Knowledge Management Practices for Stimulating Incremental and Radical Product Innovation

Abstract

Designing and implementing an innovation strategy that embraces both incremental and radical product innovation is complex and insights in how to successfully do so are incomplete. While it is generally accepted that firms can improve their overall innovation performance by stimulating knowledge transfer and creation among employees through the implementation of knowledge management practices, there is little evidence on the impact of such practices on incremental and radical innovation in particular. A sample of 822 Flemish manufacturing and service companies provides evidence that incentives oriented at the transfer and creation of related versus unrelated knowledge stimulate incremental versus radical innovation performance respectively. Cross-functional teams, which aim at the transfer and creation of unrelated knowledge, are only beneficial for the development of radical product innovations. Financial incentives, which induce related knowledge transfer and creation, improve incremental innovation performance. Brainstorming enhances both incremental and radical product innovation. These results imply that knowledge management practices should be tailored to the innovation strategy of the firm, whether this encompasses incremental innovation, radical innovation, or a combination of both.