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S41467-017-02042-W-3.Pdf ARTICLE DOI: 10.1038/s41467-017-02042-w OPEN Serendipity and strategy in rapid innovation T.M.A. Fink1,2, M. Reeves3, R. Palma3 & R.S. Farr1 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 1234567890 analysed the mathematics of innovation as a search for designs across a universe of com- ponent 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. 1 London Institute for Mathematical Sciences, 35a South St, Mayfair, London W1K 2XF, UK. 2 Centre National de la Recherche Scientifique, Paris, 75005, France. 3 The Boston Consulting Group, BCG Henderson Institute, New York, 10016 NY, USA. Correspondence and requests for materials should be addressed to T.M.A.F. (email: tmafi[email protected]) NATURE COMMUNICATIONS | 8: 2002 | DOI: 10.1038/s41467-017-02042-w | www.nature.com/naturecommunications 1 ARTICLE NATURE COMMUNICATIONS | DOI: 10.1038/s41467-017-02042-w nnovation is how governments, institutions and firms adapt to and software products) grows as we acquire new components Ichanges in the environment and improve1. Organizations that (letters, ingredients and development tools). We observe that the innovate are more likely to prosper and stand the test of time; relative usefulness of components is not fixed, but cross each those that fail to do so fall behind their competitors and succumb other in time. Second, to explain these crossovers, we prove a to market and environmental change2, 3. Despite the importance conservation law for the innovation process over time. The of innovation, what drives innovation remains elusive1, 4. conserved quantity is a combination of the usefulness of com- Research on macro-economic development suggests that more ponents and the complexity of products. We use it to forecast – complex, diverse or re-purposable5 8 production capabilities crossovers in the future based on information we already have result in greater economic growth at a national level9, 10.Ata about the products we can make. Third, we identify a spectrum of micro-economic level, there is a perennial tension between a innovation strategies dependent on how far into the future we strategic approach, which views innovation as a rational process forecast: from short-term gain to long-term growth. A short- – which can be measured and prescribed11 13; and a belief in ser- sighted strategy maximizes what a new component can do for us – endipity and the intuition of extraordinary individuals14 16. now, whereas a far-sighted strategy maximizes what it could do The strategic approach is seen in firms like P&G and Unilever, for us later. We apply both strategies to our three sectors and find which use process manuals and consumer research to maintain a that they differ from each other to the extent that each sector reliable innovation factory17, and Zara, which systematically contains crossovers. Fourth, we resolve the tension between the scales new products up and down based on real-time sales data. strategic and serendipitous interpretations of innovation. Both In scientific discovery, “traditional scientific training and thinking can be viewed as different manifestations of the changing favour logic and predictability over chance”14. If discoveries are importance of components over time. When component cross- actually made in the way that published papers suggest, the path overs are unexpected, they appear to stem from serendipity. But to invention is a step-wise, rational process. when we can forecast crossovers in advance, they provide an On the other hand, a serendipitous approach is seen in firms opportunity to strategically increase the growth of our product like Apple, which is notoriously opposed to making innovation space. choices based on incremental consumer demands, and Tesla, which has invested for years in their vision of long-distance Results 18 electric cars . In science, many of the most important discoveries Lego game. We begin by illustrating our ideas using Lego bricks. have serendipitous origins, in contrast to their published step-by- Think back to your childhood days. You’re in a room with two step write-ups, such as penicillin, heparin, X-rays and nitrous — 14 friends Bob and Alice, playing with a big box of Lego bricks say, oxide . The role of vision and intuition tend to be under- a fire station set. All three of you have the same goal: to build as reported: a study of 33 major discoveries in biochemistry “in ” “ many new toys as possible. As you continue to play, each of you which serendipity played a crucial role concluded that when it searches through the box and chooses those bricks that you ‘ ’ ‘ ’”19, 20 comes to chance factors, few scientists tell it like it was . believe will help you reach this goal. Let us now suppose each To unify these two perspectives and understand what drives player approaches this differently. Your approach is to follow innovation, in this Article we do four things. First, we study data your gut, arbitrarily selecting bricks that look intriguing. Alice from three sectors: language, gastronomy and technology. We uses what we call a short-sighted strategy, picking Lego men and measure how the number of makeable products (words, recipes their firefighting hats to immediately make simple toys. acb Java Amazon Amazon Rails NGINX Redis Script MySQL S3 EC2 Ruby Java Sass Banana a b n Airbnb Amazon Amazon React Amazon Hadoop Presto Airflow AirPal Druid EBS RDS Elasticache Postrage Amazon Amazon Objective Mem- NGINX Redis Python Django Cassandra Orange a e g n o r SQL S3 EC2 -C cached Instagram Amazon Gunicorn EBS Gearman d ef4 R 10 Cayenne Rails Cocoa 4 jQuery UI 10 Language F Gastronomy 100 Technology 1000 Lime 50 X 1000 Sauce Labs 100 10 100 5 10 10 1 Makeable words (usefulness) 0.5 Makeable recipes (usefulness) 1 1 Makeable software (usefulness) 0 2 4 6 8 10 12 14 16 18 20 22 24 26 0 127 254 381 0 331 662 993 Acquired letters Acquired ingredients Acquired development tools 1st R 1st Cayenne 1st Rails 2nd F 2nd Cocoa 2nd jQuery UI Rank 3rd X Rank 3rd Lime Rank 3rd Sauce Labs Fig. 1 Products, components and usefulness for three sectors. We studied products and components from three sectors. a In language, the products are 79,258 English words and the components are the 26 letters. b In gastronomy, the products are 56,498 recipes from the databases allrecipes.com, epicurious.com and menupan.com23, and the components are 381 ingredients. c In technology, the products are 1158 software products catalogued by stackshare.io and the components are 993 development tools used to make them. d–f The usefulness of a component is the number of products we can make that contain it. We find that the relative usefulness of a component depends on how many other components have already been acquired. For each sector, we show the usefulness of three typical components: averaged at each stage over all possible choices of the other acquired components and—for gastronomy—for a particular random order of component acquisition (points) 2 NATURE COMMUNICATIONS | 8: 2002 | DOI: 10.1038/s41467-017-02042-w | www.nature.com/naturecommunications NATURE COMMUNICATIONS | DOI: 10.1038/s41467-017-02042-w ARTICLE E A a I R N T 6 O S L C U D M Language 13 P H G Y B F V 20 K W Z X J Q 26 Egg Wheat Butter Onion b Garlic Milk Vegetable_oil Cream Tomato Olive_oil 95 Black_pepper Pepper Vanilla Cayenne Vinegar Cane_molasses Bel_pepperl Cinnamon Parsley Chicken Gastronomy 190 Lemon_juice Beef Cocoa Corn Bread Scallion Mustard Ginger Basil Celery 286 Carrot Potato Chicken_broth Yeast Rice Mushroom Cheese Soy_sauce Cumin Oregano 381 Google Analytics GitHub jQuery nginx c Bootstrap Slack JavaScript NewRelic Redis Google Apps 248 Amazon S3 Amazon EC2 Git AngularJS Node.js MySQL Amazon CloudFront Trello Rails PostgreSQL Technology 496 Ruby MongoDB Python MailChimp Mixpanel Pingdom PHP Docker Mandrill Sublime Text 745 Elasticsearch Heroku Stripe Sass Google Drive SendGrid npm Jenkins Bower Grunt 993 Fig. 2 a–c Crossovers in the mean usefulness of components. The relative usefulness of different components changes as the number of components we possess increases. For example a, if you are only allowed six letters, the ones that show up in the most words are a, e, i, o, s, r. For gastronomy b and technology c, for clarity we only show the 40 components most useful when we have all N components. A pure short-sighted strategy attempts to acquire components in the order that they intersect the diagonal, whereas a pure far-sighted strategy attempts to acquire them in the order that they intersecta vertical. If there are no crossovers, the strategies are the same NATURE COMMUNICATIONS | 8: 2002 | DOI: 10.1038/s41467-017-02042-w | www.nature.com/naturecommunications 3 ARTICLE NATURE COMMUNICATIONS | DOI: 10.1038/s41467-017-02042-w Small kitchen Big kitchen 127 ingredients: almond to fenugreek 381 ingredients: almond to zucchini Recipe complexity 21 597 recipes in total 56,498 recipes in total 17 13 9 5 ab1 600Recipes 00 Recipes 6000 21 89 recipes contain cocoa 4801 recipes contain cocoa 17 13 9 5 cd1 100Recipes with cocoa 0 0Recipes with cocoa 1000 Cocoa is more useful than cayenne Cayenne is more useful than cocoa 21 43 recipes contain cayenne 7950 recipes 17 contain cayenne 13 9 5 ef1 100Recipes with cayenne 0 0Recipes with cayenne 1000 Fig.
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