Radical Product Innovation Capability: Literature Review,Synthesis, and Illustrative Research Propositions

Product innovation is a key to organizational renewal and success. Relative to other forms of innovation, radical product innovations offer unprecedented customer benefits, substantial cost reductions, or the ability to create new businesses, any of which should lead to superior organizational performance. In other words, a radical product innovation capability is a dynamic capability, one that enables the organization to maintain alignment with rapidly evolving customer needs in high‐velocity environments. Extensive research has been conducted on the antecedents to an incremental/general product innovation capability, and meta‐analyses have been conducted to integrate the results from the various studies. However, whether and how a radical product innovation capability differs from an incremental product innovation capability is also critical. The purpose of this work is to develop a testable model of the antecedents to radical product innovation success. Based on an extensive literature review, a comprehensive set of organizational components that comprise a firm's radical product innovation capability is identified. These organizational components include senior leadership, organizational culture, organizational architecture, the radical product innovation development process, and the product launch strategy. Of course, each of these components has subcomponents that provide even more texture. This review highlights how the components of a radical innovation capability function differently from those for an incremental capability. In addition, this review strongly suggests that the direct effects models that dominate this literature underestimate the complexity of the interplay of components that comprise a radical product innovation capability. Thus, a model to demonstrate this interplay of these organizational components is provided. Illustrative research propositions are offered to provide guidance to researchers. Suggestions for executives and managers who are involved in the product development process and for scholars who seek to advance the state of knowledge in this area are offered in the conclusion.     

The Interplay of Customer and Product Innovation Dynamics: An Exploratory Study

The challenges of successfully developing radical or really new products have received considerable attention from a variety of marketing, strategic, and organizational perspectives. Previous research has stressed the importance of a market‐driven customer orientation, the resolution of market and technological uncertainty, and organizational processes such as cross‐functional teams and organizational learning. However, several fundamental issues have not been addressed. From a customer's perspective, a more innovative product tends to have uncertain benefits and requires customers to learn new behaviors. Customer preferences can, therefore, change as product experience and learning increase. From a firm's perspective, it is unclear how to be customer‐oriented under such dynamic preferences, and product strategies using evolving technologies will tend to interact with how customers learn about an innovation. This research focuses on identifying unresolved issues about these customer and product innovation dynamics. A conceptual framework and series of propositions are presented that relate both changing technology and customer learning to a firm's strategic decisions in developing and launching really new products. The framework is based on in‐depth interviews with high‐tech product managers across several sectors, focusing on the business‐to‐business context. The propositions resulting from the framework highlight the need to consider relevant customer dynamics as integral to a firm's product innovation process. Successful innovation strategies and future research challenges are discussed, and applications to better understanding customer needs and theories of disruptive innovation are examined. Several key insights for innovation success hinge on a broad, downstream orientation to customer needs and product innovation dynamics. To be effective innovators, firms must know their customers' customers and competitors as well as or better than their immediate customers do. Market research must extend downstream for a comprehensive understanding of customer needs dynamics. In the context of disruptive innovation, new dimensions of customer needs may become more valuable based on perceived downstream customer trends. Firms may also innovate on secondary needs because mainstream customers do not always give firms the design freedom to radically innovate on primary features. Understanding customer commitments and how they develop under evolving needs can help firms focus resources on innovative efforts more likely to be accepted by customers.     

The field of radical innovation: Making sense of organizational cultures and radical innovation

Organic organizational structures and cultures facilitate innovation because they allow organizations to shift their understanding of what a product, service or technology means. Yet, organic organizations may have to instill mechanistic structures and bureaucratic processes if they produce successful radical innovations. Thus, the basis of innovation can be undermined by its consequences. To explore this issue, this paper analyzes data from an ongoing longitudinal case study of a SME digital-design agency that developed a radical innovation for the market research industry. The paper observes that founders of the organization shifted their position to become managers as a result of their radical innovation and that other members of the organization have, consequently, re-evaluated their attitude toward the organization. To conceptualize our findings we turn to the work of Pierre Bourdieu. His notion of fields—which structure experiences and are, themselves, structured by experiences—offers a framework to understand the dynamics within an organization that occur as a result of a successful radical innovation. The contribution of our paper is: theoretically, we relate the discussion of innovation to wider social theories of practice and, thus, introduce temporal and cultural dynamics into the account of radical innovation; methodologically, we provide an example of a longitudinal study; and, in managerial terms, we indicate where divisions occur within an organization concerning the construction of meaning between managers and employees after a radical innovation.     

Making innovation happen in organizations: individual creativity mechanisms,organizational creativity mechanisms or both?

Marketing managers increasingly face a product innovation dilemma. Managers will have to sell more with fewer new products in an environment where new products are providing lower revenue yields. Therefore, understanding what drives successful innovation is of paramount importance. This paper examines the organizational innovation hypothesis that innovation is a function of individual efforts and organizational systems to facilitate creativity. Our model formulates creativity as a property of thought process that can be acquired and improved through instruction and practice. In this context, individual creativity mechanisms refer to activities undertaken by individual employees within an organization to enhance their capability for developing something, which is meaningful and novel within their work environment. Organizational creativity mechanisms refer to the extent to which the organization has instituted formal approaches and tools, and provided resources to encourage meaningfully novel behaviors within the organization. Using data collected from 634 organizations, we find support for this hypothesis. The results suggest that the presence of both individual and organizational creativity mechanisms led to the highest level of innovation performance. The results also suggest that high levels of organizational creativity mechanisms (even in the presence of low levels of individual creativity) led to significantly superior innovation performance than low levels of organizational and individual creativity mechanisms. The paper also presents managerial and academic implications. This study suggests that it is not enough for organizations to hire creative people and expect the innovation performance of the firm to be superior. Similarly, it is not enough for firms to emphasize management practices to enhance creativity and ignore individual mechanisms. Although it is true that doing either will improve innovation performance, doing both should lead to higher innovation levels. Our understanding of what and how creativity influences innovation performance can be greatly enhanced by additional research that integrates the intrinsic and extrinsic drivers of creativity. Research that examines the role of team creativity efforts in enhancing innovation performance is also vital to an overall improved understanding of creativity, learning, and innovation within organizations.     

Organizational Learning and New Product Introductions

Organizational learning widely is believed to be important to competitive performance of companies. The purpose of this article is to examine how organizations learn from their experiences in new product introductions. Theory suggests that organizations will display a “competency trap” that reduces their ability to learn from organizational experience. Often initial success can cause a firm to rely on a single or a few experiences to develop routines, discounting later experiences. Therefore it is expected that organizations will have trouble learning from experience. The theory was tested by examining all new product introductions in the U.S. shampoo industry from 1974–1987. The dynamic nature of the business—the average brand survives about two years—made this an attractive research venue. Using the econometric technique of survival time modeling, a model was fitted of survival of brands as a function of organizational experience and organizational experience squared. The model also included controls for financial resources available to the firm and the level of first year's advertising. The model confirmed the general hypothesis that firms' brands are less successful the more experience they have. This study interprets this as evidence of a competency trap in new product introductions. The results broadly are supportive of the hypothesis that organizations find it harder to learn from experience as experience grows. Untangling the source of this problem is a goal of further research. For practice, the article suggests caution to brand managers in experienced companies. There is no guarantee that firms grow in their ability to build brands; results here suggest the opposite. Formal reviews of the new product, its process, and its performance by senior managers for lessons learned is desirable. Management of individuals and organizations may facilitate learning from experience. For managing individuals, often product success brings about a reassignment of successful personnel; care should be taken to insure that individuals' learning is captured by the new product organization before reassignment. On the organizational level, formal brand management may be a highly effective method for managing an ongoing stable of long‐lived brands but may be a poor choice in a dynamic market like shampoo. Companies may explore new organizational structures and departments to conceive and to develop new products since the skills required for managing ongoing brands may be different from creating new ones.     

Tearing down the façades of radical innovation

Managers construct organizational façades that mislead external stakeholders, organizational members, auditors, researchers, other managers, and even themselves (Nystrom & Starbuck, 1984). Very little empirical research has been conducted on how managers build these façades since Nystrom & Starbuck's first influential article. This paper reports on the creation of an organization innovation façade from the day of initial crafting to its final collapse. The paper proposes a theoretical model of façade-crafting in large organizations, and its unsuspected role in fostering radical innovation, radical change and transformative action.     

Defining and identifying disruptive innovations

Three essential questions about innovations prevent academics from helping managers determine if a new technology is a disruptive innovation to their organization. First, what is a disruptive innovation? Second, how can a disruptive innovation be disruptive to some and yet sustaining to others? Third, how can disruptive innovations be identified before a disruption has occurred in an organization? This paper proposes answers to these three questions by redefining disruptive innovations through use of innovation adoption characteristics. Through the relative nature of innovation characteristics, a heuristic, or Baedeker, to better determine if an innovation could be disruptive to an organization is proposed. Illustration of the approach is presented to show how potentially disruptive innovations could be identified before an organizational disruption has occurred.     

How mutuality reinforces partnership development: Japanese and Korean marketing perspectives

Relationship building is about ‘mutuality’ and how an organizational cultural value system enhances the development of long-term relationships that influence the marketing strategy process. This paper explains how senior managers embrace the concept of mutuality in order to establish a partnership arrangement in the context of a vertical marketing system. From the literature, four propositions relating to customer service policy, the process of innovation, relationship marketing and comparative national culture were developed and placed in the context of a Japanese and a South Korean electronics company based in the UK. The propositions were validated using in-depth, personal interviews with a limited number of senior managers in the two global companies. Evidence suggests that managers in Japanese companies formulate industry and country specific customer service policies, dictate R&D programmes, and spend a long time getting to know an individual in a potential partner organization(s) before they engage in any form of business integration. Whereas managers in South Korean companies are keen to communicate extensively and seek to acquire additional skills and knowledge so that they can innovate and implement cost effective strategies.     

Adaptation and Organizational Connectedness in Corporate Radical Innovation Programs*

This research examines how established companies organize programs for fostering technology‐based radical innovation. It addresses conflicts revealed in the innovation literature concerning the appropriate design of the strategic, structural, and process components of these programs. In developing innovation strategies, managers must balance the desire for strategic clarity with the need to allow for creativity and exploration. They must structure programs that ensure innovations benefit from the organization's resources while minimizing the numerous constraints that can impede these unconventional activities. Additionally, though they may favor management processes that provide accountability and effective resource allocation, managers must also ensure these do not restrict the flexibility required for successful innovation. The study is a longitudinal, comparative case analysis of interviews with managers involved in innovation programs in 12 industry‐leading multinational corporations. Site visits at each company were followed by biannual interviews with key managers in each company. A total of 81 follow‐up interviews were conducted over a three‐year period. These interviews were aimed at identifying the changes and progress in the programs over time and internal and external impacts on the organization's innovation activity. The analysis reveals (1) distinct but evolving objectives that maintain a logical strategic connection, (2) adaptive structures that shift and transform but preserve relationships with the broader organization, and (3) flexible processes that are understandable beyond the innovation program and are modifiable, both for the context and in response to learning over time. This suggests that programs introducing high uncertainty and risk into mature corporate environments are highly flexible systems that maintain organizational connectedness as they evolve. For academics, this implies a need to understand the evolution of innovation programs as an adaptive learning process that, regardless of form and purpose, preserves its connection to the traditional organization. For practitioners, it highlights the importance of considering the process, strategic, and structural connections to the broader organization when designing innovation programs and suggests the need for feedback mechanisms to help adapt these elements over time.     

Transformational Leadership and Organizational Innovation: The Roles of Internal and External Support for Innovation*

Leadership has been suggested to be an important factor affecting innovation. A number of studies have shown that transformational leadership positively influences organizational innovation. However, there is a lack of studies examining the contextual conditions under which this effect occurs or is augmented. Therefore, this study aimed to investigate the impact of transformational leadership on organizational innovation and to determine whether internal and external support for innovation as contextual conditions influence this effect. Organizational innovation was conceptualized as the tendency of the organization to develop new or improved products or services and its success in bringing those products or services to the market. Transformational leadership was hypothesized to have a positive influence on organizational innovation. Furthermore, this effect was proposed to be moderated by internal support for innovation, which refers to an innovation supporting climate and adequate resources allocated to innovation. Support received from external organizations for the purposes of knowledge and resource acquisition was also proposed to moderate the relationship between transformational leadership and organizational innovation. To test these hypotheses, data were collected from 163 research and development (R&D) employees and managers of 43 micro‐ and small‐sized Turkish entrepreneurial software development companies. Two separate questionnaires were used to collect the data. Employees' questionnaires included measures of transformational leadership and internal support for innovation, whereas managers' questionnaires included questions about product innovations of their companies and the degree of support they received from external institutions. Organizational innovation was measured with a market‐oriented criterion developed specifically for developing countries and newly developing industries. Hierarchical regression analysis was used to test the hypothesized effects. The results of the analysis provided support for the positive influence of transformational leadership on organizational innovation. This finding is significant because this positive effect was identified in micro‐ and small‐sized companies, whereas previous research focused mainly on large companies. In addition, external support for innovation was found to significantly moderate this effect. Specifically, the relationship between transformational leadership and organizational innovation was stronger when external support was at high levels than when there was no external support. This study is the first to investigate and empirically show the importance of this contextual condition for organizational innovation. The moderating effect of internal support for innovation, however, was not significant. This study shows that transformational leadership is an important determinant of organizational innovation and encourages managers to engage in transformational leadership behaviors to promote organizational innovation. In line with this, transformational leadership, which is heavily suggested to be a subject of management training and development in developed countries, should also be incorporated into such programs in developing countries. Moreover, this study highlights the importance of external support in the organizational innovation process. The results suggest that technical and financial support received from outside the organization can be a more important contextual influence in boosting up innovation than an innovation‐supporting internal climate. Therefore, managers, particularly of micro‐ and small‐sized companies, should play external roles such as boundary spanning and should build relationships with external institutions that provide technical and financial support. The findings of this study are especially important for managers of companies that plan to or currently operate in countries with developing economies.     

A conceptualization of an organizational learning culture in international joint ventures

This paper focuses on organizational learning and innovation in international joint ventures (IJVs). Organizational learning addresses how organizations adapt to their environments, develop new knowledge, and then achieve competitive advantage. The authors present a conceptual framework that depicts the relationship between the parent organization(s)' climate, IJVs' organizational learning culture, innovativeness culture, innovation capacity, and IJV performance. Broadly, the IJV achieves superior performance by higher levels of innovativeness (openness to new ideas) and innovation capacity (capacity to implement innovations), which are associated with its organizational learning culture.     

Reputational Effectiveness in Cross-Functional Working Relationships

The work of innovation management involves cross‐functional coordination among specialists and managers with different work orientations, time horizons, professional backgrounds, and values ( Ford and Randolph, 1992 ). While strong connections across functions are critical for new product development success ( Green et al., 2000 ), some managers may be more adept at fostering effective cross‐functional relationships than others. In this article, the authors empirically examine the factors that distinguish reputationally effective innovation workers from their less effective peers. Drawing on the work of Tsui (1984, 1994) , reputational effectiveness is defined as the degree to which a manager has been responsive to the needs and expectations of constituents. This research examines the relational skills and interaction patterns of more (versus less) reputationally effective managers. A large business unit of a Fortune 500 telecommunications firm provided the context for our study. Using a two‐phase approach, the authors first captured the social network patterns of 268 managers from marketing, research and development (R&D), manufacturing, and other business functions that were involved in the new product development process. In addition, the reputational effectiveness of each person who was identified as a member of the network was measured. In the second phase, the authors examined the relational competencies (e.g., role‐taking ability, interpersonal control, openness) of the managers who participated in Phase I of the research. As predicted, the results indicate that role‐taking ability is related positively to a manager's reputational effectiveness. No support, however, was found for the relationship between interpersonal control and reputational effectiveness. Interestingly, the authors found evidence of an inverse relationship between openness and effectiveness. By sharing too much information—or alternatively information that does not relate to the task at hand—the reputational effectiveness of a manager is damaged. Importantly, the results reveal that the social network characteristics of a reputationally effective manager differ from those of less effective managers. Closeness centrality, a measure of the degree of access one has to other organizational members, was associated strongly with reputational effectiveness. The results demonstrate that managers who are successful in working across functions appreciate the cognitive and emotional perspectives of diverse constituents and develop relationship ties that provide them with ready access to others across the organization.     

Links between Internal and External Cooperation in Product Development: An Exploratory Study*

While there is an overwhelming amount of publications on cooperation in product development projects, they mainly focus on cooperation between business functions within an organization (internal cooperation) or on cooperation between organizations (external cooperation). Yet the relationship between internal and external cooperation has received only scarce attention. This article studies how internal and external cooperation relate. Following an extensive literature study and 12 exploratory interviews with managers in eight organizations, a case‐research design was set up. More specifically, six product development projects were studied in depth, combining data from interviews, questionnaires, and information from secondary sources. Based on these cases, the authors present four different links between internal and external cooperation: (1) Internal cooperation may serve as a mechanism to coordinate external cooperation; (2) Internal cooperative norms are similar to external cooperative norms; (3) External cooperation may stimulate internal cooperation; and (4) Internal cooperation may be an essential part of organizational learning from external partners. The results of this exploratory study prove the interaction between internal and external cooperation to be a subject worthy of investigation and demonstrate that in order to appreciate fully the quality of a firm's external cooperation efforts, they should be studied in combination with the firm's internal interfaces. The authors also show the managerial implications of these links, as well as some directions for further research.     

How Experienced Product Innovators Organize

It seems that reorganizing the product development function is a common and regularly administered solution to any perceived new product malaise. It's as though new product managers keep seeking some perfect form of organization that will lift their work to new levels of success. This article helps with the search. Axel Johne believes that experience can be a good teacher so he examined how experienced product innovators organize, in comparison to firms which are not so experienced. His results are interesting to all managers who wonder how product innovation can best be managed.     

The dynamics of product innovation and firm competences

This study examines how product innovation contributes to the renewal of the firm through its dynamic and reciprocal relation with the firm's competences. Field research in five high‐tech firms of varying age, size, and level of diversification is combined with analysis of existing theory to develop the findings of the study. Based on the notion that new products are created by linking competences relating to technologies and customers, a typology is derived that classifies new product projects based on whether a new product can draw on existing competences, or whether it requires competences the firm does not yet have. Following organizational learning theory, these options are conceptualized as exploitation and exploration. These organizational learning concepts are used to gain a dynamic and path‐dependent view of product innovation and firm development, and to reveal the unique nature and challenges of different types of product innovation. Copyright © 2002 John Wiley & Sons, Ltd.     

Employees' Innovative Behavior in Social Context: A Closer Examination of the Role of Organizational Care

A substantial body of research has examined the antecedents of innovation in organizational settings, but our current understanding of how social aspects of the work environment influence the innovative behavior of employees remains underdeveloped. One of these social aspects connected to the theme of “doing well by doing good” concerns organizational care, with scholars examining how actions centered on promoting employee well‐being may result in pro‐organizational outcomes. The purpose of this study is to present a conceptual analysis of the intricate relationship between organizational care and employees' innovative behavior by detailing key mediating mechanisms and conditional factors. This research will combine insights from multiple theories and literatures, most notably self‐determination theory, social exchange theory, and the literatures on organizational care, work motivation, and innovation. The proposed multilevel model clarifies how organizational care affects the creative, complex, and mundane elements of employees' innovative behavior through its effect on the motivational constructs of intrinsic motivation, identified motivation, and introjected obligation feelings, respectively. Moreover, the model highlights the potential dark sides of organizational care that managers must consider when designing and implementing caring policies and practices. Specifically, it clarifies how the effect of organizational care on employees' innovative behavior may depend on their subjective perceptions of care intrusiveness and care insincerity. As such, this study responds to calls for rich and nuanced conceptual research in the innovation field, especially concerning the role of employees' social work environment in motivating their innovative behavior. Important theoretical and practical implications of this conceptual analysis will be discussed, and valuable directions for future research will be outlined.     

Leadership Style: Its Impact on Cross-Functional Product Development

This article reports the results of a study in which cross-functional product development projects in six companies were analyzed. The study was conducted as part of an interdisciplinary research involving technological, organizational, and behavioral analysis. The article draws on an excerpt of the data collected on leadership styles among project managers as well as some data on organizational climate and team learning. Leadership style, especially the leaders' employee orientation, co-varied significantly with how members of the cross-functional teams perceived their work climate and possibilities for innovative learning. The results of the analyses point to the leader's behavior, rather than his power, as an important factor determining the work climate in successful cross-functional product development projects.     

基于组织承诺的组织创新气氛与个体创新行为关系研究

员工的主动创新行为是推动组织创新以适应环境变化的原动力。然而在知识经济背景下,一些组织出现人才流动率过高、员工主动创新行为不足等问题,严重制约了组织的持续稳定发展。组织承诺因为能够有效预测员工的离职行为而受到学者们越来越广泛的重视。本研究根据员工在组织留任的不同动机,将组织承诺分为积极的情感承诺和消极的继续承诺,并以组织承诺为中介变量,研究组织创新气氛对员工创新行为的作用机理;揭示在组织创新气氛影响下,员工创新行为产生的内在机制,进而找到有效改善员工创新行为,促进组织创新与发展的途径。     

Structural and relational influences on the role of reward interdependence in product innovation

This study examines the relationship between reward interdependence, or the extent to which managers' rewards are tied to the performance of colleagues in other functions, and product innovation. It also considers how structural and relational features of the organizational context might moderate this relationship. Our analysis of a sample of Canadian‐based firms reveals a positive relationship between reward interdependence and product innovation that is invigorated at higher levels of job rotation, social interaction, and interactional fairness, but we find no evidence of a moderating effect of decision autonomy. Consistent with a systems approach to organizational contingencies, we also find that the reward interdependence–product innovation relationship is stronger when the organization's context comes closer to an ‘ideal’ holistic configuration that is most conducive to knowledge exchange within the organization, with a more prominent role played by the relational sub‐context (social interaction and interactional fairness) than the structural sub‐context (job rotation and decision autonomy). The findings have important implications for innovation research as they shed light on how the extent to which individual rewards are tied to collective performance can be channeled to enhance innovation pursuits.     

Organizational Learning Ambidexterity,Strategic Flexibility,and New Product Development

Although organizational ambidexterity has gained momentum in recent innovation research, previous literature still offers a confusing and partial picture about how to leverage ambidexterity for new product development because of two limitations. First, previous research mainly focuses on static resource endowment and thus offers little insight about how firms should dynamically reconfigure resource portfolios to leverage organizational ambidexterity. Second, conceptual confusion on the notion of the balance dimension of organization ambidexterity still exists. This study seeks to explore how firms should dynamically reconfigure resource portfolios to leverage organizational ambidexterity for new product development and to bring greater conceptual clarity to the notion of balance. By extending the static resource assumption, which is central to the extant debate in organizational ambidexterity literature, this research unpacks ambidexterity into a relative exploratory dimension and an interactive dimension. We further investigated the moderating effect of resource flexibility and coordination flexibility on the impacts of the two dimensions on new product development performance. Based on the dynamic resource management view and organizational learning theory, we proposed six hypotheses and collected data from 213 firms through a survey to examine the hypotheses. Our results indicate that relative exploratory dimension and interactive dimension have different effects on new product development. Specifically, the relative exploratory dimension has an inverse U‐shaped effect on new product development while the interactive dimension has a positive effect. Furthermore, we find that resource flexibility and coordination flexibility have positive moderating effects on the relationships between the two dimensions of ambidexterity and new product development performance. Our study contributes to the ambidexterity research in three ways. First, from a dynamic resource management view, this study extends previous ambidexterity research from a static view to a dynamic view by exploring the moderating effects of resource flexibility and coordination flexibility. Second, we extend the understanding on ambidexterity by bringing greater conceptual clarity to the notion of balance. Third, this research provides new evidence on the effects of ambidextrous learning on new product development performance in transition economy such as China, where ambidextrous learning is crucial for firms to adapt to a dynamic environment.