New Knowledge: The Future Of Innovation

Mr Bill Burnett

Companies come into existence because they can solve some customer problem better than anyone else. These companies enjoy a competitive advantage. Companies go out of business because they fail to solve some customer problem better than anyone else. They’ve lost their competitive advantage. 

The purpose of innovation in business is to create competitive advantage.   The key skill is problem-solving.  Problem-solving involves the hard work of understanding the customer problem then coming up with a solution.  But to create competitive advantage, the solution has to be new is some significant respect.  This ‘newness’ is found in the process of creating new knowledge.  

The ability to create new knowledge while you solve a customer’s problem in a better way, is the heart of innovation.  Unique new knowledge is the firm’s most valuable resource.

New knowledge

 We create new knowledge in three ways:


Charcoal was a discovery. Charcoal is simply wood that is burned in an environment lacking enough oxygen to complete combustion. When enough air is available, combustion is complete, and all you’re left with is ash. Without enough oxygen, the temperature does not rise as easily, and the lower heat drives out resident moisture, organic compounds, and chemicals in the wood, leaving just the carbon. In wood, the moisture and other combustibles burn at a lower temperature than does carbon. This means that you can burn away these other parts of wood at a temperature at which carbon does not combust. Carbon burns hot. It burns so hot that, in a forced-air furnace, charcoal will melt metals. It is this ability to produce higher temperature that has made charcoal valuable. 


To go from discovering some charcoal at the bottom of a fire, to making it in sufficient quantities to sell, required finding a better process. This was done through experimentation. different solutions were tried, and some worked and others didn’t. Around the world, the successful solutions were identical in key respects.   All solutions controlled the timing and amount of oxygen available to the fire, which allowed the heat to build up to around 260 degrees Celsius and the air to be cut off entirely at the end of the process. 


When charcoal is recovered from the refinery kiln, there is always a substantial collection of small bits and pieces of charcoal left over. This material is too small to sell. But charcoal manufacturers did not want to waste it either. By combining existing knowledge to form new knowledge, a solution was found. The existing knowledge was that charcoal is a natural fiber material just like wood.  The other knowledge came from the paper industry, which had discovered that natural starches serve as a good binding agent for natural wood fibers. By mixing a starch and charcoal slurry and forming this mixture into balls and letting them dry out, one could create a lump of charcoal. This is how briquettes of charcoal are made.

The ability to create valuable new knowledge is the cornerstone of innovation.


Article © 2010 Mr Bill Burnett. All rights reserved.

about the author...

Mr Bill Burnett

Mr Bill Burnett

affiliation:   Tailwind Discovery Group

position:  Partner

country:  United States (Illinois)

area of interest:  Company culture supporting innovation

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other books and writings by

Mr Bill Burnett

The Peak Interview: New Insights into Winning the Interview and Getting the Job

link to buy book

Advantage: Business Competition in the New Normal

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