A Comprehensive Model of Uncertainty Associated with Radical Innovation

Large established firms typically focus on enhancing their ability to manage their core businesses, with an emphasis on cost reduction, quality improvements, and incremental innovation in existing products and processes. To sustain competitive advantage over the long term, mature firms must in parallel develop radical innovations (RI) as a basis for building and dominating fundamentally new markets. Management practices that are effective in established businesses are often ineffective and even destructive when applied to RI projects because of higher levels of uncertainty inherent in the latter. Understanding the characteristics of RI projects and the nature of the uncertainty that pervades them is critical to developing appropriate managerial practices. This paper reports the results of a longitudinal study of 12 RI projects in 10 large established U.S.‐based firms. A qualitative, prospective design was used to collect and analyze data. Project team leaders, members, and sponsors for each project were interviewed repeatedly over five years. The analysis centers on the dimensions and characteristics of uncertainty that project teams experienced. The analysis of the challenges they confronted is used to construct a multidimensional model of RI uncertainties. The model identifies four categories of uncertainty as key drivers of project management: technical, market, organizational, and resource uncertainty. Each of these four categories is elaborated in the context of radical innovation and further distinguished via two additional dimensions: criticality and latency. These are substantiated through case based data. Implications for management skills, processes, and appropriate tools associated with radical innovation projects are discussed.     

Application and performance impact of stage–gate systems – the role services in the firm’s business focus

Although service innovation is important, knowledge of new product and service development, including the positive effect of stage‐and‐gate‐type systems, has been derived almost exclusively from studies in the manufacturing sector. In the present paper, we address two important questions: How do differences in the firm’s business focus, which describes whether a firm puts more emphasis on products or services in its business activities, influence the usage of such formal innovation processes? Is stage‐and‐gate‐type systems’ impact on innovation program performance contingent on the firm’s business focus? Unlike previous studies, we not only differentiate service and manufacturing by industry classification codes but also apply a continuous measure to take into account the blurring of boundaries between the manufacturing and service businesses. Based on a comprehensive discussion of service‐specific characteristics and their implications for innovation management and using a cross‐industry, multi‐informant sample of innovation programs from 272 firms with 1,985 informants, we find empirical support for firms with a stronger focus on the service business being less likely to use stage‐and‐gate‐type systems. Furthermore, the use of stage‐and‐gate‐type systems fosters innovation program performance, and this effect becomes stronger as the business focus shifts toward services. This result implies that service‐based firms can benefit from stage‐and‐gate‐type systems to a greater extent than product‐based firms. Our research also demonstrates the gap between the desired level of innovation process formalization and its current usage in practice, especially for firms with a dominating service business.     

Product Innovation Processes in Small Firms: Combining Entrepreneurial Effectuation and Managerial Causation

This article reports a multimethod study of product innovation processes in small manufacturing firms. Prior studies found that small firms do not deploy the formalized processes identified as best practice for the management of new product development (NPD) in large firms. To explicate small firms' product innovation, this study uses effectuation theory, which emerged from entrepreneurship research. Effectuation theory discerns two logics of decision‐making: causation, assuming that means are selected to attain goals; and effectuation, assuming that goals are created based upon available means. The study used a process research approach, investigating product innovation trajectories in five small firms across 352 total events. Quantitative analyses revealed early effectuation logic, which increasingly turned toward causation logic over time. Further qualitative analyses confirmed the use of both logics, with effectual logic rendering product innovation resource‐driven, stepwise, and open‐ended, and with causal logic used especially in later stages to set objectives and to plan activities and invest resources to attain objectives. Because the application of effectuation logic differentiates the small firm approaches from mainstream NPD best practices, this study examined how small firms' product innovation processes deployed effectuation logic in further detail. The small firms: (1) made creative use of existing resources; (2) scoped innovations to be realizable with available resources; (3) used external resources whenever and wherever these became available; (4) prioritized existing business over product innovation projects; (5) used loose project planning; (6) worked in steps toward tangible outcomes; (7) iterated the generation, selection, and modification of goals and ideas; and (8) relied on their own customer knowledge and market probing, rather than early market research. Using effectuation theory thus helps us understand how small firm product innovation both resembles and differs from NPD best practices observed in larger firms. Because the combination of effectual and causal principles leverages small firm characteristics and resources, this article concludes that product innovation research should more explicitly differentiate between firms of different sizes, rather than prescribing large firm best practices to small firms.     

PERSPECTIVE: Trends and Drivers of Success in NPD Practices: Results of the 2003 PDMA Best Practices Study*

Since 1990, the Product Development & Management Association (PDMA) has sponsored best practice research projects to identify trends in new product development (NPD) management practices and to discern which practices are associated with higher degrees of success. The objective of this ongoing research is to assist managers in determining how to improve their own product development methods and practices. This paper presents results, recommendations, and implications for NPD practice stemming from PDMA's third best practices study, which was conducted in 2003. In the eight years since the previous best practices study was conducted, firms have become slightly more conservative in the portfolio of projects, with lower percentages of the total number of projects in the new‐to‐the‐world and new‐to‐the‐firm categories. Although success rates and development efficiencies have remained stable, this more conservative approach to NPD seems to have negatively impacted the sales and profits impact of the new products that have been commercialized. As formal processes for NPD are now the norm, attention is moving to managing the multiple projects across the portfolio in a more orchestrated manner. Finally, firms are implementing a wide variety of software support tools for various aspects of NPD. NPD areas still seriously in need of improved management include idea management, project leadership and training, cross‐functional training and team communication support, and innovation support and leadership by management. In terms of aspects of NPD management that differentiate the “best from the rest,” the findings indicate that the best firms emphasize and integrate their innovation strategy across all the levels of the firm, better support their people and team communications, conduct extensive experimentation, and use numerous kinds of new methods and techniques to support NPD. All companies appear to continue to struggle with the recording of ideas and making them readily available to others in the organization, even the best. What remains unclear is whether there is a preferable approach for organizing the NPD endeavor, as no one organizational approach distinguished top NPD performers.     

Does Strategic Planning Enhance or Impede Innovation and Firm Performance?*

Does strategic planning enhance or impede innovation and firm performance? The current literature provides contradictory views. This study extends the resource‐advantage theory to examine the conditions in which strategic planning increases or decreases the number of new product development projects and firm performance. The authors test the theoretical model by collecting data from 227 firms. The empirical evidence suggests that more strategic planning and more new product development (NPD) projects lead to better firm performance. Firms with organizational redundancy benefit more from strategic planning than firms with less organizational redundancy. Increasing R&D intensity boosts both the number of NPD projects and firm performance. Strategic planning is more effective in larger firms with higher R&D intensity for increasing the number of NPD projects. The results reported in this study also consist of several findings that challenge the traditional views of strategic planning. The evidence suggests that strategic planning impedes, not enhances, the number of NPD projects. Larger firms benefit less, not more, from strategic planning for improving firm performance. Larger firms do not necessarily create more NPD projects. Increasing organizational redundancy has no effect on the number of NPD projects. These empirical results provide important strategic implications. First, managers should be aware that, in general, formal strategic planning decreases the number of NPD projects for innovation management. Improvised rather than planned activities are more conducive to creating NPD project ideas. Moreover, innovations tend to emerge from improvisational processes, during which the impromptu execution of NPD activities without planning spurs “thinking outside the box,” which enhances the process of creating NPD project ideas. Therefore, more flexible strategic plans that accommodate potential improvisation may be needed in NPD management since innovation‐related activities cannot be planned precisely due to the unexpected jolts and contingencies of the NPD process. Second, large firms with high levels of R&D intensity can overcome the negative effect of strategic planning on the number of NPD projects. Specifically, a firm's abundant resources, when allocated and deployed for NPD activities, signal the high priority and importance of the NPD activities and thus motivate employees to acquire, collect, and gather customer and technical knowledge, which leads to creating more NPD projects. Finally, managers must understand that managing strategic planning and generating NPD project ideas are beneficial to the ultimate outcome of firm performance despite the adverse relationship between strategic planning and the number of NPD projects.     

Sustaining the Flow of External Ideas: The Role of Dual Social Identity across Communities and Organizations

Firm‐hosted online communities are increasingly a part of innovation efforts that seek to provide a flow of external ideas into organizations. However, many online communities do not gain traction or die out over time. One possible but underresearched driver of sustained engagement by members of firm‐hosted communities is a social identity that makes community members feel like they are part of the firm. We sought to empirically derive the organizational practices that support community members having a dual social identity with both communities and organizations. We completed extensive field work and over 90 interviews regarding two firms that had a history of sustained engagement by members of their communities: T‐shirt firm Threadless and automotive firm Local Motors. We identified eight organizational practices that supported dual social identity. Four of these practices made members perceive a porous boundary between firm and community, including an “open house” policy and hiring from the community. Another four practices made members feel supported in community efforts, including promoting community projects and having top management active in the community. We describe the practices in detail and the implications for firms using online communities as one component of their portfolio of innovation efforts.     

How entrepreneurial orientation can leverage innovation project portfolio management

Innovation project portfolio management (IPPM) is a key task in R&D management because this decision‐making process determines which R&D projects should be undertaken and how R&D resources are allocated. Previous research has developed a good understanding of the role of IPPM in R&D strategy implementation and of successful IPPM practices. But the fundamental orientations that drive the strategy formation and implementation process have never been investigated in the context of IPPM, and it is unclear whether successful practices are equally valid for different strategic orientations. This study, therefore, investigates the moderating impact of a firm’s entrepreneurial orientation on the relationship between strategic portfolio management practices and portfolio success. An empirical analysis of 257 firms shows that both innovativeness and risk taking as entrepreneurial orientation’s dimensions positively moderate the relationship between managerial practices and performance. Specifically, we find that firms high in innovativeness profit more from stakeholder engagement compared to firms low in innovativeness. Firms high in risk‐taking profit more from a clearly formulated strategy. With increasing innovativeness and risk‐taking propensity, firms also profit more from business case monitoring and agility in portfolio steering. The results suggest that a firm’s entrepreneurial orientation can leverage the effect of IPPM practices. Vice versa, a lacking entrepreneurial orientation can render these practices ineffective. Strategic orientation and IPPM practices should, therefore, be aligned with each other to enable firms to better implement their strategy and generate competitive advantage.     

New Product Development Practices and Early‐Stage Firms: Two In‐Depth Case Studies

New product development practices (NPD) have been well studied for decades in large, established companies. Implementation of best practices such as predevelopment market planning and cross‐functional teams have been positively correlated with product and project success over a variety of measures. However, for small new ventures, field research into ground‐level adoption of NPD practices is lacking. Because of the risks associated with missteps in new product development and the potential for firm failure, understanding NPD within the new venture context is critical. Through in‐depth case research, this paper investigates two successful physical product‐based early‐stage firms' development processes versus large established firm norms. The research focuses on the start‐up adoption of commonly prescribed management processes to improve NPD, such as cross‐functional teams, use of market planning during innovation development, and the use of structured processes to guide the development team. This research has several theoretical implications. The first finding is that in comparing the innovation processes of these firms to large, established firms, the study found several key differences from the large firm paradigm. These differences in development approach from what is prescribed for large, established firms are driven by necessity from a scarcity of resources. These new firms simply did not have the resources (financial or human) to create multi‐ or cross‐functional teams or organizations in the traditional sense for their first product. Use of virtual resources was pervasive. Founders also played multiple roles concurrently in the organization, as opposed to relying on functional departments so common in large firms. The NPD process used by both firms was informal—much more skeletal than commonly recommended structured processes. The data indicated that these firms put less focus on managing the process and more emphasis on managing their goals (the main driver being getting the first product to market). In addition to little or no written procedures being used, development meetings did not run to specific paper‐based deliverables or defined steps. In terms of market and user insight, these activities were primarily performed inside the core team—using methods that again were distinctive in their approach. What drove a project to completion was relying on team experience or a “learn as you go approach.” Again, the driver for this type of truncated market research approach was a lack of resources and need to increase the project's speed‐to‐market. Both firms in our study were highly successful, from not only an NPD efficiency standpoint but also effectiveness. The second broad finding we draw from this work is that there are lessons to be learned from start‐ups for large, established firms seeking ever‐increasing efficiency. We have found that small empowered teams leading projects substantial in scope can be extremely effective when roles are expanded, decision power is ground‐level, and there is little emphasis on defined processes. This exploratory research highlights the unique aspects of NPD within small early‐stage firms, and highlights areas of further research and management implications for both small new ventures and large established firms seeking to increase NPD efficiency and effectiveness.     

Breakeven Time on New Product Launches: An Investigation of the Drivers and Impact on Firm Performance

The ability to break even faster on new product projects is becoming increasingly critical for firms in fast‐moving industries where continually reinvesting in research and development efforts matters greatly for survival. However, most research to date has focused on studying the impact of two primary innovation outcomes: sales and profits. The exclusive emphasis on sales and profit may be warranted for certain types of goods such as durable goods, but when examining the effects of new products in fast‐moving consumer goods or in the entrepreneurial sphere, where cash to cash matters greatly for survival, it is critical for both researchers and practitioners to not only consider the profits and sales generated by the new product but also the time to breakeven. This paper develops a theoretical framework using the competency‐based literature to examine the effects of innovation drivers (customer idea source, speed to market, product quality, and product newness) on breakeven time (BET) and project profits, and their subsequent impact on firm performance. A three‐stage least square estimation method was employed using longitudinal data on 945 new product development projects and launches in the morning (breakfast) foods category. The results clearly pinpoint that for successful product innovation, managers need to consider the time taken to breakeven on new product development. Specifically, the results demonstrate that speed to market and product quality shorten BET, but customer idea source extends BET. Second, the analysis also empirically demonstrates that BET is an equally effective predictor of firm performance as project profits in the short run, but significantly a stronger predictor of firm performance in the long run (t + four years), suggesting that BET should be regarded as a superior leading indicator of firm performance versus product profitability for fast‐moving consumer goods segment. This is an important finding that suggests firms that recoup their cash investments more quickly experience greater short‐term and significantly more long‐term success.     

Using R&D portfolio management to deal with dynamic risk

We develop a theoretical framework for understanding why firms adopt specific approaches for the management of innovation project portfolios. Our theory focuses on a key contingency factor for innovation, namely the dynamics of competitive environments. We use four dimensions to characterize the patterns of environmental dynamics: velocity, turbulence, growth and instability. The paper then proposes the concept of dynamic risk as a determinant of portfolio management processes. Dynamic risk results from second‐order learning by a firm confronted with a specific dynamic pattern in its environment. This learning concerns the likely nature of threats and the required updating of cognitive frameworks in such environments. Attempts to deal with dynamic risk enable various actors inside the firm to understand what kind of dynamic capabilities are needed in their innovation portfolio management processes. As a result of this diffuse learning, firms tend to favor certain common characteristics in their concrete portfolio management activities. To advance the theorizing of these characteristics, the paper also proposes four dimensions of portfolio management: structure, commitment, emergence and integration. Based on arguments inspired by the dynamic capability and related literatures, we advance a series of hypotheses, that relate environmental dynamics dimensions and portfolio management dimensions. These hypotheses are tested based on a survey of 795 firms in a variety of sectors and on four continents, using original scales and structural equation modeling methods. The results show, among other findings, that high‐velocity environments favor structured as well as integrated portfolio management approaches, while high‐growth environments favor approaches that are structured but commit significant resources to each project as well. Turbulent environments favor approaches that are emergent, but also, contrary to our expectations, have high resource commitment levels. Finally, firms in unstable environments have a marginal preference for emergent approaches. Results could help advance the dynamic contingency theoretical perspective on dynamic capabilities, as well as improve the practice of innovation portfolio management.     

Organizing for solutions: How project-based firms integrate project and service businesses

Project-based firms (PBFs) increasingly provide comprehensive solutions that consist of products, product systems and services. In solution businesses, long-term collaborative relationships between solution providers and customers are essential. However, little is still known about how relationship marketing activities should be integrated across organizational units, particularly at the practical level of delivering individual projects and services belonging to complete solutions. In this study, based on a case study of a project-based firm and four of its system delivery projects, we identify eight micro-level integration mechanisms for integrating the activities of the project and service business units at the level of delivering a single solution. The joint participation of both project and service business units in project and service activities over the life cycle of a single delivered system enhances the management of customer relationships between the units, and ensures the continuity of the customer relationship over the system life cycle. The identified integration mechanisms also help PBFs to integrate services into their core business and overcome the problems arising from the discontinuous nature of project business.     

Communication Flows in International Product Innovation Teams

Recently, we have witnessed a strong growth in the internationalization of many firms' product development activities. However, the lack of attention devoted by scientific research to the management of international innovation contrasts sharply with the importance attached to it as a cornerstone of international business success. Although several empirical studies and normative theories have specified the communication requirements in innovation teams, an empirically based insight is definitely needed on the communication requirements and requirements that prevail in the complex context of international innovation teams, in which the participants are located in different company units, countries, and cultures. This article addresses the following research question: viewing international innovation as an interfunctional activity, what are the communication requirements an international innovation team is facing, and what are the communication capabilities (interface mechanisms) that may be adopted to initiate, develop, and launch the new product effectively and efficiently? An extensive case study research project was designed to develop a comprehensive theoretical framework. Over a two year time period, the research team has investigated selected innovation projects in four European multinational corporations. The analysis of the case study data suggests five requirements that determine the effectiveness and efficiency of communication in international product development teams: network transparency, knowledge codification, knowledge credibility, communication cost, secrecy. To cope with these communication requirements, organizations may create firm level capabilities (parallel structures, cross‐functional and inter‐unit climate, communication infrastructure, goal congruence) and team level capabilities (core team, team leadership, formalization, procedural justice). The evidence from the in‐depth case study research indicates that these mechanisms provide a parsimonious and powerful approach to address the communication requirements in international product innovation teams. After the information processing framework proposed by Tushman and Nadler [124], the adoption of these mechanisms is expected to improve innovation effectiveness. This holds important consequences for the management of international product innovation projects. First, the innovating firm must balance centralization and decentralization, employ formal as well as informal strategies, and integrate ad‐hoc and permanent strategies. Second, it highlights the critical role of the project leader. Given the fact that companies often select the most available person, rather than the best person for the job, the allocation of light weight project leaders may create heavyweight problems in international teams. Third, following the argument in favor of procedural justice, the absence of involvement may severely hinder cross‐functional commitment to international innovation projects. Fourth, the innovating firm must also actively manage the communication flows with external parties. Failure to do so may result in flawed specifications, and a limited understanding about product design and market strategies.     

Goal Multiplicity and Innovation: How Social and Economic Goals Affect Open Innovation and Innovation Performance

Integrating insights from the strategic goal literature and the knowledge‐based view of the firm, this article proposes that the pursuit of social and economic strategic goals by commercial firms affects their innovation performance through different knowledge sourcing activities. The strategic goals, knowledge sourcing practices, and innovation performance of 1257 Belgian firms are investigated. Results show that both social and economic strategic goals are associated with the use of external information sources, but only the pursuit of social goals inspires firms to engage in external collaboration. No evidence is found of an inherent conflict between social and economic strategic goals. Instead, the two types of goals are independent of each other, that is, an emphasis on social goals does not preclude an emphasis on economic goals and vice versa. Moreover, firms’ external knowledge sourcing and innovation performance benefit most when strongly held social goals align with strongly held economic goals. These findings offer new insight into the nature and the effects of goal multiplicity among commercial firms. They open up a new perspective on the potential positive effects of the joint pursuit of social and economic strategic goals instead of seeing them as inherently conflicting, as past research has typically done. We illustrate how social strategic goals can deliver unique benefits to a firm, independently of and in addition to economic strategic goals. Our findings also contribute to the open innovation literature by revealing strategic goals as a driver of firms’ knowledge sourcing practices. Our findings suggest that solely emphasizing economic goals may be one reason why firms struggle to implement open innovation practices and do not reap their full benefits. The practical implications of our research are discussed.     

Subjective Performance Assessment of Innovation Projects*

Performance assessment of innovation projects is a central issue in innovation management research. Using existing literature, a model is developed to assess the performance of new product and new service development projects. In this model, project performance is defined as a combination of a formatively indicated operational performance construct and a reflectively indicated product performance construct. The validity of this model is tested based on a sample of 219 innovation projects assessed by innovation managers. Using only the innovation managers' responses, it is, however, not possible to distinguish between operational and product performance. The impact of common method bias and informant bias is subsequently assessed using a subsample of 128 of these 219 innovation projects that are assessed by the innovation manager and the project leader. These latter results show that operational and product performance are two distinct constructs. In addition, the multitrait–multimethod analyses show that especially the more abstract items of performance, such as the perceptions of quality, captured knowledge, competitive advantage, gained reputation, and customer satisfaction, suffer from random error and informant bias. Project leaders appear to be better informed to assess operational performance, while innovation managers are better in assessing product performance. The paper concludes with a qualitative comparison of several alternative performance models: the project performance model as derived from the literature, a similar (misspecified) reflective performance model, two stand‐alone models in which operational and product performance are assessed separately, and a mixed model that uses a combination of innovation managers' and project managers' data. Based on this comparison, it is advised to use either the stand‐alone models for operational performance and product performance or the mixed model whereby the project leader assesses operational performance and the innovation manager the product performance of an innovation project.     

Technological collaboration in the korean electronic parts industry: patterns and key success factors

This study empirically examines different patterns of collaborative technological development projects and the key success factors (KSFs), using data from 82 projects in the Korean electronic parts industry. The patterns of technological collaboration were categorized into 4 types by two contingency variables: development motive (technology–push or market–pull) and source of initiation (focal firm– or partner–initiated). The bivariate relationships revealed that project characteristics (technological complexity, demand certainty, and financial support of the government), partner characteristics (the level of trust with partners), and collaborative management practices (commitment of the focal firm, and information sharing in the collaboration process) appear to be different depending on the two contingency variables. Each type of collaborative R&D project also had different KSFs. While diverse characteristics like strategic importance, goal compatibility and information sharing with partners are critical for the success of technology–push projects, just only specificity of collaboration process and outcome appears important to the success of demand–pull projects. For focal firm–initiated projects, project characteristics are KSFs, whilst partner characteristics and collaboration management practice are found to be more critical for the success of partner–initiated projects. The findings suggest that the different contingencies such as development motive and source of initiation bring about different patterns of collaborative technology development projects, which in turn lead to a different set of KSFs, since different information, roles of partners and the focal firms, and collaboration management practices are needed to successfully implement the different types of projects. Based on empirical results, this study discusses managerial, policy, and theoretical implications for the collaborative R&D activities taking place in the Korean electronic parts industry.     

Definition of innovation projects in small firms: A Spanish study

Small and medium‐sized enterprises (SMEs) are the main holders of the European economy and innovation projects are essential tools for SMEs to ensure their growth. A high percentage of innovation projects implemented by SMEs lacks planning and initial management, which causes the appearance of important problems for the SMEs survival. The authors have confirmed with a field study of 72 Spanish small firms that a lot of these problems arise from an incomplete project definition, so it is necessary to help SMEs to have a specific methodology that is appropriate to their own characteristics and projects. The statistical analysis shows how the project management knowledge helps to a better project definition, contributing to the project alignment with the company strategy. Also, it reveals other problems related to the project definition as planning, budget, market and financing. Of this analysis, it concludes that the definition phase supports the other phases and is essential in order to achieve project success. This paper presents an ‘integration model of factors’ that helps SMEs in the management of the definition phase of their innovation projects. This model relates the various areas of analysis needed to ensure their integration at the project definition. The relationships between the different model areas have been defined, showing the way to integrate the technical, economic and strategic outlooks of project objectives management in the definition phase of the project. This model has been implemented in 21 new innovation project definitions. The users' valuation has been very positive with a 90.4% of success and all of the model users are interested in implementing the model again in next projects. The main advantages highlighted were user‐friendliness, intuitive model and easy application.     

R&D Partnerships and Innovation Performance: Can There Be too Much of a Good Thing?

R&D collaboration facilitates the pooling of complementary skills, learning from the partner as well as the sharing of risks and costs. Research therefore stresses the positive relationship between collaborative R&D and innovation performance. Fewer studies address the potential drawbacks of collaborative R&D. Collaborative R&D comes at the cost of coordination and monitoring, requires knowledge disclosure, and involves the risk of opportunistic behavior by the partners. Thus, while for lower collaboration intensities the net gains can be high, costs may start to outweigh benefits if firms perform a higher share of their innovation projects collaboratively. For a sample of 2735 firms located in Germany and active in a broad range of manufacturing and service sectors, this study finds that increasing the share of collaborative R&D projects in total R&D projects is associated with a higher probability of product innovation and with a higher market success of new products. While this confirms previous findings on the gains for innovation performance, the results also show that collaboration has decreasing and even negative returns on product innovation if its intensity increases above a certain threshold. Thus, the relationship between collaboration intensity and innovation follows an inverted‐U shape and, on average, costs start to outweigh benefits if a firm pursues more than about two‐thirds of its R&D projects in collaboration. This result is robust to conditioning market success to the introduction of new products and to accounting for the selection into collaborating. This threshold is, however, contingent on firm characteristics. Smaller and younger as well as resource‐constrained firms benefit from relatively higher collaboration intensities. For firms with higher collaboration complexities in terms of different partners and different stages of the R&D process at which collaboration takes place, returns start to decrease already at lower collaboration intensities.     

When Research Meets Development: Antecedents and Implications of Transfer Speed

This paper focuses on the organization of new product development in large, R&D‐intensive firms. In these firms, research and development activities are often separated. Research is conducted in dedicated research projects at specialized research labs. Once research results are achieved by research projects, they are transferred to business units for further development and commercialization. We investigate the speed whereby research projects transfer their first research results to business units (hereafter: transfer speed). In particular, we analyze the antecedents and performance implications of transfer speed. Based on data of 503 research projects from a European R&D intensive manufacturing firm, our results suggest that a fast transfer speed (as measured by the time it takes for a research project to develop and transfer its first research result to business units) is associated with a better research performance (as measured by the total number of transfers the research project generates). Moreover, we find that different types of external R&D partners—science‐based and market‐based partners—play distinct roles in speeding up project first research transfers. While market‐based partnerships (i.e., customers and suppliers) generally contribute to a faster transfer of first research results, science‐based partnerships (i.e., universities and research institutions) only speed up first research transfers of technologically very complex projects. Our results also show that early patent filings by research projects accelerate first research transfers.     

Managing Knowledge for Innovation: The Case of Business‐to‐Business Services*

The present study builds a typology of organizational knowledge in business services and empirically examines the effects of knowledge on innovation performance. It is suggested that firms differ with respect to their knowledge creation approaches and that these approaches have implications for firms' innovation activities. A conceptual framework of knowledge assets with degrees of tacitness and collectiveness as the principal axes is used to ground the empirical analysis. The organizational knowledge framework is empirically operationalized using survey data from 167 business service firms and supplementary case study evidence from 16 other firms. It is found that business service improvements and new service introductions are significantly associated with collectively held knowledge, such as codified service solutions or team‐based competences and procedures. In contrast, relying solely on tacit knowledge held by individuals may hamper innovation. The results also suggest that tacit collective knowledge is more closely associated with new service introductions, whereas explicit collective knowledge is associated with service improvements. Tacit collective knowledge is thus conducive. A managerial implication is that new service introductions necessitate team competences and routines, whereas incremental service improvements are more likely if procedures are in place to codify services into explicit solutions or technologies. Thus, the knowledge management approach should depend on the strategic orientation of the service firm toward continuous improvement of existing services or development of completely new services.