Strategy shift: Integrating strategy and the firm’s capability to innovate

Innovation is a key source of organizational growth and profitability. Many organizations at the front end of innovation struggle to engender an innovation approach that is effective and lasting. This article presents a framework that defines the interdependency of innovation and strategy, and then outlines the role of top management to continuously renew the positioning of the firm. Based on a synthesis of prior research—including the Dynamic Capabilities View, Innovation Orientation, and Disruptive Innovation Theory—and our own experience working with organizations, we present an operational strategy shift framework, which allows practitioners to increase, refine, and transform their firm’s capability to innovate (CTI) toward achieving their strategic objectives. This framework provides guidance that leaders can use to integrate innovation into their strategic process.     

Interactive and synergistic relationships among different types of innovations

The coronavirus (COVID-19) pandemic has not only led to rapid innovation but also shortened the innovation cycle. By comparing the manufacturing and service industries, this study investigated the controversial relationship between product and process innovation from a long-term perspective and examined the synergistic effects of diverse types of innovation on firm performance. Recent five-year Korean Innovation Survey data showed that product and process innovation had interrelationships rather than a one-way sequential relationship. Furthermore, the four different innovation activities have synergistic effects on the firms’ financial performance.     

Are ICT,Workplace Organization,and Human Capital Relevant for Innovation? A Comparative Swiss/Greek Study

This paper investigates and compares the relationships for Swiss and Greek firms between indicators for the intensity of use of modern information and communications technologies (ICT), several forms of workplace organization, and human capital, on the one hand, and several measures of innovation performance at firm level, on the other hand. For the Swiss firms, we find that ICT contribute to innovation activities (a) as enablers of process innovation (but not of product innovation) and (b) as means for increasing the efficiency of the R&D process. The organizational variables for “work design” and “employee voice” show significant positive correlations for most innovation indicators. Human capital matters primarily for R&D activities. The findings for the Greek firms indicate positive correlations of ICT with product and process innovation and of new “work design” with product innovation and R&D. No correlation of human capital with innovation could be found. No complementarities for the three factors with respect to innovation performance could be detected in either country.     

Organizational culture,innovation, and performance: A test of Schein's model

Innovation is the key to organizational survival and therefore the study of processes that support innovation should be of interest to researchers and practitioners alike. Schein's multi-layered model of organizational culture offers a useful framework for thinking about processes that foster innovation. A defining characteristic of the model is the subtle but important distinctions between the varied “layers” of organizational culture (i.e., values and norms, artifacts and behaviors). The basic assumption of this study is that Schein's model offers a tractable explanation of cultural processes that support organizational innovation, especially in service firms. Despite the intuitive appeal and practical value of Schein's conceptual framework, empirical research in relation to the model is limited. This paper develops a rationale for an empirical model based on Schein's conceptual model; the study reports a test of an empirical model. Data collected from approximately 100 principals of law firms provides a suitable empirical context for a test of the model. The findings generally support the hypothesized relationships. A key result is how layers of organizational culture, particularly norms, artifacts, and innovative behaviors, partially mediate the effects of values that support innovation on measures of firm performance. The findings have implications for theory and practice, especially in relation to building an organizational culture within professional service firms that fosters innovative behavior.     

The HR system, organizational culture, and product innovation

This paper outlines the critical role of organizational culture in the link between the HR system and development of new products and services. While it has been generally accepted that an innovation-oriented HR system would lead to higher level of innovation, the literature does not lend full support to this link. This paper is to point out the inadequacy of such simplified view. It is suggested that a developmental culture is the missing link in-between HR system and innovation outcomes. An HR system which emphasizes extensive training, performance-based reward, and team development is necessary to create an organizational culture that is conducive to product innovation. The empirical findings from a survey of 332 firms in Hong Kong confirmed that organizational culture acted as a mediator between a firm's HR system and product innovation.     

The Power of Consequential Product Sounds

Building on theory in sensory marketing, mental simulation, and cue diagnosticity, this research investigates when consequential product sounds, or ancillary sounds generated by the normal operation of a product, can impact customers’ perceptions and behavioral intentions. Across four studies, we demonstrate how consequential product sounds coupled with imagery and phrasing of products in use can encourage customers into a mental space in which they can clearly envision using the product, also known as a process mindset. This mindset allows customers to use the amplitude of the consequential product sound to make inferences about its power, and subsequently enhances their willingness to pay for louder products (versus quiet products or those with no sound). Effects are attenuated when customers are encouraged into an outcome mindset, or a mental space in which they only consider the end benefits of using a product. We provide clear theoretical and managerial implications and, based on our findings, propose that retailers should consider incorporating consequential product sounds into customers’ shopping experiences, as these auditory cues can help to encourage a process mindset and thereby, positively impact customers’ willingness to pay.     

LOGISTICS INNOVATION: A CUSTOMER VALUE‐ORIENTED SOCIAL PROCESS

This paper reports on a qualitative, grounded theory research project conducted in the United States, Sweden, and The United Kingdom designed to explore logistics innovation as perceived by leaders of logistics service provider firms and logistics business functions within product focused firms. Analysis of 33 depth interviews conducted within seven organizations revealed activities that reflect multiple aspects of being innovative, including: (1) setting a stage for innovation; (2) identifying clues to shifts in what customers value; (3) negotiating, clarifying, and reflecting upon insights; and (4) managing inter‐organizational learning.     

Managing innovation dilemmas: The cube solution

Innovation has become a universal feature of corporate life. Almost no company can survive without innovation. However, when it comes to developing innovation strategies, managers often are left alone to decide which innovation types to pursue, how to balance them in an overall portfolio, how to allocate resources, and how to implement them. In short, managers face a variety of innovation dilemmas. One of the most pertinent problems is how to distinguish innovation types in a meaningful way. In this article, we introduce the innovation cube, a tool that helps position innovation types in a managerially meaningful way. Once managers know how to relate and compare their innovation types to those of other companies, the cube helps them to better formulate their innovation strategy.     

Measuring Innovation in European Industry

This paper analyses the results of the 1993 Community Innovation Survey (CIS). Fifty per cent of European firms introduced a product or process innovation during 1990-92. The share of innovating firms varies between industrial sectors and firm size. The percentage of innovating firms is higher for large firms than for smaller ones. In high-tech sectors this share is two thirds and for traditional ones is one third. The largest part of firms' expenditure for innovation is linked to the adoption and diffusion of technologies through machinery and equipment, which absorbs 50% of firms' innovation expenditure. R&D activities represent, on average, 20% of total innovation expenditure while other innovative activities, such as design and trial production, account respectively for 10% and 11%. The mix of innovation inputs, especially R&D and investment, is strongly correlated with firm size, displays little change across countries and varies greatly across industries.     

Innovation leadership: Best-practice recommendations for promoting employee creativity,voice, and knowledge sharing

Innovation—the implementation of creative ideas—is one of the most important factors of competitive advantage in 21^st century organizations. Yet, leaders do not always encourage employee behaviors that are critical for innovation. We integrate existing literature on the critical factors that serve as antecedents of innovation, including employee voice and knowledge sharing, which in turn lead to creativity and innovation. Based on existing empirical research, we offer evidence-based recommendations for managers to become innovation leaders by: (1) developing the right group norms, (2) designing teams strategically, (3) managing interactions with those outside the team, (4) showing support as a leader, (5) displaying organizational support, and (6) using performance management effectively.     

Is innovation in pricing your next source of competitive advantage?

Few companies treat innovation in pricing as seriously as product innovation or business model innovation. However, after interviews with 50 executives and the analysis of pricing practices of 70 companies worldwide, our research suggests that innovation in pricing may be a company's most powerful—and, in many cases, least explored—source of competitive advantage. Innovation in pricing brings new-to-the-industry approaches to pricing strategies, to pricing tactics, and to the organization of pricing with the objective of increasing customer satisfaction and company profits; too many companies today see pricing as a win/lose proposition between themselves and their customers. Innovation in pricing breaks this deadlock and shows how to increase profits and customer satisfaction conjointly. As a result of our research, we present a canvas laying out more than 20 possible avenues for innovation in pricing, offering to any organization—regardless of size, industry, or nationality—a few key ideas on how to increase both profits and customer satisfaction.     

Organizational climate for innovation and creativity – a study in Swedish retail organizations

ABSTRACT

Innovation in retailing is under-investigated in academia and yet a highly relevant concern given the current changes in the retail landscape. Although retailing is often characterized by a dynamic and highly competitive environment, retail organizations are not often considered as ‘innovative,’ at least when compared with manufacturing industries, or when using existing innovation frameworks in academic literature. There are many aspects of innovation discussed in literature and a need to consider different ways of looking into retail’s innovativeness. Among them, the importance of organizational climate on influencing creativity and innovation may help explain how to enable innovation in service organizations, such as retailers. The purpose of this study is to evaluate the climate for innovation and creativity and examine how retail organizations perceive it. We applied a mixed-methods approach using an established organizational climate survey and semi-structured, one-on-one interviews regarding the innovation climate and other aspects of innovation management in the companies. The study shows that despite retail organizations still struggling to incorporate innovation on a strategic level and move beyond incremental developments in their operations, retailers score positively on being innovative regarding certain dimensions of the organizational climate survey. This indicates that retailers (especially conventional ones) could benefit from challenging current practices and moving towards becoming more active and strategic innovators since their organizational climate to a certain extent allows for it. Respondents within the organizations also express a need for better innovation support, whether it is through established structures and processes or an improvement in the current conditions of the organizational climate. How retailers could enable themselves to become more active innovators – based on what we know that retailers look more towards entrepreneurship and continuous development as a driving force rather than formalized innovation practices per se – is a potential avenue for further research.     

Creativity and Growth in: Edmund Phelps (2013), Mass Flourishing. How Grassroots Innovation Created Jobs,Challenge and Change

This article reviews the thesis presented by Edmund Phelps, Mass Flourishing. How Grassroots Innovation Created Jobs, Challenge and Change (Princeton University Press, 2013) that modern economic growth is an indirect outcome of human creativity, and that the object of enlightened policy ought to be to promote this creativity, or flourishing, rather than economic growth per se. The book is a remarkable contribution to the literature on economic growth, with its focus on how entrepreneurship and innovation generates endogenous growth and, more importantly to the author, improves human satisfaction.     

Clustering,MNEs, and Innovation: Who Benefits and How?

Abstract

This paper explores three under-researched questions in the literature on multinational enterprises (MNEs), clustering, and innovation. First, to what extent does multinationality lead to higher rates of innovation activity and performance? Second, what, if any, is the link between MNE cluster location and innovation inputs and outputs? Third, are there any significant differences between enterprises belonging to domestic and overseas MNEs in these regards? Evidence is based primarily on 11,775 firms derived from the UK Community Innovation Survey 2007. Diversity in the regional economy exerts the most consistent positive influence, followed by the scale of employment in the enterprise’s own industry. Enterprises belonging to domestic MNEs appear to exert higher levels of innovation effort. However, evidence regarding their superiority in innovation outputs was weaker. Contrary to Michael Porter’s work, it appears that enterprises belonging to overseas firms benefit more than domestic firms.     

Involving mind, body, and friends: Management that engenders creativity

Based on the careful observation and interviews of employees at three companies, and supplemented by cases from the popular business press, a discovery approach is used to derive four management principles that engender creativity and innovation in organizations: (1) manage organizations so that their knowledge base is more diverse than what would occur naturally; (2) encourage employees to embrace a collaborative and non-complacent attitude towards work and the organization; (3) make it possible for organization members to engage in the quick testing of ideas and solutions as they emerge; (4) reward employee and supervisor behaviors that support these principles and punish resistance to their implementation. The principles work in companies even if creativity and innovation are not stated organizational objectives, and do not require large investments or disruptions to work processes to yield valuable results.     

Innovation in family and non-family SMEs: an exploratory analysis

This study provides an exploratory analysis of differences between family and non-family firms in innovation investment, product and process innovation outcomes, and labor productivity. Using data from the Community Innovation Survey on 2,087 German small- and medium-sized enterprises (SMEs), we observe significant disparities at each stage of the innovation process. Whereas family SMEs have a higher propensity to invest in innovation at all, conditional on investing in innovation, these companies do so less intensively than their non-family counterparts. Family SMEs further tend to outperform non-family SMEs in terms of process innovation outcomes when controlling for innovation investment. Given the level of product and process innovation, however, family SMEs underperform regarding labor productivity in comparison to non-family SMEs. These findings complement previous empirical research by illustrating how the presence of a dominant family relates to innovation inputs and outputs of SMEs in Europe’s largest economy and its innovative SME sector.     

科技社团助力“双创”和“科创中国”分析——以泉州纺织服饰产业新型研发平台为例

在国家“双创”战略背景下，为深入贯彻习近平总书记关于统筹疫情防控和经济社会发展的重要指示，中国科协以促进科技经济深度融合为目标，开展“科创中国”工作。通过对科技社团促进科技经济融合的分析和实地调研，认为中国纺织工程学会参与建立的“一馆一院两中心”泉州纺织服饰产业综合公共服务平台，有力地支持了地方纺织服饰企业创新转型升级，是一种有效的产学研融合的组织机制，作为新型研发组织，其经验值得借鉴推广。     

Fraud and deception: a response to Gedeon Rossouw

This response addresses the question: how can ethical values play a role in combating fraud? Three points are made. Firstly, ethical values are both self‐ and other‐related. Secondly, changing the prevalence of fraudulent behaviours requires not only a reduction in opportunity for fraud but also a change in mindset of the perpetrators. Thirdly, that change in mindset involves the recognition that there are personal and organizational advantages to be gained by not contributing to or abetting fraudulent behaviour. This latter point is illustrated with reference to the experience of Unilever where sustainable development is seen as contributing to the creation of long‐term shareholder value.     

Will the new competitive landscape cause your firm's decline? It depends on your mindset

A view of the new competitive landscape shows globalization, rapid technological change, and hypercompetition as conduits leading to either organizational decline or organizational growth. In this article we explain how managers can use four mindsets to convert potential threats posed by these environmental challenges into pathways of prosperity, instead of pathways of decline. A global mindset, or the ability to view the world using a broad perspective, converts globalization threats into growth opportunities by thinking beyond geographic boundaries, valuing integration across borders, and appreciating regional and cultural diversity. An innovation mindset, meaning a mental framework that fosters development and implementation of new ideas, transforms rapid technological change threats into opportunities by valuing constant generation of new ideas and business models, realizing sources of new ideas, and stressing next practices rather than best practices. A virtual mindset, or the ability of managers to hand over their firms’ activities to external providers, turns hypercompetition into prospects for growth by facilitating flexibility and responsiveness. Finally, a collaboration mindset, meaning a willingness to engage in business partnerships, converts all three challenges into opportunities by allowing firms to form successful partnerships that can lead to synergy by combining business complementarities.