How does co-creation with customers influence innovation performance? The role of connectedness

Abstract

Co-creation with customers is considered to be an important source of competitive advantage. However, prior research has provided mixed results to what extent it increases innovation performance and mainly included the role of formal coordination mechanisms within an organization in it. To contribute to address these gaps in the co-creation literature, we examine how co-creation, conceptualized by relationship learning, influences exploitative and exploratory innovation and how these effects are contingent upon an important informal coordination mechanism: connectedness within a unit. Based on a survey among Dutch care organizations, our findings indicate that relationship learning with customers has an inverted U-shaped effect on exploitative innovation, while its effect on exploratory innovation is positive. Additionally, connectedness flattens the negative effect of higher levels of relationship learning with customers on exploitative innovation, while it has a negative effect on exploratory innovation...