Divergent thinking and market visioning competence: An early front-end radical innovation success typology

Abstract

Achieving superior and longer-term rewards associated with the pursuit of radical innovation requires that firms have a market vision (MV), or a clear and specific image of a desired and important product-market for a new technology, and are able to attract human and investment capital (AAC) in order to carry out and finance these risky ventures. To achieve these outcomes, firms need to build a market visioning competence (MVC)—that is, an ability to link advanced technologies to market opportunities of the future. Developing an MVC entails the efforts of both the individuals who are part of the innovation process and the organization itself. Four components comprise the MVC equation: the individual-level capabilities of “networking” and “idea-driving,” and the organization-level capabilities of “market learning tools” and “proactive market orientation.” In this article, we focus on the conditions within the firm that need to be created and fostered to ensure an effective MVC. The antecedents of interest involve the capacity for divergent thinking—that is, the ability to go beyond the boundaries of established thought—and include four individual- and two organization-level constructs. Individual divergent thinking skills include (1) attitude of openness to new ideas; (2) ability to create, combine and help others to generate new ideas; (3) ability to move efficiently from divergent to convergent thinking; and (4) a passion for cognitive challenges. Two organization-level antecedents include: an innovation culture of (5) encouragement of idea freedom and (6) encouragement of diversity. Based on a survey of 198 high-tech firms in the North American nanotechnology sector, cluster analysis was used to develop a typology of scenarios that provides a holistic view of what distinguishes firms in terms of MVC, their ability to create and manage individual- and organization-level divergent thinking approaches, as well as the outcomes of MV and AAC. Three distinct profiles emerge. The “balanced MVC profile” rates high on all factors—components, antecedents and outcomes—and provides a “model” for managers concerned with developing an effective MVC. Cluster #2, labeled “need MVC system/culture,” while having the most important element in place—the individuals who think in dynamic ways and connect firms with totally new opportunities—require both market learning systems and a more proactive market orientation, and in particular, an organization culture where management encourages divergent thinking. Cluster #3 (“lack MVC basics”) firms have invested in MVC-related infrastructure, but this provides an anemic context when the key elements of individual innovativeness in terms of the ability to think in radically new ways and an organization culture that encourages this are lacking. Based on the MVC concepts, relationships discussed and the empirical evidence, this article offers insights for researchers in terms of theory and scale development, and for managers charged with radical innovation in terms of the actions needed to enhance MVC and, ultimately, NPD performance.