HOW TO BENEFIT FROM CROSS-INDUSTRY INNOVATION? A BEST PRACTICE CASE

Abstract

Cross-industry innovation is becoming more relevant for firms, as this approach often results in radical innovations. However, firms can only benefit from cross-industry innovation if they are open to external knowledge sources and understand how to explore, transform, and exploit cross-industry knowledge. Firms must establish certain structures and processes to facilitate and operationalise organisational learning across industry boundaries. Since Henkel, an international leader in industrial and consumer business, has systematically applied cross-industry innovation and created numerous radical innovations through this approach, I used this firm as a best practice case for analysis. I applied a mixed methods approach to learn more about Henkel's organisational learning process and its subsequent benefits. Based on quantitative data, I conducted a partial least squares structural equation modelling (PLS-SEM) analysis, including an importance–performance matrix analysis (IPMA), and combined these results with qualitative interview data and corporate reports. My results show how Henkel has successfully systemised its organisational learning process and reveal how exploratory, transformative, and exploitative learning can enhance a firm's outcome through cross-industry innovation.