How to scale your business and become an outlier venture
Research suggests that successful scale-ups are those that can interpret different information and spread that meaning across the organization to guide coordinated action. ...
Family business
The businesses creating breakthrough products from old knowledge
An Italian healthcare firm and Turkish industrial conglomerate show how to tap into existing ideas and knowledge to innovate and stay competitive.
Rapid read:
- Recombinant innovation enables family businesses to turn historical knowledge – archives, traditions, and legacy expertise – into differentiated products and even new market categories by combining old insights with modern science and technology.
- Success follows a three‑phase process: recovering and codifying historical knowledge, reviving it to challenge entrenched organizational assumptions, and renewing it through market‑ready offerings that reshape industry positioning.
- Case examples from Aboca and Sabanci Holding show how leveraging archives – including via AI – can strengthen competitiveness, enhance decision‑making, and create unique value propositions anchored in both heritage and innovation.
Most innovators stand on the shoulders of giants, but in a race to innovate, invent, and ideate, family businesses are dismissing old knowledge – wisdom that could hold the key to their next breakthrough.
In a family enterprise, tradition is valued and respected yet simultaneously seen as something to overcome. New generations often enter with a hunger to shift products, modernize processes, and diversify portfolios alike. It’s what I have often coined the tradition and innovation paradox, where old values intersect with new ideas.Â
However, new research demonstrates that the two worlds do not stand in opposition; they can and should be recombined and reinterpreted to create new market offerings. Innovation is no longer about invention, but reinvention and reinterpretation, and in this article, I translate these research findings into actionable insights you can use to transform institutional memories into new market offerings.
History isn’t about repetition but reinvention
Most organizations sit on vast pools of historical and archival data, writing them off as outdated or irrelevant. Century-old ideas, technologies, perspectives, and institutional memories are often left stuck in time. But ironically, this isn’t what history has taught us to do.
Some of the world’s most seminal products were developed by recombining established knowledge components. For example, 3M’s flexible circuit is based on technologies that date almost a century but was commercialized only a few decades ago to develop electronic devices, such as LCD screens, laptop keyboards, robots, and biomedicine. Other notable examples include Polaroid’s combination of its legacy instant photography technology with digital imaging and social media, as well as the invention of television based on the recombination of seven different technologies that existed for decades. Research has long recognized that a firm is shaped but not necessarily trapped by its past.
This is precisely what we refer to as recombinant innovation, the process in which atypical or unexpected combinations of knowledge generate novel outcomes. However, like much existing research in the family business field, while many studies have theorized why recombinant innovation  works, very few have explored how organizations can achieve it. Even fewer have been able to translate those learnings into practitioner insights.
Drawing on findings from research that I recently co-authored with Vittoria Magrelli, Josip Kotlar, Federico Frattini, and Antonio Messeni Petruzzelli, and featuring the case studies of Italian healthcare firm Aboca and Turkey-based industrial and financial conglomerate Sabanci Holding, I help you recover, revive, and renew existing family knowledge to remain competitive.
The Aboca Experience
Aboca is an Italian healthcare company that combines centuries-old herbal remedies with evidence-based medicine to develop breakthrough products. Founded in 1978 by Valentino Mercati and Rosetta del Bene in Tuscany, Italy – an area renowned for the cultivation and use of medicinal plants. Aboca is now a European leader in the production and distribution of medical devices and dietary supplements, all based on natural substances extracted from medicinal plants. The company’s revenue surpassed €311m during our research, which also saw 37 national and international patents and 75 product lines developed and launched in a relatively short period of time.
However, the firm’s competitiveness does not lie solely within scientific research. Like many enterprising families, the Mercatis boast a family museum which includes the Aboca Bibliotheca Antiqua, a dedicated library housing 3,000 printed volumes from the 15th to the 20th century on the therapeutic value of plants, more than 38,000 digitized and stored old medicinal recipes, and around 12,000 digitized botanical sheets. Aboca uses this old knowledge alongside modern scientific research to compete in the healthcare industry, and it works. The company is known in over 25 countries for its highly innovative and distinctive therapeutic natural products.
The firm’s capacity to thrive in a highly competitive industry is deeply rooted in its ability to create new opportunities for innovation and shape a new market ecosystem by relying on old knowledge.
Aboca bridged the gap between past and present, crafting a distinctive market position that appealed to both
tradition-conscious and science-oriented consumers.
Three steps to innovate the past
Aboca bridged the gap between past and present, crafting a distinctive market position that appealed to both tradition-conscious and science-oriented consumers. Its success is rooted in a multi-level process that can be reinterpreted in family businesses across every sector. It involves three key recombinant innovation phases: recovering, reviving, and renewing:
1) Recovering: How individuals reinterpret and reimagine old knowledge
First, leaders need to systematically focus on recovering, restoring, and digitizing historical materials such as books, recipes, and artifacts, transitioning them from external, exogenous resources to organized and accessible knowledge bases.
In the case of Aboca, teams then reinterpreted this knowledge and used it to challenge existing assumptions. It enabled the family firm to transcend the conventional supplements market, giving rise to a new segment of therapeutic solutions derived from natural substances and validated by modern science.
2) Reviving: Reframing knowledge at an organizational level to redefine norms
In the second phase of the recombinant process, organizations are introduced to the newly reinterpreted knowledge, and it is used to steer new discussions around market and product offerings. Crucially, this phase also involves overcoming deeply embedded cultural and value systems within the organization to sustain its innovative approach.
For Aboca, this organizational reframing enabled the company to develop therapeutic natural products, such as treatments targeting respiratory inflammation rather than merely suppressing coughs.
3) Renewing: Bringing reinvented knowledge and products to industry
From individual to company to industry, this third and final phase is about introducing new products and services, shaped by old knowledge, to market.
For Aboca, this is where innovations were validated and repositioned in emerging market spaces, ensuring they aligned with regulatory standards and consumer expectations. Strategic actors play a pivotal role at this stage at Aboca in legitimizing and repositioning herbal formulations to align with broader market and innovation goals.
This phase emphasizes how an organization projects its innovations outward, broadening the level of analysis to address external market dynamics and industry positioning.
The family created new combinations of old knowledge and used it to inspire business decisions internally and externally through its entrepreneurial channel.
When ancestors meet artificial intelligence
This isn’t just applicable to healthcare either. Turkey-based Sabanci Holding recently featured on the Family Business Centre’s philanthropy webinar series. While the focus of the conversation was the family’s structured approach to giving, it was the current generations’ reinterpretation of family values and use of digital technology to bring old knowledge to life that made it so remarkable.
‘Nowgen’ Melisa Sabanci Tapan told IMD how she used artificial intelligence (LLMs) to translate the family’s physical and digital archives into a digital version of her great-grandfather – a bot that allowed her to apply his wisdom and vision to modern situations in a consistent and aligned way. What began as an internal engagement and decision-making tool later evolved into a new business discipline – a podcast series, through which Sabanci Tapan shares his old knowledge with new generations beyond the family. The family created new combinations of old knowledge and used it to inspire business decisions internally and externally through its entrepreneurial channel.
Conclusion
Recombinant innovation not only generates novel products but can also create entirely new product categories. The key lesson is that the past can be a rich source of innovation if treated as a dynamic resource rather than a nostalgic reference. Firms in industries such as food, wellness, fashion, or cosmetics, where tradition adds value, can gain a competitive edge by combining old knowledge with modern science, crafting a unique innovation narrative that resonates with both regulators and consumers. For businesses looking to follow in the footsteps of Aboca and the Sabanci family, they must follow this three-phase framework, which in short means:
- Restoring old knowledge, de-embedding, and codifying into an old knowledge repository
- Disrupting established logics and reframing, creating new combinations of old knowledge
- Reconfiguring product–market relations, legitimizing, and repositioning as new products for new markets
Authors
Related
Potong:Â Rethinking legacy in a family business
Chef Pam transformed a 120-year-old family business into a Michelin-starred restaurant, showing how heritage can fuel innovation and competitive edge...
How to raise financially capable children
Discover the number one parenting mistake that turns children into voracious spenders – and the simple steps to transform them into capable, confident, and conscious investors....
Prescribing a new future for healthcare: How Roche is rewriting what corporate leadership looks like
André Hoffmann has reshaped a 125-year legacy by redefining Roche’s identity, modernizing its governance, and anchoring the company in a renewed sense of purpose....
Learn Brain Circuits
Join us for daily exercises focusing on issues from team building to developing an actionable sustainability plan to personal development. Go on - they only take five minutes.
Â
Explore Leadership
What makes a great leader? Do you need charisma? How do you inspire your team? Our experts offer actionable insights through first-person narratives, behind-the-scenes interviews and The Help Desk.
Â
Join Membership
Log in here to join in the conversation with the I by IMD community. Your subscription grants you access to the quarterly magazine plus daily articles, videos, podcasts and learning exercises.
Â