Why some companies break through with radical innovation (and others don’t)

Rev­o­lu­tion­ary break­throughs in bio­med­i­cine and tech­nol­o­gy emerge at break­neck speed: from Regeneron’s AI-dri­ven anti­body ther­a­pies that can iden­ti­fy promis­ing drug can­di­dates in weeks rather than years, to cut­ting-edge CRISPR gene ther­a­pies that lit­er­al­ly rewrite genet­ic code. These rad­i­cal advances don’t just improve exist­ing solu­tions, they com­plete­ly rede­fine what’s pos­si­ble. Each rep­re­sents a fun­da­men­tal shift that cre­ates entire­ly new mar­kets and ren­ders pre­vi­ous approach­es obsolete.

Yet for every break­through that makes head­lines, count­less ground­break­ing ideas nev­er see the light of day, buried with­in organ­i­sa­tions that inad­ver­tent­ly sup­press their own poten­tial. While some com­pa­nies like Miche­lin embrace open inno­va­tion through hun­dreds of exter­nal R&D part­ner­ships that tap into glob­al exper­tise, and oth­ers like Microsoft under­take dra­mat­ic cul­tur­al trans­for­ma­tions from “know-it-all” to “learn-it-all” envi­ron­ments, many organ­i­sa­tions still strug­gle to nur­ture tru­ly trans­for­ma­tive ideas. What sep­a­rates the break­through inno­va­tors from the incre­men­tal improvers?

The answer lies not just in R&D bud­gets or bril­liant sci­en­tists, but in some­thing more sub­tle yet pow­er­ful: the social net­works that con­nect peo­ple with­in organ­i­sa­tions. Net­work theory—the study of rela­tion­ships and connections—reveals that the way peo­ple col­lab­o­rate fun­da­men­tal­ly shapes whether an organ­i­sa­tion pro­duces rev­o­lu­tion­ary ideas or set­tles for mod­est improvements.

Two com­pre­hen­sive stud­ies of US phar­ma­ceu­ti­cal and biotech­nol­o­gy firms analysed over 19,000 patent records from 93 lead­ing com­pa­nies between 2001 and 2013. This mas­sive dataset allowed researchers to trace the social con­nec­tions behind each inno­va­tion, map­ping who col­lab­o­rat­ed with whom and iden­ti­fy­ing the net­work pat­terns that pre­ced­ed both break­through and incre­men­tal inno­va­tions. Their find­ings chal­lenge con­ven­tion­al wis­dom about what dri­ves inno­va­tion and offer sur­pris­ing insights about collaboration’s role in creativity.

The research uncov­ered a fas­ci­nat­ing para­dox: the same tight-knit rela­tion­ships that excel at incre­men­tal inno­va­tion can actu­al­ly sup­press rad­i­cal break­throughs. This coun­ter­in­tu­itive find­ing has pro­found impli­ca­tions for how we think about team design and col­lab­o­ra­tion. In short, net­works that dri­ve incre­men­tal suc­cess, some­times sti­fle rad­i­cal think­ing at the same time.

Dense, inter­con­nect­ed teams built on trust and fre­quent com­mu­ni­ca­tion excel at refin­ing exist­ing ideas and imple­ment­ing improve­ments effi­cient­ly. These close-knit groups share tac­it knowl­edge seam­less­ly, coor­di­nate com­plex efforts with min­i­mal fric­tion, and can rapid­ly iter­ate on proven con­cepts. Think of how Apple’s hard­ware and soft­ware teams work in tight coor­di­na­tion to deliv­er incre­men­tal improve­ments in each iPhone generation—better cam­eras, faster proces­sors, refined designs that build on estab­lished foundations.

How­ev­er, these same net­works tend to main­tain estab­lished ways of think­ing and resist ideas that chal­lenge exist­ing norms or threat­en cur­rent suc­cess for­mu­las. Group mem­bers devel­op shared men­tal mod­els and sim­i­lar per­spec­tives, cre­at­ing what researchers call “cog­ni­tive lock-in.” When every­one thinks alike, tru­ly nov­el ideas can seem for­eign or risky. Con­sid­er Kodak’s engi­neers, who devel­oped the first dig­i­tal cam­era in 1975 only to see it dis­missed by lead­er­ship as mere­ly “cute”, a clas­sic exam­ple of how entrenched think­ing with­in tight-knit net­works can blind orga­ni­za­tions to rev­o­lu­tion­ary potential.

The data backs this up with strik­ing math­e­mat­i­cal pre­ci­sion: regres­sion analy­ses show that stronger ties and denser net­works sig­nif­i­cant­ly reduce rad­i­cal inno­va­tion, with coef­fi­cients of –2.29 and –1.77 respec­tive­ly. In prac­ti­cal terms, this means that every increase in net­work den­si­ty cor­re­spond­ing­ly decreas­es the like­li­hood of pro­duc­ing break­through innovations.

The most rad­i­cal inno­va­tions emerge from unex­pect­ed places: the edges of organ­i­sa­tion­al net­works. These periph­er­al positions—less con­nect­ed to the organ­i­sa­tion­al core but more open to out­side influences—prove sig­nif­i­cant­ly more like­ly to gen­er­ate trans­for­ma­tive ideas. With­out the pres­sure to con­form to estab­lished group think­ing, peo­ple at these net­work edges can pur­sue tru­ly nov­el approach­es and chal­lenge fun­da­men­tal assumptions.

This phe­nom­e­non explains why some of his­to­ry’s most rev­o­lu­tion­ary inno­va­tions came from out­siders or bound­ary-span­ners. The per­son­al com­put­er emerged not from IBM’s cen­tral research labs but from garage-based entre­pre­neurs on the periph­ery of the tech­nol­o­gy estab­lish­ment. Sim­i­lar­ly, many biotech­nol­o­gy break­throughs come from aca­d­e­m­ic-indus­try col­lab­o­ra­tions where researchers oper­ate at the inter­sec­tion of dif­fer­ent knowl­edge domains.

The under­ly­ing mech­a­nism makes intu­itive sense when we con­sid­er infor­ma­tion flows. Strong ties, while ben­e­fi­cial for trust and com­mu­ni­ca­tion, often con­nect sim­i­lar peo­ple who share redun­dant infor­ma­tion and sim­i­lar per­spec­tives. Weak ties, despite their rela­tion­al chal­lenges like reduced trust and poten­tial mis­un­der­stand­ings, pro­vide access to fresh, non-redun­dant infor­ma­tion that can spark break­through think­ing. These con­nec­tions act as bridges between dif­fer­ent worlds of knowl­edge, bring­ing togeth­er insights that would nev­er meet with­in dense, homo­ge­neous networks.

These insights offer tech­nol­o­gy lead­ers a prac­ti­cal roadmap for man­ag­ing inno­va­tion, sug­gest­ing that dif­fer­ent types of inno­va­tion require fun­da­men­tal­ly dif­fer­ent organ­i­sa­tion­al approaches:

For incre­men­tal inno­va­tion: Fos­ter dense, col­lab­o­ra­tive net­works with strong inter­nal bonds. Encour­age fre­quent face-to-face inter­ac­tions, build deep trust between team mem­bers, and cre­ate envi­ron­ments where exist­ing knowl­edge can be sys­tem­at­i­cal­ly refined and effi­cient­ly imple­ment­ed. Estab­lish clear com­mu­ni­ca­tion chan­nels, reg­u­lar review process­es, and shared suc­cess met­rics. This approach works excep­tion­al­ly well for prod­uct improve­ments, process opti­mi­sa­tion, and per­for­mance enhancements.

For rad­i­cal inno­va­tion: Delib­er­ate­ly cul­ti­vate net­work diver­si­ty and struc­tur­al gaps. Avoid over­ly tight-knit groups that rein­force con­ven­tion­al think­ing. Instead, cre­ate “struc­tur­al holes” (strate­gic gaps in social net­works that force dif­fer­ent groups to con­nect and share fresh per­spec­tives). Encour­age col­lab­o­ra­tions across depart­ments, indus­tries, and even com­peti­tors. Sup­port employ­ees who serve as “knowl­edge bro­kers”, con­nect­ing pre­vi­ous­ly unlinked groups and trans­lat­ing insights across domains.

The crit­i­cal insight is that organ­i­sa­tions need both approach­es oper­at­ing simul­ta­ne­ous­ly. While loose con­nec­tions pro­vide access to nov­el ideas and diverse per­spec­tives, teams still need enough strong ties to effec­tive­ly eval­u­ate, devel­op, and imple­ment new con­cepts. This means active­ly sup­port­ing cross-depart­men­tal col­lab­o­ra­tions, exter­nal part­ner­ships, sab­bat­i­cals in dif­fer­ent indus­tries, and hir­ing peo­ple from out­side the sec­tor who bring fresh viewpoints.

Prac­ti­cal­ly, this might involve cre­at­ing ded­i­cat­ed “inno­va­tion out­posts” in dif­fer­ent geo­graph­ic regions or sec­tors, estab­lish­ing for­mal rota­tion pro­grams that move peo­ple between depart­ments, or insti­tut­ing “inno­va­tion tour­na­ments” that bring togeth­er diverse teams to tack­le spe­cif­ic challenges.

Lead­ing organ­i­sa­tions must go beyond net­work design to address cul­tur­al bar­ri­ers. This means incen­tivis­ing exper­i­men­ta­tion, tol­er­at­ing ambi­gu­i­ty and fail­ure, and reward­ing cal­cu­lat­ed risk-taking—all essen­tial for over­com­ing the nat­ur­al con­ser­vatism of close-knit net­works. By under­stand­ing the dual dynam­ics of net­work cohe­sion and bro­ker­age, man­agers can archi­tect orga­ni­za­tion­al struc­tures that nur­ture both steady improve­ment and trans­for­ma­tive breakthroughs.

The research offers some­thing rare in busi­ness strat­e­gy: a clear, evi­dence-based roadmap for one of man­age­men­t’s great­est chal­lenges. In an era where rev­o­lu­tion­ary ideas can reshape entire indus­tries overnight, under­stand­ing the social forces behind inno­va­tion isn’t just aca­d­e­m­ic, it’s essen­tial for survival.

For more info

• Jia Zhang, Jian Wang, Jos Win­nink, Sim­cha Jong (2024). Turn­ing cre­ative ideas into suc­cess­ful inno­va­tions: dif­fer­en­tial effects of net­work struc­ture for rad­i­cal and incre­men­tal inno­va­tion. Jour­nal of Tech­nol­o­gy Transfer.
• Jia Zhang, Jian Wang, Jos Win­nink, Sim­cha Jong (2025). Col­lab­o­ra­tion net­works and rad­i­cal inno­va­tion: Two faces of tie strength and struc­tur­al holes. Jour­nal of Informetrics.