at UC Davis, Hargadon teaches scientists, executives and entrepreneurs the skills they need in order to identify, build and create networks around their ideas. The principal skill, he stresses, is the willingness to connect. Called by sociologists “the laughing third” or, more formally, “Tertius Gaudens,” this refers to the person who benefits from connecting two others. “In other words,” Hargadon explains, “the most important skill is simply to make it possible for others to connect and not try to sit in the middle and get in the way“One of the biggest pitfalls is attempting to control the network rather than create the conditions and then let it self-organize and then just hang on.”
The CIMS Connection
CIMS TMR concluded its interview by asking Hargadon whether all of this actually began with his CIMS-sponsored brokering research in 1996.
“Absolutely. It absolutely did, and it was a very linear progression of recognizing that the best way to advance innovation is to focus on building networks. And so, if we want to promote innovation in the sciences, which I define as moving ideas out of the lab and into broader use, then it becomes critical to recognize where that network-building process breaks down.
“For me, where it breaks down is when it has to leave the scientific community and form new networks with business investors and entrepreneurs.”
You can talk with Hargadon about innovation ecosystems at firstname.lastname@example.org. And read about his earlier research in CIMS TMR Spring 2004, Spring 2001 and No.5, 1996. His original CIMS report, “The Theory And Practice Of Technology Brokering: How Design And Manufacturing Organizations Innovate By Creating New Combinations of Existing Knowledge,” written with Robert Sutton, is available on http://CIMS.ncsu.edu