Exploration and exploitation activities for design innovation

Abstract

ABSTRACTThis paper focuses on design innovation: that is, the development of products that are new in terms of products’ appearance, the emotions products evoke, and/or the way they enable customers to express their identity. Although prior research acknowledges the importance of design innovation for product and organisational performance, studies on how to manage design innovation are relatively scarce. The present study attempts to fill this gap by investigating design innovation and its management in terms of the degree of exploration and exploitation activities and designers’ decision freedom when developing new offerings. We collected data on projects in which external design consultancies were actively involved during the development process (n = 83). For each project, we surveyed both the external senior designer and the project manager at the client’s side. Our results suggest that exploration activities enhance design innovativeness, and that design innovativeness results in better market performance. Furthermore, we find that exploitation activities moderate the relation between design innovativeness and process performance: when exploitation activities are high (low), design innovativeness results in better (worse) process performance. In addition, we find that when designers have decision freedom, the positive relation between exploration activities and design innovativeness is enhanced. However, our data also suggest that design innovativeness has a negative (positive) influence on market performance when designers have high (low) levels of decision freedom.