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.     

Modularity in making: simplifying solution space for user innovation

An increasingly popular form of open innovation in the digital age is ‘making,’ where users innovate across multiple disciplines and make products that meet their needs, using mechanical, electronic, and digital components. These users have at their disposal, a wide solution space for innovation through various modular toolkits enabled by digital‐age technologies. This study explores and outlines how these users simplify this wide solution space to innovate and make tangible products. Following a modularity theory perspective, it draws on case studies of users and their innovations: (1) Users with initial prototype product designs based on the Internet of things (IoT) from a maker event and (2) users with established product designs from the online community platform Thingiverse. The studies found that users reused the design in the form of existing off‐the‐shelf products and utilized digital fabrication and low‐cost electronics hardware as a ‘glue’ to create physical and informational interfaces wherever needed, enabling bottom‐up modularity. They iteratively refined their innovations, gradually replacing re‐used designs with own integrated designs, reducing modularity, and reducing wastage. The study contributes to open innovation and modularity with implications on the design of products and toolkits enabled by the digital age.     

Successful Innovation Using Strategies to Reduce Consumer Resistance An Empirical Test

This article focuses on a relatively neglected concept in new product management: innovation resistance. Specifically, it examines why consumers develop resistance to innovations at the attitude formation and intention-to-buy stages of their decision process, and what strategies marketing firms have within their direct control to reduce this resistance. S. Ram identifies two major sources of innovation resistance: perceived risk and cognitive resistance. These are studied in the context of four product groups and two distinct strategies to reduce innovation resistance. The results show that a strategy of innovation modification works to reduce resistance caused by perceived economic and functional risk. On the other hand, communication strategies can reduce resistance caused by perceived social or psychological risk. Sources of innovation resistance and appropriate strategies vary across different product groups.     

Innovating the innovation process: an organisational experiment in global pharma pursuing radical innovation

The challenge of managing the fuzzy front end of the innovation process is particularly acute for large, multi‐brand, research and development (R&D)‐intensive firms. Poor performance at generating radical innovations has resulted in many large organisations seeking to innovate how they organise for innovation. This paper presents an inductive, longitudinal study of an organisational experiment that sought to get ‘game‐changing, radical ideas’ into the new product development funnel of a top three pharma. The immediate outcomes of a team‐based internal innovation tournament included 33 new product ideas, 14 of which were radical. The medium term outcome of the experiment was a reorganisation of how the firm now pursues radical innovation activities. We link these outcomes to team leadership, contrasting innovation processes, including decisions about how to incorporate the ‘voice of the consumer’. The inductive, longitudinal study suggests causal interconnections between innovation team leadership, innovation team processes, and innovation outcomes.     

Knowledge management and innovation in knowledge-based and high-tech industrial markets: The role of openness and absorptive capacity

Knowledge, as resource, and technological innovation, as a dynamic capability, are key sources for firm's sustained competitive advantage and survival in knowledge-based and high-tech industries. Under this rationale has emerged a research stream where knowledge management, organizational learning, or intellectual capital, help to understand and constitute the key pieces of one of the most complex business phenomena; the ‘firm's technological advantage’. This being so, it is also true that in knowledge-based and high-tech industrial markets, competitive success comes directly from continuous technological innovations, where a single organization cannot successfully innovate in isolation; therefore, firms should rely on external relationships and networks in order to complement its knowledge domains, and then, develop better and faster innovations. In this sense, I would like to highlight the cross-fertilizing role of three constructs that are nurtured by different research traditions: ‘collaborative/open innovation’, from Strategy and Innovation Management research; ‘absorptive capacity’, from ‘A Knowledge-Based View’; and ‘market orientation’, from Marketing research.     

Change and persistence with failed technological innovation

Organizations learn by reinforcing past actions. When firms experience actions with negative outcomes, they change in response. Any persistence with such actions is said to be suboptimal, attributable to factors such as threat rigidities. This paper theorizes that persistence may sometimes be rational, attributable to the characteristics of feedback. It uses a novel dataset of medical devices to show how organizations learn to search for future novel or incremental innovations based on failure. It finds that firms change innovation activities when novel innovations fail, but persist when incremental innovations fail. These findings support the hypothesis that inferences based on failure from incremental innovations tend to be more robust, leading firms to be more willing to persist when failure occurs. Copyright © 2014 John Wiley & Sons, Ltd.     

Improvisers,Incrementalists and Strategists: How and Why Organizations Adopt ADR Innovations

This article identifies three ways in which alternative dispute resolution (ADR) innovations are adopted by organizations in Ireland: improvisation, incrementalism and strategy, and examines how external and internal influences shape different patterns of ADR innovation. The article contributes to the literature in three ways. First, it highlights the limitations of typologies of innovation based on simple dichotomies, such as reactive/proactive and of prevailing understandings of how ADR may interact with strategy. Second, the article develops an integrated framework for the analysis of influences on patterns of innovation that distinguishes between the features of markets and commercial strategies, organizations, stakeholders and champions and institutions, laws and public policies. Third, the article questions the central premise underlying the literature that a strategic approach to ADR equates with the adoption of conflict management systems.     

Innovation upgrading of local small and medium-sized enterprises and regional innovation policy: An empirical study

The aim of this paper is to clarify factors that promote innovation upgrading of regional SMEs and to analyze why and how policy programs implemented by local government affect their upgrading. This study is based on a firm-level questionnaire survey conducted in 2014 that targeted 1324 SMEs in Hyogo Prefecture, Japan. Innovation upgrading was classified into four stages depending on the novelty of the technology used and products; the novelty is classified according to whether they were existing or new. Measures of upgrading include the ratio of research and development (R&D) investment to sales, open innovation, sources of ideas, problem solving ability, human resource development (HRD), and business development strategies. An ordered probit model was employed. Six policy programs of Hyogo Prefectural Government were analyzed. The Manufacturing Academy was seen to be significant, and how this policy program affects upgrading through factors inside SMEs was examined by introducing cross-terms of policy programs and measures. Estimation results demonstrated that this policy program enhanced upgrading through HRD in SMEs, and it is considered that this was due to the policy programs meeting the necessity that SMEs have to develop the skills and abilities of their engineers and workers.     

Collective action for market chain innovation in the Andes

The Papa Andina network employs collective action in two novel approaches for fostering market chain innovation. The participatory market chain approach (PMCA) and stakeholder platforms engage small potato producers together with market agents and agricultural service providers in group activities to identify common interests, share market knowledge and develop new business opportunities. These forms of collective action have generated commercial, technological and institutional innovations, and created new market niches for Andean native potatoes grown by poor farmers in remote highland areas. These innovations have benefited small farmers as well as other market chain actors. This paper describes Papa Andina’s experiences with collective action for market chain innovation. It then discusses the implications of these experiences for the understanding of collective action and the policy implications for research and development organizations.     

Grantbacks,territorial restraints,and innovation

We analyse the effect of grantback clauses in licensing contracts. While competition authorities fear that grantback clauses might decrease the licensee's ex post incentives to innovate, a standard defence is that grantback clauses are required for the patent-owner to agree to license its technology in the first place. We examine the validity of this “but for” defence and the equilibrium effect of grantback clauses on the innovation incentives of the licensee for both non-severable and severable innovations, which roughly correspond to infringing and non-infringing innovations. We show that grantback clauses do not increase the patent-holder's incentives to license when non-severable innovations are at stake but they do when severable innovations are concerned – suggesting that the “but for” defence might be valid for severable innovations but not for non-severable ones, in direct contradiction to regulation in some jurisdictions. Moreover we show that, for severable innovations, grantback clauses can increase the range of parameters for which follow-on innovation by the licensee occurs. Our work extends the large literature on sequential innovation to an environment where information diffuses through licensing rather than through the mere act of patenting. In this different informational set up we show that Green and Scotchmer (1995)’s conclusion that the initial innovator should have a patent of infinite breadth no longer holds.     

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.     

Reconciling the paradox of supply-side and demand-side strategies in industrial innovation

Abernathy and Utterback [Abernathy, W.J. & Utterback, J.M., (1978). Patterns of industrial innovation. In Burgelman, R.A., Maidique, M.A. and Wheelwright, S.C., Strategic management of technology and innovation: 149-155. McGraw Hill.] argued that successful firms seek a functional product performance strategy in the early stage of industrial innovation and seek a cost reduction strategy in the late stage. However, Adner and Levinthal [Adner, R. & Levinthal, D., (2001). Demand heterogeneity and technology evolution: Implications for product and process. Management Science, 47(5), 611-628.] argued firms enhance functionality or reduce prices to a level that corresponds to consumer willingness to pay in the early stage, and increase performance at a relatively stable product price (i.e. new strategy they claimed) in the late stage. This study reconciles this paradox of choosing strategies using an integrative framework for theory development. Generated from the framework, a numerical indicator of performance/cost ratio directs firm strategy choices in industrial innovation when an environment changes. This study justifies the popular use of performance/cost ratio in practices as primary criteria to predict the winning dominant standard from a value creation perspective and elucidates an evolution of industrial innovations by using a three-year field study.     

Analysis on product rollover strategies: The innovation level perspective

We focus on the firm's decision on product rollover strategies from the view of innovation level. Consider an innovative firm produces and sells durable goods to strategic consumers over two periods. In period one, the firm offers a product with a low innovation level. During that period, the firm continues to innovate such that a product with a high innovation level can be offered in period two. The analysis is separated into two parts: minor-to-moderate innovation and major innovation. We find that the rollover decision is considerably different when the innovation is minor-to-moderate from when the innovation is major. In the former case, the optimality of each rollover strategy is fully determined by the innovation level of the product introduced in period two and the customers' discounter factor; whereas in the latter case, the single rollover strategy always dominates the dual rollover strategy. Moreover, the firm's pricing policy under single rollover is strongly dependent on the innovation level of the product introduced in period two. Whereas under dual rollover, the firm's pricing decision is independent of the innovation level. Finally, it is to be noted that the findings in this research are mainly contingent on the model framework.     

Commercializing a radical innovation: Probing the way to the market

Needs, market structures, business models, and relationships concerning radical innovations (RIs) are unpredictable and, consequently, firms face critical challenges in commercialization. Therefore, this study examines the commercialization of RIs as a process complicated by divergent challenges. By drawing on the literature on innovation management, RIs, and the commercialization and adoption of innovations, and by analyzing six longitudinal cases, the study generates its contribution: a dynamic process model for the commercialization of RIs. The model captures the iterative and partially unpredictable commercialization process comprising transits back and forth between three main zones: strategic marketing decision making, market creation and preparation, and sales creation and development. Over this probing process, a firm faces major commercialization challenges: 1) choosing a feasible strategy in conditions of uncertainty, 2) understanding the benefits of innovation from the customer's perspective, 3) creating credibility, 4) acquiring support from stakeholders and the ecosystem, 5) overcoming adoption barriers, and 6) creating sales. For managers, the results suggest diligence in the neglected market creation and preparation zone instead of attempting rushed sales creation.     

Organizing for innovation over an industry cycle

The basic hypothesis in this paper is that a gap tends to develop over an industry's evolution between potential innovators in a company and the organizational mainstream. The innovative gap is a function of the type of innovation needed for longer-run survival and the disposition of the mainstream organization towards innovation. This hypothesis is used to predict which of four popular organizations for innovation is most suited to each stage of an idealized industry's evolution. The predicted organization set is discussed in terms of well-known cases, and tested in an exploratory manner using executive survey data.     

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.     

Marketing and Organisational Innovations in Entrepreneurial Innovation Processes and their Relation to Market Structure and Firm Characteristics

This paper analyses the influence of marketing and organisational changes on the innovation process. Using data from the German community innovation survey 2007, two topics are investigated: First, we analyse whether firm and market characteristics trigger certain innovation strategies. Second, this paper investigates whether marketing and organisational innovations (MO innovations) are complementary to product and process innovations (PP innovations) or whether they are substitutes. Our results suggest that firms choose broad innovation strategies, which combine MO and PP innovations, if they have large internal resources and intermediate market power. We also find that marketing innovations make product and process innovations more successful.     

Design-driven laboratories: organization and strategy of laboratories specialized in the development of radical design-driven innovations

Nowadays, consumers are paying increasing attention towards the socio-cultural aspects of products. For this reason firms must consider the need for linguistic and semantic innovations as well as technological and functional innovations. Historically, the knowledge needed for each kind of innovation has been separately developed and interpreted: while technological knowledge is developed by industrial R&D centers, the knowledge about socio-cultural trends is often tacit and developed by design studios and marketing agencies. The paper analyzes nine in-depth case studies about companies that develop radical design-driven innovations for the household environment. It aims to identify the principal characteristics of the companies' R&D organizations [their design-driven laboratories (DDL)]. It introduces a classification of DDL that reveals how specific organizational characteristics might facilitate different innovation strategies.     

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.     

A tentative model of the innovation process

The paper proposes a model of innovation claimed to be applicable both to the lone entrepreneur and the large institution. It treats innovation as a social process and views it in some respects as analogous to natural selection.
The model takes into account 12 elements: the innovator, the new concept, the innovating group, the new product, target user, competitors, capital supply, strategy, supplying organization, technology, relevant environment and chance. The author characterises each element and shows how they interact in the course of guiding a particular innovation to success or failure.
The operation of the model is illustrated by applying it to two cases — the rise and decline of the metal ski and the launch and success of a national US newspaper.
The paper concludes with a list of possible uses of the model, as a checklist for action, as a basis for incorporating other approaches to the innovation process and as a starting point for a quantitative representation of the innovation process.