Radical Innovation Project Research Articles

Enabling Creative Destruction: A View from the Perspective of Managerial Control

Creative destruction originates in successful development and launch of a radically different product/process/market configuration, or radical innovation, by a company. A radical innovation can materialize in a business firm only if autonomy is extended to organizational personnel, towards experimentation with heterogeneous knowledge from outside the organization. In this article, I inquire into conditions that enable the materialization of radical innovation—an important precursor to creative destruction—while affording top management the wherewithal to stay in control. An extended version of March’s computational model suggests that when a radical innovation project initiates with a low level of collective human capital with respect to the new process–product–market domain being considered and the project personnel are provided a certain extent of autonomy to experiment in the new domain, top management can detect a change to organizational outcomes by changing the rate of exploitation. Thereby top management obtains a feeling of being in control of proceedings. This situation is, therefore, conducive to the materialization of creative destruction. The indirect method of control to nurture radical innovation—demonstrated in this research—constitutes an improvement over the autonomy-averse ‘agency’ and ‘transaction cost economics’ approaches that are sub-optimal in open systems characterizing radical innovation efforts in corporate venturing.

Who Should I Listen to in Radical Innovation Project Choice? Investigating CEO Decision Making

Who Should I Listen to in Radical Innovation Project Choice? Investigating CEO Decision Making

Selecting Innovation Projects: Do Middle and Senior Managers Differ When It Comes to Radical Innovation?

AbstractDrawing on the attention‐based view, we theorize about the differences in middle and senior managers' choices to pursue innovation projects. We test our hypotheses in an experimental study examining the decision‐making processes of 180 senior and middle managers in selecting, or not, 2880 innovation projects. We find that managers differ in how they select innovation projects in general, and this difference becomes even more salient when such selections involve radical innovation. Specifically, when considering a radical innovation project, middle managers place more value on innovation characteristics required to complete the project, such as social capital and internal knowledge resources. In comparison, senior managers are concerned only with external knowledge resources, which can benefit radical innovation. Our study highlights the need to understand the role of middle managers, who frequently lead the implementation of innovation projects, and provides a theoretical underpinning for the differences in middle and senior managers' decision‐making.

Innovation drift: the influence of digital artefacts on organizing for innovation

ABSTRACT The literature on digital innovation often relies on examples of radical, even paradigm-changing novelties. In order to develop such radical innovations, organizational separation of innovation efforts has been advocated by many as an effective strategy. We have conducted a longitudinal case study of a radical innovation project at a born-digital company. The company established a separate organization to develop radical innovation, but over time, the innovation drifted from radical to incremental. Even keeping the organization separate proved difficult. In explaining the events in the case study, we follow the argument that new theories of digital innovation can be developed with reference to the specific properties of digital artefacts. We outline how properties like editability and distributability may contribute to innovation drift, i.e., the proclivity of radical innovation ambitions to gradually drift towards more incremental realizations. Due to their nature, digital artefacts can diffuse through the organization and, thus, pose a challenge to the effectiveness of organizational separation as a strategy for innovation. With this work, we contribute to the literature on digital innovation by responding to calls for research on new theories of digital innovation and the demand for greater appreciation of digital materiality in organizing. We also challenge the prevailing view of digital innovations as radical and aim to open a debate on the possibility and considerations surrounding incremental digital innovations.

Designing coopetition for radical innovation: An experimental study of managers' preferences for developing self-driving electric cars

The major premise of this study is that managers purposefully shape the business context for radical innovation. Particularly, the strategic option of developing radical innovation in collaboration with direct competitors offers opportunities otherwise unattainable. We tap into its cognitive underpinnings by running an experimental study of coopetition design for radical innovation. We have collected 5760 binary decisions from a sample of 160 managers. Their indications are used to run a choice-based conjoint analysis in order to identify utilities attributed to coopetition-shaping decisions in a radical innovation project (using a scenario of self-driving/electric cars produced by VW, Daimler or Tesla). We use Hierarchical Bayes Multinomial Logit Regression to test a set of four hypotheses, each addressing a different coopetition factor to unveil manager's preferences in coopetition design for radical innovation. Our findings pinpoint a clear preference for network coopetition, using formal governance, and being based on intensive knowledge sharing. Contrary to prior literature, market uncertainty does not appear to significantly influence coopetition design for radical innovation.

The Timing of Openness in a Radical Innovation Project, a Temporal and Loose Coupling Perspective

We extend the Profit from Innovation (PFI) framework (Teece, 1986) by combining it with open innovation insights: we explore when and how managers make the transition between closed and open innovation, and how they use appropriation (formal and informal defense mechanisms) and project strategies to capture the value generated from the innovation at the project level. Based on a radical innovation project at Jaguar (UK), we contribute to a process and temporal perspective of open innovation by shedding light on two core project processes and their enabling mechanisms which influenced the ability of Jaguar to maximize profits from the innovation. The first core project process was the choice of timing of the shift from a closed to an open model of innovation: it was enabled by a pro-active change in the formal defense strategy (i.e. submission of a patent), and by an internal loose coupling project strategy that involved autonomy of the project champion and internal engineers’ weak membership in the project. The second core process was an external loose coupling project strategy that was enabled by the deployment of two complementary informal appropriation mechanisms namely, the reduction of the scope of tasks allocated to external partners combined with the development of guarded relationships with them.

The timing of openness in a radical innovation project, a temporal and loose coupling perspective

We extend the Profit from Innovation (PFI) framework (Teece, 1986) by combining it with open innovation insights: we explore when and how managers make the transition between closed and open innovation, and how they use appropriation (formal and informal defense mechanisms) and project strategies to capture the value generated from the innovation at the project level. Based on a radical innovation project at Jaguar (UK), we contribute to a process and temporal perspective of open innovation by shedding light on two core project processes and their enabling mechanisms which influenced the ability of Jaguar to maximize profits from the innovation. The first core project process was the choice of timing of the shift from a closed to an open model of innovation: it was enabled by a pro-active change in the formal defense strategy (i.e. submission of a patent), and by an internal loose coupling project strategy that involved autonomy of the project champion and internal engineers’ weak membership in the project. The second core process was an external loose coupling project strategy that was enabled by the deployment of two complementary informal appropriation mechanisms namely, the reduction of the scope of tasks allocated to external partners combined with the development of guarded relationships with them.

Measuring radical innovation project success: typical metrics don’t work

PurposeFirms frequently struggle with measuring the performance of their radical innovation activities. Due to the uncertainty and ambiguity involved, key performance indicators (KPIs) used for incremental innovation projects are often not useful in this context. The purpose of this paper is to explore suitable KPIs particularly useful for radical innovation projects.Design/methodology/approachThis study first reviews commonly used measures for innovation projects, which is then followed by case-study evidence from three industry-leading international firms. This study includes 13 in-depth interviews with innovation managers and directors in these firms, providing insights on how they measure the progress and performance of radical innovation projects.FindingsKPIs used commonly in incremental innovation showed lackluster results in the case firms and were problematic for radical innovation context. A key finding was that radical innovation project performance should be evaluated based on the process rather than on the expected outcome. Concurrently, based on the literature review and the cases, three sets of KPIs with 13 specific KPIs useful for radical innovation projects are proposed.Originality/valueThe paper addresses a core challenge in using established KPIs in a radical innovation context. The paper gathers and synthesizes a range of measurement points suitable for radical innovation projects and provides specific suggestions for appropriate metrics that innovation managers can use.

Gestão baseada em capacidades para novas empresas de base tecnológica: framework para Gestão do Processo de Conversão de Tecnologias

Resumo A abordagem de implantação de melhores práticas para melhoria na Gestão do Desenvolvimento de Novos Produtos e para a Gestão da Tecnologia não é suficiente em contextos de um projeto de inovação radical ou de novas empresas de base tecnológica. Por esta razão, a abordagem de gestão de capacidades é discutida no panorama internacional como forma de prover melhorias em projetos de desenvolvimento de produtos inovadores. Especificamente, este trabalho conduz o desenvolvimento de um framework para um empreendimento originário de uma nova empresa de base tecnológica, propondo uma abordagem de Gestão baseada em Capacidades para o Processo de Conversão de Tecnologias em Processos, Produtos e Serviços (PCTPS). Com base em modelos referenciais existentes de Gestão do Processo de Desenvolvimento de Produtos, incorporaram-se conceitos, práticas, e princípios identificados na literatura referente às áreas de conhecimento: Evolução de Empresas (especificamente Visão Baseada em Capacidades), Desenvolvimento de Empresas de Base Tecnológica, Modelo de Negócios, Gestão Tecnológica e Engenharia de Sistemas. A unidade de análise é o empreendimento, não apenas de um departamento funcional ou de uma única empresa participante do empreendimento. Como resultado, o framework apresenta, além da gestão de processos, serviços e produtos, a evolução do modelo de negócios. A abordagem proposta permite tolerância à incerteza e a mudanças frequentes do ambiente.

Implementation of an open innovation strategy for a radical innovation project at Jaguar

This study contributes to the theoretical development of a contingency and relational perspective on open innovation strategy at the project level. An in-depth case study at Jaguar (UK) reveals that there are multiple and interdependent contingency forces at work which make it necessary under certain conditions to either close or open the innovation model during the course of a single radical innovation project. The case study indicates that the stages of the New Product Development (NPD) project, the strength of the appropriability regime and the use of informal appropriation instrument (i.e. secrecy) are key contingencies which influence the decision to either close or open the innovation model during the project. In addition, the risks of losing control and objectivity over the project, compounded with the risks of opportunism and loss of intellectual capital, are the underlying reasons which explain why Jaguar developed non-embedded and guarded relationships with the external partners during this part...

Customer participation and new product development outcomes: The moderating role of product innovativeness

AbstractInvestigation of customer participation in new product development (NPD) performance has yielded conflicting results. This study explores the idea that intensive customer participation is not always better. Instead, the usefulness of customer participation in NPD is determined by the fit between product innovativeness and customer participation as information providers and as co-developers. An empirical study of 196 NPD projects of Taiwanese high-tech firms is analyzed by structural equation modeling. The findings show that product innovativeness negatively moderates the impact of customer participation as information providers on NPD outcome. Thus, the greater the involvement of customer participation as information providers in radical innovation projects, the lower the NPD outcome. Moreover, our results also indicate that product innovativeness positively affects the relationship between customer participation as a co-developer and NPD outcome, which suggest that the more customer participation as a co-developer in a radical innovation project, the better the NPD outcome.

Impact of Economic and Technical Uncertainties on Dynamic New Product Development

A new product development process is usually under economic and technical uncertainties, and adjustable to the arrival of new information. As a result, new product development is not a one-time decision but a dynamic process under uncertainties. This paper applies repeated real options to derive optimal decision-making rules for a firm that faces two repeated options: 1) an incremental innovation project that is relatively easy to be developed and 2) a radical innovation project that offers superior performance but its development is much more difficult. Our findings can help firms make dynamic investment decisions on coexisting new product development projects.

Impact of Social Capital on Radical Innovation Efforts of the Organizations: A Case in the Aviation Industry

Social capital stems from the social relationships and yields highly critical benefits such as creativity, innovation and team productivity. However, the context and the structure of the social ties can potentially change the outcomes of social capital. This study aims to reveal the extent and the characteristics of social capital used in the radical innovation efforts. The strength of ties, type of trust and type of knowledge utilized in a selected radical innovation project were analyzed in this research. As an exploratory and descriptive study, case study method was adopted to investigate social capital as a relatively unexplored phenomenon, and to reflect the experiences of re levant individuals in regards to the social relationships embedded in the innovation efforts. The findings indicate that the or ganization has benefited from the existence and effective use of internal social capital, strong ties were developed and used among the members of the same department, strength of the ties got weaker as the team members, job descriptions and responsibilities started to vary and, finally, the case revealed that competence-based trust and tacit knowledge were found to be the essential parts of creative and innovative thinking.

Accelerated radical innovation: Theory and application

Radical innovation has been responsible for some of society's greatest advances over the past hundred years in fields as diverse as transportation, power, information technology, and medicine. But as scholars have found, it is such a long-term, chaotic, meandering, unpredictable process that promising radical innovation concepts are often never undertaken, to society's detriment. Does it need to be this way? Or can radical innovation be accelerated so that it is manageable within modern society's economic and political time horizon? This question prompted the organization of the Accelerated Radical Innovation (ARI) project five years ago. In this paper we summarize the ARI methodology as it currently stands and then report the results of an empirical verification with a radical medical innovation project that is currently under way — monochromatic X-rays for cancer diagnosis and treatment. Several conclusions were drawn. First, by and large, the ARI model tracked closely with the reality of this innovation, offering confirmation of its grounding in the real world of innovation. Second, the model offered a rationale and framework for this innovation process that could be more widely adopted. Third, the ARI model exposed critical issues whose early resolution could have accelerating the innovation cycle. Fourth, the application of a core principle of ARI, Systematic Competitive Intelligence, could have provided early warning on a competing technology that emerged suddenly. Last, the use of another core ARI concept, accelerated innovation prototyping, might help the innovator overcome the key barrier facing the innovation — the necessity of a long, expensive, high-risk clinical trial. Overall, the verification study confirms the potential of the ARI model to put the radical innovation process on a faster, lower-cost, better-managed track.

The governance of innovation centers in large established companies

This paper presents a model for the governance of radical innovation (RI) efforts within the firm. A longitudinal study of 12 large established companies committed to develop and institutionalize a radical innovation capability are used to inform our work. Thus the firm, rather than the RI project, is the unit of analysis for this work. We draw on Agency Theory, Firm Level Governance, Stewardship Theory and Stakeholder Theory as well to enrich the model. We find that none of these theoretical frames adequately describes the issues faced by companies as they build governance systems to oversee high risk, high uncertainty innovation portfolios. A series of propositions is offered based on the data analysis and extant literature that address board composition, decision style and decision processes that, we believe, enhance a company's ability to generate and commercialize radical innovations.

PERSPECTIVE: Establishing an NPD Best Practices Framework

Achieving NPD best practices is a top‐of‐mind issue for many new product development (NPD) managers and is often an overarching implicit, if not explicit, goal. The question is what does one mean when talking about NPD best practices? And how does a manager move toward achieving these?This article proposes a best practices framework as a starting point for much‐needed discussion on this topic. Originally presented during the 2004 Product Development Management Association (PDMA) Research Conference in Chicago, the article and the authors' presentation spurred a significant, expansive discussion that included all conference attendees. Given the interest generated, the decision was made to move forward on a series of rejoinders on the topic of NPD best practice, using the Kahn, Barczak, and Moss framework as a focal launching point for these rejoinders. A total of five rejoinders were received and accompany the best practices framework in this issue of JPIM. Each rejoinder brings out a distinct issue because each of the five authors has a unique perspective.The first rejoinder is written by Dr. Marjorie Adams‐Bigelow, director of the PDMA's Comparative Performance Assessment Study (CPAS), PDMA Foundation. Based on her findings during the CPAS study, Adams comments on the proposed framework, suggesting limitations in scope. She particularly points out discrepancies between the proposed framework and the framework offered by PDMA's emerging body of knowledge.Dr. Elko Kleinschmidt, professor of marketing and international business at McMaster University, wrote the second rejoinder. Based on his extensive research with Robert G. Cooper on NPD practices, he points out that best practices really raise more questions than answers.Thomas Kuczmarski, president of Kuczmarski and Associates, is the author of the third rejoinder. Kuczmarski highlights that company mindset and metrics are critical elements needing keen attention. Where do these fit—or should they—in the proposed framework?The fourth rejoinder is written by Richard Notargiacomo, consultant for the integrated product delivery process at Eastman Kodak Company. Notargiacomo compares the proposed framework to a best practices framework Kodak has used for new product commercialization and management since 1998. The distinction of the Kodak framework is the inclusion of a product maturity model component.Dr. Lois Peters, associate professor at Rensselaer Polytechnic Institute (RPI), is the author of the fifth rejoinder. She brings out issues of radical innovation, a natural focal issue of RPI's radical innovation project (RRIP). It is highlighted that radical innovation may require unique, distinctive process characteristics a single framework cannot illustrate. Multiple layers of frameworks may be more appropriate, each corresponding to a level of innovation desired.The overall hope is that the discourse on best practices in this issue of JPIM generates more discussion and debate. Ultimately, the hope is that such discourse will lead to subsequent continued study to help discern what NPD best practice means for our discipline.

GLOBAL DREAMS — LOCAL TEAMS: RHETORIC AND REALITIES OF TRANSNATIONAL INNOVATION

This article challenges notions of transnational innovation and global project teams as imperatives for modern management of innovation. Proceeding from an account of the localised dynamics of a radical technology innovation project in the early 1970s, the article reviews the strategy theorists of the 1990s, who proclaimed the virtues of cross-border innovation processes. Their expectations of international synergies and world-wide learning are confronted with the realities and local harvesting in a transatlantic innovation project at a European multinational. An account follows of a radical innovation project at the firm, which was the scene of the introductory study. Now, 25 years later this industrial technology company had become part of a far-flung multinational, which according to popular management theorists was the model of international innovation. The case account highlights the surprising similarities between the two projects, and the sustained importance of intensive local interaction and commitment in uncertain innovation projects.

Development of SMEs and heterogeneity of trajectories: the case of biotechnology in France

Biotechnology is an emergent sector based on the creation of research-intensive Small and Medium Enterprises (SMEs). While some SMEs are growing, most of them remain small, even those set-up several years ago. What is the pattern of development of the biotech sector? What are the patterns of development of firms? Studies on the development of high-tech SMEs have focused on a business model, in which entrepreneurs rely on growth forecasts to persuade capital investors (business angels and venture capitalists) to invest in a radical innovation project. Firms aim for a world market to industrialise their innovation, and initial public offering (IPO) enables initial investors to make profits that offset risky initial investment. While this model is appealing, it is simply one of the possible models of biotechnology development. Some firms are not designed to experience exponential growth, and choose to target local markets. Moreover, not all firms have the ambition of being listed on the stock exchange. Based on an in-depth analysis of the business and development of 60 French biotech SMEs, this article identifies two business models. By defining the development trajectories of each of these models, it highlights the temporary nature of the emergent model.

Radical innovation: triggering initiation of opportunity recognition and evaluation

The gap between a firm’s reservoir of technical knowledge and the formation of a project to explore the commercial potential of a breakthrough technical insight or discovery is the first major discontinuity in the radical innovation lifecycle. The first step toward bridging that gap occurs when the researcher with the technical insight recognizes that it might have commercial potential and decides to alert a research manager. In our longitudinal study of eight radical innovation projects in six large, multi‐national, R&D‐intensive firms, the initiation of a radical innovation project was neither frequent nor routine. In fact the participants in the study indicated that the initiation of a project – in their terminology, the ‘fuzzy front end of innovation’– was the most challenging and uncertain part of the lifecycle. In this paper we explore the case data to illuminate the nature of the initiation gap. In addition we present an assessment framework that can help researchers decide whether or not to bring their technical idea to the attention of management. If the decision is positive, the assessment tool can help them prepare for the discussion with management and identify the strengths and weaknesses of the case to submitted for evaluation.

Inter-firm knowledge management practices for technology and new product development in discontinuous innovation

Discontinuous, or radical, innovation has been regarded as a critical factor in renewing firms' competitive position. The results of the Rensselaer Radical Innovation Project (RRIP) show that the development of new businesses and product lines based on discontinuous innovations requires distinct inter-firm knowledge management practices. Knowledge management studies suggest that inter-firm collaborative networks, such as strategic alliances, enhance corporate innovative capability by facilitating flow of knowledge across companies. Due to the increasing significance of inter-firm collaborative networks, there is a need for further understanding of knowledge management at the inter-firm level. By reviewing the literature on knowledge management practices, this article suggests that knowledge management practices vary from one organisation to another. The variety of corporate knowledge management practices attribute to distinct organisational settings, and technology domains in the context of technology and new product development. The authors propose that the different types of inter-firm collaborative networks are established to fulfil specific knowledge management requirements for divergent technology and new product development in discontinuous innovation.