From Experience: Harnessing Tacit Knowledge to Achieve Breakthrough Innovation

Abstract The ability to create a stream of revolutionary new products can represent a sustainable competitive advantage for firms in almost any industry. Whereas evolutionary product improvements often follow predictable trajectories, breakthrough innovations involve unexpected leaps of creativity and insight. Despite its strategic importance, however, little is known about the process by which innovators achieve these valuable breakthroughs. This article proposes that breakthrough innovations result from the harnessing of tacit knowledge possessed by individuals and project teams. Tacit knowledge lies below the surface of conscious thought and is accumulated through a lifetime of experience, experimentation, perception, and learning by doing. Managers who can tap into this vast pool of creative energy can elevate the innovative capabilities of their teams well beyond the incremental and mundane. The article begins by establishing the vital importance of breakthrough innovations to the competitiveness of firms. This strategic mandate is followed by a brief discussion of the nature and implications of tacit knowledge in the context of innovation. The remainder of the article describes three mutually reinforcing methods for encouraging the explication and sharing of tacit knowledge among design team members. The ultimate goal is to establish a generative atmosphere for breakthrough innovation, in which divergent thinking, improvisation, and artistic creativity merge with the practical demands of the product development process. The first step toward harnessing the creative power of tacit knowledge is to foster the emotional commitment and deep personal involvement of design team members. Managers can accomplish this goal through the development of inspiring “innovation stories,” encouragement of reasonable risk-taking and experimentation, building of unique team identities, and displaying unbridled confidence in a team’s creative abilities. Once the emotional commitment of team members has been assured, two techniques are proposed as catalysts for breakthroughs derived from tacit knowledge. These methods are based on evidence that intimate physical interaction during the creative process, both person to object and person to person, may be a catalyst for tacit insights. The first technique highlights the use of early and frequent prototyping as a powerful focal point for the explication of tacit knowledge from both the design team and potential customers. The second technique involves the encouragement of face-to-face interaction between innovators during product development, thereby enabling creative improvisation and real-time knowledge sharing. Several implications for managers are highlighted, including the need for a greater emphasis on employee retention, the importance of developing a nurturing environment for innovation, and the value of intimate physical interaction, including early prototyping, indwelling with customers, and co-location of teams wherever possible.