Resource orchestration for team‐based innovation: a case study of the interplay between teams,customers, and top management

The resource orchestration concept has attracted considerable interest in contemporary innovation research. However, resource orchestration is a manager‐centric framework and not all of its components necessarily reflect the value‐creation processes of organizations focusing on team‐based innovation. Drawing on a single‐case study of an innovative Swedish software company, we illustrate the roles of autonomous teams, customers, and top managers in orchestrating resources for team‐based innovation. Moreover, we introduce the concept of resource flocculation to describe how key actors co‐orchestrate various resource orchestration processes. The study contributes to research on resource orchestration by adapting the model to the conditions characterizing team‐based innovation, and to research on team‐based innovation by addressing how innovative teams are related to overall resource orchestration processes and, ultimately, organizational innovation outcomes.     

Entrepreneurial co‐creation: societal impact through open innovation

New open innovation initiatives, such as accelerators, living labs, social innovation labs and open labs, involve for‐profit and not‐for‐profit actors working closely together to co‐create both business value and societal impacts. However, there is a lack of theoretical underpinning to understand how and why co‐creation by actors generate different types of social value in the concurrent pursuit of business and social value. Adopting an inductive case study approach, we find that different types of entrepreneurs who co‐exploit co‐identify opportunities for co‐creation, generate potentially competing social and business values. We develop four propositions relating to how and why profit orientation and key resource contributions of entrepreneurs co‐identifying an opportunity to co‐create decide the nature of social value generated. We discuss avenues for future research and practical implications, underlying the importance of developing entrepreneurialism as ways to generate different social impacts through open innovation approaches, such as co‐creation.     

Open Service Innovation: The Role of Intermediary Capabilities

This study examines how intermediaries, in general, and those with digital service platforms specifically, engage with clients to help them innovate their services within their service ecosystem. Based on an embedded, longitudinal case study, the results reveal the cumulative development and deployment of technological, marketing, and co‐creation capabilities by intermediaries, and how these capabilities allow intermediaries to engage with clients, so as to enable clients’ open service innovation despite their internal challenges. In turn, this article extends theory on service innovation by clarifying the role and function of intermediaries in service ecosystems in enabling clients to leverage open service innovation. Second, this study contributes to resource‐based scholarship by clarifying how these three sets of capabilities and their micro‐foundations relate to each other. Despite the obvious importance of technological capabilities, online intermediaries are more than just “virtual” service platform providers. The intermediary’s technological and marketing capabilities assist clients in dealing with project‐related and organizational challenges to open service innovation. Acting as a higher‐order capability, co‐creation capabilities—through shaping marketing and technological capabilities over time and also through conditioning their deployment—improve the proficiency of these capabilities. The findings advance insights on the agential role of the intermediary’s co‐creation capabilities, purposefully developed and deployed to foster client engagement, and thus support service organizations in leveraging open service innovation.     

A rolling stone gathers no moss: the effect of customers' perceived business model innovativeness on customer value co‐creation behavior and customer satisfaction in the service sector

Both researchers and practitioners have been focusing extensively on business model innovation, as it has shown to positively influence business performance. Although the effect of business model innovativeness on customer behavior might be an important mediator between business model innovation and business performance, it has not yet been analyzed. In line with recent calls to consider the customer side in business model innovation research, our paper addresses this problem by studying the influence of customers' perceived business model innovativeness (CPBMI) on customer satisfaction and customer value co‐creation behavior in the service sector. We, therefore, emphasize customers' perceptions and reactions to business model changes. Relying on data from a large‐scale survey of restaurant customers, we find that perceived value creation innovativeness and value proposition innovativeness positively affect customer satisfaction and customer value co‐creation behavior. In addition, we identify a significant indirect effect of CPBMI on customer satisfaction via customer value co‐creation behavior. Our findings allow deriving concrete implications for both researchers and practitioners.     

Value Creation and Value Capture in Open Innovation

Open innovation has attracted a significant amount of attention from scholars and practitioners. Prior research on open innovation has mainly focused on collaborative inventing. However, understanding the processes and outcomes of joint inventing is not sufficient for understanding sustained open‐innovation activities and the competitive advantages of the actors involved in open innovation. Instead, an understanding of value creation and value capture is paramount for advancing our understanding of sustained open‐innovation activities. Open innovation requires collaboration among distributed but interdependent actors who rely on each other’s capabilities for value creation and capture. Value in open innovation is driven not only by actors’ value creation but also by their ability to capture value. While value creation and value capture are discussed in the open‐innovation literature, the advancement of this stream of research is hindered by conceptual ambiguity, especially in relation to the concept of value capture. This article adopts a value perspective on open innovation, offers consistent conceptualizations of value creation and value capture, and outlines potential avenues for further research at the interface of open innovation, value creation, and value capture.     

Autonomous Teams and New Product Development

An autonomous team is an emerging tool for new product development (NPD). With its high degree of autonomy, independence, leadership, dedication, and collocation, the team has more freedom and stronger capabilities to be innovative and entrepreneurial. Several anecdotal cases suggest that autonomous teams are best when applied to highly uncertain, complex, and innovative projects. However, there is no empirical study to test such a notion. Moreover, autonomous teams are not a panacea, and implementing them can be costly and disruptive to their parent organization. When should this powerful, yet costly tool, be pulled out of the new product professional's toolbox? This paper attempts to answer this question. The objective of this study is to explore under which circumstances an autonomous team is the best choice for NPD. Based on contingency and information‐processing theories, autonomous teams are hypothesized to be more effective to address projects with: (1) high technology novelty and (2) radical innovation. To test these hypotheses, the relative effectiveness of four types of team structures: autonomous, functional, lightweight, and heavyweight are compared. The effectiveness measures include development cost, development speed, and overall product success. Vision clarity, resource availability, and team experience are the controlled variables. The empirical results based on the data from 555 NPD projects generally support the research hypotheses. Relative to other team structures, autonomous teams are more effective in addressing projects with high technology novelty or radical innovation. The results also suggest that heavyweight teams perform better than other teams in developing incremental innovation. These results provide some evidence to support contingency and information‐processing theories at the project level. Given the importance of the development of novel technology and radical innovation in establishing new businesses and other strategic initiatives, the findings of this study may not only have some important implications for NPD practices but may also shed some light on other important topics such as disruptive innovation, strategic innovation, new venture, corporate entrepreneurship, and ambidextrous organization.     

Only the Brave: Product Innovation,Service Business Model Innovation,and Their Impact on Performance

Recent empirical findings concerning the performance effects of service business model innovation (servitization) and its interplay with product innovation are mixed. Using the lenses of the demand‐based view on value creation and complementarity, the performance impact of two key service business models is examined: the product‐oriented model and the customer‐oriented model, implemented jointly with product innovation. Results indicate that the interplay between service business model innovation and product innovation results in long‐term performance benefits coupled with a degree of short‐term performance sacrifice. Service business model innovation in isolation from product innovation results in short‐term profit gains but long‐term knowledge loss and, thus, market performance decline. Our study suggests that firms need to look beyond the evidence on short‐term effects in order to achieve superior performance in the long run.     

Dynamic capabilities for service innovation: conceptualization and measurement

Although the development of new services is becoming a major concern for firms throughout the entire economy, there is only little insight in the organizational antecedents of service innovation. It is widely acknowledged that engaging in R&D is relatively uncommon for service providers, but there are also indications that the R&D concept is poorly applicable to service innovation in the first place. Therefore, attention is shifting toward the actual capabilities that allow a firm to source ideas and convert them into marketable service propositions. This paper provides the operationalization of a set of dynamic service innovation capabilities (DSICs) that is general enough to be relevant across different sectoral contexts. While the selected framework is found to consolidate earlier works on the specificities of service innovation, it also captures broad insights on the evolutionary properties of the creation of novel solutions. Thereby, it exemplifies how DSICs can be conceptualized according to the so‐called synthesis approach to service innovation. We operationalize a refined version of such DSICs and develop a measurement scale, using two multi‐industry subsamples from a dataset of 391 Dutch firms. The measured capabilities are found to correlate to different extents with performance measures. Our main contribution, a validated scale for five complementary DSICs, opens the way to comparative analyses regarding firm abilities for creating innovative services.     

Users' contributions to radical innovation: evidence from four cases in the field of medical equipment technology

This paper focuses on contributions of users in early phases of radical innovation projects. In a multiple case study analysis in the field of medical equipment technology, we identify characteristics of users who contribute substantially to the development of radical innovations by being their inventors and (co)-developers. These innovative users have high motivation to seek new solutions, possess a diverse set of competencies, and are embedded in a supportive environment. We furthermore observe that they play an entrepreneurial role as they establish and organize the required innovation networks. These innovation networks are needed to transform the users' radically new concepts into first physical prototypes and marketable products. The study highlights how manufacturing firms can benefit from innovative and entrepreneurial users in the early phases of radical innovation projects.     

Open for innovation: the role of openness in explaining innovation performance among U.K. manufacturing firms

A central part of the innovation process concerns the way firms go about organizing search for new ideas that have commercial potential. New models of innovation have suggested that many innovative firms have changed the way they search for new ideas, adopting open search strategies that involve the use of a wide range of external actors and sources to help them achieve and sustain innovation. Using a large‐scale sample of industrial firms, this paper links search strategy to innovative performance, finding that searching widely and deeply is curvilinearly (taking an inverted U‐shape) related to performance. Copyright © 2005 John Wiley & Sons, Ltd.     

Why co‐creation experience matters? Creative experience and its impact on the quantity and quality of creative contributions

This article introduces ‘virtual design competitions’ as a new means of opening up the innovation process and enriching the companies, ‘design‐ideas’ by utilizing the creativity of a multiplicity of external designers and enthused consumers all over the world. The ‘Swarovski Enlightened^? jewellery design competition’, explored in this study, demonstrates the enormous potential of virtual co‐creation platforms. It further highlights the importance of the co‐creation experience and its impact on the quantity and quality of designs submitted. First, we introduce the idea of virtual co‐creation platforms and the requirements on the design of such a platform. Second, we explore the impact of the co‐creation experience on the content contributed by participants. Our study shows that co‐creation experience significantly impacts the number of contributions by consumers as well as the quality of submitted designs. Our paper contributes to a better theoretic understanding of the impact of a participant's perceived autonomous, enjoyable, and competent experience, as well as participants' perceived sense of community on their experience. From a managerial perspective, it provides guidance in designing successful idea and design competitions. While innovation managers may be interested in creative contributions, for participants, it is the experience which matters. Fully featured community platforms rather than single idea submission websites are required to attract creative users to submit their ideas and designs.     

Control of intellectual assets in client relationships: implications for innovation

This empirical study of business‐to‐business service firms examines the determinants and effects of control rights to intellectual assets in a property rights theoretic framework. Regression analyses using survey data suggest that service suppliers that retain control over their intellectual output are more innovative. In long‐term relationships, service firms' clients may thus be better off balancing their need to control outsourced activities with the suppliers' incentives to invest in learning and innovation. Additionally, and aligned with property rights theoretic predictions, service suppliers' bargaining power and their indispensability in service projects are positively associated with their ability to retain control rights. In contrast, innovation capabilities are not very significant in determining control rights allocation between service suppliers and their clients. Copyright © 2008 John Wiley & Sons, Ltd.     

The Institutionalization of an Electronic Marketplace in China, 1998–2010

The paper traces the evolution of the electronic marketplace in China from 1998 to 2010. According to an application of actor network theory and institutional theory, the e‐marketplace was co‐constructed and institutionalized by various participating actors in interwoven diffusion and legitimation processes. A content analysis of news articles reveals key actors who helped develop and shape the e‐marketplace: consumers, online vendors, online criminals, technology companies, transaction platforms, entrepreneurs, professional associations, banks, and the government. The analysis of their interrelationships and major events reveals four distinct stages in the institutionalization of the e‐marketplace in China: novelty, incubating, empowering, and growth. Unique problems emerge at each stage, and different types of actors enter the actor network at different phases, playing unique roles in the co‐creation process to establish cultural, normative, and regulatory legitimacy. Many varied agents participated in a transformational process specific to the macro‐socioeconomic and technological environment of China, which featured particular institutional forms. eBay's failure to maintain a first‐mover advantage in China helps illustrate that global companies must understand political, economic, cultural, and institutional environments before considering expansion.     

A Bibliometric Review of Open Innovation: Setting a Research Agenda

Through an objective, systematic, and comprehensive review of the literature on open innovation (OI), this article identifies gaps in existing research, and provides recommendations on how hitherto unused or underused organizational, management, and marketing theories can be applied to advance the field. This study adopts a novel approach by combining two complementary bibliometric methods of co‐citation analysis and text mining of 321 journal articles on OI that enables a robust empirical analysis of the intellectual streams and key concepts underpinning OI. Results reveal that researchers do not sufficiently draw on theoretical perspectives external to the field to examine multiple facets of OI. Research also seems confined to innovation‐specific journals with its focus restricted to a select few OI issues, thereby exerting limited influence on the wider business community. This study reveals three distinct areas within OI research: (1) firm‐centric aspects of OI, (2) management of OI networks, and (3) role of users and communities in OI. Thus far, studies have predominantly investigated the firm‐centric aspects of OI, with a particular focus on the role of knowledge, technology, and R&D from the innovating firm's perspective, while the other two areas remain relatively under‐researched. Further gaps in the literature emerge that present avenues for future research, namely to: (1) develop a more comprehensive understanding of OI by including diverse perspectives (users, networks, and communities), (2) direct increased attention to OI strategy formulation and implementation, and (3) enhance focus on customer co‐creation and conceptualize “open service innovation.” Marketing (e.g., service‐dominant logic), organizational behavior (e.g., communities of practice), and management (e.g., dynamic capabilities) offer suitable theoretical lenses and/or concepts to address these gaps.     

Incremental and Radical Innovation in Coopetition—The Role of Absorptive Capacity and Appropriability

This study examines why some firms are better able than others to reap benefits from collaborating with their competitors in innovation. Whereas on the general level, collaborative innovation has been studied widely, and firm‐specific success factors in collaboration between competitors (i.e., coopetition) have not been exhaustively addressed. Earlier literature describes coopetition as a risky but potentially rewarding relationship in which sharing, learning, and protection of knowledge are recognized as the key issues determining the possible benefits and hazards. This study provides evidence of factors related to this, suggesting that the firm's ability to acquire knowledge from external sources (potential absorptive capacity) and to protect its innovations and core knowledge against imitation (appropriability regime) are relevant in increasing the innovation outcomes of collaborating with its competitors. This study also distinguishes between incremental and radical innovations as an outcome of coopetition, and provides differing implications for the two innovation types. The empirical evidence for the study was gathered from a cross‐industry survey conducted on Finnish markets. The data are analyzed with multivariate multiple regression analysis. The results of the analysis suggest that (1) potential absorptive capacity and appropriability regime of the firm both have a positive effect in the pursuit of incremental innovations in coopetition, and (2) in the case of radical innovations, appropriability regime has a positive effect, while the effect of absorptive capacity is not statistically significant. However, the results also indicate that there is a moderating relationship between these variables, in that the potential absorptive capacity is positively associated with creation of radical innovations within high levels of appropriability regime. These results yield important theoretical and managerial implications. As a whole, the results presented in this study provide new evidence on which types of firms can reap success in the challenging task of collaborative innovation with rivals. In the case of incremental innovation, a firm‐level emphasis on knowledge sharing and learning will positively affect the results of coopetition, as will an emphasis on knowledge protection. Thus, when incremental developments are pursued in coopetition, firms should not only seek to exchange knowledge to create value but also remember to secure the firm‐specific core knowledge within the firm's borders to stay competitive. On the other hand, when the firm is pursuing radical innovation with its rivals, the heaviest emphasis should be on protecting its existing core knowledge and also emerging novel innovations and market opportunities. Capabilities in knowledge acquisition are also beneficial in these cases, but the full benefits of knowledge exchange realize only when the firm's knowledge protection mechanisms are sufficiently strong, allowing for safe knowledge exchange between rivals.     

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.     

Innovation patterns and policy implications of ADSL penetration in Korea: A case study

Korea has been leading the world in broadband Internet access services since 1999. Based on an in-depth case analysis of the penetration of asymmetric digital subscriber line (ADSL) in Korea, the present study explores the patterns of decision making and interactions among key innovation actors, such as the government, Internet service providers, equipment providers, and content providers, using a conceptual framework wherein models of innovation systems and decision making under uncertainty are combined. The results revealed that the Korean government played a pivotal role in the creation of the ADSL-based Internet service market by providing a strong vision for this emerging service, building a coalition among various key actors, and stimulating initial market needs and supply of necessary equipment during the early period of higher uncertainty. As the level of uncertainty decreased with market evolution, however, the role of industrial actors and their market competition became more important to the rapid growth of the ADSL market. Based on these findings, policy and managerial implications are proposed.     

The Effects of Mainstream and Emerging Customer Orientations on Radical and Disruptive Innovations

The merits of being customer‐oriented for firm innovation have long been debated. Firms focused on their existing customers have been argued to be less innovative. This paper distinguishes between mainstream and emerging customer orientations and examines their effects on the introduction of disruptive and radical product innovations. Radical product innovations draw on a substantially new technology and could initially be targeted at a mainstream or an emerging market. In contrast, disruptive innovations are initially targeted at an emerging market, and may not involve the newest technology. This paper hypothesizes that mainstream customer orientation is negatively related to disruptive innovation and positively related to radical innovation, and that emerging customer orientation is positively related to disruptive innovation. To test these hypotheses, longitudinal and multiple informant data from senior executives in 128 SBUs of 19 Fortune 200 corporations are analyzed, with technology scanning and willingness to cannibalize as key control variables. The results support the hypotheses, providing evidence for contrasting effects of being oriented to mainstream customers and/or emerging customers on radical and disruptive innovations. Mainstream customer orientation has a positive impact on the introduction of radical innovations but a negative impact on disruptive innovation, while emerging customer orientation has a positive effect on disruptive innovation and is unrelated to radical innovations. Technology scanning is positively related to radical innovation but not to disruptive innovation, supporting the idea that disruptive innovation may not require new technology. In contrast, willingness to cannibalize is positively related to disruptive innovation but not to radical innovation, supporting the idea that radical innovation does not require cannibalization of existing investments. Additionally, mainstream customer orientation is found to have a near‐zero correlation with emerging customer orientation, indicating that the two can coexist and can be pursued simultaneously.     

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

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

Exploring the contribution of innovation intermediaries to the new product development (NPD) process: a typology and an empirical study

In the ‘knowledge economy’ upheld by the European Lisbon strategy, knowledge‐intensive services are considered a key driver for innovation and competitiveness. A category of knowledge‐intensive services that has become of utmost importance in the last few decades is new product development (NPD) services, which interconnect distant knowledge domains with the client firms. In addition to NPD service providers, web‐based innovation intermediaries have started to help innovative firms access dispersed bodies of knowledge. Despite the heterogeneity of their characteristics, however, a clear typology of the strategies used by traditional NPD service providers and web‐based intermediaries to interact with their knowledge sources and with their clients is missing. This typology would be very useful for those firms that are willing to collaborate with innovation intermediaries because it could highlight the typologies of NPD problems different intermediaries are apt to address and the managerial challenges that working with them entails. Developing such a classification framework is the main goal of this paper. The typology proposed in this paper suggests that innovation intermediaries should be distinguished based on the following: (1) the way they access their distributed knowledge sources and (2) the way they deliver value to their clients. By combining these two dimensions, four categories of innovation intermediaries are identified, which are named brokers, mediators, collectors and connectors. A multiple case study analysis involving four innovation intermediaries and 12 of their clients is presented in the paper. The analysis provides exploratory insights into (1) the typologies of NPD problems that each class of intermediaries addresses and (2) the managerial challenges that working with each of them entails. These preliminary findings call for further theoretical and empirical research into the complex interaction among innovation intermediaries, their dispersed sources of knowledge and their clients.