A great technology that failed: Barriers to radical process innovation

Abstract

Improving a firm’s technological capabilities through implementing sustaining innovations (to maintain ‘business as usual’) is a pre-requisite for maintaining the firm’s value. Yet, this path of exploiting the current capabilities is unlikely to stimulate shareholder wealth creation through growth in firm market capitalization. To achieve growth, established companies must capitalize on the successful introduction of radical innovations. While a radical innovation can be embedded in new products or new processes of production, so far, most studies have concentrated predominantly on the product aspect. We know relatively little about challenges for successful implementation of radical process innovation projects. This study addresses this gap using a critical case study of an established company in a process-oriented industry (oil sector), which was not able to commercialize a promising radical technological innovation (technical feasibility coupled with substantive cost savings potential). We identify and describe the challenges that the company faced, classifying them in four major groups: (1) resource mobilization dynamics shortcomings, (2) piloting strategy failure, (3) innovation leadership failure, and (4) shareholders’ expectations management failure. The lessons learned from the case study extend the scholarly and practical understanding of radical process innovation.