Individual differences, environmental scanning, innovation framing, and champion behavior: key predictors of project performance

Although increasing evidence points to the importance of champions for keeping product innovation ideas alive and thriving, little is known about how champions identify potential product innovation ideas, how they present these ideas to gain much needed support from key stakeholders, and their impact on innovation project performance over time. Jane M. Howell and Christine M. Shea address this knowledge gap by using measures of individual differences, environmental scanning, innovation framing and champion behavior to predict the performance of 47 product innovation projects. Champion behavior was defined as expressing confidence in the innovation, involving and motivating others to support the innovation, and persisting under adversity. Interviews with 47 champions were conducted to collect information about the innovation projects and the champions' tendency to frame the innovation as an opportunity or threat. Survey data were obtained from three sources: 47 champions provided information on their personal characteristics (locus of control and breadth of interest) and activities (environmental scanning), 47 division managers subjectively assessed project performance at two points in time, and 237 innovation team members rated the frequency of champion behavior. The results revealed that an internal locus of control orientation was positively related to framing the innovation as an opportunity, and breadth of interest was positively related to environmental scanning. Environmental scanning of documents and framing the innovation as a threat was negatively related to champion behavior, while environmental scanning through people was positively related to champion behavior. Champion behavior positively predicted project performance over a one‐year interval. Overall, the findings suggest that in scanning the environment for new ideas, the most effective source of information is the champion's personal network of people inside and outside the organization. Also, the simple labeling of an idea as a threat appears to diminish a champion's perceived influence and erode credibility in promoting an innovation. From the perspective of division managers, champions make a positive contribution to project performance over time, reinforcing the crucial role that champions play in new product development process.     

Opening and closing open innovation projects: A contractual perspective

In this article we introduce three concepts from transaction cost economics that have so far remained excluded from the open innovation literature, and that enable us to address the demands in the literature for an explanatory mechanism for closing open innovation: unanticipated disturbances, tolerance zone and interpretations of contracts. First, we argue that threats resulting from unanticipated disturbances are absorbed in a tolerance zone and lead to adaptations in knowledge sharing. Second, we argue that these threats and changes in knowledge sharing at the project level impact the interpretation of the open innovation contract at the firm level. Adopting a contractual perspective, the article contributes to the open innovation literature by explaining the tolerance zone of transitioning between closed and open innovation. We illustrate in a case study on a B2B open innovation project how a threat to value creation leads to a continuation of open innovation, whereas a threat to value capture leads to a closing of open innovation.     

Management innovation in complex products and systems: The case of integrated project teams

This paper examines the process of a management innovation in complex products and systems (CoPS). Prior literature offers limited theoretical and empirical insights into how an inter-organizational relationship delivers CoPS by moving towards ‘integrated project teams’ over time. The research is based on an in-depth, longitudinal case study, drawing on 34 semi-structured interviews and secondary data from following a client-contractor relationship in the UK water industry over time. The study draws out the various management innovation development phases. It also provides detailed insights in the developments and benefits of setting up integrated project teams. The study contributes to extant literature and practice by linking previously separate research streams of organizational design and management innovation with the management of CoPS.     

Value innovation in business markets: Breaking the industry recipe

The industrial marketing as well as the strategic management literature stresses the importance of “value innovation” in order to create/sustain competitive advantage and to rejuvenate the organization.In the first part of this article the construct of value innovation is operationalized within the context of selected business-to-business markets. We report the results of an ongoing research project; starting from traditional ways of value creation, the study reveals different types of value innovation initiatives undertaken by industry participants. We observe, however, that networks, firms and managers are embedded in industry recipes. These recipes block the creation and realization of value innovation. Some firms are trying to break out of existing frames and their experiences pinpoint to specific ways of markets sensing, strategic marketing and different marketing-mix tools. As such, the research frames value innovation initiatives in the existing industry contexts and managerial frames, and identifies drivers, barriers and perceived success factors for the process of value innovation.The second part of the article then looks at the stages of value innovation and their impact on marketing, organizations and networks. Based on the data analysis, the paper posits propositions which stress the concept of “multilevel absorptive capacity”.     

Resource allocation strategy for innovation portfolio management

Our study demonstrates empirically that the choice of resource allocation strategy affects innovation performance. Allocating resources to a broader range of innovation projects increases new product sales, an effect that appears to outweigh that of resource intensity. In addition, we find that the performance benefit of breadth is higher for firms that allocate resources selectively at later stages of the innovation process. This breadth‐selectiveness effect is greatest for firms intending to create relatively more novel products, departing further from their knowledge base. Based on these results, we theorize that breadth increases performance because it spreads firms' bets on unproven innovative endeavors. Limiting resource commitments by selecting out deteriorating projects prevents an escalation in the costs of breadth. This advantage increases with the uncertainty implicit in greater innovative intent. The paper thus contributes to theory of how resource allocation strategies influence performance outcomes of innovation project portfolios. Copyright © 2013 John Wiley & Sons, Ltd.     

Open innovation ecosystem organizing from a process view: a longitudinal study in the making of an innovation hub

This paper uses process theory as a theoretical lens to analyze AstraZeneca's enactment of an open innovation initiative with the purpose of strengthening the firm's surrounding innovation ecosystem. Based on empirical data collected over 7 years, we develop a process model of open innovation enactment and explain how the initiative gradually transformed while maintaining its guiding principles, which were set from the start. In applying a process perspective, we highlight open innovation initiatives as dynamic and evolutionary – but not deterministic – developments. As such, we provide a comprehensive and more nuanced understanding of not only what open innovation is but also how it becomes. This study also contributes to the innovation ecosystem literature by theorizing how firms orchestrate innovation ecosystems through open innovation initiatives over time.     

Stalling innovation of Cognitive Radio: The case for a dedicated frequency band

After more than a decade of frantic R&D efforts, Cognitive Radio (CR) technology continues to fail to pass the first developmental milestone of a working prototype, suggesting that the CR innovation process may be stalling. This paper analyzes possible reasons for this situation from the perspective of innovation management and economics. The CR innovation process has developed in a complex environment shaped by a combination of technology-push and market-pull forces. This paper shows that this process is being stifled by two barriers emerging from the current reliance of CR technology on opportunistic dynamic spectrum access as the sole means for entry into the wireless market. The technology-push is affected by the barrier of technological complexities linked to the requirement to protect highly sensitive incumbent systems. The market-pull forces are being negated by market lock-in and a strong status quo of well-established wireless players. This paper argues that overcoming these barriers and revitalizing the practical development of CR could be possible with the aid of light-touch governmental intervention. This could take the form of designating a dedicated CR band, which would benefit CR through less strict spectrum access requirements. A vibrant cognitive environment could flourish in this type of band, supporting CR innovation.     

A service design perspective on the stakeholder engagement journey during B2B innovation: Challenges and future research agenda

Innovation in business-to-business (B2B) contexts deals with highly dynamic, complex, and heterogeneous constellations of stakeholders with a diversity of goals, motives, and capabilities that further challenge successful management of B2B innovation processes and outcomes. Complex challenges, such as sustainability and digitization trends, push these B2B firms to embrace new innovation methods that help them manage disruptive change. Service design thinking has emerged as an innovation management practice emphasizing a human-centered innovation process of user interactions, creativity, and learning mindsets. In this article, we aim to evaluate the challenges and develop a research agenda on how service design can effectively enable stakeholders' engagement during the B2B innovation process. We argue that to advance service design opportunities for stakeholder engagement, we need to address the unique complexities and challenges of stakeholder engagement during innovation from a systemic and dynamic process perspective. From a systemic perspective, we zoom in on the building blocks of stakeholder engagement and address multi-level stakeholder engagement platforms (i.e., innovation networks). From a dynamic process perspective, we treat stakeholder engagement as an emerging process and zoom in on the temporal and relational connections and hybrid orchestration to allow for both structural and emerging stakeholder engagement during innovation. We develop a stakeholder engagement journey in which we integrate service and innovation stages and propose how service design activities can support and facilitate the aforementioned challenges and complexities. Finally, we identify concrete research questions and, accordingly, develop a research agenda for future research on stakeholder engagement in B2B innovation trajectories.     

Non-customers as initiators of radical innovation

Customers who initiate innovation is a topic frequently discussed in the marketing literature. However, the literature largely ignores non-customers – individuals or firms not using products in the category – as potential initiators of innovation in general and of radical innovation in particular. We argue that non-customers have high knowledge of their own needs, but their knowledge of technology is insufficient to self-generate an innovation. By approaching a potential supplier with a high knowledge of technology but an insufficient knowledge of the need, a unique dyad is created, characterized by a bilateral knowledge gap that stimulates increased learning and co-creation of a potentially radical innovation. We use an historical approach to examine the technological and social antecedents and consequences of three innovations initiated by non-customers: air-conditioning, the pill, and the jeep. We contend that non-customers can initiate innovations that may potentially change industries, create new markets, and have long-term social and economic effects.     

Learning from leading-edge customers at The Sims: opening up the innovation process using toolkits

Recently, toolkits for user innovation and design have been proposed as a promising means of opening up the innovation process to customers. Using these tools, customers can take on problem-solving tasks and design products to fit their individual needs. To date, arguments in favor of this new concept have been limited to the idea of satisfying each user's needs in a highly efficient and valuable way. The aim of this empirical study is to extend our knowledge of how users deal with 'the invitation to innovate' and how attractive individual user designs might be to other users. In studying the users of toolkits for the immensely popular computer game The Sims , we found that (1) users are not 'one-time shoppers'– in fact, their innovative engagement is rather long-lasting, continuous, evolving, and intense. We also found that (2) leading-edge users do not merely content themselves with the official toolkits provided by the manufacturer. They employ user-created tools to push design possibilities even further. (3) Moreover, individual user designs are not only attractive to the creators themselves; instead, certain innovative solutions are in high demand among other users. Based on our findings, we discuss how toolkits and their users might add to the process of innovation in general. We argue that toolkits could serve as a promising market research tool for guiding a firm's new product development efforts. Furthermore, toolkits may serve as a crèche for interested but inexperienced users who could evolve into leading-edge users over time. These innovative users might then be integrated into more radical product development efforts.     

Acts of hidden franchisee innovation and innovation adoption within franchise systems

Franchising, as an imitative business model, provides a challenging context to create and manage innovation, as franchisors may wish to limit their franchisees' innovative activities to ensure network consistency. Drawing on data from two related empirical studies of franchisees operating in the UK, we seek to understand how franchisees contribute to innovation within their systems. Our first quantitative study reveals that although many franchisees develop innovations, these innovations are not always adopted by the franchise system, suggesting acts of hidden innovation. These findings motivated our second, qualitative study. Through a case analysis of 29 franchisees from 7 different franchise systems, we identify a number of organizational and relational factors that influence both franchisee engagement in innovation, and the extent to which their innovations are disclosed to the network. From these, we develop a theoretical framework of franchisee-led innovation processes, which contributes to the role of social exchange theory in innovation practices within business-to-business contexts. Our findings extend emerging research on innovation in franchise systems, and also provide practical insights on how franchisees can be best supported in creating and disclosing innovations to benefit the franchise system.     

Change processes in open innovation networks – Exploring living labs

Examining change in business networks can illuminate how time, temporality and process unfold and engage different stakeholders in open innovation. Living labs are increasingly popular open innovation networks that provide a fruitful area in which to study change processes and their influencing factors in network dynamics. We adopt a longitudinal process perspective to analyze eight living labs focused on urban development in a Northern European city. Our analysis reveals six pertinent processes: (i) expansion, (ii) reinforcement, (iii) focusing, (iv) unification, (v) termination, and (vi) recurrence. These processes reflect change in networks characterized by diverse actors, the coexistence of individual and shared motives, a high degree of openness, and user involvement. The identified change processes are a result of living labs disclosing their needs, data, and operations to their stakeholders. We propose a theoretical concept, which we describe as “network boosters”, to illustrate the factors that foster change processes. Scholars and practitioners of innovation management can learn from these findings that understanding change in open innovation networks may help to depict and predict short- and long-term relationships, and it may assist them in managing innovation in open environments.     

Serial Innovators' processes: How they overcome barriers to creating radical innovations

Formal new product development processes typically are depicted in the literature as linear processes having some number of stages, each of which is completed by a cross-functional team. At the end of each stage a management committee makes a decision as to whether the project will proceed to the next stage, be stopped, or recycle through the previous stage to better complete some of the tasks or steps in the stage. Teams proceed stage by stage, until the product is launched into the market.However, this formal process typically is positioned as occurring after the “fuzzy front end” (FFE), the chaotic, messy up-front part of new product development before there is a solidified concept. Because incremental, evolutionary innovations go through an abbreviated FFE, or even have none at all, these formal processes work quite well for them. However, radical innovations typically have very messy, chaotic and fuzzy front ends, which are not helped by these formal processes. Formal product development processes may actually act as a barrier to radical innovation. Very little research to date has investigated processes that overcome the barriers to radical innovation and allow firms to successfully bring radical innovations to market.This research investigates the product development processes used by 19 Serial Innovators—individuals in large, mature firms who have been associated with one after another radical innovation success. We find that Serial Innovators' processes have four specific features that enable them to overcome organizational barriers and allow them to create and successfully commercialize radical innovations. Serial Innovators' processes:

• •are not at all linear in nature;
• •focus significant time and effort on the fuzzy front end;
• •explicitly manage the transition from the fuzzy front end tasks and outputs (a proposed solution to a problem) to the more formal and institutionalized development process; and
• •proactively work to create market acceptance.

     

Project Suspensions and Failures in New Product Development: Returns for Entrepreneurial Firms in Co‐Development Alliances

Entrepreneurial biotech and large pharmaceutical firms often form alliances to co‐develop new products. Yet, new product development (NPD) is fraught with challenges that often result in project suspensions and failures. Considering this, how can firms increase the chances that their co‐development alliances will create value? To answer this question, the authors build on insights from signaling theory to argue that prior project suspensions provide positive signals leading to an increase in value creation, while project failures have the opposite effect. In addition, drawing on insights from temporal construal theory, this research predicts that the strength of these effects is contingent on the stage along the exploration–exploitation continuum at which the alliance is formed. The authors undertook event study analyses of 248 alliances formed by 104 biotechnology firms from the United States and Europe listed on eight stock exchanges over an 8‐year period between 1996 and 2003. The results confirm that prior NPD project suspensions have a stronger value creation effect (or prior failures have a weaker value destruction effect) in the case of exploration alliances in the upstream of NPD processes than in the case of moderate‐scale exploitation alliances in the downstream of NPD. This study is among the first to examine how both prior NPD project suspensions and failures of firms affect the abnormal returns achieved from co‐development alliances. This research therefore contributes to the innovation literature by honing a better understanding of setbacks and failures in NPD. Moreover, the findings contribute to the literature on strategic alliances by identifying new conditions under which firms can create or preserve value. This research also contributes to signaling theory by providing evidence of the moderation effect caused by the signaling environment. Finally, this study contributes to the entrepreneurial literature on value creation for entrepreneurial firms in alliances following adverse events.     

Process Innovation and Integration in Process‐Oriented Settings: The Case of the Oil Industry

Scholars have long argued that in new product development integrated innovation processes replace sequentially organized ones because of changing capabilities, integration of knowledge, and the increasing importance of market orientation. The intention of this paper is to study whether this also applies in process‐oriented industries. Process‐oriented settings are fundamentally different from product‐oriented ones as the emphasis is on efficiency, clear guidelines, and tacit knowledge, while radical innovation is less important. It is also less obvious why market orientation—a key driver of integration in new product development—should change the way the innovation process is organized, as there is no product to be developed in the first place. A Stage Gate Model could therefore be well‐suited to achieve more efficiency and effectiveness. In order to investigate process innovation in a process‐oriented setting, we decided to study the upstream oil and gas industry, a scale‐intensive, process‐oriented setting that substantially contrasts with traditional science‐driven industries such as biotechnology and pharmaceuticals, where patents are relevant. The particular advantage of this setting is that virtually no product innovation occurs, allowing the isolation of process innovation. Relying on five inductive case studies of major projects (BP's Prudhoe Bay, Chevron's Kern River, Conoco Philips's Ekofisk, ENI's el‐Bouri, and Shell's Troll field), we find that integration occurs in process‐oriented settings but does so for different reasons than in product‐oriented ones. Integration emerges from an innovation mode characterized by: (1) trial and error (not R&D) as the main mode of innovation; (2) the cooperation of experts from different knowledge backgrounds; (3) the development of Information and Communication Technology (ICT), which facilitates this cooperation across disciplines and projects; and (4) the need to increase efficiency as demand outstrips supply. More precisely, demand shapes reward systems and determines whether new raw materials will be used (creating new supply that requires innovation of processes in periods when demand outstrips supply). Supply and reward systems therefore create the conditions where trial and error, integration of knowledge, and ICT development mutually enforce each other, leading to the integration of the innovation process. Besides contributing to the literature on innovation the paper also offers interesting insights for managers. In order to foster innovation in process‐oriented settings they need to provide specialists with room to experiment over extended periods of time, encourage cooperation across disciplines, and create both incentives and systems to facilitate this process. Finally, managers need to consider the ability of staff to cooperate at the outset, when they set up their recruitment process.     

Commercialization performance of outbound open innovation projects in public research organizations: The roles of innovation potential and organizational capabilities

The current literature on open innovation (OI) has been limited to organization-level studies of inbound OI despite the importance of understanding outbound OI to improve performance of public research organizations (PRO) at project level. Our study contributes to the OI literature by investigating the relationship between the innovation potential and the commercialization performance of 189 outbound OI projects between PROs and firms, and the effect of network and project management processes on this relationship. In line with our expectation, our results demonstrate that PRO-firm outbound OI projects with technologies of high innovation potential are likely to have high commercialization performance. In addition, we empirically establish that among projects with technologies of high innovation potential, those with high resource allocation quality are more likely to have high commercialization performance. Finally, our findings indicate that among projects with technologies of high innovation potential, those with high opportunity discovery through networks are more likely to have high commercialization performance.     

Business model innovation processes of average market players: a qualitative-empirical analysis

Business model innovation is by now mainly understood as a strategic option for firms to enhance competitiveness. As a result, business model innovation research usually focuses on outperforming firms that deliberately innovate their business models. We enhance this rather narrow perspective by analysing business model innovation processes of average market players against the background of a multiple-case study. Our findings show that average market players do at least initially not deliberately pursue business model innovation. Instead, they experience business model innovation as a highly emergent and very often unintended process. We identify four phases of this process and describe them in detail. Furthermore, we highlight factors that determine whether a firm is able to complete the process step or not. The results of our study are reflected in a newly developed process model that considerably enhances the understanding of business model innovation processes with regard to average market players and may serve as framework for future research.     

Managing innovation in a knowledge intensive technology organisation (KITO)

This study aims to add to the existing knowledge of how innovation works in organisations. By understanding how to assess/evaluate processes that support and enable innovation, managers can better manage innovation as a business process. This paper addresses elements of organisational behaviour that relate to people management where innovation and technology management is concerned. Perception plays a crucial role in driving behaviour and therefore the widely accepted business scorecard methodology has been used to measure innovation practices in the organisation. The research was done in a knowledge intensive technology organisation (KITO) in South Africa. Interviews with managers of R&D were conducted. These interviews were used to adapt an existing audit instrument to suit the technology–based organisation. Thereafter, a comprehensive audit of innovation was conducted at three different management levels using the adapted instrument. Over 100, mostly R&D managers, were asked to complete a scorecard–based questionnaire and to draw a visual representation (VR) of innovation. The results of the interviews, audit and VRs were used to produce a management framework that is not only applicable to a KITO, but can also be used widely to improve innovation through enhanced visual understanding of any technology–based organisation. The results of the study indicate that measuring innovation through a validated instrument is highly valuable. The Holistic System Framework for innovation and the measurement instrument facilitated (1) management of, and (2) organisational learning about innovation. The comprehensive audit indicated, on a strategic level, the strengths and weaknesses of the innovation process as practised in the organisation. The instrument is valuable at a strategic management level as it indicates where in the organisation the gaps exist regarding the management of the process of innovation with the aim to create a competitive advantage.