From new venture idea to viable business: Breakthrough innovation capability in established firms

Abstract

Breakthrough innovation (BI) is critical to the long-term growth and renewal of large established firms. Therefore, these firms could benefit greatly from possessing a capability for breakthrough innovation, the ability to achieve breakthrough innovation intentionally, repeatedly, and reliably. While previous research has provided extensive insights into facilitators of breakthrough innovation, we still know little about what firms and their managers do to act upon those. In particular, we lack detailed understanding of the specific activities that jointly constitute a BI capability. Because we are able to build on an extensive (but fragmented and incomplete) literature on BI, we use the extended case method to “extend” – that is elaborate – existing theory. We iterate between interview data on a large set of incumbent firms and related literatures on exploitation-exploration, uncertainty, and innovation more generally to build a detailed and integrative framework of practices used to achieve BI – what managers actually do, with what goals, and assessed by which metrics. We find these practices in turn underpin three sub-competences: conceptualization, experimentation, and scaling (CES), which together constitute a BI capability. Conceptualization is the generation, elaboration, and articulation of business concepts, experimentation is exploring and validating these concepts, and scaling is growing a viable business. Taking a Practice-Based View, we present fine-grained insights into distinct goals, metrics, and practices that support these competences, and we explain how these work together.