Internet computing as a disruptive information technology innovation: the role of strong order effects1

A cross‐sector survey study was conducted between 2004 and 2005 among 121 software firms that adopted internet computing for the presence of strong order effects, which explain how, why and in which order radical innovations in information system (IS) are adopted. The following strong order effects were detected: (1) the amount of base innovations positively and directly influenced the amount of service innovation and the amount of process innovation, while the amount of service innovation partially mediates the impact of base innovation on process innovation; (2) the radicalness of base innovations directly and positively influences the radicalness of service innovation, while the impact of the radicalness of the base innovation on the radicalness of process innovations is fully mediated by the radicalness of service innovation; (3) the predominant sequence of initial adoption of radical information technology innovations is first in base innovations, followed by service innovations and finally by process innovations. Our study helps to better understand how and why radical innovations are adopted in ensembles by software firms. In consequence, software organizations should orchestrate flexible innovation strategies that recognize that radical innovations are interconnected and heterogeneous.     

Which types of firm use collaborative innovative spaces?

Collaborative innovation spaces (CIS) can bring together multiple actors to enhance creativity, collaboration and knowledge exchange, sometimes leading to innovation. In this paper, we suggest that CIS can be categorized into three broad types (internal to the firm, external and virtual) and that each type is related to innovation processes, knowledge-sourcing and geographic context in specific ways. Our results, based on an original firm-level survey, reveal that there is heterogeneity with respect to firm attributes and innovation activities associated with different types of CIS. In particular, whilst innovation is associated with the use of CIS in general, radical and technological innovations are more strongly associated with internal CIS, whereas smaller firms tend to use virtual CIS. External CIS, whilst not associated with technological innovation, are associated with high-tech firms. CIS use does not vary across geographic context. These results emphasize the importance of in-person, internal, CIS for radical and technological innovation and the need to distinguish between different types of CIS in order to understand how each is associated with different types of innovation, knowledge-sourcing and firm.     

The Front End of Radical Innovation: A Case Study of Idea and Concept Development at Prime Group

A firm's ability to develop radical innovation is heavily contingent on the front‐end phases where ideas and concepts are created, yet few empirical studies provide detailed insights into radical idea and concept development. Using literature on problem finding and problem solving, we explore how radically new ideas and concepts emerge, and outline the process by which they are created. Based on multiple case studies of five completed and two ongoing projects conducted by a highly innovative consultancy firm, Prime Group, the article proposes a six‐step process for radical idea and concept development. The insights provide theoretical implications and advice for how firms can increase novelty and success rates of emergent radical ideas and concepts.     

Organizational culture and radical innovation: Does innovative behavior mediate this relationship?

Product innovation, in particular radical product innovation, is considered to have a positive effect on company success. As a consequence, there is growing interest in the literature on how to foster radical product innovation. Organizational culture is frequently cited as an antecedent. The underlying assumption is that the culture facilitates radical innovation by encouraging employees' innovative behavior. However, empirical research on the mediating role of employees' innovative behavior in the relation between organizational culture and radical product innovation is scarce. The purpose of this paper is to analyze this mediating role using a sample of Spanish firms. Findings show that adhocracy and market cultures are positively related with the degree of radicalness of product innovation and that employees' innovative behavior mediates that relation, but only in the case of the adhocracy culture.     

Strategic aspirations for net-enabled business

The net-enabled business innovation cycle (NEBIC) model describes a path by which firms employ dynamic capabilities to leverage net-enablement. Some firms strategically aspire to follow this path in a more gradual fashion striving for business process improvements (incremental strategy) while others aspire to exploit rapidly net-enablement to achieve business innovation (leapfrogging strategy) that offers completely new market opportunities. Study results suggest that firms adopt accelerated leapfrogging strategies when faced with more severe external competitive pressures. This combined with strong leadership, a propensity to embrace internal user involvement, IT maturity, and an accommodating firm structure, as indicated by path accelerators, result in higher aspirations for business innovation. Firms shying away from leapfrogging strategies tend to protect existing customers and employees from more radical changes. These firms sometimes lacked the internal capability to enact more aggressive strategies and thus had to acquire the necessary capabilities before aspiring for business innovation.     

Design‐Driven Innovation in Retailing: An Empirical Examination of New Services in Car Dealership

The paper focuses on innovation in the automotive retail industry. Innovation in service has been acknowledged as a critical source of competitive advantage and retail firms are looking for innovations that can increase their competitiveness. This notwithstanding, there are no studies that focus on whether and how design‐driven innovation (DDI) can be pursued by retail firms as an innovation strategy. In the attempt to close this gap in our understanding of innovation in retail firms, this paper discusses 104 examples of strategic innovation projects identified by automotive retail firms which operate in the UK, Germany, Italy, Serbia and Spain. The exploratory empirical analysis shows that a certain number of automotive retail firms (although not the majority) choose DDI as a strategy embodied in strategic innovation projects designed to achieve superior performance. Moreover, by following the typology proposed by Sawhney and colleagues, the analysis suggests that these projects are elicited by spatial reconfiguration and expansion, whereas temporal innovation does not seem to provide a fertile ground for DDI.     

Alliance Formation in the Automobile Sector during an Era of Ferment

When developing radical innovations, firms often form collaborative relationships with external organizations to have access to additional resources. Therefore, alliance formation is influential in innovation and plays a key role in industrial change. However, most studies have not distinguished between individual alliances and instead aggregated collaborations when analysing firm external R&D efforts. Our research sought to explore manufacturer use of alliances to acquire expertise in key knowledge areas as they developed and commercialized electric vehicles. Alliances from 24 manufacturers were analysed according to type (explorative or exploitative), key knowledge area, and firm type (incumbent or start‐up). The results show distinct alliance formation patterns in different key knowledge areas. Heterogeneity of alliance formation in key knowledge areas indicates that developing a radical innovation is not as simple as acquiring new expertise. Rather it is a complex process where firms seek to develop their own knowledge base and use the expertise of other companies. This likely stems from a desire to develop technologies connected to core business models. Analysing alliance formation according to key knowledge area provides a rich account of how firms approach knowledge acquisition as they develop radical innovations during a time of industrial uncertainty.     

Radical Innovation with Limited Resources in High‐Turbulent Markets: The Role of Lean Innovation Capability

How do firms radically innovate with limited resources in high‐turbulent environments? We examine this question via in‐depth comparative case studies of ten start‐up firms in diverse high‐turbulent markets. Evidence shows that the perceived value of resources depends on two contextual factors: market type and business model type. More interestingly, firms that see resource limitation as an enabler rather than an inhibitor seem to have a distinct capability that we call lean innovation capability. It is defined as a distinct capability that reflects a firm's ability to experiment with ideas that meet core customer needs by constantly iterating the initial offering with the purpose of validating the learning through continuous market feedback to achieve sustainable performance. The three main qualities of these companies are (1) adopting abductive reasoning, (2) embracing a validity‐driven approach, and (3) operating in the overlapping spaces of fundamental customer needs, business viability and technological feasibility. Lean firms adopt design‐thinking methodology and act like bricoleurs, such as make‐do by applying combinations of the available resources through rapid prototyping to new problems and opportunities in an experimental way. Briefly, lean innovation capability enables firms to manage limited resources by reconfiguring and reallocating existing resources, and, thereby, helps empower resource‐limited radical innovation.     

Exploring Relationships among Proactiveness,Risk‐Taking and Innovation Output in Family and Non‐Family Firms

In an empirical investigation of 532 Finnish firms, and using the entrepreneurial orientation (EO) literature to frame our arguments, we demonstrate that relationships among proactivity, risk‐taking and innovation output differ in family and non‐family firms. Specifically, we find evidence that risk‐taking does not affect innovation output in family firms, whereas in non‐family firms, innovation output is increased through risk‐taking. Also, proactive family firms influence their innovation output more positively than proactive non‐family firms do. This study adds important new insights to the growing knowledge of EO, which are discussed in the following for both academic and business audiences.     

Using online textual data,principal component analysis and artificial neural networks to study business and innovation practices in technology-driven firms

In this paper we introduce a method that combines principal component analysis, correlation analysis, K-means clustering and self organizing maps for the quantitative semantic analysis of textual data focusing on the relationship between firms’ co-creation activities, the perception of their innovation and the articulation of the attributes of their product-enabled services. Principal component analysis was used to identify the components of firms’ value co-creation activities and service value attributes; correlation analysis was used to examine the relationship between the degree of involvement in specific co-creation activities, the online articulation of firms’ service value attributes and the perception of their innovativeness. K-means and self organizing map (SOM) are used to cluster firms with regards to their involvement in co-creation and new service development, and, additionally, as complementary tools for studying the relationship between co-creation and new service development.The results show that, first, there is a statistically significant relationship between firms’ degree of involvement in co-creation activities and the degree of articulation of their service value attributes; second, the relationship should be considered within the context of firms’ innovation activities; third, OS Software-driven firms are the best example in terms of co-creation and new product-enabled service development, i.e. the collaborative principles built in their customer participation platforms should be adopted by other (non-software) firms interested in enhancing their innovation capacity through involvement in co-creation and new product-enabled service development.     

Business intelligence and analytics use,innovation ambidexterity,and firm performance: A dynamic capabilities perspective

To survive in a dynamic and hyper-competitive business environment, firms are compelled to simultaneously introduce incremental and radical innovations. While it is recognised that business intelligence and analytics (BI&A) can support innovation and provide organisational value, the literature provides a limited understanding of its impact on balancing different innovation activities and ensuring performance gains. In this study, we examine the relationship between BI&A use, innovation ambidexterity, and firm performance by relying on the process theory of IS value creation as well as the dynamic capabilities perspective. We test our model using data collected from medium- and large-sized firms in Slovenia, applying partial least squares modelling. The results support the notion that BI&A use is positively associated with successful balancing between explorative and exploitative innovation activities, which in turn enhances firm performance. Our results also indicate that innovation ambidexterity is enhanced in two ways: indirectly through interaction with the firm’s absorptive capacity, and directly by increasing the possibilities of faster experimentation with offerings of products or services and improved predictability of the value of new products or services.     

Continuous and Discontinuous Innovation: Overcoming the Innovator Dilemma

Challenged by competition pressures and unprecedented pace of change, firms can no longer choose whether to concentrate on the needs of today's customers or on the anticipation of those of tomorrow: they must be excellent in both. This requires managing two related balancing acts: on the one side, being excellent in both exploitation and exploration of their capabilities and, on the other side, being excellent in managing both incremental and radical innovation. These balances are critical since exploitation and exploration, on the one side, and incremental and radical innovation, on the other, require different approaches that have traditionally been considered difficult to combine within the same organization. Working on evidence and discussion from the 7th CINet Conference held in Lucca (Italy) in 2006, this Special Section is aimed at contributing to theory and practice on these two complex balancing acts that today represent a hot issue in innovation management.     

Innovation in IT firms: An investigation of intramural and extramural R&D activities and their impact

This research examines how intramural activities that are developed internally within the firm and extramural activities that are undertaken in collaboration with an external partner lead to product and process innovation. We use hierarchical regression analysis on data collected for European and Chinese firms and determine that intramural activities have a profound positive impact on process innovation, whereas their impact on product innovation is positive only for large firms. We discover that process innovation positively impacts product innovation but not vice versa. The results are important for managers who guide the R&D activities of a firm to product and process innovation.     

Conceptualizing organizational innovation: The case of the Brazilian software industry

This paper presents and tests a conceptual model that explains the innovation practices and innovation outcomes in Brazilian software firms. In terms of internal and external innovation capabilities, the ability to manage the relationship between people and their organizational contexts plays an important role in organizational innovation. Based on these results, we propose that the disparities between software firms in building organizational innovation can be attributed, in part, to differences in their internal capabilities. The paper aims at encouraging and supporting managers to develop internal capabilities as a means of effectively leveraging the internally and externally distributed knowledge essential to innovation development.     

Neural Networks to model the innovativeness perception of co-creative firms

Value co-creation is an emerging business, marketing and innovation paradigm describing the firms aptitude to adopt practices enabling their customers to become active participants in the design and development of personalised products, services and experiences. The main objective of our contribution is to make a quantitative analysis in order to assess the relationship between value co-creation and innovation in technology-driven firms: we are using Artificial Neural Network (ANN) to investigate the relationship between value co-creation and innovativeness, and Self Organising Map (SOM) models to cluster firms in terms of their degree of involvement in co-creation and innovativeness. Results from the ANN show that a strong relationship exists between value co-creation and innovativeness; furthermore, SOM are well performing in identifying cluster of firms that are more involved in co-creation values. Our work makes a methodological contribution by adopting and validating a combination of techniques that is able to address complexity and emergence in value co-creation systems.     

An integrated model of innovation drivers for smaller software firms

High-technology innovation is essential for economic development in industrialized societies. However, innovation practice in smaller software companies has received little attention. We derive software innovation drivers and outputs from a fragmented literature and analyze their empirical relevance using qualitative data from 25 in-depth interviews with software executives in the Silicon Fen. Repeating patterns in the data set revealed through content analysis show that the most important innovation drivers for smaller software firms are external knowledge, leadership and team processes. Specialized innovation tools and techniques are hardly used. We develop a model of software innovation drivers, together with explorative theoretical propositions.     

How Award‐Winning SMEs Manage the Barriers to Innovation

Much attention has been focused on increasing the so‐called ‘innovation quotient’ of national manufacturing economies. In particular, there has been widespread interest in revealing and examining those barriers that impede innovation, the suggestion being that the removal of such barriers constitutes a prerequisite for successful innovation. This study reports on the experiences of eight firms who had received a UK Design Council ‘millennium product’ award for ‘groundbreaking’ innovation. The implication of the award is that these firms should have overcome any barriers they faced and therefore act as exemplars of how to manage innovative new product development. However, the research shows that the firms were as likely to ignore barriers as they were to address them. Living with a barrier as an alternative to overcoming it is clearly an acceptable strategy for a number of these award winners. The study reports on how the firms managed the various barriers that they encountered.     

‘Orchestrating’ sustainable crowdsourcing: A characterisation of solver brokerages

Exemplars of open innovation have revealed that intellectual property (IP) need not only be sourced through existing hierarchical or market relationships. Rather IP can be acquired from individuals and firms with whom an organization has no prior relationship. In such cases, an intermediary, operating as an innovation exchange or brokerage, frequently facilitates the development and acquisition of IP. This paper examines one type of innovation intermediary, the ‘Solver Brokerage,’ which enables innovation exchanges between organizations and unknown external firms and individuals (i.e. a crowdsourcing process). While the commercial success of Solver Brokerages indicates the potency of arguments concerning the potential of crowdsourcing, little is known about the operation of such brokerages or the crowdsourcing processes that they enable. This paper examines extant research on innovation networks, crowdsourcing, and electronic marketplaces to identify three processes (knowledge mobility, appropriability and stability) that we argue are necessary to ‘orchestrate’ crowdsourcing. Using a field study of four Solver Brokerages, an innovation seeking organization, as well as 15 innovation providers (i.e. members of the ‘crowd’), the paper illustrates the ways in which the three orchestration processes are enhanced in Solver Brokerages. It reveals that while knowledge mobility and appropriability processes can be enhanced by activities under the control of the Solver Brokerage, stability is largely determined by innovation seeking organizations and the innovation providers. The paper concludes that broker-provided value-added ‘orchestration’ services need to enable knowledge mobility and appropriability, and to ensure that ‘unsuccessful’ innovation seekers and providers appropriate sufficient value to participate again.     

The Impact of Technological Opportunities and Innovative Capabilities on Firms’ Output Innovation

In this study, we analyse the effect that external sources of knowledge and absorptive capacity exert on a firm's output innovation. In addition, we examine the moderating influence of absorptive capacity on the effect that technological opportunities have on output innovation. Empirical research was carried out on a sample of 91 Spanish firms from the ceramic tile industry. Absorptive capacity is operationalized by ‘systematic or continuous R&D’ and output innovation by ‘percentage of sales from new products’. Technological opportunities are divided into several industry and non‐industry related variables. Our results show the positive effect that both the industry's technological opportunities and a systematic approach to R&D exert on output innovation. Moreover, firms with a systematic approach to R&D usually achieve higher innovation output than firms which do not follow this approach. The innovation results of this second group decrease as a result of embedded technology acquisition.     

The Challenges of Using Design Thinking in Industry – Experiences from Five Large Firms

Design Thinking (DT) is advocated as a user‐centred approach to innovation, based on the way designers think and work. Despite being increasingly promoted as an approach to innovation, there is still little evidence of successful impact. Rather, indications suggest that firms find implementation challenging. The purpose of this paper is to analyse challenges of using DT in light of literature on innovation barriers, in order to discuss whether there is something unique about DT as a concept that makes it particularly challenging to use. The paper is based on an interview study of five large firms that all have at least five years of experience of using DT. The analysis shows that several of the perceived challenges can be linked to known barriers to innovation. However, other challenges have not previously been described in the innovation literature, and the paper suggests that there are some unique aspects of DT that makes it particularly challenging for firms to integrate it in innovation work. These are related to its core themes: user focus, problem framing, experimentation, visualization and diversity. Additionally, the paper contributes with an empirically based categorization of challenges that managers will find useful if they want to implement design thinking in their organizations.