Who is most likely to find the innovative breakthrough: an expert with a deep knowledge of the domain or a cross-functional team with broader knowledge and a variety of experience? New research shows that the cross-functional and diverse knowledge approach to innovation can be a double-edged sword: shattering the myopia of experts but not providing the expertise needed to generate novel ideas in the field.
Two schools of thought exist on the best source of innovation. The foundational school argues that a deep, expert knowledge of the domain is required to unlock new pathways. Only someone with a complete immersion in the topic is going to discover the breakthrough innovation in that topic. The tension school argues that a diversity of knowledge and experience battling for ideas will spark solutions that escape the notice of experts, who are locked into the way things have been done in the past.
All innovation comes through “recombination” of ideas and knowledge. The tension school promotes “broad” recombination — the recombination of distant and diverse knowledge. The foundational school promotes “narrow” recombination focused on knowledge from the core domain of the innovation — a process known as “local search.”
Instead of viewing the two schools of thought as mutually exclusive, two researchers from the University of Toronto’s Rotman School of Management and London Business School argue that innovation emerges from both broad and narrow innovation: broad innovation to break the locked-in mindset of the expert; narrow innovation to find openings for innovation.
To describe the interrelationships between broad and narrow recombination, the researchers focused on the two dimensions of innovation: its cognitive novelty, which relates to the original or novel ideas it introduces; and its economic value, which relates to its potential to general economic returns.
Using a database of patents as the source of their data, the research metric for economic value was the number of times a patent was cited in other patents. The metric for cognitive value, based on a computer science technique called “topic modelling,” was the new topic(s) introduced by a patent.
The first and most direct question explored by the research was: which type of recombination (distant and diverse recombination or local search) produced the greater economic value. The results of the data analysis showed that a patent based on distant and diverse recombination was more likely to receive a greater number of citations than a patent based on local search. In other words, distant and diverse recombination generated greater economic value.
However, when the researchers focused on a different pathway to economic value, through cognitive novelty, the result was a bit different.
First, they showed through their analysis that cognitive novelty leads to economic value: patents in their database that had a greater number of novel topics were more likely to receive a higher number of citations in other patents. They then demonstrated that local search leads to more cognitive novelty than distant and diverse recombination: patents produced through local search had more novel topics embedded in them.
Looking at the influence of cognitive novelty, therefore, it would seem that local search has its own contribution to make to economic value: it generates more novel ideas, which in turn generates greater economic value (in this case, measured by more citations).
This effect is not automatic. There are other variables, such as the reputation of the inventors or the match of the invention with the environment, which will play a factor in the economic success of a novel idea. Another important variable is cumulative or generational research: a novel idea is then used in another invention that becomes economically valuable.
The variables related to cognitive novelty notwithstanding, the research highlights the double-edged sword of distant and diverse recombination: broad recombination can be needed to overcome the lock-in mindset or myopia of experts in the field, but can reduce the chance for truly novel ideas that emerge when experts identify anomalies that open the door to breakthroughs.
The declarative tone of innovation books, filled with case studies that support the authors’ methodologies or approaches, can oversimplify the process. A broad cross-functional team can bring new perspectives and broader knowledge to the process, but sometimes it is deep knowledge in a particular field that finds the door to new ideas.
Organizations must recognize this double-edge sword of broad recombination and manage their innovation processes accordingly. Rather than putting all eggs in the broad recombination basket, they must develop an innovation strategy that bridges the gap between recombination and local search in order to find the new ideas that can become the innovative products or services.
Another consideration is whether the organization’s innovation is focused on generating novel ideas that can advance the field (but not necessarily be quickly turned around into economic valuable innovations), or generating market-ready innovation. In the past, many innovation strategists might assume that the two decisions are not in conflict: their companies should pursue new ideas to make more money. This research highlights the nuances in these two decisions.
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