The Breakthrough Incubator
How to rapidly create and launch a new step-out business
Creating a new step-out businessis not easy
Achieving the revenue growth that markets
expect can be challenging: growth byacquisition is expensive, and organic growthis often too slow and incremental.
Therefore, a key priority for global
corporations is to improve performance in
breakthrough innovation to overcome thegrowth gap.
However, despite some successes, many
companies fail to create sustainable newbusinesses of scale. For example, in ourown breakthrough innovation survey11,
more than 85 percent of companies wereunsatisfied with their breakthroughinnovation performances. Usually, this is notdue to lack of good concepts, but because
companies do not truly embrace the idea ofinvesting in step-out business opportunities
which involve commercial risks and require
new competencies.

How the Breakthrough Incubatormodel can help
Arthur D. Little (ADL) has been working
with clients using a powerful new external
incubator approach to overcome thesechallenges and accelerate new businesscreation.
The Breakthrough Incubator (BI) is a modelin which the entire end-to-end innovation
process is externalized and conducted by alead delivery partner managing a network ofother players, from ideation through tolaunch and commercialization. In essence,
this is a “build, operate, transfer” philosophy
applied specifically to innovation andproduct development.
The key features of the BI model are as
follows:

ADL holds full responsibility fordelivery and acts as an “orchestrator”,
conducting every part of new-businesscreation, with only a small client focalpoint guidance team involved in close,
regular interactions with the team Once the scope and aims are defined,ADL commences the program with an
initial strategic review aimed atestablishing and confirming thefeasibility of the proposition
 The product/service development
process then proceeds using an agile
approach with early testing and fastdevelopment cycles, including
prototyping, scale-up and in-market
testing stages
 The scope also includes supply chain
sourcing, manufacturing/operational
analysis and planning, pricing, brandstrategy, channel strategy, businesscase and growth strategy
Once the development is complete, ADL
transitions the proven and tested new
business from the incubator back into thecompany.
Key features of the BI approach

Source: Arthur D. Little

The benefits for clients
The BI model offers clients major benefits.
The agile approach leads to a reduction intime to market of 20–30 percent or more,
as well as cost savings of 15–30 percent due
to resource efficiencies. In addition, ADL is

1 Arthur D. Little Survey, "Systematizing Breakthrough Innovation", 2015

www.adl.com/Breakthrough_Incubator

able to take an integrated, cross-functional
approach and bring the best-available global
expertise to advance the company’s knowhow and capabilities. Finally, the BI model
mitigates risks by keeping the project
external – and brand anonymous – until it islargely proven, at full scale.

When is the model applicable?
The BI model has broad applicability acrossboth the B2B and B2C sectors. In particular,
it is suitable for companies that are:
Looking to create new products andservices in areas where they lackinternal expertise Already resource constrained on corebusiness innovation, yet need to make
rapid progress on non-core
innovation due to perceived threats
and opportunities
 Looking to engage support in not only
identifying new growth opportunities,
but also in realizing these in practiceand building a new business rapidlyWhy engage ADL for this type ofproject?
Delivering a Breakthrough Incubator
project requires a unique combination ofskills, from business strategy to productdesign, as well as from manufacturing
planning to transformation and program
management.
Most strategy consulting firms are unable tocover the deep technical expertise required
to deliver the work successfully. With its
130-year heritage as a “problem solver”
linking strategy, technology, innovation andtransformation, as well as a deep and broadtrack record to draw from, ADL is uniquely
qualified to deliver a BI project.

Contact:
Rick Eagar
eagar.richard@adlittle.com
Max Senechal
senechal.max@adlittle.com