Watch the full episode on YouTube: https://youtu.be/t0V8uK8LBCE
Combinatorial innovation is the idea that most new products are not invented from scratch at all. They are assembled from components that already exist. Paul Nunes, co-author of Jumping the S-Curve, Big Bang Disruption and Pivot to the Future, joins Aidan McCullen to apply that idea to one of the strangest stories in business, a company everyone wrote off that came back anyway.
Aidan borrows a term from palaeontology to frame it. A Lazarus taxon is a species that vanishes from the fossil record and then reappears, alive, long after everyone declared it extinct. Companies do this too, and Paul has been collecting them. Motorola is the headline case.
What is combinatorial innovation?
Combinatorial innovation means recombining what is already on the table rather than inventing from nothing. Paul uses the Apollo 13 solution as the image, because the crew built what they needed from what was already in the module.
Drones make the commercial version obvious. Nobody invented the drone from first principles. The cameras came from an industry with cameras to spare, the gyroscopes came from phones and gaming, and the rest was software. Because of what Paul and his co-authors call near perfect market information, anyone can now see every part on the market and price it. He fixed his own washing machine with a ten-dollar part from Amazon, which is the same logic at domestic scale.
Modularity, and why your supplier is your innovation partner
Modularity is what makes combinatorial innovation work. Motorola could not keep up with its own phone software, so it moved to Android and traded customisation for simplicity, repairability and a free upgrade path. Fewer parts, easier fixes, faster cycles.
However, that model only pays if suppliers innovate too. Paul’s example is tempered glass in a windscreen. Is it the carmaker’s job to invent that, or the glass company’s? In Accenture’s research on the sources of innovation, supplier-based innovation sits alongside customer-led and leadership-led innovation, and it is the one most companies never think about.
There is a catch. Partners become competitors. BYD made batteries, then decided to build a car around the battery. As Paul puts it, almost all profitable advantage comes from closed systems, and closing a system is exactly what provokes everyone else to band together around an open one.
Motorola, non-consumers and the $180 phone
Motorola’s comeback came from the segment nobody else was designing for. Under Lenovo it built a phone around $180 to $200, using affordable parts and, crucially, hardware designed to conserve battery. Battery life barely registers in the affluent world. In places where a hut runs its lights and its phone charger off a solar panel, it is the whole product.
Aidan connects this to Clayton Christensen’s non-consumer, the customer who is not buying from you yet. General Motors and Ford dismissed Toyota’s arrival in the United States in the 1950s because Toyota was not competing with them. It was competing with people who could not afford a car.
Treasure in the trash
Kodak kept earning billions from patents and licensing long after it was declared dead. That is the IP layer. There is also manufacturing capability, and there is talent. Paul raises the idea of selling a working team as a unit rather than as individuals, which is roughly what happens informally every time a company hires an executive and hopes four colleagues follow.
Shockley Semiconductor is the cautionary version. Eight extraordinary people, including Robert Noyce and Gordon Moore, walked out together and founded Fairchild. Shockley had the talent and lost it, which is why we do not say the name today.
Vanity, the talent curve and the deflation problem
Aidan raises the companies remembered only from old football shirts. Paul takes the point further. Stadium naming rights and Super Bowl slots do signal financial strength, but they often arrive at the pinnacle, when executives have stopped asking who still needs to hear of them.
Meanwhile the talent curve quietly ends. During the climb, companies fire the inventors because nothing needs inventing. Then the environment shifts and, as chief strategy officers told Paul for years, the problem was never knowing what to do. It was no longer having the people to do it.
Which leads to the closing argument. Technology takes cost out of a system far more easily than it creates something new, and consumers now know it, so they expect the saving. As a result, deflation, not competition, may be the fundamental challenge of strategy today. The question is what you do with the money you save, and whether you are reinvesting it or eating your seed corn. Paul’s last word is an optimistic one. In forty years he has never seen technology outrun people’s ability to use it.
About the Guest — Paul Nunes
Paul F. Nunes is co-author of Jumping the S-Curve, Big Bang Disruption, Pivot to the Future and Mass Affluence, and spent years as Global Managing Director of Research at the Accenture Institute for High Performance. His research on growth, disruption and reinvention has been covered by the New York Times, the Wall Street Journal and Forbes. Find him on LinkedIn.
About the Host
Aidan McCullen is the 2025 Thinkers50 Innovation Award recipient, keynote speaker on AI, disruption, innovation and change, host of The Innovation Show, and author of Undisruptable: A Mindset of Permanent Reinvention (Wiley). Learn more about Aidan.
About The Innovation Show
The Innovation Show is the Thinkers50-recognised podcast where square pegs find their place in a world of round holes. Each week, Aidan McCullen hosts world-class authors, scientists and practitioners on disruption, innovation, change, transformation, leadership and creativity. This series is brought to you by Kyndryl, who run and reimagine the technology systems that drive advantage for the world’s leading businesses, learn more at kyndryl.com. Subscribe to the Thursday Thought on Substack for a chance to win a copy of one of Paul’s books, with thanks to Kyndryl.
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Frequently asked questions
What is combinatorial innovation?
Combinatorial innovation is innovation that recombines existing components rather than inventing new ones. A drone, for example, is largely a phone camera, a gyroscope, propellers and software. Near perfect market information makes it possible, because anyone can now see and price every available part online.
What is a Lazarus company?
The term comes from palaeontology. A Lazarus taxon is a species that disappears from the fossil record and later reappears alive. A Lazarus company is one written off as failed that returns years later through its intellectual property, its manufacturing capability or its talent. Motorola is Paul Nunes’s central example.
How did Motorola come back?
Motorola split into Motorola Solutions and Motorola Mobility. Mobility collapsed and was sold to Google largely for its patents, then on to Lenovo, where it repositioned around foldable screens and an affordable phone priced roughly between $180 and $200 for customers who value battery life and durability over premium features.
What is supplier-based innovation?
Supplier-based innovation is improvement that originates with your component makers rather than your own R&D. Tempered glass in a windscreen is invented by the glass company, not the carmaker. In a modular, combinatorial world, getting suppliers to make your product better is a primary source of continuous innovation.
Why is price deflation a strategy problem?
Technology takes cost out of a system more easily than it creates new value, and customers now know it, so they expect the saving passed on. That squeezes the profit that funds the next S-curve, and it forces a choice about whether savings are reinvested or simply harvested.
Who is Aidan McCullen?
Aidan McCullen is the 2025 Thinkers50 Innovation Award recipient, host of The Innovation Show, author of Undisruptable: A Mindset of Permanent Reinvention, and a keynote speaker on AI, disruption, innovation and change.