What kind of intimacy is meaningful to you? How intimate interactions foster individuals' sensemaking of innovation

This study examines how intimacy affects individuals' sensemaking of innovation in their organization. Although sensemaking facilitates understanding innovation and envisioning new worldviews, it involves a delicate process of self-disclosure, reflection, personal contact and communication. Intimacy focuses on time-bounded interactions that foster individuals' progressive self-disclosure and perceptions of mutual understanding. Therefore, drawing on intimacy theories, we investigate from a microlevel perspective how temporally bounded intimate interactions foster the meaningfulness of innovation for individuals. As sensemaking processes differ in large-scale radical and incremental innovations, we examine both contexts in a post hoc analysis. Through a field study, we show that different intimacy dynamics (emotional, cognitive and listening) influence meaningfulness perceptions. In particular, we find that the emotional intimacy dynamics positively influence meaningfulness perceptions in the context of radical innovation initiatives, while the cognitive and listening intimacy dynamics positively influence meaningfulness perceptions in the context of incremental innovation initiatives. This study contributes to the sensemaking innovation literature by introducing intimacy as an enabler of sensemaking. Our study also suggests that managers should encourage moments of intimate interaction when pursuing innovation to facilitate sensemaking of change.     

Organizational Design for Enhancing the Impact of Incremental Innovations: A Qualitative Analysis of Innovative Cases in the Context of a Developing Economy

Research literature on innovation in established firms has made a useful distinction between radical innovation and incremental innovation and identified the organizational features associated with each. An implied assumption of many such studies is that radical innovations (compared to incremental) would have a greater impact on the organization as well as the economy. While this is generally true, it is incorrect to assume that all incremental innovations could be uniformly categorized as low‐impact innovations. In a study of 31 cases of innovation implemented in large corporations in India, it was observed that though all of them could be classified as ‘incremental’, their impact varied considerably. A combined index for assessing the impact based on the novelty of the idea, revenues generated/costs saved, dissemination within and outside the organization, extent of commercialization and patentability, was used to categorize the innovations into high impact (HI) and low impact (LI) groups. The analysis of the two groups was qualitative and was based on the detailed case studies prepared through extensive interviews of people involved in the projects. Inferences from the comparative analysis are explained under six sub‐themes that emerged as important in differentiating between low and high impact innovations, namely: individual versus team action; the top management support; the role of the immediate supervisor; rewards, recognition and incentives; focus on core versus non core areas; and documenting and patenting practices. An important factor that enhances the impact of innovations is that organizations should have a deliberate innovation strategy and corresponding organizational structures and processes. Coupled with the innovation strategy, organizations should also develop and implement a value appropriation strategy.     

Exploration and Exploitation within Firms: The Impact of CEOs' Cognitive Style on Incremental and Radical Innovation Performance

Previous studies have provided valuable insights into how environmental and organizational factors may influence levels of explorative and exploitative innovation in firms. At the same time, scholars suggest that individual characteristics, such as cognitive and behavioural inclinations of top executives, might also have significant impact on the ability of a firm to engage in explorative and exploitative activities. The importance of the CEO is of interest, especially in medium‐sized companies, where the CEO appears to be most influential. Very few studies, however, have quantitatively examined the relationship between individual characteristics of top managers and firm‐level exploration and exploitation. Most of the existing research focuses on observable managerial characteristics and the composition of top management teams. Therefore, some important psychological issues may have been bypassed. This study complements prior research in two fundamental ways. First, whereas previous studies focus on extrinsic organizational factors that influence individual exploration and exploitation, we rely on insights from cognitive psychology to hypothesize a relationship between intrinsic factors (i.e., cognitive style) and individuals' tendency for exploration versus exploitation. Second, whereas existing research remains silent on the implications of individual CEO characteristics for firm performance, we hypothesize a relationship between CEOs' tendency for exploration or exploitation and firm‐level innovation performance.     

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.     

Green exploration and exploitation: Capabilities,product advantage,and policy considerations

While sustainability has been identified as a critical driver of innovation, our understanding of green innovation activities interrelationship with capability antecedents and consequences of both green exploration and green exploitation remains unclear. A preliminary framework is developed to guide hypotheses and provide insights into green innovation and its connections with new product advantage from a Resource-Advantage (R-A) perspective. A sample of 197 traditional Chinese manufacturing enterprises conducting green innovation is an input into a structural equation model. The results indicate that green exploitation has direct positive effects on both innovative eco-friendly products' customer satisfaction and differentiation, whereas green exploration only positively impacts product differentiation. Importantly, green exploitation fully mediates the connections between capability antecedents (i.e., technology capability and market capability) and new product advantage (i.e., customer satisfaction and differentiation). By contrast, green exploration only fully mediates capability antecedents on new product differentiation. Our findings shed new light on exploration and exploitation research that shapes green innovation activities. Further, it contributes greater clarity into how manufacturing enterprises translate their technology and market capabilities into new eco-friendly product advantage. Moreover, the results suggest implications for manufacturers to become both “green and competitive” as well as offer policy-makers insights into shaping programs to assist green innovation.     

Developing radical innovation capabilities: Exploring the effects of training employees for creativity and innovation

The resilience of organizations is increasingly dependent on their ability to develop radical innovation capabilities. While the literature documents numerous cases of organizations that already have radical innovation capabilities, the question of organizational devices that can be used to stimulate the emergence of such capabilities remains poorly addressed. Specifically, training for innovation and creativity has been proposed as a means to foster innovation capabilities; however, there has been little empirical evidence concerning the long‐term impacts of such training. To fill this gap, this article aims to document and evaluate the efforts of the research institute of a major Canadian energy company to provide training for innovation and creativity to initiate a radical innovation capability. We rely on a longitudinal study over the span of 18 months, where we observed 128 h of training and conducted 70 semi‐structured interviews with a sample of 40 researchers. We found that training for creativity and innovation has the potential to develop individual creative skills for exploration, to catalyze and federate collective action through common methods and a shared sense of what innovation entails, and to help create a common language and vocabulary between the different groups or divisions of an organization to talk about exploration.     

Ties with government,strategic capability,and organizational ambidexterity: evidence from China’s information communication technology industry

Organizations that are capable of pursuing exploration and exploitative innovation strategies simultaneously have demonstrated superior performance. For information and communication technology (ICT) firms, it is especially critical to achieve such organizational ambidexterity in order to both allocate limited resources and pursue different innovation strategies appropriately. As the ICT industry in China faces higher environmental uncertainty, a less developed institutional framework, and increased power of market competition, we explore the antecedents of ambidexterity conjointly, considering the effects of institutions and organizational capabilities. Building on ambidexterity literature, we develop a capability-building framework to explore firms’ strategic choice-making between exploratory innovation strategy versus exploitation innovation strategy, and their orientation to pursuit one, or both. With survey data from China’s ICT industry, we find that ties with government promote an ambidextrous focus on both types of innovation strategies. In addition, we find that strategic capability partially mediates the main effects of ties with government on both exploratory and exploitative innovation strategies. Implications for organizational ambidexterity in China’s ICT industry are discussed.     

Disruptive information system innovation: the case of internet computing

Abstract. Information system (IS) innovation can be defined as a novel organizational application of digital computer and information communication technologies (ICT). This paper discusses how modalities of applying ICT technologies in their form and scope exhibit radical breaks, which are introduced herein as ‘disruptive IS innovations’. This notion of disruptive IS innovation is developed by drawing upon and extending Swanson's (1994) theory of IS innovation as well as the concept of radical innovation. Disruptive innovations strongly influence the future trajectory of the adoption and use of ICT in organizational contexts and make the trajectory deviate from its expected course. In doing so, these disruptive innovations distinctly define what an IS is and how it is deployed in order to address current and future organizational and managerial prerogatives. Such changes are triggered breakthroughs in the capability of ICT that lead to the revision and expansion of associated cognitive models (frames) of computing. Disruptive IS innovations are those that lead to changes in the application of ICT that are both pervasive and radical. The pervasive nature implies that innovative activity spans all innovation subsets of the quad‐core model of IS innovation introduced herein. Innovation types include: IS use and development processes; application architecture and capability; and base technologies. Radical in nature, disruptive is innovations depart in significant ways from existing alternatives and lead to deviation from expected use and diffusion trajectory. This paper demonstrates the importance of a concept of disruptive IS innovation by investigating how changes triggered by internet computing (Lyytinen et al., 1998) meet the conditions of a disruptive IS innovation defined herein. The analysis also affirms both the pervasive and radical nature of internet computing and explains how internet computing has fundamentally transformed the application portfolio, development practices and IS services over time. The analysis demonstrates that, with the concept of disruptive IS innovation, we can fruitfully analyse ‘long’ waves of ICT evolution – an issue that has largely been overlooked in the IS community. On a theoretical plane, the paper advocates the view that we need to look beyond linear, unidirectional, and atomistic concepts of the diffusion of IS innovations where innovative activity takes places in a linear fashion by oscillating between small technological innovations and small organizational innovations. In contrast, IS innovation can exhibit fundamental discontinuity; we need to theoretically grasp such disruptive moments. The recent influx of innovation, spurred by internet‐based technology, offers one such moment.     

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.     

The Ethical Dilemma of Information Asymmetry in Innovation: Reputation,Investors and Noise in the Innovation Channel

A sufficient and steady stream of innovations is widely seen as a basis for healthy modern economies. Governments divert substantial resources from other purposes in society to increase innovation. Yet the failure rate among innovative SMEs is high, suggesting that resources are wasted. Avoiding such waste is a challenge for both governments and investors, but also raises a question for the innovative company, namely how to build and fund the enterprise on an ethical basis. The dilemma of giving in to temptations to ‘cut corners’ clearly exists, for example to exploit the inevitable asymmetry of information arising in innovation and potentially deploy this in support of misleading claims about specific capabilities and/or the unjustified creation and exploitation of reputation. This is consistent with Olaf Fisscher's finding that entrepreneurs starting new ventures tend to exhibit an inherent bias towards compromising their own values in order to succeed at any cost. When the innoSME's aspirations are unrealistic or the proposed innovations are of marginal value, the ethical issues are broader and extend also to those who are potential financiers. Noting this as a gap in the ethics literature, we argue that the current situation fails to match economic and ethical ideals and that work is needed to develop tools which allow those who provide finance and support for innovation to target it more effectively at those who have a prospect of successfully launching genuine innovations and thus reduce the ‘noise’ in the innovation field.     

The role of information governance in big data analytics driven innovation

The age of big data analytics is now here, with companies increasingly investing in big data initiatives to foster innovation and outperform competition. Nevertheless, while researchers and practitioners started to examine the shifts that these technologies entail and their overall business value, it is still unclear whether and under what conditions they drive innovation. To address this gap, this study draws on the resource-based view (RBV) of the firm and information governance theory to explore the interplay between a firm’s big data analytics capabilities (BDACs) and their information governance practices in shaping innovation capabilities. We argue that a firm’s BDAC helps enhance two distinct types of innovative capabilities, incremental and radical capabilities, and that information governance positively moderates this relationship. To examine our research model, we analyzed survey data collected from 175 IT and business managers. Results from partial least squares structural equation modelling analysis reveal that BDACs have a positive and significant effect on both incremental and radical innovative capabilities. Our analysis also highlights the important role of information governance, as it positively moderates the relationship between BDAC’s and a firm’s radical innovative capability, while there is a nonsignificant moderating effect for incremental innovation capabilities. Finally, we examine the effect of environmental uncertainty conditions in our model and find that information governance and BDACs have amplified effects under conditions of high environmental dynamism.     

Inter-organizational innovation and cloud computing

Firms are increasingly shifting from the ‘closed’ innovation paradigm, in which their innovation design and implementation activities were based on their own internal knowledge resources, skills and production facilities, towards the inter-organizational ‘open’ innovation paradigm, which is based to a significant degree on collaboration with other organizations, aiming at the exploitation of external knowledge resources, skills and production facilities as well. This paper investigates empirically the effects of firm’s inter-organizational collaboration for the design and implementation of innovations, and also use of ICT for supporting this collaboration, on firm’s propensity to adopt cloud computing (CC), and in this way it examines in an ‘objective’ manner to what extent firms regard CC as a cost-effective means of supporting inter-organizational collaboration for the design and implementation of innovation. Our study is based on a dataset collected in the e-Business Survey of the European Commission from 676 European firms from the glass, ceramics and cement manufacturing sectors. It has been concluded that firms of these sectors regard CC as a cost-effective means of supporting collaboration with other firms for the design of innovations in their products, services and processes, and also of reducing the costs and increasing the capabilities and flexibility of already existing electronic support of inter-organizational innovation design collaboration. Furthermore, our results indicate that firms find CC useful for the reduction of the costs and the increase of the capabilities and flexibility of their existing electronic support of the complex operations required for the inter-organizational implementation of innovations.     

Core capabilities for practitioners in achieving e-business innovation

The rapid advance of information technology and its penetration into the core elements of the business model and organizational structures is enabling profound and significant organizational changes. In such a dynamic environment, firms must be able to continually evolve their capabilities to facilitate electronic business (e-business) innovation. Yet, current research pays little attention to the core capabilities that contribute to e-business innovation in general. This research seeks to identify the core capabilities that are necessary for achieving e-business innovation. We propose a tri-core model of e-business innovation adopted from Swanson (1994), which knits together three cores: business technology, the business model and the value network. We use this model initially to specify the functional areas of the capabilities. Based on data collected through an intensive literature review and an exploratory Delphi study, thirteen essential capabilities were considered as the keys to e-business innovation exploitation and exploration. Firms can facilitate their e-business solutions over time through the successful development of these capabilities. These findings provide great insights for practitioners and scholars alike to better understand the core capabilities for achieving e-business innovation. It can also help practitioners form a template of the requisite in-house management for identifying knowledge gaps and developing action plans.     

Building contextual ambidexterity in a software company to improve firm-level coordination

Software organizations increasingly face contradictory strategic choices as they develop customized and packaged solutions for the market. They need to improve efficiency of development processes while at the same time adapting to emerging customer needs; they need to exploit software products in relation to existing customers while simultaneously exploring new technology and market opportunities; and, they need to consider both incremental and radical innovations. While the integration of such opposing strategies requires software organizations to become ambidextrous, there is limited actionable advice on how managers can develop such capability. Against this backdrop, we report from a two-year action research study into a small software firm, TelSoft. Based on Pettigrew's contextualist inquiry, we develop a framework that integrates existing theory on contextual ambidexterity with a generic process for improving software organizations, and we apply this framework to analyze how TelSoft improved its coordination of products, projects, and innovation efforts. As a result, we offer principles for how software managers can build ambidextrous capability to improve firm-level coordination.     

Embedded (Lead) Users as Catalysts to Product Diffusion

Firms can harness social user networks not only for ideation, but also to accelerate and facilitate diffusion of new product introductions. They select individuals whose own product adoptions and opinions influence adoption decisions of others. In this paper we transfer this rationale to firm employees. We focus on ‘embedded users’ who are employees of a firm, but at the same time users of the firm's products. We aim to find out if their access to user networks, use experience and lead userness impact their opinion leadership and domain‐specific innovativeness. We also show how cognitive empathy towards external users is a mechanism to explain these relationships. Drawing on the user innovation and consumer behaviour literature, we derive and test eight hypotheses on a sample of 54 firm employees in gaming hardware firms. We find that lead userness is positively related to domain‐specific innovativeness and opinion leadership, but use experience only to the former. Cognitive empathy mediates all relationships in our study. To facilitate embedded users' tendency to act as opinion leaders and to adopt new products, managers should encourage their employees to use the firm's products to build use experience and thus develop cognitive empathy towards external users.     

Embracing Innovation as Strategy: Corporate Venturing,Competence Building and Corporate Strategy Making

Large diversified companies companies do not have good track records in managing discontinuous change and in turning breakthrough innovations into long‐term growth and profit engines. Their existing technological capabilities tend to facilitate cognitive inertia, path dependency and low levels of experimentation. However, some companies seem to find a dynamic balance between exploitation and exploration, between path creation and path dependence. We focus on how these established firms manage that continuous change process, and more specifically we seek to answer how corporate strategy, competence building and new business development interact in rejuvenating a company. Furthermore, we investigate how these concepts are at play on an operational level by looking at corporate practices in large companies that have a track record of successful strategic rejuvenation.     

Task difficulty and team diversity on team creativity: Multi-agent simulation approach

Organizational structures are complex and vary according to sector, field, and type of business or service. In order to be effective, an organization needs to tailor its activities to the environment in which is it located. Based on contingency perspectives, this study is focused on investigating effective ways to design team diversity and maximize team creativity according to task difficulty levels. Considering the organizational team member as an agent, the study employed a multi-agent simulation method to understand the progress of creative manifestation, by observing the exploration and exploitation activity of team members over certain periods of time. The results first reveal that the level of team diversity influences the amount of creativity manifested by team members’ activities, such as exploration and exploitation. Second, managers have to properly facilitate either exploration or exploitation depending on task difficulty by striking a balance between them.     

Employee acceptance of disruptive service innovations at the frontline: The role of collective sensemaking processes

Acceptance of service innovation by frontline employees is a challenging issue, especially if such innovations have the potential to disrupt existing value creation models and individual competencies. Disruptive service innovations are often (1) characterized by a high degree of innovativeness related to significant changes in technology and in the market and (2) may be introduced by technology manufacturers as new service market entrants that cause a competitive threat to the existing service provision. We argue that such innovations challenge frontline employees' focus on routines and standardized service operating procedures. The perceived threat and resulting high levels of uncertainty may inhibit innovation acceptance. Our study follows a collective sensemaking perspective, paying special attention to investigating the moderating role of (1) the exchange of operational information within a workgroup and (2) a firm's entrepreneurial orientation. Whereas the former may increase frontline employees' preference for incremental improvements, the latter may help to increase the acceptance level of potentially more disruptive innovations. We test our theoretically derived hypotheses with an experimental vignette study of 671 frontline employees in the field of audiology, a health care market particularly affected by both more radical and market entrant innovations. Results show that a high degree of innovativeness has a negative effect on innovation acceptance. Frontline employees accept radical innovations less readily than incremental innovations. A competitive threat from new technology manufacturers in the supply chain does not lead to a lower innovation acceptance level. The moderation results indicate significant effects of both information exchange and entrepreneurial orientation. Intensive information exchange within the workgroup strengthens the negative relationship between the degree of innovativeness and innovation acceptance. In contrast, a high degree of entrepreneurial orientation weakens the negative relationship between a competitive threat and innovation acceptance.     

Organizational readiness for digital innovation: Development and empirical calibration of a construct

The advent and proliferation of digital technologies purport to increase the innovation potential of most organizations. However, approximately 90% of new ideas never convert to new product or service deliveries because of the lack of organizational readiness. This paper conceptualizes a formative multidimensional construct to gauge organizational readiness for digital innovations. Such a construct would facilitate cumulative research on the role of digital innovation, while benchmarking to track organizational readiness. The proposed construct includes 21 measures, categorized under seven subconstructs: resource readiness, IT readiness, cognitive readiness, partnership readiness, innovation valance, cultural readiness, and strategic readiness.     

The dual role of IT capabilities in the development of digital products and services

Past research on the business value of information technologies (IT) has demonstrated the positive contribution of IT capabilities (IT-C) to product innovation performance. However, with the advent of digital technologies, a new kind of product innovations gained importance: digital product and service innovations (DPI). As a consequence of their idiosyncratic characteristics, the usefulness and validity of existing product innovation management concepts cannot be transferred to the context of DPI without further ado. Accordingly, this study reinvestigates the role of IT-C in the specific context of DPI. Therefore, we begin with a differentiation of DPI from traditional, non-digital product innovation. Then, we propose that IT-C affect the performance of DPI projects via two paths. First, based on the notion that DPI rely on the use of innovative IT, we assume that IT-C directly impact DPI performance. Second, following prior research that has argued that the performance contribution of IT-C is mediated by other organizational intermediaries, we assume that IT-C also indirectly contribute to DPI performance through their positive influence on other organizational capabilities. One such organizational capability that mediates the influence of IT-C on DPI performance is a firm’s DPI capabilities (DPI-C). DPI-C allow firms to deploy their digital resources for DPI purposes and, thus, are an important antecedent for DPI performance. To test our assumptions, we use partial least squares–structural equation modeling technique and analyze survey data collected from DPI projects across different industries in Germany, Austria, and Switzerland.