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EDITORIAL 221 Editorial T ransforming creative industries: strategies of and structures around creative entrepreneur...

Author: Petra de Weerd-Nederhof and Olaf Fisscher (Editors)

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EDITORIAL

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Editorial

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ransforming creative industries: strategies of and structures around creative entrepreneurs is the central theme of this issue’s special section, in which guest editors and EGOS subtheme organizers Jesper Strandgaard Pedersen (Copenhagen Business School, Denmark), Silviya Svejenova (ESADE Business School, Spain) and Candace Jones (Boston College, USA) brought together a total of six contributions, and a book review, which will be highlighted and introduced to you further below. Three additional articles, including a case study, make this issue a full and varied one, which we hope will inspire you in your own creative and innovation processes, as well as provide input and food for thought for research and practice.

Creative Industries and Entrepreneurs Creative industries, encompassing sectors such as book and magazine publishing, visual and performing arts, sound recordings, cinema and TV films, as well as design, fashion, and games, are increasingly at the forefront of economic growth and social progress. Understanding how creative businesses are formed, managed and transformed could yield important clues for unleashing their creative and business potential. It could also cast light on managing talent and shaping-up creativity as a company’s core competence. The motors of the new talent-based competition and economy are creative entrepreneurs who work at the intersection of art and commerce and are able to generate, develop, and bring creative ideas and artwork to market. Studies on entrepreneurship have focused on social, technological or corporate entrepreneurs, yet they have left a particular category largely unattended, that of entrepreneurs in creative sectors. Such work on entrepreneurs, organizations and institutions in the creative industries has been an ongoing concern and on the agenda of the EGOS sub-theme, organized by the three guest editors of this special issue since the 2002 EGOS colloquium1 in Barcelona. This sub-theme has become a forum for exchange among scholars with different disciplinary © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

background from Europe, North and South America, Asia, Australia and New Zealand. This special issue brings together some contributions from the sub-theme’s meetings. With the call for papers, we sought to advance understanding of the role entrepreneurs play in transforming the creative industries. We focused on the strategies they adopted and the structures they shaped or used to make the projects of their liking. In particular, we sought to understand what activities and characteristics distinguish the entrepreneurs in creative sectors and what particularities the new ventures created at the frontier of design and management possessed. We wanted to know more about the strategies that creative entrepreneurs pursue and how these strategies are influenced by institutional logics. We sought explorations of how institutionalized logics, regimes and gatekeepers, as well as formal and informal networks of relationships stifled or facilitated entrepreneurial initiatives in creative industries and how entrepreneurs in turn influenced or helped shape these structures. Through the review process, we selected six articles that offered novel insights on those issues. In the first contribution, ‘Creative Strategies for Creative Industries: Learning from Jerry Springer the Opera’, Anna Dempster shows that entrepreneurs in the UK theatre industry face a number of demand uncertainties and reveals how they address the sources of these uncertainties. In a historical, in-depth case-study analysis of the controversial production, Jerry Springer the Opera, Dempster illustrates how creative entrepreneurs employ a multi-staged production process to distribute risks over time and across agents. She examines what contributes to their success or failure, and highlights strategic lessons for creative entrepreneurs in managing uncertainty. Doris Eikhof and Axel Haunschild, in the article ‘Lifestyle Meets Market. Bohemian Entrepreneurs in Creative Industries’, ex-

1

A call for papers for our forthcoming sub-theme ‘Journeys of Creative Entrepreneurs: Interaction among Individuals, Organizations and Institutions in Creative Industries’ at the 2007 EGOS Colloquium in Vienna is available at the end of this issue.

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amine how artists act as ‘bohemian entrepreneurs’ of their talent. Drawing upon an empirical study into artistic work and employment in German theatres, they argue that the bohemian lifestyle, which is characterized by a devotion to art for art’s sake, is an essential source for work motivation and a way to integrate private life, artwork and intensive selfmanagement and self-marketing. In the article ‘Transforming the Danish Film Field via Professionalization, Penetration and Integration’, Chris Mathieu focuses on the entrepreneurial actions of a key actor, the head of the Danish Film Institute (DFI), and the agency that he leads, and their contribution to the transformation and recent success of the Danish film field. Mathieu centres on the ‘entrepreneurial bureaucrat’ who from his legitimate, central role in the field is able to influence profoundly the operation and transformation of the industry. John Davenport also draws insights on the film industry. In his article ‘UK Film Companies: Project-Based Organizations Lacking Entrepreneurship and Innovativeness?’, he questions the largely accepted role of projectbased organizations and informal networks as conduits to innovation and creativity, arguing that in the UK film industry these have led to loss of novelty and initiative. Jin-ichiro Yamada and Masaru Yamashita, in the article ‘Entrepreneurs’ Intention and Partnership toward Innovation: Evidence from the Japanese Film Industry’, argue that an entrepreneur in creative industries can have a relational intention that leads him or her to form a partnership. It is the partnership, and not the sole entrepreneur, that carries out innovative activities. In the article ‘The Development of Creative Capabilities in and out of Creative Organizations: Three Case Studies’, Nancy Napier and Mikael Nilsson broaden the definition of creative sectors to include organizations from theatre, software and sport. They advance understanding of the role of the creative entrepreneur in leading the efforts for building collaboration, exploiting knowledge and managing relationships in and out of the organization, as well as developing and using creative routines to enhance creative capabilities. As part of the special section, Gertjan Hospers provides reviews of two of Richard Florida’s books – The Rise of the Creative Class and The Flight of the Creative Class – and comments on their importance as a source of new perspectives and ideas. The articles in this special issue cover a range of creative sectors (film, theatre, sports and software) and different national contexts

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(Denmark, Germany, Japan, UK and USA). They reveal different entrepreneurial roles that are played in creative industries, from the lifestyle, bohemian, sole entrepreneurs in German theatre engaged in self-management and selfpromotion (Eikhof & Haunschild), to the central, legitimate actor at the helm of the Danish Film Institute who has both resources and opportunities for strategic action (Mathieu). With their strategies, entrepreneurs in creative sectors pursue different outcomes. They seek to develop creative capabilities (Napier & Nilsson), achieve self-realization (Eikhof & Haunschild), spark innovation (Yamada & Yamashita), contribute to field transformation (Mathieu) or address uncertainty by distributing risks across agents and over time (Dempster). Entrepreneurship in creative sectors is a collaborative activity that requires certain structures and process to be put in place. In teams or project-based structures, art makes its way to the market through co-operation. To address uncertainties, theatre entrepreneurs shape multi-stage processes and interact with changing audiences and a range of media (Dempster). To innovate, entrepreneurs in the Japanese film industry need to materialize their relational intent and build committed teams (Yamada & Yamashita). Creative routines and processes evolve and are preserved in the organizational structure, affecting the creative capabilities. (Napier & Nilsson). Yet structures are not only enablers of innovation in creative sectors. Informal and project-based networks may act as a barrier to novelty rather than as an engine of change (Davenport). We believe that the articles in the special section raise a number of issues on the role of creative entrepreneurs and the strategies and structures they shape and use. However, they are only a step in this direction and call for further research and understanding. In conclusion, we would like to thank the editors of Creativity and Innovation Management – Olaf Fisscher and Petra de Weerd-Nederhof – for their ongoing support in the review process. We extend our thanks to Simone Ferriani, Henrik Holt, Carmelo Mazza, Brian Moeran, Joeri Mol and Lise Skov for their time and constructive feedback.

Additional Papers and CAIM News ‘Innovation Speed in the Small and MediumSized Enterprise’ is the topic and title of Michael Allocca and Eric Kesslers contribution to this September 2006 issue of Creativity and Innovation Management. A conceptual model of innovation speed for SMEs, developed from © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

EDITORIAL

relevant literature, is tested by them with 158 projects across several technology-related industries. Results revealed that SMEs had indeed different speed antecendents from large firms, had their antecedents vary by radicalness, and found speed to be synergistic with efficiency, quality and project success. Confirming the positive relationship between innovation speed and the outcomes of project success, cost and quality, one of their recommendations is for SME management to strive for speed without undue concern for negatively affecting these factors. The ‘crea-political process model’ developed by Han Bakker, Kees Boersma and Sytse Oreel in their contribution, ‘Creativity (Ideas) Management in Industrial R&D Organizations’ is used to analyse the way in which the Corus Group Research development and Technology department has implemented an electronic idea management system called eureka! The eureka! system has been designed as a straightforward platform to capture, review, evaluate and select creative ideas. Bakker et al’s findings challenge the literature on idea management in organizations to consider the political acitvities of ideators in the whole process of creativity. The issue is concluded with a contribution from one of our June 2006 issue’s special section guest-editors Alf Rehn, and co-author Sheena Vachhani. Their article ‘Innovation and the Post-Original: on Moral Stances and Reproduction’ can be seen as an extenstion of the discussions in the ‘Explorations of the New’ special, as the fundamental issue in both is that of innovation and ontology. The authors introduce the concept of ‘post-originality’as a way to understand how time and reporductive acts can be understood in relation of the

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innovative, illustrating their line of thoughts with three identified variations: Derivation (Bratz dolls based on Barbie) Mania!’, KnockOffs, and Post Production (the Grey Album as a ‘mash-up’ of the Beatles’ White Album and Brooklyn rapper Jay-Z’s Black Album). The authors, through their ‘post-original meditation’ try to return to the prime question of innovation, namely that of how value is created through juxtapositions, but to do this in a way that does not strive for essentialization of the networks and temporalities in which these unfoldings take place. As has become our custom, at the end of the editorial we provide some brief information on CAIM, or CAIM-related activities. In the autumn of 2006 your CAIM editors are looking forward to the Taiwan R&D Management Conference on Creativity and Innovation Management, and the PDMA Annual International Conference in Atlanta. We also hope to be able to finalize our affiliation with CINet before our December 2006 issue, which will contain a special section guestedited by John Bessant on continuous innovation and improvement, based on papers presented at the 6th International CINet Conference in Brighton in 2005. At the end of this issue you will also find a ‘Call for Papers’ for next years R&D Management conference on Risk and Uncertainty, which will be held in Bremen in July 2007. We wish you an inspiring read and a good start to the new Academic Year! July 2006 Jesper Strandgaard Pedersen Silviya Svejenova Candace Jones Petra de Weerd-Nederhof

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Managing Uncertainty in Creative Industries: Lessons from Jerry Springer the Opera Anna M. Dempster This article considers the impact of uncertainty on entrepreneurial performance in the UK theatre industry. The article identifies and evaluates the major determinants of demand uncertainty – audience composition, critical acclaim and media coverage – whose management is key to entrepreneurial success. An in-depth historical case study of the controversial production, Jerry Springer the Opera, analyses the evolution of these three distinct sources of uncertainty and illustrates that they should not be treated in isolation since they interact in complex ways which change with time. The case study shows how the entrepreneurs involved used a multistaged production process as a strategy to market test their product and to distribute their risks across agents and over time. The article therefore considers what contributed to both the successes and failures of these entrepreneurs as well as highlighting important strategic lessons for managing uncertainty in creative industries.

Introduction

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his article is concerned with a number of interrelated questions central to creative industries research. What are the key uncertainties underlying the production of creative goods? What strategies do creative entrepreneurs employ in managing their risks? What contributes to the success of particular creative products and entrepreneurs’ management of uncertainties? While these questions have been variously addressed in the growing creative industries literature, this article reexamines them in the context of the UK theatre industry with an in-depth analysis of a particular production – Jerry Springer the Opera. This theatrical production was heralded by contemporaries as a radical departure from existing norms, both artistically and in terms of its production process. The objective of this article is therefore to investigate the composition, impact and management of uncertainty by creative entrepreneurs. Drawing on theoretical and empirical findings this article considers specific sources of uncertainty how they evolved and the interactions between them. The case highlights how the entrepreneurs involved made use of a staged, multi-period strategy to manage these

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uncertainties over time and across agents, thereby contributing to the sustainability of their creative product. The article is organized as follows: the introduction is followed by a review of the literature focusing on concepts of uncertainty relevant to theatrical production. A methodology section briefly discusses data collection, data analyses and the application of the case study method. This is followed by an empirical case study, which is presented along a number of key theoretical dimensions. Lastly, a discussion section summarizes the main contributions and findings.

Literature Review and Theoretical Frame There has been significant interest in the impact of uncertainty on the production of creative and cultural goods (Caves, 2000; De Vany, 2004; Faulkner & Anderson, 1987; Hirsch, 1972, 2000; Miller & Shamsie, 1999). This literature has emphasized the importance for creative industry participants to identify specific sources of uncertainty in order to better manage the risks associated with their creative projects. © 2006 The Author Journal compilation © 2006 Blackwell Publishing

MANAGING UNCERTAINTY IN CREATIVE INDUSTRIES

In their study of the Hollywood film industry from 1936 to 1965, by mapping Milliken’s (1987) three kinds of uncertainty (state; effect; response), Miller and Shamsie (1999) highlight the importance of systematic identification of sources of uncertainty in predicting the variability of product offerings. They argue that conceptually vague notions of uncertainty must be disaggregated into distinct components because ‘different kinds of uncertainty have very different effects on strategy’ (1999, p. 98). The ‘uncertainties’ they focus on exist at three levels of analysis including: industry specific, environmental (or state); organizational level (effect); and individual level (decision response). They argue that these types of uncertainty are largely independent of each other, failing to find significant interaction effects. However, Miller and Shamsie do conclude that ‘more research is needed on such interactions’ (1999, p. 113), which this article in part addresses. Faulkner and Andersen (1987) also identify key sources of variance as the ‘uncertainties of combining financial and artistic talent’, ‘uneven nature of investment flows’ and the ‘stochastic nature of market demand’ (pp. 884– 886). However, they fail to discuss possible interaction effects between these sources of variance. Similarly, while Lampel, Lant and Shamsie (2000) identify various tensions or ‘polarities’ that characterize creative industries, they do not discuss how these might interact in the dynamic production of creative goods. Consumer demand is one of the most pervasive risks facing creative industry entrepreneurs and has been identified as such in the literature. Faulkner and Andersen argue that ‘market demand has a large random component, making it nearly impossible to predict’ (1987, p. 884) In Miller and Shamsie’s model, consumer demand exists at the environmental level alongside competitive behaviour and sociocultural trends (1999, p. 100), making it not only difficult to forecast but by implication nearly impossible for individuals or organizations to control. Although increasingly challenged, a lingering notion remains in the literature that because creative industries are somehow ‘unique’ (Hirsch, 1972; Lampel, Lant & Shamsie, 2000), the unpredictability of demand will continue to confound industry participants and observers. Because creative products are ‘experiential goods’ and their consumption is highly subjective, they are difficult to group into classifiable and predictable categories (Caves, 2000; Hirsch, 1972; Lampel, Lant & Shamsie, 2000). This characteristic has resulted in a persistent belief in the infamous ‘nobody knows’ © 2006 The Author Journal compilation © 2006 Blackwell Publishing

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property of creative goods (Caves, 2000; De Vany, 2004). In order to better understand (and possibly predict) the dynamics of consumer demand, this article proposes that the consumer demand uncertainty construct can further be decomposed into key determinants which, in the theatre industry, and case presented here, include: audience composition, critical acclaim and media coverage. Audience composition is perhaps the most straight-forward determinant of consumer demand. For some creative products audience composition is relatively stable over time. For example, R-rated films remain adult-rated entertainment from initial cinema release through to the subsequent video-rental market. However, the audience for theatrical productions is highly volatile and can change over time. A production in an avant-garde ‘fringe’ venue would be consumed by a significantly different group of patrons from the same show in a commercial ‘main-stream’ theatre. Therefore, the question of what is an optimal strategic ‘fit’ (Zajac, Kraatz & Bresser, 2000) between the current product and its environment, including the consumers within this environment, becomes an important consideration for the entrepreneur. The contribution of critical acclaim and industry awards to the success of creative goods has also been explored in the literature. For example, cinematographer’s past awards seem to predict well the subsequent performance of films (Faulkner & Anderson, 1987) and skill-levels of industry participants can be proxied for by the number of industry awards won (e.g. Miller & Shamsie, 1999). Awards and critical acclaim are an important feature of an industry where reputational assets are paramount (Caves, 2000), future partnering decisions are based on recent successes (Fee, 2002) and the industry axiom is ‘you’re only as good as you’re last credit’ (Faulkner & Anderson, 1987). ‘Expert’ judges perform important information-sorting and gatekeeping functions in a market where quality is largely subjective and difficult to quantify (Caves, 2000; Ginsburgh, 2003). There is evidence to suggest that even though ordinary consumers and professional critics rely on different standards of evaluation, there are significant similarities between their tastes and the appeal of particular creative products (Holbrook, 1999). In the theatre industry, as in the film industry, the diversity and ongoing success of industry awards suggests that critics and audiences alike gain utility from their existence and that they can therefore affect consumer demand. Media coverage is a third determinant of consumer demand in the theatre industry, which

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has gained much less academic attention, in spite of public fascination with it and extensive press coverage that creative industries receive (Lampel, Lant & Shamsie, 2000). The substantial literature on corporate disclosure, however, strongly suggests that an increase in the quantity and quality of information in the marketplace (for example, regarding an organization or product) significantly reduces risks for interested parties (e.g. Diamond, 1985). Furthermore, these effects are stronger in cases were there is little or no prior information available in the marketplace (Botosan, 1997), as is the case with many (novel) creative goods. In the context of creative industry, these findings would suggest that the quality, quantity and type of media coverage would affect consumer demand for particular creative products. The difficulty of managing the complex and dynamic set of underlying uncertainties described briefly above is augmented by the fact that many creative projects have characteristically long periods of gestation and development (Caves, 2000) and that risks increase over longer time horizons as the probability of failure/success becomes increasingly difficult to predict (Knight, 1921). Prior literature has highlighted how entrepreneurs resort to project-based organizations (Faulkner & Anderson, 1987; Staber, 2004), and rely on informal social networks (Starkey, Barnett & Tempest, 2000) to manage underlying uncertainties. The case study presented here highlights another important strategy employed by creative entrepreneurs – that of separating their project into distinct yet complementary stages, which contribute to its evolution and development. In fact, creative goods are often produced in a series of sequential stages ‘with costs sunk at each stage completely sunk when the product moves to the next stage’ (Caves, 2000, p. 3). Research into the use of staged financing to manage the high levels of uncertainty faced by entrepreneurs and venture capitalists in the development of new ventures provides support for the benefits of such a strategy; which include encouraging entrepreneurial commitment (Admanti & Perry, 1991), better monitoring functions (Gompers, 1995) and reducing hold-up problems (Neher, 1999). Perhaps most importantly, this literature highlights how staging investments facilitates the development of ventures that might otherwise not be economically viable (e.g. Wang & Zhou, 2002). The case presented in the next section shows that a sequential multi-staged production process was employed by the creative entrepreneurs involved. Rather than viewing multi-staged investment as an exogenous by-

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product of the production process, the case illustrates that it was pursued purposefully and encouraged as a risk management technique, with each stage actively used to develop, refine and market test the creative product.

Data and Research Method A full-text, English language search on the Factiva database was used to identify relevant press articles. Such a systematic newswire search is consistent with prior creative industry studies (e.g. Fee, 2002). The search string “Jerry Springer the Opera” was applied from 1 February 2001 (as the show opened on 8 February 2001) to 1st March 2005 (following its closure in London on 19 February, 2005) and revealed 2,271 articles. A distribution of articles over time suggests that press coverage was fairly consistent, with more coverage around the production’s opening in each new venue – as would be expected surrounding a theatrical ‘first’ night. The articles were read and repetitive information was discarded. Both ‘factual’ articles and opinion pieces were retained since they indicated the evolution of coverage and reception by the media. Once cleaned, the extensive archival data was used to construct a detailed historical narrative also consistent with case-study research methods (e.g. Yin, 1981; Mintzberg & McHugh, 1985; Jones, 2001).1 The case history was given to sources close to the production in a central production capacity and involved in the show’s management, for examination. In 2004 and 2005, 42 hours of semi-structured interviews were conducted with these sources. Because of the sensitive nature of the interview data and requested anonymity, these interviews were primarily used to provide guidance on data ‘blind spots’ that should be investigated further, corroborate reported events and check factual accuracies of the constructed case history. All of the information and quotes in this article are therefore publicly available. The central constructs proposed here and explored in this case emerged through an 1

Quantitative measures such as information of expenditure and revenues were noted whenever available, as they provided measures of the production’s evolving scale and scope. However, because financial information is highly sensitive and proprietary in the theatre industry, it was only inconsistently reported in the press and eventually excluded from this article, although this will be a focus of future research. © 2006 The Author Journal compilation © 2006 Blackwell Publishing


iterative process of reviewing existing theoretical insights and prior empirical findings from as well as the current case study data, this is consistent with Eisenhardt’s (1989) model of theory building from case-study research.2 For the sake of parsimony, only information relevant to the central constructs identified is reported here. While clarifying central constructs and developing theory (Eisenhardt, 1989, 1991) that better explains entrepreneurial success and failure in the creative industries is a central aim here, the single-case and in-depth study also aims to illuminate a rich context of the case and communicate an interesting and memorable story (Dyer & Wilkins, 1991). The unit of analyses employed here is the theatre project or production. This is a departure from many studies in the theatre industry which use specific theatres as the locus of economic activity (e.g. Shellard, 2004). However, research into the film industry commonly employs individual films as the unit of analyses (Faulkner & Anderson 1987; Fee, 2002; Hirsch, 1972; Miller & Shamsie 1999). This is appropriate in short-term project orientated activities where ‘the project is the firm, rather than a temporary structure within the firm’ (Faulkner & Anderson, 1987, p. 882). The production itself is also a useful unit of analysis because it represents the outcome of a process embedded within an industry system, which implies the existence of many events and actors that are interconnected and interdependent (Hirsch, 1972, 2000).

Case Study Analyses A piece of new writing by Richard Thomas (music) and Stewart Lee (lyrics), Jerry Springer the Opera (henceforth ‘JSTO’) is a musical parody on the American television chat-show The Jerry Springer Show, in which the host reveals his guest’s ‘shocking’ secrets in front of a live studio audience.3 The theatre production was seen as highly innovative in terms of its application of a ‘high-brow’ art form (opera) to a ‘low-brow’ subject matter (a television talk-

2 This article therefore employs case study methodology, which is appropriate where research aims are to ‘examine contemporary phenomenon in its real-life context especially when the boundaries between phenomenon and context are not clearly evidence’ (Yin, 1981 p. 59). The phenomenon of present interest is uncertainty mitigation by entrepreneurs explored here in the context of the UK theatre industry.

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show) and Richard Thomas’ experiments of setting swear words to classical operatic music4 in a blatant disregard for established genre boundaries. The life of the production can be analysed in terms of multiple developmental stages. Each stage is defined in terms of its physical venue, and is distinct also in terms of the determinants of demand uncertainty. These are summarized briefly in Table 1 and their evolution discussed in the following analyses. Over time, the production increased in scale in terms of expenditure and potential profit. Significant increases were seen in venue size, audience capacity, financing and number of (cast and crew) participants. Not uncharacteristically in creative industries, where size of investment (and potential loss) increases with each stage of a project’s development (Caves, 2000), each stage represented a substantial increase in risk for the central entrepreneurs, who here included the core creatives (Richard Thomas and Stewert Lee) and the lead producer (Jon Thoday).

Audience Composition and History The production began life as ‘How to write an Opera about Jerry Springer.’ On 8 February 2001, when writer, musician and comedian Richard Thomas sat at the piano to perform a 20minute version to an audience of seven under a ‘pay what you can’ ticket scheme at the Battersea Arts Centre (henceforth BAC) in South London. In what became part of the show’s mythology, Thomas offered a beer to anyone in the audience who came up with a good idea. Four days later the show was selling out (The Scotsman, 11 April 2003). With the recruitment of Stewart Lee to write the libretto and co-direct, and additional funding from Jon Thoday, managing director of the production company Avalon, an extended version was commission by BAC to run as part of its experimental Opera Festival. JSTO was rewritten to include an embryonic second act (Page Six.com, 2 August 2001) and once again proved to be a big success with the BAC audi-

3 The first act is set during the filming of a live episode of The Jerry Springer Show, which features three sets of guests who reveal their guilty secrets to partners and the audience. Act two is set as Jerry Springer descends into hell, where he is asked by the Devil to mediate a conversation with God and the guests return as biblical figures to participate in the debate. 4 Richard Thomas had experimented with this concept for some time, including the cult operatic piece Tourette’s Diva which was JSTO’s predecessor.

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Apr. 2002 –Sept 2003

Nov. 2003 –Feb 2005

3

4

Jan 2006–…

Aug. 2002

2

5

Feb. 2001 Aug. 2001 Feb. 2002

Dates

a.) b.) c.)

1

Stage

Central London, part of the British National Theatre

Central London: in the ‘West End’ theatre-land district

The Lyttleton Theatre

Cambridge Theatre

Various UK cities and towns outside London

Central Edinburgh, during the Edinburgh Fringe Festival

The Assembly Rooms (Music Hall)

Tour of regional theatres

South London community arts centre and ‘fringe’ venue

Venue Location

Battersea Arts Centre ‘Scratch night’ Opera festival Main show

Venue

Table 1. Stages in Jerry Springer the Opera

Commercial and grant aided

Fully Commercial

Government grant-aided and self-supporting.



Venue funding

(Various)

1253

891

636

Mezz. Room: 25 Lower Hall: 180 Grand Hall: 550

Venue Capacity

Regional press. Mixed reception.

National and popular press. Mixed reviews including positive and some very negative press.

National and international coverage in all leading papers. Overwhelming positive.

Local and national (largely specialist) press. Overwhelmingly positive.

Initially limited but steadily increasing. Local as well as specialist press. Largely positive.

Media Coverage

Mass-market with medium to low income. Expectations of vetted product. Mixed or risk averse.

Mass-market, with mixed income. Expectations of vetted product and ‘acceptable’ level of entertainment. Risk averse.

Mixed market, mixed income. Interested in innovative yet industry vetted products. Medium risk-takers

Low to medium income, specialist market. Interested in innovative productions with commercial potential. Risk-loving.

Low income, specialist market. Interested in experimental productions. Risk loving.

Audience composition

Mixed reviews.

Mixed reviews from critics. Receives a number of major and minor industry awards. Highly mixed reviews from critics.

Widespread support from ‘educated’ tastes. Widespread critical acclaim.

Widespread support from ‘educated’ tastes. Edinburgh Fringe Festival Best New Musical Award

Individual support from a few notable ‘educated’ tastes.

Critical acclaim

228 CREATIVITY AND INNOVATION MANAGEMENT



ences at the three-week run in February 2002, which sold out. As a local arts centre whose mission is to ‘promote exciting, innovative, accessible, high quality and surprising arts activity’5 BAC audiences would expect to see challenging, experimental theatre, representative of the innovation that characterizes a healthy ‘fringe’ theatre. Following a frenzied period of rewriting and re-casting, JSTO followed the path of much new theatre in the UK to the Edinburgh Fringe Festival where it played at The Assembly Rooms, one of the larger Fringe venues. The production now had two full acts, a larger cast and a live band. Running alongside the largest theatre and performing arts festival in Europe, The Edinburgh Fringe Festival is founded on the principle of ‘open access for all’6 and attracts performers and audiences from all over the world interested in experimental and new theatre. On the wave of its London success and a sizeable investment from Jon Thoday, Edinburgh was seen as an important training ground by the core creatives. ‘It’s good doing it here because the Assembly [Rooms] is quite like the West End in a way’ explained Lee (The List, August 1, 2001). The festival provided exposure to a more diverse, yet receptive, audience, in an important test of the production’s wider appeal. ‘It’s written and sung to an incredibly professional level and that really throws people because they think they’re going to get some sketch show burlesque of American talk shows’, Lee explained (The List, August 1, 2001). The innovative production left Edinburgh with a great deal of publicity, having been enjoyed by a wider audience and brought to the attention of the commercial London based theatre sector. On 5 December 2001, Nicholas Hyner, the incoming artistic director of the British National Theatre in London, made the dramatic announcement that he would open his directorship and the season with JSTO to run at the National’s Lyttleton Theatre. Seen as a radical departure from previous repertoire, the decision was in effect a sanctioning of the innovative production by London’s theatre establishment and ‘educated’ tastes. The National also contributed significantly to JSTO’s developed into a polished professional show worthy of the venue’s international reputation. The run was coupled with a special promotion of £10 tickets in an attempt to encourage first-time bookers and young audihttp://www.bac.org.uk/about.php?id=4 http://www.edfringe.com/area.html?r_menu= global&id=36

5 6


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ences, targeting a new market niche and updating the National’s image. When box office figures for 2003 were release, it became clear that JSTO had been a major success, with the opening season attracting houses of 80– 90%,7 of whom 46% were first-time bookers (Financial Times, 25 September 2003). Following a very rapid ten-day transfer and re-cast, JSTO opened on 11 November, 2003 at the Cambridge Theatre in the heart of London’s West End ‘theatre-land’. For the first time, JSTO played in a fully commercial venue, to audiences of more than 1,000, where ticket prices were charged at market rate. Commentators noted at the time how the significantly higher ticket prices might have excluded precisely the show’s target audience. For example, The Guardian reported that the tickets which ‘start at £25 and move up sharply to £50 . . . is pretty steep for the youthful NME-reading8 market the show is being marketed to’ (13 November 2003). Other commentators questioned how a ‘profanity laden’ and ‘sacrilegious’ show would be received by the mass market of West End musicals. The show would clearly not be to everyone’s liking. ‘I wouldn’t recommend taking your own mum to this opera’, warned a critic, ‘the language alone is strong enough to turn her hair white . . .’ (The Independent, 6 November 2003). The decision to air an uncut version of JSTO on television (on 8 January 2005) announced by the British Broadcasting Corporation (BBC),9 would bring the production to a larger and more heterogeneous audience than ever before. While the BBC argued the decision was in line with their mission to facilitating access to an otherwise exclusive art form and introduced ‘a new generation of viewers to opera’ (The Independent, 5 January 2005; Reuters News, 5 January 2005), the screening of JSTO by a publicly funded channel on national television provoked a record number of complaints (some 50,000 at final counting). Fervent opponents to the screening including MediawatchUK, The Christian Institute and the Christian Voice, who organized street protests outside BBC offices around the country and symbolic 7 This compared with an average of 80% for the previous year under Trevor Nunn. 8 NME (New Music Enterprise) is UK’s biggest selling music weekly, with guides to shows, reviews and interviews with leading industry players. 9 The BBC is the UK’s state-owned broadcasting network funded primarily through the sale of television licences. As a public organization the BBC has the remit to provide services in the interests of the public, with an emphasis on educational scheduling.

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burning of their TV licences (Reuters News, 7 January 2005). More sinister were the threatening telephone calls received by BBC employees (Daily Mail, 8 January 2005; Reuters News, 8 January 2005). Nonetheless, the BBC’s broadcast also attracted a record 2.6 million viewers for the broadcast of a musical production. The backlash of complaints was not initially taken very seriously by the JSTO entrepreneurs. In an interview, Stewart Lee joked that the Daily Mail newspaper who printed a sensational story on the ‘record number of swear words’ in the production must have multiplied the number of swear words by the number of people on stage to arrive at its final 8,000 word count (The Daily Telegraph, 7 January 2005). What started as a joke, however, escalated into a situation with potentially serious consequences when on 27 February 2005, Jon Thoday announced that a major financial backer had pulled out as a result of the furore surrounding the show (Independent On Sunday, 27 February 2005). Rumours also began to circulate that the national tour was in jeopardy because of the opposition lobby, who threatened local theatres and their audiences. By 15 March, 2005 JSTO’s producers announced that ‘pressure from radical Christians has caused 11 regional theatres to pull out of showing Jerry Springer-The Opera’ (The Times, 16 March 2005). The precise effect of the anti-JSTO lobby is in fact debatable. Rows of ‘empty seats’ had been reported for some time by audience members (Observer Review Pages, 11 July 2004). By midMarch 2005 it was becoming increasingly clear that JSTO was far from the financial triumph that had been expected following its early successes. For example, Dennis Hall, chief executive of Southampton’s Mayflower theatre, stated that his decision to turn down JSTO was not based on the controversy surrounding it but because he ‘did not believe it would be commercially viable at the box office’, explaining that as a ‘financial proposition’ JSTO simply did not match up to the competition (Newsquest Media Group Newspapers, 19 March 2005). In a highly competitive industry, JSTO’s ability to attract mass market audiences, both in the West End and at the regional level was being questioned.

artistic director of the National Theatre was spotted enjoying it there. In Edinburgh, Hytner was once again spotted in the audience as well as Jerry Springer himself, who attended a performance unannounced on 24 August, 2002 (The Observer, 25 August 2002). Springer removed a major obstacle to the show’s development when he openly endorsed it pronouncing it ‘wonderful’, ‘great’ and ‘many-layered’ and saying ‘I don’t object to anything in it . . .’ (The Observer, 25 August 2002). The production left Edinburgh having generated a significant amount of publicity and winning the festival’s coveted Best New Musical Award. Its transfer to the National, the bastion of British theatre, was an open endorsement of the show by London’s ‘educated tastes’ and warmly received by the reviewing press. It was during the West-End run that JSTO capitalized on its prior critical acclaim to win a string of industry awards. On 24 November, 2003, JSTO won the coveted Evening Standard Theatre Award for Best New Musical, unique in that it is decided upon by both a panel of judges and public nominations. On 3 February 2004 it won the Critic’s Circle Theatre Award for Best New Musical. On 15 January 2004, JSTO received eight nominations for Britain’s top theatre accolades, the Laurence Olivier Awards, and beat off tough competition to win four of them on 22 February 2004. The show also won two What’s On Stage Awards and four Nowt2do.com awards. The many awards were subsequently used for marketing and promotional, activities both in London and regionally, to stimulate consumer demand.

Media Coverage The first performance of JSTO had no official press night but word of mouth was so enthusiastic that the show eventually sold out. Early reviews were largely positively, if somewhat bemused (The Independent on Sunday, 19 August 2001).11 In August 2001, the show had been spotted by several of London dailies, including the Evening Standard. By early September JSTO had made it onto the critics list of major national newspapers including The Independent and The Sunday Times (2 September, 2001). Interestingly, the show was also reviewed internationally by papers in the

Critical acclaim As well as the generally positive reviews it received whilst at BAC, the fledgling production was given a boost by the attendance of a number of London’s ‘educated tastes’10 not least when, Nicholas Hytner, the then future

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10 Term borrowed from Richard Caves (2000) for people respected in the industry. 11 The review was written by Anna Picard for The Independent on Sunday, who subsequently claimed it as her ‘discovery’.



USA, including The New York Post’s online version Page Six.com (2 August 2001) and The Detroit News (10 October 2001). At the start of the Edinburgh Festival, The List Festival Guide featured one of JSTO’s controversial characters on its front cover, designating it ‘the hot-ticket show’ (The List Festival Guide, 1 August 2002). Despite being ‘the most hyped production of this year’s Fringe’ (Peter Lathan, British Theatre Guide, 2002),12 it was overwhelmingly well received by festival critics and audiences. The opening of JSTO at the National’s Lyttelton Theatre on 9 April 2003 was greeted with an almost synchronized exclamation of approval by the press. The Mirror declared ‘For originality I have no hesitation in declaring Jerry Springer The Opera to be the greatest production on earth . . . and in hell’ while The Times praised it as ‘gloriously spot-on’ (30 April 2003). The Herald called it ‘the stuff of dreams’ (1 May 2003), while The Independent noted the ‘heartening statement of intent by the Hytner regime. And what better place for a “chick with a dick” than in an opera with balls?’ (30 April 2003). The show gained a remarkable four or five stars in all the major UK newspapers known (internationally) for their notoriously tough critics (The Guardian, 6 May 2003). By the time JSTO opened at the Cambridge Theatre the production was well-known by the press and in theatre circles. Some reviews remained positively upbeat: ‘Seeing it for the second time, I remain convinced that this is a musical with a touch of genius about it’ (The Daily Telegraph, 11 November 2003). Many, however, were conspicuously more critical. ‘OK – it’s a terrific show’, another critic admitted, ‘But, just because it’s been hyped, may I point out its limitations?’ (Financial Times, 12 November 2003). The television broadcast brought JSTO to the attention of an altogether different press. Notorious for their sensational coverage of low-brow subjects, the British ‘tabloid’ press was a rather less benign chorus than the ‘highbrow’ reviewers who had previously covering the production. Characteristically, The News of the World criticized the BBC for broadcasting a show that it described as ‘a cult musical known for sex, swearing and violence’ (21 November 2004), and the Daily Mail accused JSTO of being ‘the most expletive-strewn programme in TV history’, running the headline ‘BBC to Air Springer Musical and all its 8,000 Obscenities’ (6 January 2005). 12

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Perhaps most detrimentally, rumours began to circulate in the press that the show was ‘not selling’, culminating in a claim made by the tabloid paper, the Daily Mail, that the musical was ‘losing money hand over fist’ at a rate of £40,000 a week (January 2004). The furious producers responded by presenting the paper with their accounts in March 2004, after which the Daily Mail admitted it was ‘wide of the mark’ and the show was in fact making a ‘healthy profit’. In spite of the paper’s retraction, Jon Thoday claimed the reputational damage to the production had resulted in cancellation of lucrative group bookings, resulting in substantial loss of income estimated at £400,000 (The Independent, 25 October) and filed a lawsuit against the Daily Mail (eventually settled out of court) (The Independent, 30 October 2004). The unforeseen legal expenses, coupled with high weekly running costs, jeopardized the production and precipitated a major fallout between the largest investors, who disagreed on the best way to save the show. Amid ongoing controversy, JSTO closed at the Cambridge on the 19 February 2005. In spite of its meteoric rise from the London fringe to the National Theatre, and a string of accolades, JSTO’s early success did not immediately translate to mass-market appeal and the production did not fulfil all the entrepreneur’s expectation or attain the hoped for levels of commercial success based on mass consumer demand. The regional tour was postponed and only began nearly a year later in January 2006.

Discussion The evolution of JSTO was facilitated by an extraordinary multi-staged production process, which itself attracted a great deal of attention and was held up as exemplary model of managing radical theatre. It was characterized by constant interaction with the audience and ruthless re-writing by the core creative team, which greatly impressed critics and contemporary observers: ‘What the opera has done is to change the way that many works are written’, Jon Thoday subsequently explained, ‘by following the stand-up comedian’s route of testing material through public workshops, Jerry Springer The Opera went through a unique development stage of public editing. By the time it reaches the West End, it will be on its sixth or seventh version. Other productions have now followed the same process. ‘It’s part of the reason that it’s so good’, he said, because ‘They did their editing in front of an audience’ (The Indepen-

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dent, 29 September 2003). The multi-staged production process was also seen as an attempt to manage the various risks associated with demand uncertainty. The entrepreneurs would only progress to the next stage if the previous stage proved to be a success along a number of key dimensions. At each stage the entrepreneurs could monitor the audience’s reception (consumer demand) and use it to adjust their predicted probabilities of future success. The case also illustrates how audience composition, critical acclaim and media coverage, which helped determined consumer demand, changed dramatically across stages. For example, the composition of the audience, especially in terms of their expectations and risk profile, changed dramatically over time. The BAC audience was risk-loving and experiment-familiar, the Edinburgh Fringe attracted devoted liberal punters and fellow thespians, and the National Theatre was supported by a dedicated elite of ‘educated’ tastes and the newly converted. The mass market audiences of the West End were decidedly different. Unlike the subsidized sector, attendance of a West End show represented significant cost and therefore a risk to the consumers. Not only were tickets significantly more expensive, but ‘additional visitor spend’ per audience member in London has been estimated at nearly seven times than that for regional theatres (Shellard, 2004). There are also important opportunity costs for consumers, as audience spending patterns suggest that outings to West End theatres are considered major events (Cogo-Fawcett, 2003).13 The way JSTO was received by the press also changed dramatically over time. Initially, JSTO was reviewed by niche reporters familiar with the back streets of London’s ‘fringe’ theatres. As it progressed through Edinburgh to the National, JSTO grabbed the attention of leading theatre critics in the national papers and internationally. By the time it had reached the West End the show was being reviewed by a much broader range of media including a spectrum of tabloid papers interested in, and highlighting for their readership, the various controversies that surrounded the production. Like the chorus in Greek tragedy, the press had a role to play in both reflecting and shaping public opinion. Intertwined with the changing audience composition and media coverage was the critical acclaim and various awards

13

Additional visitor spend has been estimated as £7.77 per audience number outside West End as opposed to £53.77 inside the West End (CogoFawcett, 2003, p. 6).

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the production received, which interacted and ultimately affected consumer demand. This production therefore highlights the significant interactions between the different determinants of consumer demand. While previous literature has focussed on the importance of identifying sources of uncertainty (Faulkner & Anderson, 1987; Miller & Shamsie 1999), it does not sufficiently explore the interactions between them. Furthermore, while a multi-stage production process pursued by the entrepreneurs contributed to their management of individual uncertainties, this case suggests that interaction effects are what had a significant and sizeable impact on the productions eventual performance. Future research should therefore consider such interaction effects in more detail.

Conclusions While many creative industry studies focus on the US film industry, this study considers theatrical production in the UK context. The development of complementary case studies, in another industry and country, could permit replication and cross-case corroboration of specific propositions (Eisenhardt, 1989, 1991). Because the theatre industry is a highly immediate art form (for example, unlike film, both actors and audience are ‘live’ and there is no recourse to a secondary market such as video rental) the uncertainties facing creative entrepreneurs are amplified, providing an interesting context in which to observe their strategies, production structures and management of underlying uncertainties. This case supports prior research that argues that identifying specific sources of uncertainty is key to entrepreneurial success. In order to better understand demand uncertainty in the theatre industry, the article proposes that it can be separated into the three key determinants of audience composition, critical acclaim and media coverage. The case study analysis also illustrates how these distinct sources of uncertainty cannot be treated in isolation, but interact in complex ways. Creative entrepreneurs’ riskmanagement strategies must therefore be sensitive to both individual contributing factors and the interaction effects between them.

References Admanti, A. and Perry, M. (1991) Joint Projects without Commitment. Review of Economic Studies, 58, 255–74. Botosan, C.A. (1997) Disclosure Level and the Cost of Equity Capital. Accounting Review, 72(3), 323– 49. © 2006 The Author Journal compilation © 2006 Blackwell Publishing


Caves, R.E. (2000) Creative Industries: Contracts between Art and Commerce. Harvard University Press, Cambridge, MA. Cogo-Fawcett, R. (2003) Relationships between Subsidised and Commercial Theatre. The Arts Council of England. Available at http://www. artscouncil.org.uk/. De Vany, A. (2004) Hollywood Economics: How Extreme Uncertainty Shapes the Film Industry. Routledge, London. Diamond, D.W. (1985) Optimal Release of Information by Firms. Journal of Finance, 40(4), 1071–94. Dyer, W.G. and Wilkins, A.L. (1991) Better Stories, Not Better Constructs, To Generate Better Theory: A Rejoinder to Eisenhardt. Academy of Management Review, 16(3), 613–20. Eisenhardt, K.M. (1989) Building Theories from Case Study Research. Academy of Management Review, 14(4), 532–51. Eisenhardt, K.M. (1991) Better Stories and Better Constructs: The Case for Rigor and Comparative Logic. Academy of Management Review, 16(3), 620– 28. Faulkner, R.R. and Anderson, A.B. (1987) ShortTerm Projects and Emergent Careers: Evidence from Hollywood. American Journal of Sociology, 92(4), 879–909. Fee, E.C. (2002) The Costs of Outside Equity Control: Evidence from Motion Picture Financing Decisions. Journal of Business, 75(4), 681–711. Ginsburgh, V. (2003) Awards, Success and Aesthetic Quality in Arts. Journal of Economic Perspectives, 17(2), 99–112. Gompers, P.A. (1995) Optimal investment, monitoring and the staging of venture capital. Journal of Finance, 50, 1461–89. Hirsch P.M. (1972) Processing Fads and Fashions: An Organization-Set Analysis of Cultural Industry Systems. American Journal of Sociology, 77(4), 639–59. Hirsch, P.M. (2000) Cultural Industries Revisited. Organization Science, 11(3), in Special Issue: Cultural Industries: Learning from Evolving Organizational Practices. (May–Jun., 2000), 356–61. Holbrook, M.B. (1999) Popular Appeal versus Expert Judgments of Motion Pictures. Journal of Consumer Research, 26(2), 144–55. Jones, C. (2001) Co-evolution of Entrepreneurial Careers, Institutional Rules and Competitive Dynamics in American Film, 1895–1920. Organization Studies, 22(6), 911–44. Knight, F.H. (1921) Risk, Uncertainty and Profit. BeardBooks, Washington, D.C.


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Lampel, J., Lant, T. and Shamsie J. (2000) Balancing Act: Learning from Organizing Practices in Cultural Industries. Organization Science, 11(3), Special Issue: Cultural Industries: Learning from Evolving Organizational Practices, 263–69. Miller, D. and Shamsie, J. (1999) Strategic Responses to Three Kinds of Uncertainty: Product Line Simplicity at the Hollywood Film Studios. Journal of Management, 25(1), 97–116. Milliken, F.J. (1987) Three Types of Perceived Uncertainty about the Environment: State, Effect, and Response Uncertainty. Academy of Management Review, 12(1), 133–44. Mintzberg, H. and McHugh, A. (1985) Strategy Formation in an Adhocracy. Administrative Science Quarterly, 30(2), 160–98. Neher, D.V. (1999) Staged Financing: An Agency Perspective. Review of Economic Studies, 66, 255– 74. Shellard, D. (2004) Economic impact study of UK theatre. Arts Council of England London. Staber, U. (2004) Networking Beyond Organizational Boundaries: The Case of Project Organizations. Creativity and Innovation Management, 13(1), 30. Starkey, K., Barnett, C. and Tempest, S. (2000) Beyond Networks and Hierachries: Latent organization in the UK Television Industry. Organization Science, 11, 299–305. Wang, S. and Zhou, H. (2002) Staged Financing and Venture Capital: Moral Hazard and Risks. Journal of Corporate Finance, 10, 131–55. Yin, R.K. (1981) The Case Study Crisis: Some Answers. Administrative Science Quarterly, 26(7), 58–65. Zajac, E.J., Kraatz, M.S. and Bresser, R.K.F. (2000) Modeling the Dynamics of Strategic Fit: A Normative Approach to Strategic Change. Strategic Management Journal, 21(4), 429–53.

Anna M. Dempster ([email protected]) is a Lecturer in the Department of Management, Birkbeck College, University of London. Her current research is broadly concerned with innovation in highly uncertain environments, including models of innovation and risk management strategies in the creative industries, with a focus on the theatre industry.

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Lifestyle Meets Market: Bohemian Entrepreneurs in Creative Industries Doris Ruth Eikhof and Axel Haunschild By linking lifestyle studies with creative industries research, this article opens a new perspective on creativity and innovation management. We argue that artists in the creative industries have to bridge the gap between artistic work and the economic need for self-management, and that a bohemian lifestyle essentially supports them in doing so. The bohemian lifestyle, which is characterized by a devotion to art for art’s sake, is an essential source for work motivation of artists and an increasing number of other creative workers. The article draws upon an empirical study into artistic work and employment in German theatres. Enacting a bohemian lifestyle enables actors as ‘bohemian entrepreneurs’ to integrate intensive selfmanagement and self-marketing as well as subordination of private life to work into their artistic work life. Analysing the link between lifestyle and creative work is crucial for understanding the way in which creative workers become artists and, at the same time, entrepreneurs of their creative talent.

Introduction

C

reative industries are said to be a special sphere of economic production: art and artistic egos rule, managers are ‘the enemies’, motley crews turn production processes into mayhem, time flies and individual success is a result of God-given talent and earthlyearned networks of contacts. As heterogeneous as these creative industries are, researchers and practitioners identified the conflict between creativity and control to be a fundamental issue in all of them (e.g. Alvarez et al. 2005; Caves 2000; Davis & Scase 2000; Howkins 2001; Jeffcutt & Pratt 2002; Sutton 2001). Creative work is reported to be spontaneous, unpredictable and following no strict rules, whereas interference with the market brings about the need to manage, plan and organize processes of creative production. Since creative industries depend on artistic motivation as their primary resource for economic production, these tensions have to be bridged at individual, organizational and field level. These tensions are mirrored in a more encompassing dichotomy, the antagonism between art and business (see also Caves 2000; Lampel, Lant & Shamsie 2000). Art as a sphere of aesthetic performance in its own right deliberately negates economic market orientation. It thrives not only on being art for art’s sake,

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but also on being non-economic (Bourdieu 1993, 1999). The conflict between art and business and the resulting consequences can be studied most persuasively amongst those artists who have to market and manage their own labour power. A large number of workers in the creative industries are self-employed or – because of strong pressures on internal labour markets – quasi self-employed, and thus forced to selfmanage their own artistic capabilities (cf. Blair, Grey & Randle 2001; Storey, Salaman & Platman 2005). These entrepreneurs of themselves have to integrate two identities: their identity as an artist, which provides them with work motivation and creative impetus, and their identity as a ‘small firm’ (Menger 1999), which enables them to make a living out of being an artist. The aim of this article is to analyse how the gap between art and business, between being artist and self-entrepreneur, is bridged. We argue that in order to understand how artists perceive themselves as involved in the production of art for art’s sake and at the same time manage themselves as market subjects, the phenomenon of lifestyle has to be considered. Most artists understand themselves as bohemians, living a lifestyle that is distinct and distinguished from the rest of society, especially the bourgeoisie and business. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

LIFESTYLE MEETS MARKET

Drawing on a qualitative study among German theatre artists, we will show that their bohemian lifestyle is central to artistic self-understanding, influences working life and allows integrating artistic and selfmanagement activities. We will use the term ‘bohemian entrepreneur’ to describe this amalgamation of theatre actors’ lifestyle with entrepreneurial practices of risk taking, allocation of individual creative resources and selfmarketing. However, neither the phenomenon of bohemian lifestyle nor our findings are confined to artists. As Brooks (2000) and Florida (2002) show, an increasing number of workers derive their work motivation from a – more or less extreme – bohemian lifestyle. Most of them work in creative or artistic businesses, and many are entrepreneurs of creative businesses or of their own labour talent (cf. Howkins 2001). Thus, analysing the bohemian practices that help to bridge the gap between artistic work and the economic need for selfmanagement adds to our understanding of a phenomenon most relevant for the creative industries in general and for creative entrepreneurs in specific. After describing the empirical research in the following section, we will introduce the concept of lifestyle and describe the characteristics of bohemian lifestyle in particular. The third section presents our empirical findings and explores the links between bohemian lifestyle and everyday work for German theatre artists. To conclude, we discuss the relevance of bohemian lifestyle for being an artistic selfentrepreneur in the creative industries.

Empirical Background The article draws on qualitative empirical data and secondary data from a research project on German theatre conducted by the authors between 2000 and 2003. The overall aim of the project was to analyse various aspects of theatrical employment at the individual, organizational and industry levels. The German theatre system was chosen since its focus on projects results in a mix of self-employment and temporary employment that is likely to become widespread in other project-focused industries too (see also Davis & Scase 2000; Lampel et al. 2000). For this article, we have focused on the individual employment situation of creative staff and mainly draw on data from semi-structured in-depth interviews (cf. King 1994; Miles & Huberman 1994) with theatre actors, theatre managers and directors. Within this group, 30 interviews were carried out and analysed along categories such as © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

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career aims, work motivation, perception of work situations, flexibility and spatial mobility and enactment of work–life boundaries. Most of the interviewees were employed by three repertory theatres, which stage a different play every night (the repertory system), derive around 80 percent of their annual budgets from public subsidies and rank as one of the approximately ten most artistically renowned theatres in Germany. In order to relate the interview data to the broader structural context, representatives of the national employers’ association (Deutscher Bühnenverein) and employees’ association (Genossenschaft Deutscher BühnenAngehöriger), the state-run work agency for actors (ZBF) and a state-run theatre school were interviewed as experts (see also Haunschild 2003). Additional information was collected in participant observation, which comprised attending premiere celebrations, gatherings after shows, rehearsals and other cultural events (e.g. readings), as well as informal discussions mainly with freelance artists. To validate the subjective information collected in the interviews, interview material was contrasted with information from secondary data sources such as statistical reports (e.g. by Deutscher Bühnenverein and Genossenschaft Deutscher Bühnen-Angehöriger), media coverage on the German theatre industry and artists in newspapers and practitioner journals, and information given on the websites of theatres and intermediary organizations. Our findings are derived from several rounds of independent and joint interpretations of the empirical data. To ensure intersubjective validity, research assistants were included in these discussions, and feedback sessions with respondents were carried out to validate the findings. From our interviews with theatre artists, the notion of lifestyle emerged as a dominant issue in individual work and employment. To verify this finding, interviews with experts, secondary sources and literature on artistic or bohemian lifestyle were analysed with respect to the relationship between bohemian lifestyle and artistic work. Indicative phrases from the interviews (indicated with inverted commas) are used to illustrate our findings.

La Vie de Bohème Since the nineteenth century, an artistic lifestyle has emerged that differs significantly from lifestyles in other societal segments. This so-called bohemian lifestyle is marked by

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egocentrism and a deliberate contradiction of bourgeois norms and values. In modern times, the ideas of praising art for art’s sake and negating bourgeois world views, and thus the main point of reference for Western society in general and the economic sphere specifically, have been central to artistic identities (Bourdieu 1999: 96–103; see also Boltanski & Chiapello 1999; Brooks 2000). In this section, we will introduce the concept of lifestyle in general, and we will outline the historical roots and the main characteristics of the bohemian lifestyle as described in the literature. Lastly, we will discuss the relevance of a bohemian lifestyle for artists and creative workers today. Lifestyles represent collectively shared patterns of perception, taste and behaviour, which are usually seen as rooted in social class and milieu (Bourdieu 1984; Weber 1972). In ‘La distinction’, his famous study of French society, Bourdieu has shown how social background is linked to taste (clothing, sports, food etc.), attitude and verbal and non-verbal patterns of expression. Studies of lifestyle focus on societal diversity and seek to identify societal sub-groups according to their distinguishable tastes, perceptions and behaviours (see, for example, Bourdieu 1984; Devine 1997; Schulze 1992; Vester 2005). Lifestyles have been shaped significantly by the emergence of work organizations. Industrialization and the development of bureaucratic organizations (together with the supporting institutions such as social security systems, education systems etc.) ‘created’ social groups sharing a social and/or professional background as well as a certain lifestyle: factory/blue-collar workers, white-collar workers, public servants, sales people, senior managers and so on (Biernacki 1985; Bourdieu & Boltanski 1981; Dennis, Henriques & Slaughter 1956; Deutschmann 2002; Goldthorpe et al. 1968; Hartmann 1995; Savage, Bagnall & Longhurst 2005; see also, for example, Arthur Miller’s Death of a Salesman). Thus, economic production and the phenomenon of lifestyles have long been linked – although their relationship has not been researched systematically. Recently, though, the lifestyle of creative workers has become a focus of organization theory and management research (Davis & Scase 2000; Eikhof & Haunschild 2004; Florida 2002; Howkins 2001). In a broad sense, this lifestyle can be characterized as bohemian. The name ‘bohemian’ goes back to groups of ‘gypsies’ consisting of loiterers, impostors, beggars, vagabonds and tramps – called bohemians because of their ostensible local origin in Bohemia (Stein 1981). It was Henri Murger’s ‘Scènes de la vie de Bohème’ (1988;

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first published in Paris, France, 1847–1849 as a magazine series and in 1951 as a book) that first expressed a certain way of living life as an artist beyond mainstream lifestyles. This bohemian lifestyle, as described by Murger (see also Kreuzer 1968; Stein 1981), was mainly characterized by its distinction from and often deliberate turning away from middle-class (bourgeois) conventions. In contrast to these conventions a bohemian life was marked by principles or ideas such as spontaneity, sporadic employment, lack of income, continuous improvization, by living from hand to mouth and by trying to enjoy life from day to day instead of subordinating to fixed (work) schedules. Work in particular was not regarded as a means to earn one’s living but as a vehicle for self-fulfilment. Since most bohemians were artists, self-fulfilment in work was tantamount to artistic expression and the participation in the art world for art’s sake (Becker 1982, Caves 2000). The overall work motivation was to integrate work and life into life as a work of art itself. Since bohemian clusters existed all across Europe, for example in Montmartre, Berlin, Vienna, Schwabing in Munich, Prague or Ascona, bohemians were often not nomads in a strict sense. Rather, they used to live in transient or transient-looking accommodation (the proverbial mansards for example). Groups of bohemians were heterogeneous but the typical member was a young, not yet successful (male) artist. Despite a high degree of individualism and the cultivation of selfishness and narcissism among this group there also was a strong feeling of belonging to a social milieu (Stein 1981). This combination of selfishness, collectivism and non-permanence makes it possible to understand the vital role of public space to enable continuous communication with other bohemians: coffee houses, pubs, gin palaces and restaurants. According to Kreuzer (1968), the societal situation and position of artists at the beginning of the nineteenth century was essential for the emergence of a bohemian lifestyle. On the one hand, there was a certain liberal attitude among the bourgeois class that provided tolerance towards these forms of living; on the other hand, the bohemian lifestyle helped an ‘artistic working class’ to develop a self-identity at the margins of society. Therefore, the bohemian lifestyle is not only a negation of societal values but also a societal product or element. Many members of the bourgeoisie condemned and envied bohemians at the same time. Undoubtedly, the outlined stereotype of a bohemian lifestyle still exists as a reference point for life scripts of artists (and would-be artists). However, societies change and, there© 2006 The Authors Journal compilation © 2006 Blackwell Publishing


fore, relational positions in the social space underlie a process of alteration. Artistic production itself has become more industrialized because of the possibility of technical reproduction (Benjamin 1977; Davis & Scase 2000; Smith & McKinley 2005) and a growing economic pressure on the market for artistic goods (Becker 1982; Caves 2000). Therefore, artists are more integrated in complex production processes with a high degree of labour division. At the same time, flexible forms of work have become widespread in non-artistic industries, too (Cappelli 1995), making work arrangements of artists and non-artists similar. Additionally, more and more creative or knowledge workers adapt elements of an artistic lifestyle (Brooks 2000, see also examples in Howkins 2001). This spreading of a (quasi-)bohemian principles and lifestyle co-evolves with flexible forms of work and a desire for a higher degree of self-actualization at work (Boltanski & Chiapello 1999; Florida 2002). Therefore, it is today more difficult to identify bohemians in the classical sense (see also Stein 1981: 10). Whereas the traditional notion of bohemian applies to irregularly or nonemployed artists only, the contemporary understanding of ‘bohemian’ is broader. New fields of artistic activity have emerged (film, video, photography, web design etc.) and work arrangements of artists vary today. Artists may work on the basis of an open-ended contract (orchestra musicians), on a temporary or project basis (actors, authors) or without any employer (painters or sculptors). One thing has not changed though: for artists, lifestyle and work activities are strongly linked. A bohemian lifestyle helps to amalgamate work and life and to follow only the logic of l’art pour l’art in doing so. Stable employment relationships as a means to earn one’s living may be part of this, but are usually frowned upon. The exploration of the role of bohemian lifestyle in artists’ life is thus essential for a deeper understanding of self-entrepreneurs in the creative industries. In the following section, we will outline practices by which theatre actors, as ‘bohemian entrepreneurs’, combine bohemian lifestyle and self-management. We will use this example to show the way in which art and economy are intertwined in the creative industries and how creative entrepreneurs deal with the resulting tensions.

Bohemian Entrepreneurs in Theatre Theatre actors in German repertory theatres either work as freelancers with contracts for single productions or on temporary contracts © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

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as ensemble members. The latter have been the focus of our research, since ensemble membership is the main career aim of professional actors in Germany. An average repertory theatre employs a group of 25–40 actors on temporary contracts, the collectively negotiated Normalvertrag Bühne. These contracts run for one year and are automatically prolonged for another year if neither party to the contract terminates them. The theatre management casts plays with ensemble members, who will then rehearse for the premieres during daytime and put on repertory plays at night. In addition to their ensemble work, many actors engage in projects outside the theatre, for instance in much better paid TV or film productions. Compared to the Anglo-Saxon theatrical system, ensemble contracts grant German actors considerable job security. Nevertheless, ensemble actors are notably active as marketers and entrepreneurs of their own labour power. They experience high pressures on internal and external labour markets (see also Becker 1982; Menger 1999) since (i) only few roles per play offer the opportunity to gain artistic reputation through outstanding performance and everyone in the ensemble competes for these roles; (ii) role assignments are influenced by reputation gained in theatreexternal projects; (iii) theatre management can terminate ensemble contracts easily, with more than enough other actors in the market looking for an ensemble contract; and (iv) theatre management regularly hires freelance actors as guests for a play if they consider none of the ensemble members good enough or suitable for the role. The effective average contract duration of ensemble members equals roughly half the average length of employment relationships (five years for established actors, two to three for beginners). As an actor’s career is defined by moves from smaller to larger theatres, actors have to be mobile in terms of place at least during the first 20 years of their career. In addition to the flexibility required by the tight time schedule of daily rehearsals and nightly shows, short-term mobility is essential when actors work on several projects at the same time: Well-cast actors may shoot a film or rehearse for a guest role during the day several hundred kilometres from the place of their nightly show. Our interviewees reported their daily work life to be influenced heavily by calculating their reputation within the occupational community. Indeed, despite all claims of contributing to l’art pour l’art, they were explicitly concerned with sustaining and increasing their employability by strategic networking,

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moving to a more prestigious theatre, acting as a guest actor in a high-status festival production or starring in a movie. Their constant calculation of investments and returns for all of their work relationships and their allocation of resources as time, energy and artistic creativity justify interpreting actors as self-employed employees or entrepreneurs of themselves, respectively (cf. Eikhof & Haunschild 2004; similar accounts of the market situation of painters and other artists are given by Becker 1982; White & White 1993). In addition to the self-entrepreneuring activities, a second, equally strong, characteristic of actors’ work practices became obvious from the empirical data. To a large degree, the actors’ behaviour and verbal statements match the bohemian lifestyle as described above. Our interviewees tended to regard their job as a vocation rather than an occupation and felt called to devote their working life to the production of theatre art as a greater good. For a lot of them, a career in acting has been a childhood dream, and often they could not even imagine working in another occupation. Our study shows bohemian principles to be most apparent in two fields of the actors’ working life: accounts of daily working life, and subordination of private life to work. Accounts of Daily Working Life When describing their daily work life, our respondents did not employ terms commonly used for describing work, such as ‘boss’, ‘subordinate’ or ‘personnel management’. Many had trouble (and some failed) to apply these terms to their own work relationships, usually ending up categorizing the theatre manager as ‘some kind of boss’. These labelling difficulties were accompanied by an interpretation of hierarchy that judges individuals’ positions according to their artistic impact. Actors work in co-operative (and project-based) relationships with directors and are usually required to offer their own interpretation of the roles rather than being told how to act. Consequently, the interviewees acknowledged directors’ artistic influences on individual projects, but did not regard them as bosses in general. Theatre managers are responsible for a theatre’s overall artistic outcome, but have little direct artistic influence on specific projects, and were thus not recognized as artistically superior by the actors either. Additionally, theatre actors did not talk of ‘going into work’, but of ‘going into theatre’ or ‘going in for rehearsal’. Asked about success, all interviewees opted for ‘being loved by theatre management, directors and critics’ instead of high wages. They also stressed the friendship-

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like nature of their relationships with fellow staff members. Summed up, in everyday life they did not present themselves as workers in the usual, slightly negatively connotated sense of labourers but as contributors to the production of l’art pour l’art. Subordination of Private Life to Work In various aspects, our interviewees subordinated most private and personal aspects of life to their work. They reported buying only furniture with which they could easily move house avoiding financial commitments such as real estate ownership or life insurances and choosing sports activities that enhance stage fitness. They recounted (re-)scheduling meetings with friends only short-term according to the next day’s rehearsal schedule, and accepted even family troubles and divorces as results of spatial mobility with an explicit devotion to theatre. According to our respondents, theatre actors in general have few friends outside theatre, and even love relationships rarely transgress the occupational community. To actors, their artistic work justifies a lifestyle that to average citizens will seem restless, excessively work-dominated, and with respect to personal relationships, often very inconsiderate. In these two fields in particular, but also in their work attitude in general, actors show practices that can thus be interpreted as elements of a bohemian lifestyle. Both the interviewees’ deliberate verbal distinction from middle-class conventions and values (e.g. describing commuters as ‘grey worn-out workers on the subway’) and their willingness to be mobile and spontaneous and to follow project work around the country for art’s sake strongly suggest that actors are driven by bohemian principles. To analyse the relationship between selfentrepreneurship and bohemian lifestyle, it is most beneficial to study the actors’ selfmarketing of their labour power. On the one hand, bohemian principles include the deliberate rejection of economic principles and thus prohibit such economically driven behaviour. On the other hand, actors need to actively market their creative talent in order to be included in the production of art for art’s sake. Both our interviews and participant observations revealed that actors deal with this contradiction by exerting their self-marketing through bohemian practices. Just like ‘old school bohemians’, the actors used public spaces such as the theatre canteen or premier celebrations for gathering information and selling their labour power. Theatre © 2006 The Authors Journal compilation © 2006 Blackwell Publishing


canteens and premiere celebrations are exchange forums for what at first glance seems to be daily theatre gossip, but is indeed vital information for a career in acting: who has cast whom for which project, who has sacked whom, who is planning which project and might be interested in new staff, which directors are going to be hired in the next season, that is, will affect future role assignments and should thus be schmoozed beforehand, whom did the theatre manager congratulate on a performance and to whom has he not spoken for several weeks. All this information keeps an individual actor up to date about his or her market value, future job possibilities and (potential) rivals. Canteen talk and premiere celebrations are used to make and maintain contacts, and to secure future employment. Theatre artists of all kinds try to get involved with people who might be able to offer jobs and career opportunities. Watching premiere celebrations from an upper balcony reveals clusters of artists carefully positioning themselves close to the influential people, waiting for an opportunity to edge into their conversation. As a rule of thumb, actors clustered around directors, whereas directors and authors clustered around theatre managers. Additionally, canteens and premiere celebrations are platforms on which acquaintances and alliances are publicly demonstrated. Being seen with an influential theatre manager, an award-winning director or a group of hip acting colleagues, stage designers and upand-coming authors enhances the reputation of an actor or actresses as being successful. Consequently, artists have to ‘avoid being seen with the wrong people’, that is, unemployed actors or less successful directors. Observed activity in these public spaces as well as stories told in interviews also show a typically bohemian combination of individualism and collectivity. On the one hand, actors understand, stylize (and sell) themselves as unique artists, emphasizing their uniqueness, for example, through extravagant clothing, typical gestures or habits such as preferences for special drinks or cigarettes. On the other hand, actors constantly referred to the occupational community as ‘the theatre family’, which they love and love being part of. They demonstrated closeness with others through gestures such as hugging and kissing, not only for hellos and goodbyes, but also throughout conversations or as good luckrituals before a show. It goes without saying, though, that they take care to be seen hugging and kissing only the ‘right’ kind of people. Throughout all these activities, boundaries between work and private activities are so blurred that they tend to be invisible. But liv© 2006 The Authors Journal compilation © 2006 Blackwell Publishing

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ing out bohemian principles, this poses little trouble for the actors. These examples show how the bohemian lifestyle allows artists to integrate selfmanagement activities into their artistic work life, and to market themselves without losing their artistic work motivation. Economic actions – such as marketing one’s labour power or moving cities for a job – are carried out within typically bohemian practices – such as partaking in public events connected to art or living a nomad life – and can thus be camouflaged as part of the lifestyle of a bohemian entrepreneur rather than being a cold-blooded businessman. The idea of being part of a bohemian milieu, and sharing cultural rather than materialistic or economic values, is hence not only central to the actors’ self-understanding, it also vitally backs up their high involvement with work and helps them to cope with disadvantages that other employees would find intolerable (e.g. short-term availability and mobility). Without the bohemian ambition to integrate all aspects of life into an individual life that is itself a work of art, devoted to l’art pour l’art, neither the continuous devotion to theatrical projects, which is seen as necessary to achieve certain artistic quality nor the selfmanagement activities necessary for a career in acting could be ensured.

Conclusion This article has shown that an analysis of creative entrepreneurs has to go beyond issues of individual creativity meeting managerial control in organizations. By including the more abstract antagonism of art versus business into the analysis, the bohemian lifestyle was identified as a concept contributing to the understanding and explanation of the link between individual behaviour of creative workers, and social structures (in other creative industries settings, trusted mediators fulfil similar functions, cf. Alvarez et al. 2005). By linking lifestyle studies with creative industries research, this article has opened a new perspective on creativity and innovation management. We have analysed theatre actors as an example of the large number of workers who make their living as entrepreneurs of their artistic or creative talent in the creative industries. Our study has shown how their work life is shaped by both a considerable extent of selfmanagement and by bohemian lifestyle. Although the creative industries can be understood as that part of the economy which depends on artistic motivation as its primary resource for production (cf. Eikhof & Haunschild 2006), the extent to which workers per-

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ceive themselves as artists and are driven by bohemian principles varies. Nevertheless, since a growing number of workers in the creative industries draw work motivation from bohemian ideas (cf. Brooks 2000; Florida 2002), theatre actors can be studied as emblematic cases of how a bohemian lifestyle enables selfentrepreneurs in the creative industries to integrate artistic and self-management activities. As the example of theatre artists reveals, creative and artistic workers show an extraordinarily high involvement with work. Long and irregular working hours are one aspect, but one that (a) is neither a unique feature of the creative industries, as it is also typical of, for example, hospital staff, airline crews or general managers, and (b) can be backed up by other, non-bohemian work motivations as well, for example by the bourgeois or protestant work ethic of conscientiousness. What is special, though, is the explicit devotion of all energy and aspects of life to work, combined with explicit self-management. Theatre artists bring not only artistic talent to the market but their whole personality (see also Menger 1999; Storr 1972). In entrepreneurial terms, they exploit their individual resources far more inclusively and thoroughly than workers in other industries. Contrary to long and irregular working hours, devotion to (artistic) work and the understanding of oneself as an artist rather than a responsible member of the family or society could not be justified by a bourgeois or protestant work ethic. Bohemian principles, though, endorse exactly such behaviour as the ‘right’ work-life attitude. Additionally, selfmanagement can be carried out within activities perceived to be typically bohemian. The bohemian lifestyle allows integrating artistic work motivation with economic rationales and concerns about one’s market value. What also has to be taken into account is the special setting of the creative industries as an economic sphere. Although, as Kreuzer (1968) claims, the bohème as an intellectual community have succeeded in increasing their independence from the rest of society by setting their own standards, the creative industries evolved, providing a work environment in which economic principles of the market, added value, investment and return mingle with the artistic principles of individual genius, reputation, self-fulfilment and producing art for art’s sake. A central reason for this co-existence is that, from an organization or industry perspective, bohemian principles play into the hands of economic profitability (see also Boltanski & Chiapello 1999): bohemian workers who cherish their independence do not care about, for example, costly longterm employment relationships, and art for

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art’s sake as a work motivation outperforms all organizational incentive schemes in terms of efficiency. Thus, the economic environment is condusive towards bohemian principles such as emphasis on individual performance, devotion to work, networking or the ideals of being mobile and moving from project to project in order to prevent deadlocks. As a result, self-employed workers in the creative industries do not have to see themselves as cold-blooded, hard-hearted entrepreneurs exploiting their very own individual creative potential. Their work context allows them to maintain a bohemian self-understanding, for which their work involvement simply means living out the bohemian principles of selffulfilment and devotion to l’art pour l’art and managing themselves is part of being an artist. Enacting a bohemian lifestyle enables selfemployed (employees) in the creative industries to be both artists and entrepreneurs of their creative talent.

Acknowledgements The authors would like to thank two anonymous reviewers and Chris Warhurst for their helpful comments. We are also grateful to Jana Schultz-Buhr for her help and faultless support.

References Alvarez, J.L., Mazza, C., Strandgaard Pedersen, J. and Svejenova, S. (2005) Shielding Idiosyncrasy from Isomorphic Pressures: Towards Optimal Distinctiveness in European Film Making. Organization, 12(6), 863–88. Becker, H.S. (1982) Art Worlds. University of California Press, Berkeley. Benjamin, W. (1977) Das Kunstwerk im Zeitalter seiner technischen Reproduzierbarkeit. Suhrkamp, Frankfurt (first published in 1936). Biernacki, R. (1985) The Fabrication of Labor. Germany and Britain, 1640–1914. University of California Press, Berkeley. Blair, H., Grey, S. and Randle, K. (2001) Working in Film. Employment in a Project Based Industry. Personnel Review 30(2), 170–85. Boltanski, L. and Chiapello, E. (1999) Le Nouvel Esprit du Capitalisme. Gallimard, Paris. Bourdieu, P. (1984) Distinction: A Social Critique of the Judgement of Taste. Routledge, London. Bourdieu, P. (1993) The Field of Cultural Production. Essays on Art and Literature. Columbia University Press, New York. Bourdieu, P. (1999) Die Regeln der Kunst. Genese und Struktur des Literarischen Feldes. Suhrkamp, Frankfurt. Bourdieu, P. and Boltanski, L. (1981) Titel und Stelle. Zum Verhältnis von Bildung und Beschäf© 2006 The Authors Journal compilation © 2006 Blackwell Publishing


tigung. In Bourdieu, B., Boltanski, L., de Saint Martin, H. and Maldedio, P. (eds), Titel und Stelle: Über die Reproduktion sozialer Macht, Europäische Verlagsanstaff Frankfurt pp. 89–115. Brooks, D. (2000) Bobos in Paradise. Simon & Schuster, New York. Cappelli, P. (1995) Rethinking Employment. British Journal of Industrial Relations, 33(4), 563–602. Caves, R.E. (2000) Creative Industries. Contracts between Art and Commerce. Harvard University Press, Cambridge MA. Davis, H. and Scase, R. (2000) Managing Creativity. The Dynamics of Work and Organization. Open University Press, Buckingham PA. Dennis, N., Henriques, F. and Slaughter, C. (1956) Coal is Our Life: An Analysis of a Yorkshire Mining Community. Eyre & Spottiswoode, London. Deutschmann, C. (2002) Postindustrielle Industriesoziologie. Juventa, München & Weinheim. Devine, F. (1997) Social Class in America and Britain. Edinburgh University Press, Edinburgh. Eikhof, D.R. and Haunschild, A. (2004) Arbeitskraftunternehmer in der Kulturindustrie. Ein Forschungsbericht über die Arbeitswelt Theater. In Pongratz, H.J. and Voß, G.G. (eds), Typisch Arbeitskraftunternehmer? Befunde der empirischen Arbeitsforschung. Sigma, Berlin pp. 93–113. Eikhof, D.R. and Haunschild, A. (2006) For art’s sake! Artistic and economic logics in creative production. Journal of Organisational Behaviors (forth coming). Florida, R. (2002) The Rise of the Creative Class and How it’s Transforming Work, Leisure, Community and Everyday Life. Basic Books, New York. Goldthorpe, J.H., Lockwood, D., Bechhofer, F. and Platt, J. (1968) The Affluent Worker. Industrial Attitudes and Behaviour. Cambridge University Press, Cambridge. Hartmann, M. (1995) Deutsche Topmanager: Klassenspezifischer Habitus als Karrierebasis. Soziale Welt, 46(4), 440–68. Haunschild, A. (2003) Managing employment relationships in flexible labour markets: The case of German repertory theatres. Human Relations, 56(8), 899–929. Howkins, G. (2001) The Creative Economy: How People Make Money From Ideas. Penguin London. Jeffcutt, P. and Pratt, A.C. (2002) Managing Creativity in the Cultural Industries. Creativity and Innovation Management, 11(4), 225–33. King, N. (1994) The Qualitative Research Interview’. In Cassell, C. and Symon, G. (eds.), Qualitative Methods in Organizational Research. A Practical Guide. Sage, London pp. 14–36. Kreuzer, H. (1968) Die Boheme. Analyse und Dokumentation der intellektuellen Subk ultur vom 19. Jahrhundert bis zur Gegenwart. Metzler, Stuttgart. Lampel, J., Lant, T. and Shamsie, J. (2000) Balancing Act: Learning from Organizational Practices in Cultural Industries. Organization Science, 25(3), 541–74. Menger, P-M. (1999) ‘Artistic Labor Markets and Careers. Annual Review of Sociology, 25, 541–74. Miles, M.B. and Huberman, A.M. (1994) Qualitative Data Analysis, 2nd edn, Sage, London. Murger, H. (1988) Scènes de la Vie de Bohème. Gallimard, Paris (first published in 1851). © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

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Savage, M., Bagnall, G. and Longhurst, B. (2005) Local Habitus and Working-Class Culture. In Devine, F., Savage, M., Scott, J. and Crompton, R. (eds), Rethinking Class. Culture, Identities and Lifestyles. Palgrave, Houndmills, Basingstoke pp. 95–122. Schulze, G. (1992) Die Erlebnisgesellschaft. Kultursoziologie der Gegenwart. Campus, Frankfurt am Main. Smith, C. and McKinlay, A. (2005) Creative Labour: Content, Contract and Control. Paper presented at the 23rd Annual International Labour Process Conference Glasgow. 21.–23.3.05. Stein, G. (1981) Vorwort. In Stein, G. (ed.), Bohemien – Tram – Sponti. Boheme und Alternativkultur. Fischer, Frankfurt pp. 9–17. Storey, J., Salaman, G. and Platman, K. (2005) Living with Enterprise in an Enterprise Economy: Freelance and Contract Workers in the Media. Human Relations, 58(8), 1033–54. Storr, A. (1972) The Dynamics of Creation. Atheneum, New York. Sutton, R.I. (2001) The Weird Rules of Creativity. Harvard Business Review, 79(8), 94–103. Vester, M. (2005) Class and Culture in Germany. In Devine, F., Savage, M., Scott, J. and Crompton, R. (eds), Rethinking Class. Culture, Identities and Lifestyles. Palgrave, Houndmills, Basingstoke pp. 69–94. Weber, M. (1972) Wirtschaft und Gesellschaft. Mohr Siebeck, Tübingen (first published in 1922). White, H.C. and White, C.A. (1993) Canvases and Careers. Institutional Change in the French Painting World. University of Chicago Press, London (first published in 1965).

Doris Ruth Eikhof ([email protected]) is a lecturer in organization studies at the University of Stirling, Scotland, and a research fellow at the Wirtschaftsuniversität Wien, Austria. Her research interests include creative industries, social theories in organization studies, changing forms of work and organization and work-life boundaries. Current research projects focus on careers in the non-profit sector and employment relations in football. Axel Haunschild (A.Haunschild@rhul. ac.uk) is a senior lecturer in human resource management at Royal Holloway, University of London, and a guest professor in HRM at the University of Innsbruck, Austria. His research interests include current changes of forms of work and organizations, as well as employment relations and human resource management in the creative industries. He is currently involved in research projects on CSR and unions, organizations and lifestyles, employment relations in football and the work-life boundary.

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Transforming the Danish Film Field Via ‘Professionalization’, Penetration and Integration Chris Mathieu Using a qualitative case study of the transformations of the infrastructure of the Danish film field by the Danish Film Institute and its CEO, three basic questions about entrepreneurial agency are raised. The first deals with the relationship between the institutional environment and the personal backgrounds of entrepreneurial actors. The study finds that certain actors can be seen as possessing extreme or unique levels of legitimacy resulting in being rewarded with tremendous resources and opportunities for strategic action. The second question has to do with how, and what sort of role transformations can take place from a structurally central, but static position in a field. Here ‘intermediary entrepreneurialism’ was used to penetrate and integrate the field in such a way as to turn a structurally fixed position from a weak to a strong nexus. The third question deals with how transformations can be effected by an organization that straddles three prominent institutional fields and logics – the state, market and artistic expression. Here, the key role of the term ‘professionalization’ is emphasized, arguing that this term proved evocative and compelling in each institutional field. The case also adds to our understanding of institutional and transformation processes in creative industries by focusing on two less-studied contexts – the role and strategies of centrally placed actors in initiating and leading transformational activities, and the role that entrepreneurial ‘bureaucrats’ can play in transforming creative industries.

Introduction

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ost entrepreneurs transforming creative industries do particular forms of institutional work (DiMaggio, 1988) in and with institutional contexts and fragments. They invent, create, alter or reconfigure in ways in which their efforts, activities, contributions and often even their intentions and/or interests, are visible. These agents ‘make a difference’ (Beckert, 1999, p. 778, emphasis added). This is what we usually attribute to creative agency, as opposed to reproductive action or conventional conduct (Beckert, 1999; Dorado, 2005; Fuchs, 2001). Significant and perhaps enduring differences can be seen as transformations. When considering who transforms creative industries, who creative entrepreneurs are, our attention usually turns to the creators and producers of artistic, cultural or ‘creative’ products – artists, authors, choreographers, designers, directors, musicians and possibly even the producers behind them.

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As this article argues though, there is a set of actors recessed beyond the credits, titlepages and by-lines of creative products who profoundly influence the operation and occasionally the transformation of creative industries. These institutional entrepreneurs transform the infrastructure of creative industries. Some do so as cultural intermediaries, mediating between production and consumption in various ways (Negus, 2002; Nixon & du Gay, 2002). Others transform the production infrastructure via entrepreneurial activity in and through vehicles that we identify as bureaucratic organizations, such as arts councils, conservatories, endowments and foundations, art schools, national film institutes and the like. This article focuses on this latter category; analysing how the entrepreneurial actions of one key actor, the current CEO of the Danish Film Institute (DFI), and the agency that he leads, the DFI, have contributed to the transformation of the Danish film field, and many contend to the enduring © 2006 The Author Journal compilation © 2006 Blackwell Publishing

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recent success of Danish cinema (Børsen, 13.05.2005). Based on the case study, this article addresses three central questions about entrepreneurial agency. The first has to do with how the institutional environment advantages some actors over others in their entrepreneur projects. Following Maguire, Hardy and Lawrence (2004), the question is framed in terms of how the institutional environment selects certain agents based on personal-biography factors or what they call ‘individual characteristics’. Our case underscores the role that the institutional environment plays not just in selecting and enlisting, but also ennobling individual actors in central, resourceladen roles from which they can carry out their entrepreneurial activities. The second question asks what type of institutional transformations are we dealing with? Three basic transformations took place at different levels. At the field level the CEO transformed the role of the DFI in the Danish film field. Here, the field constellation (the placement of actors in relation to each other) was not reconfigured, but the actual role and degree of penetration the DFI has throughout the field changed. Second, at the organizational level he consolidated the integration and organization of the newly reconstructed DFI in such a way as to increase the power of the directorate – his own role – and reducing the power of previously more autonomous groups and positions. Third, at the meta-field level the DFI has elevated the placement of film within the whole Danish arts and culture landscape, as it competes with other artistic genres for resources and recognition. The final question has to do with how these transformations were effected; especially what institutional factors facilitated these transformations and what strategies were employed. The matter of analysing ‘how individuals take action that result in significant changes in an organizational field [is an issue] which, to date, few studies have done’ (Maguire, Hardy & Lawrence 2004, p. 675). This study points to agentic exploitation of structural/positional, discursive and cognitive institutional opportunities as central to transformational action.

Data and Methods This case was selected and is of general interest for three basic reasons. First, as mentioned above, it uniquely allows investigation in the creative industries setting of institutional transformation propelled by a bureaucrat and bureaucratic organization, rather than individuals or organizations directly engaged in ‘cre© 2006 The Author Journal compilation © 2006 Blackwell Publishing

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ative’ production or marketing. Second, the institutional environment in which this entrepreneurial activity is carried out is special, lying at the confluence of at least three strong institutional logics – the state or public sector, the market and artistic expression (Friedland & Alford, 1991), and not just the conventional art versus commerce tension (Caves, 2000). Third, it accords the opportunity to analyse transformation initiated and led by a centrally placed entrepreneur in the field – it is a case of transformation of and from the centre. Many studies of institutional entrepreneurship examine how peripheral actors, with an interest in institutional transformation to make room for themselves at the centre, lead institutional transformations (Haverman & Rao, 1997; Leblebici et al., 1991; Maguire, Hardy & Lawrence, 2004). It is more seldom assumed that and investigated how central actors lead institutional transformations in their fields (notable exceptions are Greenwood, Suddaby & Hinings, 2002; Suddaby & Greenwood, 2005). Lastly, of more parochial interest, this case provides answers to the question of what transformations the DFI has effected in the Danish film field and how were these carried out. Case-study methodology was selected because institutional analysis is still in a period where expanding our understanding of the range and breadth of types of institutional transformations, and especially how these are carried out, is valuable. Case studies that are exploratory, descriptive and appreciate the importance of context and setting (Marshall & Rossman, 1995, p. 2) are necessary in order to generate hypotheses, and to augment and refine more general models (Maguire, Hardy & Lawrence, 2004). The data sources for this article comprise primarily print media (newspapers and trade and popular magazines) and primary sources. Comprehensive searches of Danish and Nordic media databases were conducted for the period 1997–2005 for press articles mentioning the DFI or its CEO in order to chart developments in, and commentaries about, them.1 Danish governmental and DFI publications are drawn upon for statistics, organizational changes, and performance goals and accomplishments. One document is particularly rel1 The databases InfoMedia and Presstext were searched, yielding over 4,000 articles on the DFI during the period and 695 on a name search for the DFI’s CEO. Combining the two subject searches yielded 473 articles. These 473 articles were read and saved; the remaining 4,000+ articles were assessed as pertinent or not based on titles, ingresses and length, with short notices being omitted. In total, 564 press articles were analysed.

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evant in this context, the Lundgaard Report, a consultancy report commissioned by the Danish Parliament to review the performance of the DFI in 2000, prior to a new (increased) budget allocation. The DFI and its CEO also figure in descriptive and commentary works of a more cinematic character about Danish film conveying implicit information about the normative, aesthetic and collaborative norms and values in the field. A further source of primary data is two interviews conducted in 2005, one with the DFI’s CEO, the other with the head of the Producer program at the National Film School. Data analysis started with the basic question of what changes or transformations took place within or were effected by the DFI. Here the transformations outlined above and those discussed below as multi-front penetration were identified using media reports, policy documents, interviews and organizational evaluations. Once the changes were identified, the question of how these were effected was addressed. Drawing on Dorado (2005), Greenwood, Suddaby & Hinings (2002) and Maguire, Hardy and Lawrence (2004), a tentative inventory of entrepreneurial processes and actions was drafted. Returning to the data sources named above, this register was employed, not as a definitive coding system, but rather as one component in a grounded theory iterative process between the terms used by field actors and journalists and academic concepts to classify how changes and transformations were undertaken.

Danish Film and the DFI After languishing in mediocrity or worse, the past 10–15 years is an epoch characterized by creative and commercial triumph for Danish film. Success can be measured in several ways; some classified as artistic, some as commercial. On the artistic side, since the late 1980s Danish films have won or been nominated for important international film prizes and have met great acclaim from domestic and international critics. Leading Danish directors have been able to capitalize on their past successes and reputation to attract and work with leading international film personalities. Commercial measures, such as share of the domestic Danish box-office,2 export sales3 and volume

of production4 also indicate success. But possibly equally as important as measurements and indicators are the widespread assumption and popular assertion that Danish film is in a ‘golden era’. What attracts attention to the Danish film industry is the concerted, sustained nature of this success produced by a relatively small industry. As the ‘individual successes’ come from a fairly broad range of directors and production companies, the suspicion is that the origins of success are more systemic, residing in infrastructure. Here two organizations stand above all others – the National Film School, which is more remote from production, but supplies the overwhelming majority of leading players in the Danish film industry, and the DFI, which is the central proximate actor in Danish film production. The DFI’s CEO has headed both organizations. He headed the National Film School for 17 years and has led the DFI from its reincarnation in 1997 to date. He spent the intermittent half-decade as the director of the British National Film and Television School in London. The importance and power of the DFI largely stems from its role in dispersing subsidies for film production. Virtually all featurelength films produced in Denmark have received DFI subsidies, making it the midwife or extinguisher of film projects in Denmark. However, as argued below, control over financial resources can be utilized in different ways, and one of the central transformations discussed below is the change in the role of the DFI from a purse that simply distributed funding to selected projects, to co-developer, where the DFI offered or imposed its technical and aesthetic input. In 2003 the DFI dispersed €33 million in subsidies; 65 percent went to feature films (DFI, 2003). The DFI operates on behalf of the Ministry of Culture and the current incarnation of the DFI is the result of a merger in 1997, which brought together three previously separate agencies: the (former) Danish Film Institute, The State Film Central and The Danish Film Museum (Ministry of Culture, law 186, 12.03.1997). The manifest reason for this merger was to consolidate and ‘professionalize’ the Danish state’s involvement with the film industry, as well as a purge in the three

2

From 1999–2004 Danish films averaged 25 percent of the domestic box-office – in Europe only France is higher at 35 percent (Børsen, 13.05.2005). 3 Between 1996 and 2004, 11 Danish films had 500,000 admissions or more outside Denmark (DFI, 2005).

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Number of Danish feature film premiers, 1994– 2004: 1994: 14, 1995: 12, 1996: 22, 1997: 17, 1998: 23, 1999: 22, 2000: 21, 2001: 24, 2002: 28, 2003: 33, 2004: 25 (source: Danmarks statistik). © 2006 The Author Journal compilation © 2006 Blackwell Publishing


agencies that were seen as dysfunctional (Berlingske Tidende, 22.09.1997).5

Discussion Ennobling, Not Just Enlisting The CEO Once this ‘super-agency’ was created, the next question was who should head it. The search committee had quite specific qualification criteria in looking for a CEO for the DFI – qualifications that can be read as necessary to attain legitimacy in the three dominant institutional fields in which the DFI operates. The CEO should have worked practically and achieved artistic recognition in the branch, have a proven track record as a public-sector administrator, understand the industry aspects of film production and marketing, and finally, at the organizational level, be neutral, impartial or sufficiently respected throughout the field to deal with the existing problems that the merger sought to solve and the new problems and anxieties that usually accompany a merger (Marks & Mirvis, 2001; Politiken, 11.09.1997). The eventual CEO’s personal career background (Bertaux & Thompson, 2003) converged almost concentrically with the articulated demands of the institutional context. He had merits from both the artistic side of the film industry, having won a Bodil (the Danish equivalent of an Oscar) for his camerawork on a film in 1970, and a proven track record as a public-sector administrator in the film field both in Denmark and abroad. Having spent the previous half-decade in England, he was deemed sufficiently distanced from the conflicts in the Danish film field in the run-up to the merger, and neither was he associated with any of the previously autonomous entities merged into the new DFI (Extra Bladet, 28.09.1997). In this case, the individual actors’ personal biography, or what Maguire, Hardy & Lawrence (2004) refer to as ‘individual characteristics’, so concentrically matched the criteria articulated in the institutional context that it did not just win him the job, it accorded him authority beyond the mere prerogatives bureaucratically invested in a position. He was ennobled. The most striking evidence of this is that from the time that he was appointed (mid-September 1997) to the point where he took up the job (1 January 1998) he functioned as a consultant to the Board that 5

The contact between the ‘old’ (pre-merger) DFI and the film industry was ‘sometimes sparing, sometimes outright acrimonious’ (Extra Bladet, 28.09.1997). © 2006 The Author Journal compilation © 2006 Blackwell Publishing

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was drafting the charter for the new DFI. Such was his power that at his recommendation the plans for the basic structure of the DFI were changed from one in which the three merged agencies continued to exist as ‘pillars’ under one roof, to a horizontal, function-based structure where all traces of the previous agencies were wiped out (CEO interview, 2005), and the power of central leadership increased – the direct opposite developments of what the Minister of Culture who launched the merger had intended (Information, 03.01.1998). The CEO-elect was clear and public about his intentions and their radical nature in this regard: ‘Call it revolution, cleaning-up or reform. This is what is necessary because the opportunity that is made available, physically and economically must be exhaustively used’ (Extra Bladet, 28.09.1997).

Transforming the DFI and its Role in the Danish Film Field: Intermediary Entrepreneurialism and Multi-Front Penetration The CEO’s actions could be termed intermediary entrepreneurialism. As the term implies, a key to this entrepreneurial opportunity is the possession of a central mediating position. For the DFI this position is structurally given (not entrepreneurially created), as it is the conduit through which the Danish state channels funding to the film industry to obtain its film policy objectives. The DFI is a bridgehead – it does not play a ‘bridging’ role as Maguire, Hardy and Lawrence (2004) define it – bringing together disparate groups and their resources that otherwise would not meet, and as the DFI does not exact rents for its mediation, this is not a classic brokering situation (Burt, 1982), though resource flow between discrete actors is controlled. Instead of rents, which would be in keeping with market logic, as argued below, the DFI capitalizes on this situation according to political-bureaucratic logic, leveraging the various resources generated on each respective side of it, and prized on the other, to expand its budget, control over allocatable resources and influence over proximate actors. From this intermediary position the CEO does not rearrange the constellation of the field, or at least this central nexus (state-DFIfilm industry), but rather leads expansionary, external penetration into: (1) the state; (2) the film industry; (3) the market; and (4) the human resource reproduction pipeline supplying the industry with the next generation of personnel. These incursions were not attempts at colonization, but rather aimed at integration

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of the field. However, this integration emanated from and largely ran via DFI, elevating its importance. So penetration and integration went hand in hand in the CEO’s quest. He publicly expressed these intentions even before formally assuming his post: ‘I’m not interested in running an operation that just sits there and dispenses subsidies – there is no point in that. One must participate much more actively in the whole process, and that is what we are going to do’ (Politiken, 19.12.1997). Penetrating the market was done through short and long-term orientations and using the DFI’s full range of functions. With regard to short-term returns activities, the DFI developed an entire distribution and marketing division, which supports the marketing of individual films nationally and internationally, grants print and movie-house subsidies, funds the participation of Danish films at festivals and shows films at its own Cinematheque, as well as collecting and making marketing information and advice available to the industry. More long-term efforts include getting children accustomed to seeing films, creating the next generation of filmgoers by seeing to it that ‘Danish children see film through our Center for Children’s and Youth Film. . . . [and that] Danish schoolchildren are fed with good Danish and foreign documentaries in school’ (Børsen, 13.05.2005). The DFI also expanded explicitly into the area of training and developing the next generation on the production side, most explicitly by changing the name and orientation of one of its departments from ‘novella films’ to ‘talent development’. Talent development differs from the other forms of support and subsidy by being individual/person, as opposed to project, oriented. The intention is to develop personal capacities, rather than necessarily developing a product that can be shown at the end of the day (Michelsen & Pihl, 2002). Penetrating the state took the form of playing the loyal and helpful servant. This was accomplished by embracing and living up to central new public management (NPM) principles that were in favour at the time: fiscal responsibility, transparency, decisional accountability, a customer/end-user focus and dedication to the policy wishes of the state (Rhodes, 1999). The CEO reaffirmed the broader economic and cultural goals of the government in promoting a more marketoriented approach to film as both an industry and cultural/artistic production, with employment, volume of production, revenue generation and reclamation goals, and branding opportunities (Camre, 2005). He was not just reactive but also proactive in the DFI’s relations with the state, by serving the Ministry of

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Culture with documentation and arguments that helped ministers in parliamentary debates and cabinet discussions to contend that money invested in the film sector was well used, accounted for and responsible for successes that benefit the whole nation (CEO interview, 2005). In this manner he leveraged the artistic and commercial success of Danish film to secure increased funding to the industry, funding that passes via the DFI. Ultimately, the DFI has parlayed Danish film’s sustained success into elevating the place of film in the Danish cultural field. Penetrating the film industry took several forms; some intimately linked to the internal role changes at the DFI. The ‘professionalization’ of the film consultant role (see below) from one of passing personal and mere judgement to one in which the consultant was expected to be an active co-developer of the projects recommended for support, which entailed not just a change in the consultant’s role but was also part and parcel of the DFI’s assertion of a quasi-co-producer role. This new role as developmental partner, whether welcomed or not by the industry, could be enforced as a form of conditionality for according subsidies. Another form of (reverse) industry penetration is the recruitment of experienced industry experts (on staff and consultancy bases) to treat applications and make recommendations about issues in their sphere of competence to the DFI. The DFI built its own staff of in-house producers who make technical and financial viability evaluations and budgetary recommendations, a job taken out of the hands of the consultants. The reason for this is to assure that the applicants from the industry do not have the upper hand on the DFI with regard to knowledge and ‘sell the DFI’s film consultants down the river’. A more cognitive than practical form of penetration of the industry is the CEO’s campaign to alter one of the classic self-understandings in the industry about the market and public acceptance from a categorical association of art = small audience, commercial (i.e. little artistic quality) = large audience. The central framing assertion in this shift is that film is a mass communication media, and that meeting an audience, as large an audience as possible, should be an ambition and not an irrelevance. This general cognitive campaign was also backed up by the DFI imposing on production companies a ‘no marketing budget, no development and production subsidy’ policy. The changes that the CEO initiated internally at the DFI were largely intended to alter the DFI’s relations with the other sectors and actors in the film field, but also had the cumulative effect of strengthening the directorate. © 2006 The Author Journal compilation © 2006 Blackwell Publishing


This internal penetration generally took two forms. One is ‘control by transparency/public review’. The other is balkanization – dividing up evaluative and decision-making tasks and parcelling them out over two or more offices or positions. The most obvious example of both processes is what happened with power of the film consultants. In law, film consultants have the right to recommend which films should receive financial support. Previously the consultants would also specify the amount of support to a film. A novel division of labour was introduced, giving the in-house producers the right to estimate how much a project will need in subsidy at the various stages, and the consultant’s role was reduced solely to making an ‘artistic’ or qualitative judgement about which films to recommend for support (CEO interview, 2005). Second, the consultant’s evaluative considerations no longer take place in camera. The consultants are required to formally and publicly discuss their considerations on an ongoing basis with, among others, the head of the department in which they are employed and the CEO. This is one example of how the jurisdictional power, autonomy and integrity of a previously highly powerful position has been eroded. With regard to the overall balance of power at the DFI, the Lundgaard Report (2000) finds weak organizational units from the Board on down to the various functional divisions – with one exception – the directorate.

The Strategic Opening Accorded by ‘Professionalization’ In explaining how these diverse and contextually radical transformations were carried out, this section focuses on the strategic use of a potent discursive resource, the term ‘professionalization’. A wide range of transformations was framed (Zald, 1999) by the CEO as ‘professionalization’. These included the manifold transformation of the role of film consultants both within the DFI and in relation to the film industry: We need to get away from the notion that [subsidy allocation] is just a personal position or standpoint on a project, and one’s taste, and say that [pause] . . . A more professional role, where they [the film consultants] can go in as a sparring partner in a development process, because most all projects need to be developed before they can make it (CEO interview, 2005, emphasis added). Wresting the right to specify the amount of subsidy a film should receive from the consultants and turning over to in-house producers © 2006 The Author Journal compilation © 2006 Blackwell Publishing

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was linked to professionalization, as was dismissing two long-tenured, senior managers at the DFI in 1998, for, according to the CEO, there is ‘no role for generalists in the departments at the [new] DFI’ (Politiken, 02.04.1998).6 Instilling a more market-orientation in the film industry was also cast as professionalization: ‘I seek a professionalization of production, so that a more market-oriented evaluation is made. When I say market oriented I don’t just mean economics, but also considerations about target audiences and the extent to which you reach them’ (Politiken, 19.12.1997). But why was this rhetoric of professionalization used, and why was it effective, resonating so deeply in quarters governed by vastly different institutional logics? First, professionalization operated as a crude form of theorization (Greenwood, Suddaby & Hinings, 2002). In one word a problem (lack of ‘professionalism’) and an abstract solution (professionalization) were identified, and implicitly justified. This was facilitated by a lead actor in the Danish film field, the Danish state, explicitly declaring that one of its primary objectives in undertaking the merger creating the new DFI in 1997 was to ‘professionalize’ its engagement with the Danish film industry. This aspiration was carried over into the terms of reference for the Lundgaard Report, where professionalism was one of the two central criteria upon which the DFI was to be evaluated (Lundgaard Report, 2000, p. 4). Thus this central actor put professionalization high on the field’s agenda and consciousness. Second, there are important general features of the lay term (as opposed to the sociological concept) professionalization. The term professionalization has both high persuasive and assurance power (Suddaby & Greenwood, 2005, pp. 39–40), while, in the form it was deployed, also being highly vacuous. Professionalization is a very powerful, almost irresistible, general rhetoric (House, 1996). Professionalization functioned as a highly potent ‘free resource’ as DiMaggio defines it: ‘some institutional understandings . . . are so generally held by actors of influence as to represent free resources on which institutional entrepreneurs can draw’ (1988, p. 14). As such, one compact, neat term simultaneously appealed to several constituencies, obviating the usual need for institutional entrepreneurs to ‘assemb[e] an array of arguments that translated the interests of diverse stakeholders’ (Maguire, Hardy & Lawrence, 2004, p. 674). This obviates the need for, and potential prob6 The same newspaper account explains the dismissals in terms of the CEO firing two prominent opponents to his centralization efforts.

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lems deriving from, translation, and using more specific terms that could prove more controversial within a given logic, and especially between logics. The rhetorical power of the term professionalization was probably not decisive on its own. The actual content of the ‘professionalization’ agenda implemented by the CEO is quite close to central tenets of NPM, thus the way was cognitively, and in some quarters normatively, institutionally paved (Kostova & Roth, 2002) as NPM-inspired public-sector reform had been undertaken by the Danish state prior to the merger leading to the establishment of the DFI (Rhodes, 1999). Ironically, the quasi-NPM reform package rhetorically touted by the CEO as ‘professionalization’ is almost antithetical to the sociologically understanding of the concept (Abbott, 1988; Brante, 1988).

Conclusion This article has analysed how a central bureaucrat and bureaucratic organization have entrepreneurially transformed key roles, relationships and conceptions in the Danish film field’s infrastructure. The central contributions of this study lie in elaborating: (a) how personal biography and articulated interpretations of demands from the institutional environment ennoble individual actors beyond merely elevating them to strategic positions from which to pursue entrepreneurial activities; (b) how leveraging in what was termed intermediary entrepreneurialism facilitated the penetration of several sectors of the film field and their tighter integration via the DFI; and (c) how the appropriation of the term ‘professionalization’ functioned as an evocative ‘free resource’ spanning three institutional fields.

Acknowledgements The author would like to acknowledge the research assistance of Mette Løth Frederiksen, Copenhagen Business School.

References Abbott, A. (1988) The System of Professions: an Essay on the Division of Expert Labor. University of Chicago Press, Chicago. Beckert, J. (1999) Agency, Entrepreneurs and Institutional Change: the Role of Strategic Choice and Institutionalised Practices. Organization Studies, 20, 777–99. Bertaux, D. and Thompson, P. (2003) Introduction. In Bertaux, D. and Thompson, P. (eds.), Pathways

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to Social Class: A Qualitative Approach to Social Mobility. Clarendon, Oxford, 1–31. Berlingske Tidende (22.09.1997) En oprydere vender hjem [A cleaner-upper returns home], Magasin, 2. Børsen (13.05.2005) Dansk film vader i succes [Danish film wades in success], 52–53. Brante, T. (1988) Sociological Approaches to the Professions. Acta Sociologica, 31, 119–42. Burt, R.S. (1982) Toward a Structural Theory of Action. Academic Press, New York. Camre, H. (2005) Filmen mellem børs og kathedral [Film between the purse and the cathedral]. Film, 45, 18–23. Caves, R. (2000) Creative Industries: Contracts Between Art and Commerce. Harvard University Press, Cambridge MA. DiMaggio, P. (1988) Interest and Agency in Institutional Theory. In Zucker, L. (ed.), Institutional Patterns and Organizations: Culture and Environment. Ballinger, Cambridge MA pp. 3–21. Danish Film Institute (2003) Annual Report. Danish Film Institute, Copenhagen. Danish Film Institute (2005) Facts and Figures 2005. Danish Film Institute Copenhagen. Danmarks Statistik. www.statistikbanken.dk/BIO2 (last accessed: 24.07.2006) Dorado, S. (2005) Institutional Entrepreneurship, Partaking and Convening. Organizational Studies, 26, 385–414. Extra Bladet (28.09.1997) Jeg nyder respekt [I enjoy respect], 21. Friedland, R. and Alford, R. (1991) Bringing Society Back In: Symbols, Practices and Institutional Contradictions. In Powell, W. and DiMaggio, P. (eds.), The New Institutionalism in Organizational Analysis. University of Chicago Press, Chicago, 232–67. Fuchs, S. (2001) Beyond Agency. Sociological Theory, 19, 24–40. Greenwood, R., Suddaby, R. and Hinings, C.R. (2002) Theorizing Change: The Role of Professional Associations in the Transformation of Institutionalized Fields. Academy of Management Journal, 45, 58–80. Haverman, H. and Rao, H. (1997) Structuring a Theory of Moral Sentiments: Institutional and Organizational Coevolution in the Early Thrift Industry. American Journal of Sociology, 102, 476– 501. House, R. (1996) The Professionalization of Counselling: a Coherent ‘Case Against’? Counselling Psychology Quarterly, 9, 343–59. Information (03.01.1998) Rygternes hus [The house of rumors], Section 1, 14. Kostova, T. and Roth, K. (2002) Adoption of an Organizational Practice by Subsidiaries of Multinational Corporations: Institutional and Relational Effects. Academy of Management Journal, 25, 215–33. Leblebici, H., Salancik, G., Copay, A. and King, T. (1991) Institutional Change and the Transformation of the U.S. Radio Broadcasting Industry. Administrative Science Quarterly, 36, 333–63. Lundgaard Report (2000) Konsulentanalyse af DET DANSKE FILMINSTITUT. Lundgaard Consultancy, Denmark. © 2006 The Author Journal compilation © 2006 Blackwell Publishing


Maguire, S., Hardy, C. and Lawrence, T. (2004) Institutional Entrepreneurship in Emerging Fields: HIV/AIDS Treatment Advocacy in Canada. Academy of Management Journal, 47, 657– 79. Marks, M. and Mirvis, P. (2001) Making Mergers and Acquisitions Work: Strategic and Psychological Preparation. Academy of Management Executive, 15, 80–92. Marshall, C. and Rossman, G.B. (1995) Designing Qualitative Research. Sage, Thousand Oaks, CA. Michelsen, L. and Pihl, M. (2002) Notater om filmpolitik [Notes on film policy] Film, 26, 3– 6. Negus, K. (2002) The Work of Cultural Intermediaries and the Enduring Distance Between Production and Consumption. Cultural Studies, 16, 501–15. Nixon, S. and du Gay, P. (2002) Who Needs Cultural Intermediaries. Cultural Studies, 16, 495–500. Politiken (11.09.1997) Dansk films topdirektör fundet [Danish film’s top executive found], Kultur 09 debat, 3. Politiken (19.12.1997) ‘Der skall styr på filmstötten’ [Film subsidies must be managed], Kulltur 09 debat, 2. Politiken (02.04.1998) ‘Filmchef fyrer topfolk’ [Filmboss fires top people], Section 1, 1.


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Rhodes, R. (1999) Tradition and Public Sector Reform: Comparing Britain and Denmark. Scandinavian Political Studies, 22, 341–70. Suddaby, R. and Greenwood, R. (2005) Rhetorical Strategies of Legitimacy. Administrative Science Quarterly, 50, 35–67. Zald, M. (1999) Culture, Ideology and Strategic Framing. In McAdam, D., McCarthy, J. and Zald, M. (eds.), Comparative Perspectives on Social Movements. Cambridge University Press, Cambridge, 261–74.

Chris Mathieu ([email protected]) is Assistant Professor at the Department of Organization and Industrial Sociology at Copenhagen Business School. He has a Masters degree in African Area Studies from the University of London, and a PhD in Sociology from Lund University, Sweden. He has researched and published on urbanization in Lesotho, moral argumentation in political policy formulation processes, gender in the IT industry and is currently engaged in a project on organization and management in the Danish film industry (project website: http://www.cinemaproject.dk).

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UK Film Companies: Project-Based Organizations Lacking Entrepreneurship and Innovativeness? John Davenport The growth of project-based forms of organization has been interpreted as a response to rapidly changing technological and market environments. Companies operating in this way are assumed to be inherently innovative, continually breaking up and reconfiguring teams of workers whose highly developed skills enable them to multi-task and apply their knowledge in novel situations, in which new technology is swiftly assimilated and deployed. Project workers, who may engage in repeat contracting with different employers, belong to technical communities wherein knowledge is developed and resides. The transformation from vertical integration to project-based working in the film industry would thus appear to privilege innovation. However, in the UK film industry at least, this study suggests that, in spite of freelance working, crew and technicians follow highly specialized, hierarchical careers, and that the organization of production is virtually the same as it was at the height of the Hollywood ‘Studio System’. Furthermore, it will be argued that the informal, reputational networks that operate in the UK industry may act as a barrier to development rather than as an engine of change.

Introduction t has been argued that project-based organization is a paradigm (Turner & Keegan, 1999) that has developed because of unstable markets and rapidly changing technology. The need to innovate in the face of continual, unpredictable change requires the rapid reconfiguration of resources and workers. This depends upon numerical flexibility and the ability of staff to develop new skills and apply old skills in novel ways. Project-based working, supported by short-term, freelance contracting, facilitates rapid reorganization of resources and staff. In this continually changing environment, technical communities, based upon reputational networks, help to store and develop the knowledge that might otherwise be lost. Indeed, the perennial redeployment of ‘knowledge-based’ workers within project ecologies (Grabher, 2004) may help to accelerate the pace of innovation. The break-up of the Hollywood ‘Studio System’ from the mid-1950s onwards is a prime example of a shift from hierarchical organiza-

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tion to project-based working (Storper, 1989). Today, the industry is entirely project based and virtually all crew and technicians work on a freelance basis. A similar transformation occurred in the UK film industry with similar results, and nowadays the production of UK feature films is undertaken by small companies that make, on average, less than one film a year. In such a context, it might be reasonable to expect a high degree of innovation in terms of organization, management and the application and development of skills. The informal networks that facilitate freelance working in the industry should help to drive the continual change demanded by a highly uncertain environment. This study gathers evidence from UK film production companies to test this thesis, with some surprising results. In the next section, theory relevant to the study will be outlined. The methodology employed to investigate key aspects of the UK film industry will then be explained. Next, the results of the study will be discussed; and, lastly, these findings will be summarized. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

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Theory

Methodology

Some have interpreted the development of the project-based organization (PBO) as a response to rapidly changing markets and technology (Turner & Keegan, 1999). The form is inherently innovative (Hobday, 2000) and facilitates improvization (Grabher, 2002, 2004). It successfully integrates diverse knowledge and skills and is able to deal with the risks and uncertainties intrinsic to new project developments. However, scholars have noted the problems of knowledge retention and transfer experienced by PBOs. Up to 80 percent of workers may disband upon completion of a project (Keegan & Turner, 2001), so that knowledge capture and transfer may be compromised (Bresnen, Goussevskaia & Swan, 2004). There appears to be a strong reliance upon informal information transmission in projectbased organizations (Salter and Gann, 2003; Veshkovsky, 1998). Such methods of communication depend upon technical communities, wherein knowledge may be stored and developed (Bahrami & Evans, 1995; Coe, 2001; Nachum & Keeble, 2003). Knowledge retention may also be facilitated by repeat collaborations of teams on successive productions (Ferriani, Corrado & Boschetti, 2005; Starkey, Barnatt & Tempest, 2000; Zuckerman, 2004). However, Starkey and Tempest (2004) argue that short-term working and multi-tasking, coupled with a loss of in-house training, has produced workers with shallow, generalized knowledge. Grabher (2004) advances a theory of project ecologies, epistemic communities based upon organizations and networks, and also ecologies of organizational logics, professionalism and individual identities and loyalties. Within this context, he posits two distinct types of knowledge production in PBOs. The first is accumulation and modularization, which seeks to create repeatable solutions (Davies & Brady, 2000); for example, platform technologies developed by German software firms (Casper & Whitley, 2004). Second, in the UK advertising industry, Grabher (2002) juxtaposes a project ecology that is organized around originality and rupture. Given that film production adopts the project-based form (Blair, Grey & Randle, 2001; De Fillippi & Arthur, 1998; Faulkner & Anderson, 1987; Jones & DeFillippi, 1996; Storper, 1989), the industry in the UK might be expected to exhibit many of the characteristics described above. However, although this proves to be the case in a number of respects, as the findings of this study reveal, there are some differences.

Sample Selection and Other Sources of Data


UK companies that had been active in filmmaking over a three-year period were sampled, using data from British Film Industry (BFI) Handbooks (Dyja, 1998–2000). A sample of 449 companies was thus assembled. However, this included many companies set up purely for the purpose of making a single film. This list was correlated with records from the section of the BFI listing contact details and credits of UK production companies over an extended period, eliminating all but 66 companies, which had operated for between five and thirty-seven years. Companies were then approached with requests for interviews with their producers. Although many were unavailable because of the pressure of work, eventually it was possible to arrange nine interviews. These were conducted between November 2001 and April 2002, while one interview (with Bigbux Productions) was conducted in April 2003.1 Respondents comprised producers (5); senior production managers (3); and one chairman and managing director. Each interview lasted, on average, for two hours. Secondary data from 62 films, made by the sample companies between 1992 and 2001, were stored in a database. Information relating to production cost, box-office receipts, Lottery funding and film classification were added from other sources (BFI website; BFI Handbooks; British Board of Film Classification website.) Although the sample is small, it represents three levels of operation (see Table 2). Moreover, films and television productions made by these companies place them at the forefront of UK production over an extended period of time. In addition, responses to key questions displayed a high degree of uniformity, giving confidence in the validity of data. Interviews were transcribed verbatim and key responses and trends identified. From this, a shorter questionnaire was devised for use with other respondents for the purpose of eliminating bias. Respondents in this second group included Simon Relph, a producer and author of a major Film Council report on lowbudget film production (2002); and senior executive officers from the main trade union,

1

As the evidence will demonstrate, a lack of change in the industry over an extended period means that responses from the latter company are equally valid.

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Table 1. Key Characteristics of Nine UK Film Companies Ownership, management Rainfall

Single producer

Endpoint

Two producers

Alphega

Co-operative, run by one producer

Eggshell

Two producers

Mountain

Two producers

Greensea

Single producer

Wolfen

Two producers

Apex

Owned by city investors, run by professional managers Two producers

Bigbux

Main markets, genre

Year established

Films with European subjects for European audiences Films with strong UK cultural content for European audiences Films with strong UK content, with strong elements of social realism, for European audiences Films with strong UK cultural content and popular appeal in Europe and worldwide Films with strong UK cultural content and popular appeal, aimed at European audiences Films with strong UK and US cultural content, aimed at European, US and worldwide audiences Films with strong UK cultural content aimed at popular, mass market European and worldwide audiences. Large slate of popular TV programmes for UK terrestrial broadcasters Large slate of popular TV programmes for UK terrestrial broadcasters.Films for European audience.

1989

Series of spectacular, blockbuster films, with international backgrounds, for major US studio

1961

BECTU;2 from PACT,3 the film producers’ association; from the Film Distributors’ Association; from Skillset, the industry’s training organization; and from the British Film Council. Evidence from these interviews was strongly supportive of the testimony gathered from production company respondents.

Data Collection The interview schedule was based upon the Aston4 Project questionnaire (Pugh, 1998), but also included questions used by Sako (1992) in exploring inter-firm relationships. Given spe-

1981 1982

1996 1974

1992

1994

1991

cialized aspects of film production, the text of some questions needed to be changed to reflect local terminology.

Company Characteristics Tables 1 and 2 show the key characteristics of the companies included in the sample, whose names have been fictionalized. It should be noted that, in Table 2, Apex and Wolfen are classified as ‘large’ because of their large slate of television productions. 4

2 The Broadcasting, Entertainment, Cinematograph and Theatre Union represents members working in the media industry in the UK. 3 The Producers’ Alliance for Cinema and Television represents producers’ interests in the UK.

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This questionnaire was developed for researching technologies, organizational structures, control and co-ordination. While the trajectory of that research was significantly different from the one presented in this thesis, the phrasing of the questions and the organizational characteristics that they probed were appropriate (with some modifications) for the purpose of this study. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

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Table 2. Scale of Operations Film Company

Scale of television productions

Rainfall Endpoint Alphega Mountain Greensea Eggshell Apex Wolfen Bigbux

– Low – – – – High High –

Magnitude of production cost per film

Average number of production office staff

Company size

Less than £3 m

3

Small

Between £3 m and £10 m

3

Medium

Between £3 m and £10 m

8

Large

Greater than £10 m

Results and Discussion Producers’ Behaviour UK producers are not entrepreneurs in the sense that the term is generally understood. As interview evidence demonstrates, their principal objectives are to earn an income and make films about which they care passionately. They have no desire to increase turnover or company size. They rarely share profit, even when their films are successful, because they raise funds for productions by pre-selling all rights. They rarely expose themselves to personal financial risk (interviews; Downey, 1999), never investing their own money, albeit sometimes forgoing advance production fees. Since less than one film in ten is successful at the box office, and the UK film company can make only about one film a year, this risk-minimizing behaviour is unsurprising. The producer reduces exposure to financial risk by coordinating resources from external sources rather than by ownership. None of those interviewed owned any production assets, hiring all equipment from subcontractors. Similarly, the production company employed only a handful of staff, on fixedterm contracts or on unpaid work experience. During production, all crew are freelancers, being retained only for as long as they are needed. Such risk minimization means that the producer must raise finance from external sources for successive productions. Maintaining a good reputation in this ‘word-of-mouth’ industry is therefore vital. However, reputation is not primarily for financial probity, because the production company receives no © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

income post-production.5 Rather, as all respondents attested, the basis of a producer’s reputation is the ability to complete productions on time and within budget. To reduce risk further, producers build slack into their schedule by paying an agreed amount of overtime (BECTU, 2003; Relph, 2002) regardless of whether crew work it or not. ‘Bought-out overtime’ increases cost, which paradoxically increases the producer’s fee.6 Once a shoot is under way, however, there is intense pressure to complete production as quickly as possible, since an overrun may cause a production failure.

Labour Organization The progressive fragmentation of the UK film industry (Blair, Grey & Randle, 2001; Starkey & Barnatt, 1997), and deregulation in the UK television industry (Starkey & Barnatt, 1997), have resulted in almost universal freelance working. Film and television workers are responsible for their own training (Langham, 1996; Llewellyn & Walker, 2003) and learn their skills ‘on the job’. Indeed, all interviewees attested that it was experience that was of overriding importance to a producer when ‘crewing up’. All unanimously dismissed formal qualifications as a means of 5 In the case of large budget productions, all income goes directly to the distributors, often the US major studios; whereas the income from low-budget movies goes directly to a Collection Agency, which is responsible for accounting to all investors. 6 Relph (2002) estimates that producers receive, on average, 6 percent of the cost of a production. They receive this income irrespective of whether a film succeeds financially.

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assessing competence. The freelance nature of the industry means that: . . . four people who’ve never worked together can meet each other at nine o’clock in the morning and by 10 o’clock they know what they’re all doing (Relph interview). The small producer’s ability to overcome this problem by using the same people on successive shoots is very limited. Lack of financial power may prevent them from attracting the best talent, but it also has another negative effect. Several producers said that the uncertainty of a production start, which often depends upon the provision of finance, means that they cannot tell previous employees when the next project will begin. Consequently, they may be working elsewhere at this crucial point, compelling the producer to take on unfamiliar crew. Although Zuckerman (2004) and Ferriani, Corrado and Boschetti (2005) provide evidence of repeat contracting in the US film industry, their research uses data from the operations of the US ‘Majors’. Significantly, the respondent from Bigbux Productions, which is funded by a US ‘Major’, testified that they are able to attract the same workers successively because of their backers’ financial power; ability to undertake successive productions at regular intervals; their six-month period of principal photography and high rates of pay. Similarly, Starkey, Barnatt and Tempest (2000) observe repeat collaboration in the UK television industry. However, as the respondent from Apex Productions testified, they are able to reconstitute crews to make series of television programmes, since production schedules are planned well in advance and they can guarantee relatively long-term work. This means that producers seek workers with highly specialized, narrowly based skills, enabling them to work together efficiently at short notice. Consequently, new entrants have to decide on their career trajectory at an early stage, developing their skills within one specialization, and it is unlikely that they will develop a cross-departmental career. According to Skillset: . . . if you want to work in the sound department, you will be a boom operator for five, ten years; and then you might progress to be a sound recordist for ten, twenty years. But if you suddenly wanted to work in the art department, that would be really hard, because you wouldn’t have the skills or the experience necessary to do that, and you’d have to go and start in a different level. As an industry, we don’t have that kind of

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cross transferring routes [sic’], really; the career paths are very singular . . . the structure’s the same, be it on a short or a Working Title film: you’ve still got the grades, you’ve still got the hierarchies. As one producer observed: On a film set, it’s always very specific . . . Everybody has got a specific job to do, everybody is budgeted for having a specific job to do. [emphasis added] Nevertheless, all respondents from the production companies and industry agencies alike testified that UK technicians are among the most skilled in the world. Indeed, it may be that this superiority would be lost if such workers were to become generalists, as may be the case in the television industry (Starkey & Tempest, 2004).

Production Methods and Innovation Respondents unanimously testified that although the method of organization in the industry has changed drastically since the 1950s, the production model used today has not changed significantly for decades. Indeed, change has been so slight that there are still ‘Heads of Department’ on set, even though a ‘department’ may comprise no more than two or three people. Further evidence for this assertion was provided by a copy of an application form, used by producers in 1973, to request funding from the National Film Finance Corporation, which was made available by the Film Council. As the interviewee testified, this form is identical to the one used today, which implies that the production process has remained the same for at least 30 years. Furthermore, the introduction of new technologies has not resulted in a change in production methods. As the interviewee at Skillset put it: . . . the people that are getting trained up by those fifty-year-olds are still working in exactly the same way as those fifty-yearolds when they were twenty. So whilst the technology moves on, [and] the creative impetus moves on, the actual working standards and practice haven’t changed.

Benefits and Constraints of Networks Informal networks are vital in this freelance industry. Producers appoint heads of department with whom they have worked before or with whose work they are familiar. In their turn, heads of department tend to recruit from among crew they know. Crew themselves may work together habitually or periodically, sub© 2006 The Authors Journal compilation © 2006 Blackwell Publishing

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ject, of course, to the constraints described in ‘Labour Organization’ above. Similarly, heads of department and linemanagers have relationships within networks of suppliers, based on previous experience, and so are likely to use particular facilities houses on successive productions. Thus, in many ways, these networks are beneficial. However, they also enforce norms (Christopherson, 2002; Jones, 1996) and will reject aspirants who do not conform. As the interviewee from Skillset put it, newcomers are trained by ‘fifty-year-olds’ who work in the same way now as they did 30 years ago. There must therefore be a strong tendency for working practices to be maintained and reinforced. Similarly, although the producer benefits from the efficient functioning of networks, he or she is also a network member and subject to socializing constraints; and so, given a heavy reliance on reputation, may be unlikely to risk experimentation. All industry agencies support and conform to this model. Indeed, some of the interviewees had begun their careers in film production, and had thus been socialized by the selfsame networks. The basis of their policy, therefore, is not to question the existing model but to see how they might better help their members realize their aspirations within its constraints. PACT, for example, does not perceive its role as being to help producers prevail against the domination of the ‘Major’ studios, which it regards as not feasible. Rather, it is active in the negotiation of industry wage rates or in maintaining the television quota at 25 percent. BECTU likewise represents its members’ interests without seeking to destabilize the industry model. Skillset bases its training on a hierarchical model and strives to educate producers in financial and other matters by bringing over Hollywood producers to lead seminars. Lastly, the Film Council does not challenge the domination of the US ‘Majors’, since it believes this to be impossible. Instead, it seeks to optimize UK production within existing constraints.

The Influence of Film Distributors Using their commercial power7 to control the industry is something that the ‘Major’ distrib-

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utors have always done (Dickinson & Street, 1985). Despite repeated government intervention, and attempts to compete by UK companies, Hollywood’s domination has never been effectively challenged. There are periods when there is heavy investment by the USA in UK film production (Blair & Rainnie, 2000), and we are perhaps in the midst of one now.8 However, these periods of plenty are often followed by periods of crisis. Moreover, this heavy inward investment, while benefiting the industry, creates a barrier to any change that might disadvantage the Hollywood ‘Majors’. If reforms were enacted that ran counter to US interests, production might well be transferred to Prague or Vancouver. Of the companies interviewed, one (Bigbux) had a long-term relationship with a US distributor, having made a series of blockbusting films for this ‘Major’ over very many years. However, in this and similar arrangements, the bulk of the profits are bound for Hollywood. Greensea Films had a ‘First Look’9 arrangement with a ‘Major’, which financed production of a film that grossed over $100 million worldwide. Although the interviewee was reticent about profits, it is very probable that most of these also went to Hollywood. Significantly, the next film that Greensea produced was declined by the ‘Major’. As the Film Distributors Association pointed out during the interview: . . . even on something massive like a Bond picture . . . MGM are going to look at it filmby-film; they’re not going to say, ‘We’ll do a deal now for 10’. Such cherry-picking, ad hoc arrangements work greatly to the advantage of the US ‘Majors’, who therefore have a strong motivation, as well as the power, to enforce industry norms.

Conclusions UK producers’ risk-avoiding behaviour means that film companies usually do not earn profits; usually do not reinvest them if they do; and consequently must raise external finance 8

7

In 2002, the world market for film was estimated to be $63 billion, of which the USA had 80 percent and the UK 5 percent (House of Commons, Hansard, 2002–03, p. 9). It should be noted that ‘British’ films are often funded by the USA, so that the figure of 5 percent will include productions where profits are, in fact, returned to Hollywood. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

In 2002, the latest year for which figures are available, inward investment totalled £730 million out of a total production budget of £1, 158 million (Film Council Statistical Handbook, 2003). 9 A ‘First Look’ agreement grants a distributor first refusal to finance a film. Arrangements typically last for three films, but there is no obligation on the part of the distributor to advance funding.

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for successive productions by selling all rights. Project-based production and freelance working reduce financial risk still further and filmmaking in the UK is highly efficient, encouraging much inward investment. However, UK producers have neither the wish nor the expertise to become entrepreneurs, which means that their film companies remain weak and dependant upon the distributors that control them. Working with freelancers at unpredictable intervals also means that low-budget producers find it very difficult to reconstitute teams from film to film. However, a significant facet of a producer’s reputation is the ability to complete films on time and within budget, since a failure to do so would make it difficult to raise finance for future productions. Crew and technicians are therefore required to specialize in narrow, interchangeable skills, so that when unfamiliar teams come together at short notice on a production, they are able to operate efficiently from the outset. The characteristics described above have theoretical implications in relation to projectbased organizations. Whereas much academic literature asserts that project-based working facilitates innovation and flexibility, this does not appear to be the case in the UK film industry. Although film companies achieve numerical flexibility and manufacturing efficiency, the production model is based on a system of organization that has scarcely changed in decades. Arguably, this is because producers strive for ‘repeatable solutions’ rather than ‘rupture’ or ‘originality’. Nevertheless, sometimes highly original films are produced, which implies that ‘rupture’ and ‘originality’ might also be achieved within this system, distinguishing another phenomenon identified above. The ability of small film producers to reconstitute teams is also questionable because of the uncertainty of raising finance and the producer’s inability to predict when production will begin. Furthermore, although cost-effective, efficient and capable of creating original solutions in individual cases, it is possible that this form of organization creates rigidities which retard ‘organizational’ development. Consequently, producers, while highly effective managers of production, do not develop the skills to organize and develop their companies. This is arguably a failure of learning and knowledge creation at the management level, happily exploited and reinforced by those whom it benefits most – the US ‘Major’ studios. Since financial weakness is arguably the root cause of the UK film company’s prob-

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lems, further research into this opaque area would be useful, albeit difficult to undertake. It might also be of value to investigate skills development and application among film crew and technicians more directly. Lastly, study of low-budget film production in the USA and other countries might help to determine whether the factors described above are peculiar to the UK, or are characteristic of the industry as a whole.

References Bahrami, H. and Evans, S. (1995) Flexible ReCycling and High-Technology Entrepreneurship. California Management Review, 37(3), 62–89. BECTU. (2003) Low-budget feature film production – view from BECTU [available at http://www. bectu.org.uk]. Blair, H., Grey, S. and Randle, K. (2001) ‘Working in Film: Employment in a Project Based Industry. Personnel Review, 30(2), 170–85. Blair, H. and Rainnie, A. (2000) Flexible films? Media, Culture and Society, 22(2), 187–204. Bresnen, M., Goussevskaia, A. and Swan, J. (2004) Embedding New Management Knowledge in Project-Based Organizations. Organization Studies, 25(9), 1535–55. British Board of Film Classification Website, http:// www.bbfc.co.uk/ (accessed September 2003). British Film Institute website, http://www.bfi.org. uk (accessed September 2003). Casper, S. and Whitley, R. (2004) Managing Competences in Entrepreneurial Technology Firms: a Comparative Institutional Analysis of Germany, Sweden and the UK. Research Policy, 33(1), 89– 106. Christopherson, S. (2002) Project Work in Context: Regulatory Change and the New Geography of Media. Environment and Planning A, 34, 2003–15. Coe, N.M. (2001) A Hybrid Agglomeration? The Development of a Satellite-Marshallian Industrial District in Vancouver’s Film Industry. Urban Studies, 38(10), 1753–75. Davies, A. and Brady, T. (2000) Organizational Capabilities and Learning in Complex Product Systems: Towards Repeatable Solutions. Research Policy, 29, 931–53. DeFillippi, R.J. and Arthur, R.B. (1998) Paradox in Project-Based Enterprise: The Case of Film Making. California Management Review, 40(2), 125–39. Dickinson, M. and Street, S. (1985) Cinema and State: The Film Industry and the British Government, 1927– 84. British Film Institute Publishing, London. Downey, M. (ed.) (1999) The Film Finance Handbook. Media Business School, Madrid. Dyja, E. (ed.) (1992–2003) British Film Industry Handbook. British Film Institute: London. Faulkner, R.R. and Anderson, A.B. (1987) ShortTerm Projects and Emergent Careers: Evidence from Hollywood. American Journal of Sociology, 92(4), 879–909. Ferriani, S., Corrado, R. and Boschetti, C. (2005) Organizational Learning Under Organizational © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

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Impermanence: Collaborative Ties in Film Project Firms. Journal of Management and Governance, 9, 257–85. Film Council (2003) Statistical Yearbook 2003, available at http://www.filmcouncil.org.uk. Grabher, G. (2002) The Project Ecology of Advertising: Tasks, Talents and Teams’. Regional Studies, 36(3), 245–62. Grabher, G. (2004) Learning in Projects, Remembering in Networks? Communality, Sociality and Connectivity in Project Ecologies. European Urban and Regional Studies, 11(2), 99–119. Hobday, M. (2000) The Project-Based Organization: an Ideal Form for Managing Complex Products and Systems? Research Policy, 29, 871–93. Jones, C. (1996) Careers in Project Networks: the Case of the Film Industry. In Arthur, M.B. and Rousseau, D.M. (eds), The Boundaryless Career: A New Employment Principle for a New Organizational Era. Oxford University Press, Oxford pp. 58–73. Jones, C. and DeFillippi, R. (1996) Back to the Future in Film: Combining Industry and SelfKnowledge to Meet the Career Challenges of the 21st Century. The Academy of Management Executive, 10(4), 89–103. Keegan, A. and Turner, J.R. (2001) Quantity versus Quality in Project-based Learning Practices. Management Learning, 32(1), 77–98. Langham, J. (1996) Lights, Camera, Action: Working in Film, Television and Video. BFI Publishing, London. Llewellyn, S. and Walker, S. (2003) A Career Handbook for TV, Radio, Film, Video, and Interactive Media, 2nd edn. A & C Black, London. Nachum, L. and Keeble, D. (2003) Neo-Marshallian Clusters and Global Networks: The Linkages of Media Firms in Central London. Lone Range Planning, 36, 459–80. Pugh, D.S. (1998) The Aston Study and its Development. Ashgate/Dartmouth, Aldershot. Relph, S., with Headland, J. and Overland, A. (2002) The Relph Report: A Study for the Film Council Examining the Costs of Lower Budget UK Films and their Value in the World Market. Available at http://www.filmcouncil.org.uk/ (accessed September 2003).


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Sako, M. (1992) Prices, Quality and Trust: Inter-Firm Relations in Britain and Japan, Cambridge University Press, Cambridge. Salter, A. and Gann, D. (2003) Sources of Ideas for Innovation in Engineering Design. Research Policy, 32, 1309–24. Starkey, K. and Barnatt, C. (1997) Flexible Specialization and the Reconfiguration of Television Production in the UK. Technology, Analysis and Strategic Management, 9(3), 271–86. Starkey, K., Barnatt, C. and Tempest, S. (2000) Beyond Networks and Hierarchies: Latent Organizations in the UK Televsion Industry. Organization Science, 11 (3), 299–305. Starkey, K. and Tempest, S. (2004) The Effects of Liminality on Individual and Organizational Learning. Organization Studies, 25(4), 507–27. Storper, M. (1989) The Transition to Flexible Specialization in the US Film Industry; External Economies, the Division of Labour, and the Crossing of Industrial Divides. Cambridge Journal of Economics, 13, 273–305. Turner, R. and Keegan, A. (1999) The Versatile Project-based Organization: Governance and Operational Control. European Management Journal, 17(3), 296–309. Veshkovsky, D. (1998) Managing Innovation Information in Engineering and Construction Firms. Journal of Management in Engineering January/ February, 58–66. Zuckerman, E.W. (2004) Do Firms and Markets Look Different? Repeat Collaboration in the Feature Film Industry, 1935-1995. Working Paper, MIT Sloan School of Management.

John Davenport (j.a.davenport@salford. ac.uk) is a lecturer in accountancy at Salford University, Greater Manchester, UK. His research interests include project-based organization and comparative international accounting.

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Entrepreneurs’ Intentions and Partnership Towards Innovation: Evidence from the Japanese Film Industry Jin-ichiro Yamada and Masaru Yamashita Many scholars have researched in the field of entrepreneurship and innovation; nevertheless, little attention has been given to a causal relationship between these two concepts; entrepreneurial intention and innovation. In the conventional view, a single outstanding entrepreneur has an intention to induce innovation, and connects market opportunities and resources. However, this view cannot fully explain the situation of entrepreneurial activities led by a team. This article presents a new research framework in entrepreneurship research. First, an entrepreneur can have a relational intention that leads to constructing a partnership. Second, such a partnership, not an individual entrepreneur, has an emerged innovative intention that leads to carrying out innovation in order to establish the competitive advantage. Adopting this framework, we examine cases in the Japanese film industry and clarifying the relational development between entrepreneur’s intention and innovation. From this study a new theoretical foundation on the dynamics of entrepreneurial intentions and outcomes in creative industries arises, and it unpacks the initial stage of innovation where organizations are newly created by employing micro viewpoints such as individuals and partnerships.

Introduction ntrepreneurship demands a creative network and relationships to enable innovation. Although numerous studies have recently highlighted entrepreneurial teams rather than individual entrepreneurs, the relationship between the formation of such teams and the process of innovation is yet to be clarified. The question here is how and where the intention to induce innovation is formed, and how such an intention leads to the innovation if team entrepreneurial activities exist. In order to constructively address this question, this study focuses on the leaders of innovation as well as their intention leading to the innovation, using the three cases of Japanese

E

1 In Japan, the term ‘content industry’ is widely and officially used to mean ‘creative industry’. For example, the Content (kontentsu) Industry Promotion Act was enacted in 2004. Scholars also use these terms interchangeably.

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film production companies for analysis. Based on the exploratory descriptions and data analyses of the three cases, entrepreneurial activities and the process of innovation in the creative industry1 are also examined from the viewpoints of teamwork and partnership.

Existing Studies: The Entrepreneurial Team and Its Intention Recent studies on entrepreneurial activities have paid more attention to entrepreneurs as a team rather than to the role of a single outstanding individual2 (Ruef, Aldrich & Carter, 2 In particular, the standpoint that the formation of entrepreneurs’ intentions and capabilities can be attributed to individuals’ characteristics is similar to the view of a single outstanding entrepreneur’s activities assumed in this article. See Lee and Wong (2004) for the concepts and analyses of individual characteristics on entrepreneurs’ intentions.


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Innovative intention A single entrepreneur

Innovation Market opportunities + Resources Network

Figure 1. Conventional Framework

2003). There is a good body of empirical studies on the relationship between the scale of entrepreneurial teams and corporate achievements, revealing that businesses established by teams are more successful than those started-up by individuals (Chandler, Honig & Wiklund, 2005). There is also a study that attempts to define entrepreneurial activities in terms of whether or not some sort of organization has been newly created (Gartner, 1988), further evidence of the importance of team formation. When viewing entrepreneurs as a team, it is strategically essential to consider with whom the intention to induce innovation is shared and in what context (Shepherd & Krueger, 2002), because such entrepreneurs’ intention is considered one of the greatest factors influencing the performance of their newly established organization including its survival, growth and profitability (Bird, 1988; Shepherd & Krueger, 2002). As Low and MacMillan (1988) point out, the process between the intention and the result must be examined more carefully than anything else in the study of entrepreneurial activities. In general, entrepreneurs’ intention is formed from both analytical thinking and judgement in a broader context, and holistic thinking based on individual background and capability (Bird, 1988), and its sharing is strongly affected by interpersonal communication among the members. Mintzberg (1978) argued that strategies are not planned but rather spontaneously emerge with changes in the environment. This view is also applicable to the intention of entrepreneurs (Jenkins & Johnson, 1997). In considering the causal process by which a certain intention results in innovation, it is naturally important to examine what intention team members share and what relationships they build, because the results vary greatly according to the process by which the intention merges and is shared among the members rather than the intention itself. Ajzen (1991) states that the intention of a certain action depends on how the people around the ‘actor’ recognize this, and how this recognition is in turn affected by the capability © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

and character of the one with the intention. In other words, there is a certain degree of interaction between intentions and the surrounding circumstances. In the process of creating a new organization, it is essential for the wouldbe entrepreneur to have future visions, but such an organization would not be created by a one-time solo decision. In many of the existing studies on entrepreneurial teams, research was conducted and theories constructed within a framework that emphasizes the existence of a core entrepreneur (leader), who will be the founding president and team members as his or her followers (Eisenhardt & Schoonhoven, 1990). If there is anything that earlier studies overlooked, it is the interaction process by which team members who will be the core of the organization build relationships with each other, and the emergent intention to induce innovation is shared among the members and ultimately realized. Although earlier studies clarified that, as innovation leaders, entrepreneurs need a team or partnership, they did not look to the process between the formation of a partnership and the result. In particular, they paid little attention to the view that innovation is induced by diverse interaction processes between several individuals rather than by the strong leadership of a single entrepreneur who seizes a market opportunity to start up a business (Kanai, Ashizuka & Ishida, 1999; Itami, 1999).3 3

The standpoint that attempts to examine innovative business start-up from the viewpoint of ‘Ba’ clarifies the roles and involvement of individuals in a knowledge network that induces innovation, emphasizing the importance of the autonomous teamwork of several individuals rather than the presence of a single outstanding individual. It is interesting to note that the point of this view is to place less importance on who plays a leading role at the beginning of innovation. Nonaka (1998) used the concept of ‘ba’, a Japanese word meaning ‘place(s) or locus’, to explain the foundations for the effective creation, distribution and interaction of knowledge. Ba is defined as a dynamic context, the sharing of space and time under conditions determined by interactions.

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An individual

Relational Intention

Partnership

Emergent Innovative Intention

Innovation

Collaboration

Figure 2. Framework Assumed in this Article

Methodology Analytical Framework In order to thoroughly examine how the intention to induce innovation emerges and leads to the result through entrepreneurial activities led by a team, this article assumes the following frameworks: In the conventional view, a single outstanding entrepreneur has an intention to induce innovation, and connects market opportunities with management resources to promote the innovation while utilizing his or her network (Hoang & Antoncic, 2003).4 However, this view cannot fully explain the situation of entrepreneurial activities led by a team. This study assumes that a clear-cut intention to induce innovation and its sharing among the members do not initially exist, but spontaneously emerge from the formation of a partnership. In other words, any intentions that each individual has prior to the formation of a partnership would not directly lead to the innovation. This article defines this type of intention as a relational intention, which refers to the one that seeks to build partnerships through which to share the same intention to induce the innovation. On the other hand, the intention formed through partnership is termed in this article as an emergent innovative intention, because it differs from a single individual’s initial intention.5 The relational intention leads to the action of partnership building, and the innovative intention emerging from the partnership in turn leads to innovation (see Figure 2).

Research Design In order to confirm and further elaborate this framework, three domestic film production 4

Intention in this context is not a vague desire for innovation, but rather refers to the intention to induce innovation with specific content (corresponding to business models). 5 The term ‘single individual’ (single actor) is used here, instead of ‘single entrepreneur’, for someone who conceives of a certain innovation, which does not always lead to the innovation.

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companies were analysed. Film production is one of the much-discussed creative industries. According to case studies conducted by Mezias and Kuperman (2001), the essence of the emergent activities of entrepreneurs involved in content development and innovation is an innovation process in dynamic community formation. It is also empirically understandable that the creative industry requires frequent development of original products because of its product characteristics. Film production may be one of the most suitable industries for the examination of entrepreneurial characteristics. As easily can be imagined from the end credits, the creative industry of film production accumulates vast amounts of personal data, and who made what contribution beyond the organizational framework is clearly shown. In addition, it is easier to observe individual actions, and the relationship between individuals, the point of this study, is more apparent than in any other industry.6 This study focuses on the point of innovation as well as their intention leading to the innovation, using three cases of Japanese film production companies for analysis. Up until the 1990s, the Japanese film industry had three major studios that occupied about 90 percent of theatres specializing in Japanese films. Thus the film makers could not distribute their own films without the networks of the major studios. Consequently, many film directors and producers were making films as subcontractors, and they could not have any copyrights or they were unfairly put at an economic disadvantage. It was a main factor for the long stagnation in Japanese film industry, as there was little incentive for film makers to make artistic or entertaining films (Yamashita & Yamada, 2003). In such a climate the three small productions that we researched managed to become equally powerful in contract-making, and developed their unique production method

6

Our research has an orientation of repeated observations in this case study (Yin, 1994) in order to attain the difficult data of entrepreneurial intention and outcome. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing


that allowed them to continuously produce excellent films.7 They are the most successful ventures in the Japanese film industry in 1990s: Altamira Pictures, which produced the film Shall We Dansu? and still produces boxoffice hits such as Waterboys (2001), Gege (2004) and Swing Girls (2004); Office Kitano, which produced HANA-BI (1997) and Zatoichi (2003), which won the Grand Prix and the Best Director Award respectively at the Venice Film Festival; and Itami Production, which produced 11 films, including their first The Funeral (1984), almost all of which were boxoffice hits. The common characteristic of these companies is that they have a solid production system with excellent production skills while remaining independent from major studios, and thus they are highly regarded by major companies. Although the majority of film production companies are likely to become sub-contractors of major studios, these three companies are maintaining the autonomy and independence of venture companies. A variety of sources of data and methods of collection were used in order to explore their entrepreneurial behaviour (Yin, 1994) and intensive and repeated interviews were preferred in order to provide grounds only for the analytical generalization of findings. Other data sources included company documents, participant observation and a Japanese film database. Interviews8 were conducted mainly between 1997 and 2004 with President and Producer Shoji Masui and Business Associate Yuji Ogata at Altamira Pictures, Producer Takio Yoshida and Promotion Staff Ryo Terumoto at Office Kitano, and President Yasushi Tamaoki and On-site Producer Takashi Kawasaki at Itami Production.9 The interview time was slightly less than two hours on average, with a maximum of three hours.

7

The criteria of the ‘excellent film’ in this article is to have a great box-office success and at the same time to have obtained high evaluation for artistic worth. Based on this standard, the research companies were chosen from the data of the cinematic review magazine traditionally most trusted in Japan (Kinema-Junpou). 8 All interviews were recorded an MD recorder and these were all transcribed and analysed. 9 Although irrelevant to the content of this article, interviews were also conducted with promotion staffs of Toho and Toei, major film studios, which were helpful in gaining a deeper understanding of the three production companies. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

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Three Cases from the Japanese Film Industry Case 1: Altamira Pictures Ogata, a managing director of a theatrical agency, introduced a film director, Masayuki Suo, to a producer, Masui. Masui was an employee of an established film studio, Daiei. Masui and Suo produced Fancy Dance, presented by Daiei in 1989, and they found kindred spirits in each other. They made Shiko Funjatta in 1992 and received acclaim at the box office and from critics. They swept almost all of the awards presented in various film festivals and contests in Japan in that year. As a result, Masui became a star producer in Daiei. Many projects were brought to him. However, he wanted to concentrate on projects with Director Suo. After a while, he left the studio; Masui and Suo founded a production company, Altamira Pictures, with Ogata and director Itsumichi Isomura, who was a mutual friend of Suo and Masui. Masui and Ogata took a scenario that Suo wrote for Daiei, and Masui and Ogata asked Daiei to launch a new project. Thus, Daiei released Shall We Dansu? in 1996, and it turned out to receive much acclaim in the art world. Furthermore, the film was released in the USA and made US$9m there, as well as being remade in Hollywood, starring Richard Gere. Altamira Pictures was not, however, given any reward apart from being paid a fixed production cost and fee. Officially, Altamira Pictures was just a sub-contractor of Daiei. Since Suo overspent on the budget, they went into the red in the end. Masui stopped co-producing films with Daiei. Altamira Pictures started to produce films with a major broadcasting company (Fuji Television) after this, and consequently gained more commissions. They make more than one film a year now by also using outside directors. Altamira Pictures is one of the most financially successful production companies in Japan today.

Case 2: Office Kitano One of the most popular Japanese comedians, Takeshi Kitano had been very interested in the film business since he appeared in Merry Christmas, Mr Lawrence, directed by Nagisa Oshima. When a major distribution company, Shochiku, offered Kitano the opportunity to direct a film, he willingly accepted it. Thus, he produced Violent Cop in 1989. It was Yoshida who performed as on-site producer on that occasion. Although Yoshida had been an assistant director, he had made a decision to be a

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producer and had entered a small production company. After he had gained experience as an assistant producer in several films, the company recommended him to act as an on-site producer in Violent Cop. He has, until the present day, been an on-site producer in all the films directed by Takeshi Kitano since that first film, Violent Cop. Even though Violent Cop did not make much money, it was highly acclaimed in the art world. The following year, director Kitano and onsite producer Yoshida made their second film presented by Shochiku. Film critics appreciated the film again, but the proceeds were very small. Kitano made the third film sponsored by a talent agency, Office Kitano, that comedian Takeshi Kitano belonged to. The executive Mori gained acclaim as producer for the first time in this film. Since this film, Mori has performed as managerial producer in films directed by Takeshi Kitano. The film was distributed by another big company, but went into the red all the same. His fourth film, Sonatine, released in 1993, was the last film presented by Shochiku. Though Kitano, Mori and Yoshida felt that the fourth film was better than the first three they had made, the person in charge of distribution at Shochiku assessed it as a failure. At that time, a British film critic asked Takeshi Kitano for an interview. The critic told Kitano that his films were highly appreciated in Britain. Shochiku had never given such feedback to Office Kitano. Thus Office Kitano stopped dealing with Shochiku. From the sixth film, Office Kitano started distributing by themselves as well as promoting. Yoshida quit the small production company he had belonged to, and joined Office Kitano formally in 1995. They planned to enter their seventh film into the Venice Film Festival as they knew Kitano’s films were highly appreciated in Europe. The film, HANA-BI won the grand prize (Golden Lion) there. They then established an international strategy. Furthermore, their eleventh film, Zatoichi won the Director’s award (Silver Lion) at the Venice Film Festival in 2003. Office Kitano is the most successful Japanese production company internationally.

Case 3: Itami Productions When an actor Juzo Itami thought he wanted to direct a film, he asked his friend Tamaoki, who managed a confectionery company, to sponsor the project. Though Tamaoki was happy to provide sponsorship, neither Tamaoki nor Itami had ever made a film before. Itami invited Okada to perform as producer. He had produced many films when Itami was an actor. Okada then appointed Hosogoshi as an on-site producer. So The

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Funeral was made and released in 1984, and turned out to be superbly profitable. The film was also appreciated in the artistic community and won many film prizes in Japan. Tamaoki gained confidence by observing Okada on the first film and felt that he would be able to perform as producer. Itami made a decision to produce the second film on the basis of the very good reviews of the first. Then Itami invited officially Tamaoki to take an executive role in Itami Productions. They thought that they would not need the cooperation of Okada any more as a managerial producer, but they asked Hosogoshi to continue to help them as an on-site producer. Tamaoki decided not to use the profits that The Funeral earned as a budget for the second film, because their company would run out of money if the second film failed. Tamaoki attempted to raise production funding by raising funds from banks and by pre-selling the publishing, video and broadcasting rights. On the one hand, Tamaoki dealt well with the finance; on the other hand, in creating content, director Itami and on-site producer Hosogoshi kept making attractive films. With this production style, Itami Productions produced 11 films and earned a great deal of money up until 1997. After the eighth film, however, onsite producer Hosogoshi died. But they kept making films by appointing Kawasaki as a new on-site producer. Kawasaki had been performing as production manager, assisting Hosogoshi, since Itami’s second film. Kawasaki proved to be a good partner with director Itami. Because of this structure, Itami Productions was the most successful independent production in Japan at that time. Itami Productions, however, has not made any films since 1997, when Juzo Itami put an end to his own life. Tamaoki returned to being an executive of his confectionery company. Though Kawasaki has performed as a producer under other directors since then, none of the films have been commercially successful.

Analyses Innovation and Network Context in Film Making The innovation observed in each case is not mere development of good content but the establishment of a production system capable of continuously developing content in a commercially viable way, which may be called a unique business system. What is the system that is capable of continuously developing good content? Creative industries including the film industry are generally characterized © 2006 The Authors Journal compilation © 2006 Blackwell Publishing


by their division of roles. In the film industry, for example, there are roles such as directors, main staff including camera operators, site producers, managerial producers, film distributors and movie theatres. Historically, division of roles spread in Hollywood in the 1950s, triggered by incidences in which major studios fired all of their creators, including directors and technical staff. One reason for this is that they ran afoul of the antitrust laws. Another reason is that they wanted to improve their filmmaking environment so that they could explore various combinations of human resources in order to develop diverse and innovative content, utilizing sophisticated technology (Christopherson & Storper, 1989). Thus, the division of roles was intentionally promoted in the field. Indeed, although it is possible to freely combine various resources in the film industry, the careers of successful creators show that they are more likely to work with almost the same staff members (Jones, 1996). People with competency build partnerships in order to establish their own production system. The competency is traced by their performance history, which requires skills. This signalling expertise based on prior films and experiences does help entrepreneurial activity to be understood and to align one another’s intentions, although this signal depends on the institutional context as whole (Jones, 2002). This unique production system is the key to entrepreneurial success, providing a competitive advantage with which to negotiate on equal terms with the studios. The next question is how such skilled creators build partnerships, in particular in their initial career development. The selected three companies answer this question. First, they establish partnerships with directors and producers. One example is a partnership built through previous collaboration experiences, as in the case of Director Takeshi Kitano and Mori, who used to work together as entertainer and manager. Likewise, Director Suo and Masui showed perfect compatibility in past collaborations. Another example is an established friendship, as in the case of Director Juzo Itami and Tamaoki. In each case, the partnership was not built by newly combining heterogeneous elements, but instead was built on a relationship that already existed.10 10

Although many previous studies regard the career paths of directors as well as producers who both play a major role in film production as boundaryless career phenomena, the process of their partnership building is paradoxically the building of relationships through organizations (Yamashita & Yamada, 2003).


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Relationships Between Entrepreneurial Concepts; Single Actor, Partnership and Innovation As explained above, skilled creators establish their own production system through partnership activities. Specifically, it is a system by which to convert directors’ intentions to shoot films into commercially viable film projects. For example, Altamira Pictures broke away from the major studio of Daiei, from which film projects were offered, in order to collaborate instead with Fuji Television on film production. This is the result of Altamira’s efforts to establish its own production system. The dimensions of such a system largely depend on the nature of the partnership. Office Kitano decided to operate an independent distribution business because film distribution was an integral part of their ideal production system. The partnership on which such production systems are based is unique in that each component is irreplaceable, and therefore an inimitable resource. Table 1 sums up the characteristics of the three companies, namely Altamira Pictures, Office Kitano and Itami Production, in terms of achievements, innovation content, members and starting points of relational intentions as well as emergent innovative intentions. Thus, the formation of a partnership sets the foundation for creating a unique production system capable of continuously producing good content. This suggests that organizing a team is a part of the essence of entrepreneurial activities. Although the conventional framework of entrepreneurial activities may assume the existence of someone with a clear-cut intention to induce innovation and plan or design the direct process for realizing the innovation, it is extremely difficult to single out such an individual in the cases shown in the table. For example, Itami Production’s unique production system appears to have been established by the intention of managerial producer Tamaoki; however, their production style largely depends on and is subject to the nature of the partnership as mentioned above. Even though Tamaoki might have had a clearcut intention to establish his own production system, it is an ex-post intention that spontaneously emerged as the partnership was formed and each role began to function. In that sense, it is an emergent innovative intention. At the stage of building a partnership on which the innovation was based, Director Juzo Itami invited Tamaoki to his production as a business manager; therefore, it is more appropriate to say that the partnership was built through the intention of the director (rela-

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Table 1. Analyses of the Three Cases Altamira Pictures Outcome of innovation Means of innovation

Partnership members

Starting point of relational intention Starting point of emergent innovative intention

Acquisition of shared profit Establishment of structure in co-production with a broadcasting company Director: Suo and Isomura Producer: Masui and Ogata Masui or each member No one or intention emerged from core partnership

tional intention) rather than through Tamaoki himself. The same is true of Altamira and Office Kitano, whose unique production systems were not established by someone’s clear-cut intention right from the start. In most cases, they get together not for the purpose of establishing a production system of any kind but to produce good-quality films (relational intention). After building partnerships, they begin to establish their own production system as the most suitable business method (emergent innovative intention). Thus, it is extremely difficult to single out an entrepreneur who plays a crucial role in the process of innovation. What is obvious in each case is that the formation of the partnership preceded the establishment of the competitive production system. However, someone’s intention (relational intention) must have played a part in the formation of the partnership, as in the case of Itami Production, in which Director Itami invited Tamaoki as a business manager. It should be noted that this relational intention per se did not directly lead to the innovation. In most cases, innovation emerges from partnership activities. If there is any entrepreneurial intention derived from a specific individual in the entire process of innovation, it is that of building a core partnership at the initial stage of the process. Actual innovation after the formation of the partnership is not initially planned by a spe-

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Office Kitano

Itami Productions

Market expansion

Stable cash flow

Internalization of distribution functionadvance of global market with film festivals Director: Kitano Producer: Mori and Yoshida

Establishment of unique financing method by raising funds

Kitano or each member No one or intention emerged from core partnership

Director: Itami Producer: Tamaoki and Kawasaki (Hosogoshi) Itami or each member Tamaoki or intention emerged from core partnership

cific individual (single actor) but is realized by the partnership (multiple entrepreneurs) (see Figure 3).

Conclusion and Implications As discussed above, although prior studies assume that the role of entrepreneurs is to newly combine various elements (Carland et al., 1984; Schumpeter, 1971), little attention was paid to the interacting process between such elements. Considering the uncertain factors and limited visibility in the process of innovation, it is unlikely that a single entrepreneur plans everything from the start to the end of the innovation. In addition, it is important to note that it is not easy to build a partnership base on which a new combination of elements is achieved. If it were possible to achieve such a new combination, using easy-to-access elements, the innovation would be readily imitable, providing no long-term competitive advantages. Therefore, entrepreneurs first aim to establish an organization or team consisting of elements that are not easily accessible, because the combination of human resources (partnership) is rare and unique, and therefore the least imitable type of resource combinations. This partnership provides competitive advantages for entrepreneurial activities, encouraging the combination of various other elements necessary for innovation. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing


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Constructing Partnership (Plural Actors) (ii) Emerged Innovative Intention

(i) Relational Intention

A Single Actor (Entrepreneur)

Realizing Innovation Not Direct Causal Process (Innovative Intention)

Figure 3. Two Types of Intention Leading to Innovation

Actual innovation emerges along with the formation of the partnership. Although the partnership has various positive affects on the team members, it is difficult for them to foresee the results. This is because innovation depends not only on the circumstances but also on the characteristics of the partnership, which also constantly change after the formation of the partnership. Therefore, it is impossible for a would-be entrepreneur to assume and design everything for the results of a partnership pursuing innovation. Thus, there is some good extant literature focused on careers’ development as coupled rather than individual phenomena, coined as symbiotic careers in creative industry (Alvarez & Svejenova, 2002; Alvarez et al., 2005) and we pushed forward this nascent stream of literature, focusing on the initial emerging process in the different institutional background. This article makes two main contributions to the theoretical domains of entrepreneurship and innovation study in creative industries. The first contribution is that it has addressed research agenda that have been overlooked between innovation research and entrepreneurship research, and established a framework for future empirical research. Our analytical framework will advance further understanding about the organizational emergence and innovation occurring processes from the viewpoint of entrepreneurial intention and the relational constructing. The second contribution is that it suggested scope for analysing the initial stage of innovation and the actors’ behaviour from a new perspective, by connecting entrepreneur intention and initial entrepreneurial team development in a creative industry. Previous studies on the creative industry tended to observe the actors’ adaptation process under certain institutional changes from the macro perspective. Our research, in contrast, focuses on the original stage of innovation in the certain situation before the organization has © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

achieved success, in order to acquire deeper insight into entrepreneurial efforts and their behaviours. This study also raises the question of the dynamics of entrepreneurial intentions and outcomes in creative industries. Is it impossible for a single individual (or single actor) to realize innovation with a distinct purpose? The answer is no. Although it may not be easy, it is possible to induce innovation by building a partnership with the relational intention as a starting point, and making plans suited to the characteristics of the partnership. It is not the intention to ‘do what’ but the intention to ‘do with whom’ that counts. However, it is an innovative intention emerging from a specific partnership or entrepreneurial activities led by a team, rather than a single individual, that directly realizes innovation. This article has focused on the interacting process between individuals at the initial stage of innovation, emphasizing the need to reexamine the conventional framework shown in Figure 1, which places greater importance on the role of a single outstanding entrepreneur in an organization process. There may be organizations consisting of a single outstanding entrepreneur and his or her replaceable followers when dealing with business models related to the innovation content itself.11 In such a business model, a personal connection mainly formed by a single outstanding hero such as an inventor may sporadically contribute to innovation, a case in which an individual’s initial intention directly leads to innovation without being divided into a relational intention and emergent innovative intention.

11

Vesper (1989) points out the necessity of deciding whether an innovation should be promoted by a single individual or a team according to its content, and to consider how to create a network and utilize outside members on an ad-hoc basis.

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Nonetheless, it is extremely difficult for a single individual to establish inimitable competitive advantages through building a new business system. He or she may need to secure the advantages of a pioneer by continuous investment or constantly devising new business models. Innovation by entrepreneurs is not a pie-in-the-sky concept or business model but, in most cases, is realized through actual business operation with partners after a process of trial and error.12 Considering the various highly uncertain factors in the process of innovation, it is virtually impossible for a single outstanding entrepreneur to realize innovation on his or her own. An analytical framework in view of the realistic situation of entrepreneurial activities led by a team (partnership) was proposed in this article. However, there are three issues to be further discussed in the future, two of which are immediate: whether or not this new framework can be applied not only to the institutions of the creative industry in Japan but also to the process of creating venture or new businesses in a broad range of industries and other countries’ creative industries; and how to answer this question, or is it necessary to quantitatively examine to what extent this framework can contribute to the study of innovation. The final, and broader issue is to what point in the entire process of innovation the newly proposed framework can be applied. The continuum from reproducer to innovator is defined by outcomes, not intentions (Aldrich & Kenworthy, 1999). It is important to fully examine this issue because, although it is useful to employ micro viewpoints such as individuals and partnerships at the initial stage of innovation where organizations are newly created, macro viewpoints such as organizations and inter-organizational relationships may become more useful as the scale of the business or organization increases with further promotion of the innovation. Therefore, it is necessary to determine the exact timing when this framework loses its validity, and also to predict what major changes occur at that point. It is a vital issue related to the essence of entrepreneurial activities.

Acknowledgements This research project is supported by following research grants: Japanese Ministry of 12 Kagono and Inoue (2004) point out the importance of distinguishing business systems from business models, defining the business system as a source of long-term competitive advantages that include ‘unintended results’ (2004, p. 48).

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Education, Kakenhi (Science Foundation no.16530255:2004–2007, no.17730246:2005– 2007), Authors gratefully acknowledge special cooperation by all interviewees, and wish to thank three special editors for organizing EGOS conferences and for their constructive efforts. The authors are also indebted to Jeff Rao and Michiko Yamada for their help with English translation, reading the entire text in its original form.

References Aldrich, H.E. and Kenworthy, A. (1999) The Accidental Entrepreneur: Campbellian Antinomies and Organizational Foundings. In Baum, J.A.C. and McKelvey, B. (eds.), Variations in Organization Science: In Honor of Donald T. Campbell. Sage, Newbury Park, CA pp. 19–33. Alvarez, J.L., Strandgaard, J., Mazza, C. and Svejenova, S. (2005) Shielding Idiosyncrasy from Isomorphic Pressures: Towards Optimal Distinctiveness in European Filmmaking. Organization, 12(6), 86388. Alvarez, J.L. and Svejenova, S. (2002) Symbiotic Careers in Movie Making: Pedro and Agustín Almodóvar. In Peiperl, M., Arthur, M., Goffee, R. and Anand, N. (eds.), Career Creativity: Explorations in the Remaking of Work. Oxford University Press, Oxford pp. 183–208. Ajzen, I. (1991) The Theory of Planned Behaviour. Organizational Behavior and Human Decision Processes, 50, 179211. Bird, B.J. (1988) Implementing Entrepreneurial Ideas: The Case for Intention. Academy of Management Review, 13(3), 442–53. Carland, J.W., Hoy, F., Boulton, W.R., and Carland, J.A.C. (1984) Differentiating Entrepreneurs from Small Business Owners: A Conceptualization. Academy of Management Review, 9(2), 354– 60. Chandler, G.N., Honig, B. and Wiklund, J. (2005) Antecedents, Moderators, and Performance Consequences of Membership Change in New Venture Teams. Journal of Business Venturing, 20(5), 705–25. Christopherson, S. and Storper, M. (1989) The Effects of Flexible Specialization on Industrial Politics and the Labor Market: The Motion Picture Industry. Industrial and Labor Relations Review, 42, 331–47. Eisenhardt, K.M. and Schoonhoven, C.B. (1990) Organizational Growth: Linking Founding Team, Strategy, Environment, and Growth among U.S. Semiconductor Ventures, 1978–1988. Administrative Science Quarterly, 35(3), 504–30. Gartner, W.B. (1988) Who is an Entrepreneur? Is the Wrong Question. American Journal of Small Business, 17, 22–29. Hoang, H. and Antoncic, B. (2003) Network-based Research in Entrepreneurship: A Critical Review. Journal of Business Venturing, 18(2), 165–87. Itami, H. (1999) The Management of Ba. Tokyo: NTT Shuppan. (in Japanese) © 2006 The Authors Journal compilation © 2006 Blackwell Publishing


Jenkins, M. and Johnson, G. (1997) Entrepreneurial Intentions and Outcomes: A Comparative Causal Mapping Study. Journal of Management Studies, 34(6), 895–920. Jones, C. (1996) Careers in Project Networks: The Case of the Film Industry. In Arthur, M.B. and Rousseau, D.M. (eds.), The Boundaryless Career: A New Employment Principal For New Organizational Era. Oxford University Press, Oxford p. 5875. Jones, C. (2002) Signaling Expertise: How Signals Shape Careers in Creative Industries. In Peiperl, M., Arthur, M., Goffee, R. and Anand, N. (eds.), Career Creativity: Explorations in the Remaking of Work. Oxford University Press, Oxford pp. 209– 28. Kagono, T. and Inoue, T. (2004) Business System Strategy: Unpacking Business System and Competitive Advantage. Tokyo: Yuhikaku. (In Japanese) Kanai, K., Ashizuka, I. and Ishida, S. (1999) Formation and Evolution of Venture Network in Region’, Paper presented in The Creation of Fast Growth High-Tech Ventures: Experience in the USA, the UK and Japan. Working Paper, International Conference in Osaka Chamber of Commerce and Industry, 5 August 1999. Lee, S.H. and Wong, P.K. (2004) An Exploratory Study of Technopreneurial Intentions: A Career Anchor Perspective. Journal of Business Venturing, 19(1), 7–29. Low, M.B. and MacMillan, I.C. (1988) Entrepreneurship: Past Research and Future Challenges. Journal of Management, 14(2), 139–61. Mezias, S.J. and Kuperman, J.C. (2001) The Community Dynamics of Entrepreneurship: The Birth of the American Film Industry, 1895–1929. Journal of Business Venturing, 16(3), 209–33. Mintzberg, H. (1978) Patterns in Strategy Formation. Management Science, 24(9), 934–48. Nonaka, I. (1998) The Concept of ‘Ba’: Building a Foundation for Knowledge Creation. California Management Review, 40(3), 40–54. Ruef, M., Aldrich, H. and Carter, N. (2003) The Structure of Founding Teams: Homophily, Strong Ties and Isolation among US Entrepreneurs. American Sociological Review, 68(2), 195–222. Shepherd, D.A. and Krueger, N.F. (2002) An Intentions-Based Model of Entrepreneurial Teams’


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Social Cognition. Entrepreneurship Theory & Practice, 27(2), 167–86. Schumpeter, J. (1971) The Fundamental Phenomenon of Economic Development. In Kilby, P. (ed.), Entrepreneurship and Economic Development. The Free Press, New York pp. 43–70. Vesper, K.H. (1989) New Venture Strategies. Englewood Cliffs, NJ: Prentice Hall. Yamashita, M. and Yamada, J. (2003) Producer’s Role and Career in the Japanese Film Industry: The Impact of Producer-Director Partnership’s Evolution. Paper presented in the EGOS Conference, Copenhagen, 3–5 July. Yin, R.K. (1994) Case Study Research: Design and Methods, 2nd edn. Sage Publications, Thousand Oaks, CA.

Dr. Jin-ichiro Yamada (jyamada@ec. kagawa-u.ac.jp) is an associate professor of entrepreneurship and strategy in School of Management, Faculty of Economics, Kagawa University, Japan, a visiting fellow in Cranfield School of Management, UK, and a research fellow in Chair Arts, Culture & Management in Europe, Bordeaux Business School, France. His main interests are new venture strategy and strategic management in creative industries and high technology industries. His current research work focuses on the multi-dimensional roles of entrepreneurship in innovation and industrial clustering. Dr. Masaru Yamashita (yamashita@busi. aoyama.ac.jp) is an associate professor of business, Aoyama Gakuin University, Tokyo, Japan. His research interests include organizational creativity in Japanese organization, especially in Japanese film industry. He studies what organizational process makes an organizational creativity, and focuses on social capital and human resource development.

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The Development of Creative Capabilities in and out of Creative Organizations: Three Case Studies Nancy K. Napier and Mikael Nilsson This paper describes and analyses how creative organizations develop and use routines and processes to strengthen their creative capabilities. Using an exploratory framework based in resource-based theory and creativity literature, it focuses on the role of the creative entrepreneur as a key component for organizations developing creative capabilities. The creative entrepreneur or agent builds collaboration, exploits knowledge and enhances relationships in and out of an organization. Drawing on three in-depth case studies from different sectors (theatre, sports and software), the article expands the idea of creative capabilities to encompass routines and processes in organizations in industries generally not considered ‘creative’. Furthermore, it outlines how the creative entrepreneur is instrumental in developing and using the creative routines so that they form creative capabilities. Based on the analysis, the article discusses creative capabilities, collaboration in the process, and the creative entrepreneur’s role in developing and using them.

Introduction nterest in creativity and innovation among business and other organizations has grown rapidly in the last decade, both in the general press (Friedman, 2005; Johansson, 2004) and in the academic world (Davila, Epstein & Shelton, 2006; Drazin, Glynn & Kazanjian, 1999; Nijstad & Paulus, 2003; Runco, 2004). Both groups question how creativity could be(come) a resource yielding competitive advantage – for countries, communities or organizations (Florida, 2002, 2005; Friedman, 2005; Howkins, 2001). The scholarly literature on individual creativity offers insights into motivation, creative problem-solving and thinking, and characteristics of creative persons (e.g. John-Steiner, 1997; Sternberg, 1999). In addition, organizational creativity research has focused on group organizational support and environment, group motivation and methods (Amabile, 1996, 1999; Bennis & Biederman, 1997). Yet, despite much research, three areas emerge as needing more attention: (1) multidisciplinary perspectives on how creativity operates within organizations (Drazin, Glynn & Kazanjian, 1999; Runco, 2004); (2) group creativity and role of the creative entrepreneur

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(Lubart, 2001; Miura & Hida, 2004; Zhou & Shalley, 2003); and (3) how the creative process varies across organizational types (JohnSteiner, 2000; Woodman, Sawyer & Griffin, 1993). The purpose of this article, then, is to describe and analyse how creative organizations develop and use routines and processes to strengthen their creative capabilities. Using an exploratory framework drawing upon resource based theory and creativity literature, the article focuses on the role of the creative entrepreneur as a key component for organizations developing creative capabilities. The article has three main parts. First, it outlines an exploratory framework that identifies components making up an organization’s creative capabilities as well as enabling the development and use of routines and processes that enhance their creative capability. This framework is then applied to case studies of three project-based organizations, with a focus on the creative process and the organizations’ access to contextual input and market-based assets. Throughout, the role of the creative entrepreneur is analysed. Lastly, the article offers conclusions and suggestions for future research. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

CREATIVE CAPABILITIES IN AND OUT OF CREATIVE ORGANIZATIONS

Exploratory Framework: Building Creative Capabilities The literature on creativity and creative actions has focused primarily on understanding and describing the actions of creative people and increasingly on group processes of creativity. Using an organizational approach, creativity can be examined as a source of competitive advantage, with creative ideas defined as something new, appropriate for the context and valuable. Subsequently, creative actions and the capability of creative behaviour and actions – here defined as creative capability – become important in order to achieve competitive advantage. The creative process is here considered to be a subset of the innovation process, in line with Woodman, Sawyer and Griffin (1993). The exploratory framework has three components (Figure 1) that describe an organization’s ability to develop and use creative capabilities: (A) the creative entrepreneur as architect, supporter and developer of creative capabilities; (B) the creative process, including collaboration routines and processes, as part of an organization’s creative capability; and (C) contextual input and market-based assets. The following section discusses these components.

The Creative Entrepreneur’s Role (A) The literature suggests that creative interaction and collaborative occur to a larger extent in organizations and groups where there is a strong creative and often entrepreneurial leader who encourages such exchange (e.g. Amabile, 1999; Bennis & Biederman, 1997). The term ‘entrepreneurial’ focuses on the actions of an entrepreneur: to identify opportunities, take risks and garner resources with an explicit focus on the creation of new (for the

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context) products, services, knowledge or ideas (Shane, 2003). However, in creative organizations leaders also require other components to build the creative capability. One such component is the capability to link the creative process and its participants to the external environment; in addition, creative entrepreneurs consider trends and opportunities, and identify and exploit resources that can strengthen the organization’s ability to be creative. While others in the organization can – and often do – play a role in the external interaction with the environment, the leader is important for considering environmental conditions or potential resources to develop. In addition, overall resource availability – where research suggest that slack resources have a positive effect on creativity (Tushman & Nelson, 1990) – lies within the realm of the leader’s responsibilities. Another component is leadership style. Studies suggest that the use of a participative managerial style may increase the creativity in an organization (Woodman, Sawyer & Griffin, 1993). Subsequently, we would expect the leadership style to influence creative behaviour and actions. The literature also suggests that the role of the leader depends on and should be adapted to the type of team, organizational context and task at hand (Wheelwright & Clark, 1992). Managerial tasks can include interpreting market and customer needs for the team, interpreting interaction between different functions, managing and coordinating the team’s functions, continuous project management and being a carrier of the concept from idea to completion. This also involves bolstering and co-ordinating these activities. In conclusion, to lead creative organizations and teams, leaders require not only an entrepreneurial stance but also a number of managerial skills, routines and approaches to ensure that the team can perform well. We propose that these multiple components can be combined into the role of the creative entrepreneur, here defined as a managerial role that, through an entrepreneurial approach, designs as well as initiates the development and maintenance of an organization’s creative capabilities.

Organizational Creative Capabilities (B)

Figure 1. Exploratory Creativity Capabililites

Framework:


Building

Resource based theory holds that certain resources are critical in understanding firm behaviour and give an organization the capability to innovate and create economic value (Prahalad & Hamel, 1990). Simultaneously, the evolutionary learning that creates routines and processes, which make up the organiza-

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tion’s capabilities, also may become a hindrance to novel thinking and changed behaviour (Leonard-Barton, 1992; Nelson & Winter, 1982). To understand how organizations are able to be creative yet develop and maintain routines and processes requires a better understanding of the different types of routines and processes that creative and innovative organizations develop and use. This study broadens the map of routines by including traditional as well as non-traditional creative organizations. In addition it looks at routines that enable an organization to interact and attract knowledge from the context and market based-assets, such as experienced human resources.

Structures Have an Impact on Creative Capabilities Creative capabilities are made up of routines and processes that enhance an organization’s ability for creative action and behaviour. These routines and processes evolve within and are preserved in the organizational structure, having an impacting on the creative capabilities. Burns and Stalker’s (1961) describe two organizational types: (1) the mechanistic type, suited for stable environments; and (2) the organic type, suited for changing or dynamic environments. Each suggests a different design of organizational structures for creative processes. Later studies suggest that organic organizational structures enhance creative capability (Woodman, Sawyer & Griffin, 1993). Studies also describe innovation and creation of new products, services or offerings as increasingly occurring in networks of people and organizations, which resemble the organic structure (Brown & Duguid, 1991; Prahalad & Ramaswamy, 2004). In addition to the organizational structure, there are routines and processes at different levels of analysis and type in an organization, making up both reinforcing and hindering structures for creative actions (Drazin, Glynn & Kazanjian, 1999). Examples of such processes include the ability to ‘patch’ and reconfigure technologies and processes (Eisenhardt & Sull, 2001; Henderson & Clark, 1990), the ability and structure to brainstorm with customers (Sutton & Hargadon, 1996; Nijstad & Paulus, 2003), and the building blocks of organizational and interorganizational creativity (Kelley & Littman, 2001; Starkey, Barnatt & Tempest, 2000). These are examples of how routines and/or processes give an organization the capability to be creative, yet develop and improve ways of working.

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Routines and Processes Creative capabilities enable an organization to handle a changing environment by exploiting existing processes and competences, residing internally or externally (Teece, Pisano & Shuen, 1997). Based on changes in the marketplace and organizational context, these resources can be rearranged or reconfigured to ensure competitive advantage. Zolla and Winter define these capabilities as a ‘learned and stable pattern of collective activities through which an organization systematically generates and modifies operating routines’ (2002, p. 340) to be more effective. Participants in a creative organization comprise individuals and groups at several levels. They interact within or across groups informally, or within a group, with the goal of producing a specific creative output. Collaborative processes and team work are important ways for an organization to produce a specific creative outcome (Bennis & Biederman, 1997). The combined routines and processes that occur within or across groups of people as they work to achieve a specific creative outcome, including the collaborative processes, make up the creative capabilities. These knowledge and action patterns develop through evolutionary learning processes that allow an organization to codify experiences and innovate (Nelson & Winter, 1982). One portion of the creative entrepreneur’s role is to encourage collaboration that leads to creative actions and behaviour. An important type of process creates innovations, new ideas and insights through combination and recombination of knowledge and experience from different sources (e.g. Hargadon, 2003; von Hippel, 1988). Collaboration processes take on different shapes – ranging from casual interactions and exchange of ideas, to more intimate collaboration in pursuit of specific creative outputs and goals (John-Steiner, 2000; Woodman, Sawyer & Griffin, 1993). Collaboration to discover new ideas, knowledge or to solve a problem varies both in nature (i.e. how people and groups work together) and intensity (i.e. how deeply and frequently they work together) (JohnSteiner, 2000). Collaboration patterns also vary across hierarchical, functional, organizational boundaries based on the nature of the problem or task at hand as well as based on how the context and structures affect them.

Contextual Input and Market-Based Assets (C) Much of the research on organizational creativity has been inwardly focused. Emphasis © 2006 The Authors Journal compilation © 2006 Blackwell Publishing


has been on how creativity works within an organization or group, rather than on how context or environment may relate to the creative process. Yet, collaboration and interaction across a cluster or network is increasingly seen as important to get new input and knowledge (Porter, 1990), as well as to attract and motivate high-quality people. The organizational ability to transform interaction within the context into creative actions and behaviour rests on two asset types: relational and intellectual (Srivastava, Shervani & Fahey, 1998). Relational assets (e.g. reputation, trust) affect relationships that a firm has with key stakeholders in its external environment such as community groups, customers or strategic partners. The quality of interactions and the ability to explore and exploit these interactions in the creative process depends on the strength of these relational assets. Building these relationships develops the individual and groupbased social capital, and allows exchanges with both the core and periphery of social networks and clusters (Granovetter, 1973; Nahapiet & Ghoshal, 1998). Intellectual assets include knowledge about the organization’s environment and the work it is doing in the creative process (e.g. emerging technologies, competitor actions, information about community groups or customers). Intellectual assets allow the organization to anticipate and adopt responses to contextual changes in an industry, technology or customer group. The development of relational and intellectual assets can occur in many different ways. Examples include interaction with customers and suppliers (von Hippel, 1988; Millson, Raj & Wilemon, 1996) with specifically advanced or high demands and the use of probes/test launches that guide further development (Lynn et al., 1996). Different types of collaboration and interaction expand the developing organization’s knowledge and forces the organization to question established truths and processes. New information, knowledge and reactions from important stakeholders become incorporated into the established routines over time. This requires an ability to transform the signals into input for the creative process. At the same time the challenge to balance exploration with exploitation and avoid being blindsided by new developments is well documented (Henderson & Clark, 1990; Levinthal & March, 1993). This section has outlined an exploratory framework of the creative process, which encompasses routines and processes through which an organization engages in creative actions and behaviour, both collaborative processes, and brings in contextual input and © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

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market-based assets. Specific focus is on the role of the creative entrepreneur as architect, supporter and developer of creative capabilities. The next section discusses the research approach.

The Research Approach To analyse how creative organizations and creative entrepreneurs develop and use creative capabilities, we used an approach based on indepth case studies (Yin, 2003) of organizations from three industry sectors in the USA (regional theatre, business analysis software and American university football). Choosing three different industries gave a broader understanding and map of capabilities, allowing for an exploration of how creative interaction among industry sectors could work and how ‘non-creative’ industries could develop creative capabilities. The qualitative approach allowed more detailed descriptions and a way to describe the complex linkages across multiple levels and organizational boundaries (Napier, in press). The cases had several criteria for selection: (1) the organization’s recognition nationally or globally in its industry as a consistently high performer; and (2) the organization’s reputation in its field for being creative or ‘different’. Figure 2 compares the organizations based on the two criteria. Studying three medium-sized organizations (less than 200 members) allowed for easier ‘untangling’ of the impact of the creative entrepreneurs on an organization. Additionally, we avoided organizations that were too small, for fear that they would not reflect the concept of dynamic capabilities, which by their definition are a ‘learned and stable pattern of collective activities through which an organization systematically generates and modifies operating routines’ (Zolla & Winter, 2002, p. 340). This requires a certain stability, time to evolve and size in order for organizational capabilities to appear.

Creative Processes as the Unit of Analysis The unit of analysis in this study is the creative process and the routines that make up creative capabilities. This offers an opportunity to connect the concept of creative capability with the actual routines and processes that make up this capability (Dougherty & Heller, 1994). Figure 3 shows the stages of the creative process for each organization. The organizations clearly vary on structure, the time span involved, as well as several factors affecting the complexity of the creative process. At the

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Indicators of openness to creativity

Indicators of success

Theater Critics’ reviews, comments from directors and artists from larger cities. Financially successful –50,000 attendees annually (in a city of 200,000).

Football Head coach described in national publications as willing to try ‘new ideas’. Ranked in the top 25 U.S. teams from 2002, and was ranked 12 in the USA in 2004.

Software Mentioned in software publications as innovative and creative.

Survival in consolidating industry. Listed as one of the fastest growing or best firms in class by e.g. Deloitte Technology Fast 500, Inc. 500, Software 500, Teched 2005 and Intelligent Enterprise.

Figure 2. Indicators of Creativity and Success

Figure 3. The Creative Processes of the Three Organizations

same time, the overall process bears resemblance in terms of the activities in each stage. To describe the routines and processes in the creative process, data gathering and analysis were done in an interactive process over time. Starting with a set of interviews and questions based on the exploratory framework, continued interviews and questions developed as knowledge and understanding about the three cases grew. Data for the case studies were gathered through semi-structured interviews (27 with the theatre; 13 with the software firm; 27 with the football programme), news articles, internal documents and reports, formal studies on the community and the role of the arts and observation. The interviews with participants in the creative process as well as the creative entrepreneurs were aimed at capturing both creative routines and processes at different levels of the creative process as well as how different roles allowed creative routines

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to evolve successfully. In the next section, we describe and analyse the cases in more depth.

Analysis of the Cases Based on Exploratory Framework The exploratory framework outlines three components of an organization’s creative capabilities: (A) the creative entrepreneur as architect, supporter and developer of creative capabilities; (B) the creative process, including collaboration routines and processes, as part of an organization’s creative capability; and (C) contextual input and market-based assets.

Creative Entrepreneurs The model describes, and the three cases support, the creative entrepreneur as critical to an organization’s ability to develop capabilities © 2006 The Authors Journal compilation © 2006 Blackwell Publishing


for creative action as well as creative outcomes. In the cases, the creative entrepreneurs were a play director, a head coach and a software-firm senior management team. They straddle the border between the internal and external worlds of their organizations, building relationships and exploiting market-based assets (externally), while setting overall vision and leading the creative collaboration processes (internally). A critical task for the creative entrepreneur is to recruit and nurture talent, whether in a short-term organization (e.g. a six-month long theatre production), medium term (e.g. a football team, where 25–30% of players change each year) or longer term (e.g., a software firm where average stay is 2–5 years). In theatre, play directors, designers and actors collaborate for short periods (six weeks for actors; six months for director and designers) to produce a specific play, for a specific audience, in a specific location. The director sets the vision for the play, the tone of collaboration (more or less open or directive) and uses external links to attract talent. In football, the creative entrepreneur (head coach) balances internal (e.g. other coaches, players) and external relationships (e.g. the community, potential donors) to support creative collaboration, such as generating plays for a game to surprise and overwhelm an opponent. He also seeks ideas from other disciplines, including biomechanical engineering research – to help improve a player’s ballthrowing ability. His openness to new ideas permeates the organization. The software creative entrepreneur fosters internal creative collaboration and taps the environment for creative ideas. The rapidly changing environment forces the creative entrepreneur to stress having people at all levels involved in creative collaboration, as a way to increase the number of ‘touch points’ with the external environment. The entrepreneurial leadership varies in terms of when in the process and to what

Creative process Creative outcome Creative initiative Number of participants Need for coordination

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extent it develops creative capabilities. These cases show that for shorter-term organizations such as the theatre and football, the entrepreneurial leadership and participative style comes in at certain points, whereas for the software company it is a continuous process.

Creative Collaboration Processes and Routines The creative entrepreneur has two critical internal tasks to enhance creative capabilities: to set the structure and identify routines and processes for creative collaboration that can make the organization stand out among its peers. The structure refers to who is involved in creative collaboration and how. Routines and processes refer to the activities that organizations undertake to enhance the likelihood of successful collaboration occurring. To put these in a context, Figure 4 compares the components of the creative process for the three organizations. Structure The cases revealed at least three types of creative collaboration structures: co-ordinator in a clear hierarchy (theatre), symmetrical yet separate clusters (football) and overlapping clusters (software). In theatre, the creative entrepreneur (director) is the central co-ordinator for creative collaboration (Figure 5). The structure is hierarchical, and depending on the director, can be somewhat dictatorial. All artistic design (e.g. set, costumes) and acting decisions feed into the director’s overall vision. Football’s creative structure is relatively symmetrical and egalitarian, yet separate (Figure 6). The two primary coaching groups (offensive and defensive) do not overlap or collaborate creatively because their tasks are quite distinct: the players of the different groups are never ‘on the field’ at the same time, thus there is little need to co-ordinate or collaborate directly. The pattern appears very symmetrical, organized and inclusive at the

Theater Production of play

Football Staging a football game

Play, Performance

Game, Performance

Top and some from members Wide range (e.g. 10– 40) In design and at end of process

Top

Software Development of software program/solution Software, Product

Divided top and project members 6–10 coaches and 100+ 5–10 project members players Significant within Significant groups of players

Figure 4. Key Factors in the Creative Processes © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

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Figure 5. Creative Collaboration in Theatre

Figure 6. Creative Collaboration in Football

top of the organization, with little input from the ‘bottom’ (i.e. the players). The creative entrepreneur (head coach) participates, encourages and nurtures creative collaboration but, unlike the hierarchical co-ordinator role in theatre, does not play a distinctively separate role from others during the creative collaboration processes of game preparation. The software firm’s creative entrepreneurs seek a ‘bottom-centric’ firm, with a structure of overlapping clusters of creative collaboration. The Product Architect is the link between the upper and lower creative collaboration clusters (Figure 7). In addition, the structure separates creative collaboration for new product development from mechanics of project management, allowing creativity to be relatively unconstrained by deadlines and budgets. Routines and Processes In the theatre case, the director’s routines and processes comprise an ‘inclusive’ directorial

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Figure 7. Creative Collaboration in Software

style and she used a naturalistic approach to acting. She has a clear vision but solicits ideas from designers and actors and incorporates those that ‘fit’ her vision. This ‘participative’ approach is relatively uncommon in American regional theatre, according to many actors. Furthermore, the director brought new stylistic approaches: actors turn and speak to the audience and to each other in a naturalistic manner. Actors resisted both the participative approach and the naturalistic delivery during play production, but acknowledged their value once the play opened: response was overwhelmingly positive. In this sense, the routines follow the director, who is the ‘carrier’ and incorporates them into productions (the concept) she directs, building competitive advantage for herself and the group. With regard to football, the creative entrepreneur (head coach) has established processes and routines that encourage smooth creative collaboration, partly because of limited time and context of the game. Football teams typically have one week between games to plan and communicate a game strategy. Thus, the way creative collaboration becomes a source of dynamic capability in football rests mostly in the conduct of practices, such as timing and intensity for each day’s practice, and encouraging players to adjust to changes, by ‘overloading’ them with amount and complexity of plays, pacing and timing during practice. Thus, if coaches insert plays during a game that are different from those practised during the week, players adapt more readily. Lastly, the software firm’s routines and processes for creative collaboration process derive partly from external sources (e.g., Microsoft’s agile development) and partly from internal ideas. For example, the firm routinely generates, tests and spreads (some) ideas that come from an internal blog called ‘Geek Spew’ and © 2006 The Authors Journal compilation © 2006 Blackwell Publishing


from aggressively seeking ideas that may – or may not – have direct or immediate applicability for the organization. When compared, each of the three cases shows very specific and clear structures, processes and routines for how to work and interact in the creative process. However, how these processes develop, the type of processes employed and the amount of interaction across boundaries in the organizations differs significantly. The pattern reflects the creative entrepreneurs’ role shown above, which means that with increasing entrepreneurial activity/mindset the more interactive and participative the approach to work is.

Contextual Input and Market-Based Assets Market-based assets comprise intellectual knowledge about competitors and relational assets (i.e. relationships) with groups critical to the success of an organization. Because regional theatre creative entrepreneurs (directors) compete for work, they admit that knowledge of other directors’ approaches to play production can be useful, although most claim to try not to imitate other directors. But they acknowledge the value of relational assets, or relationships. ‘Who you know’ and ‘who you can work with’ are critical in getting work and finding the best artists to collaborate with. Rarely do actors, directors and designers work repeatedly together on the subsequent plays. Thus, external relational assets become decisive in the theatre’s competitive environment. A director, as creative entrepreneur, must build and maintain strong links with the best suppliers (i.e. designers, actors and technicians) or relational assets that can yield creative and successful productions. For football teams, relational assets are relatively less important than intellectual market-based assets. The creative entrepreneur dominates interaction with the external environment, in terms of engaging the community, selected donors to the programme, or other teams’ coaches. Furthermore, since maintaining ‘secrecy’ of approaches and routines is critical, external interaction is somewhat limited. In contrast, however, the intellectual knowledge of upcoming opponents can be a major asset: coaches and teams that understand their opponents more deeply than others can more likely anticipate and create a successful game plan. The creative entrepreneur (head coach) builds such intellectual knowledge several ways. Coaches and players spend hours reviewing videotapes of opponents’ previous games; coaches also mine historical tapes for creative ideas that could be re-used. That knowledge, along with coaches’ ability to © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

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weave it into a game plan that takes advantage of opponent weaknesses, can be a major creative capability. In software, market-based assets – relational and intellectual knowledge – are also vital. Given the nature of the environment – fast changing, multiple direct competitors – the business analysis software firm seeks and maintains close relations with lead users, other developers and technology experts in the industry, for two reasons. First, including these groups offers efficient and quick input during creative collaboration – especially during development and testing. In addition, such ties may provide intellectual knowledge about competitors, the market and technology trends. In this business, having knowledge and being able to adapt it to develop creative new products is the currency that is most critical for success. As a result, with a fluid collaboration process internally they generates opportunities for more ‘touch points’ externally, which in turn can yield the input and knowledge that became market-based assets. As shown in Figure 8, the three cases vary significantly in terms of dependence on relational and intellectual assets. While they all show fairly high levels of asset reliance, both the nature of assets employed and the phase in the creative process they are used in are different and seem to be industry specific. We can conclude that, for the theatre, strong relational and intellectual assets are crucial to setting up a high-quality performance. The creative entrepreneur is key in this stage, and it is his/ her relational assets that determine the quality of many later stages. For football, knowledge and intellectual assets are important, but fact gathering (what) is more important than people gathering (who). Lastly, for the software company, both types of assets are important at multiple levels of the hierarchy. To attract talent and knowledge requires continuous investment to keep these assets strong.

Discussion and Conclusions This study has used an exploratory framework to describe and analyse how creative organizations develop and use routines and processes to strengthen their creative capabilities. Specifically, the study has focused on the role of the creative entrepreneur as architect, supporter and developer of these creative capabilities. In the three cases, the creative entrepreneurs play a key role in developing the creative resources and capabilities in their organizations. While their roles are similar, their approaches differ, as they aim to achieve dif-

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Types of market Relationship-based Outcomes of relationship between based assets organization and stakeholders Theatre HIGH Long relationships among directors, actors, designers has built unique ‘company’; draws on city reputation as good place to act. Football LOW Reputation of programme known by potential players; became a media ‘darling’ because of access and openness. HIGH Software Close links to partners, lead customers, ‘easy to work’ with reputation; flexible.

Knowledge-based Knowledge an organization holds about environment LOW Director needs some understanding of local audience’s openness to ‘new’ approaches.

HIGH Coaches study and know opponents and team is (usually) able to capitalize on weaknesses. HIGH Knows/anticipates customers and trends; ahead of others; imitated by several.

Figure 8. Contextual Input and Market-based Assets in the Three Cases

ferent objectives. The football-team approach involves building up resources through planning and execution of the process of development (through which the team and coaches develop building blocks, culture and interaction patterns). As part of the process the coach sets the ‘parameters’, such as how flexible a football team needs to be for creativity to emerge. With that accomplished, he focuses on deploying those resources for ‘creative moments’ during the games. The ability and trust to do so stem from achieving results/ wins and subsequent confidence and respect from stakeholders, including players. The theatre director plans and develops the concept and structure of a play, which is executed through rehearsals and building of sets and technical settings. Naturally, there are moments of creative work and ideas throughout the rehearsals and around specific checkpoints, but many creative points are prior to production and during set-up of production. The director’s ability to do so comes from having a network of contacts and a reputation for recurring high-quality productions. The software company relies on the recruitment of people and the setting up of project groups with complementary skills and knowledge sets as well as an outlook of questioning ‘how things are done’. To achieve creative ideas and product features that really stretch the envelope also requires people with open minds. Management’s ability to do so comes from both a reputation and the potential to offer the incentives, both financial and, in this case, lifestyle factors, to potential employees. The analysis suggests that the role and activities of the creative entrepreneur is an indicator of the way she or he works as an architect of what and how routines and processes are developed as well as maintained. The devel-

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opment and use of routines and processes for creative action follows three different paths. In the football case, creative capabilities are very much tied to routines and processes that support creative actions and behaviour during games. In other words, it focuses on the execution and deployment of previous knowledge and ability. The head coach’s role is initially as an architect to design and develop flexible and combinatory processes through practice. Later, he becomes an orchestrator of those plays as they are combined into new configurations, to meet an opponent’s move or to take charge in a game. Preparation builds up the skills, routines and attitude to be executed and deployed during the game. In the software case, creative capabilities are tied to the ability to continuously learn and adapt based on experimenting and building. This firm and its creative entrepreneurs develop and use routines and processes through continuous exploration of new ideas combined with the ability to exploit prior experiences, contacts and knowledge when applicable for creative insights, regardless of stage in the process or project. Managerial focus is on ensuring important knowledge and information is interpreted correctly by the organization and that employees actively participate. For the theatre, creative capabilities are tied to the important design, setting up and planning stages of the work. Establishing an idea and vision happens early on and later stages are aimed towards executing on that vision/concept. In that execution, there are, of course, creative aspects of how the work should be done in detail, but it is bounded by the strong structures of both professional roles and the functional roles of the theatre. This study has explored how creative organizations can develop and use creative © 2006 The Authors Journal compilation © 2006 Blackwell Publishing


capabilities, and the role of the creative entrepreneur in this process. At least two areas for further inquiry emerge from our results. First, longitudinal research would allow for longer time spans to study these organizations to encompass both historical development and future developments. This would give a view of how the routines and processes of these organizations evolve over time. Additionally, it would improve our understanding of if and how creative capabilities can be stable over time or if they are bound to change, as suggested by the organic model. Second, future research could expand the number of organizations in each sector, as well as add organizations from new sectors (e.g. healthcare, military) to improve our understanding of what sets a high performer apart from a lower performer and how creative capabilities vary across other ‘unlikely’ places. Lastly, an important part of such a study would be to develop measures for creative outcome, both on a process level and for the creative actions and behaviours in the creative process.

Acknowlegements Many thanks to Mike Harvey and Markus Pudelko for their insights.

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nizations: A Sensemaking Perspective. Academy of Management Review, 24(2), 286–307. Eisenhardt, K. and Sull, D. (2001) Strategy as Simple Rules. Harvard Business Review, January, 107–116. Florida, R. (2002) The Rise of the Creative Class. Basic Books, New York. Florida, R. (2005) The Flight of the Creative Class. HarperBusiness, New York. Friedman, T.L. (2005) The World is Flat. Farrar, Straus & Giroux, New York. Granovetter, M. (1973) The Strength of Weak Ties. American Journal of Sociology, 78, 1360–80. Hargadon, A. (2003) How Breakthroughs Happen: The Surprising Truth about How Companies Innovate. Harvard Business School Press, Cambridge MA. Henderson, R.M. and Clark, K.B. (1990) Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms. Administrative Science Quarterly, 35(1), 9–30. von Hippel, E. (1988) The Sources of Innovation. New York: Oxford University Press. Howkins, J. (2001) The Creative Economy. Penguin Books, London. Johansson, F. (2004) The Medici Effect. The Harvard Business School Press, Cambridge, MA. John-Steiner, V. (1997) Notebooks of the Mind. Oxford University Press, New York. John-Steiner, V. (2000) Creative Collaboration. New York: Oxford University Press. Kelley, T. and Littman, J. (2001) The Art of Innovation – Lessons in Creativity from IDEO America’s Leading Design Firm. Currency Doubleday, New York. Leonard-Barton, D. (1992) Core Capabilities and Core Rigidities: A Paradox in Managing New Product Development. Strategic Management Journal, 13, 111–25. Levinthal, D.A. and March, J.G. (1993) The Myopia of Learning, Strategic Management Journal, 14, 95– 112. Lubart, T.I. (2001) Models of the Creative Process: Past, Present and Future. Creativity Research Journal, 13(3/4), 295–308. Lynn, G.S., Morone, J.G., Paulson and Albert, S. (1996) Marketing and Discontinuous Innovation: The Probe and Learn Process. California Management Review, 38(3), 8–37. Millson, M.R., Raj, S.P. and Wilemon, D. (1996) Strategic Partnering for Developing New Products. Research Technology Management, 41–49. Miura, A. and Hida, M. (2004) Synergy between Diversity and Similarity in Group-Idea Generation. Small Group Research, 35, 540–64. Nahapiet, J. and Ghoshal, S. (1998) Social Capital, Intellectual Capital, and the Organizational Advantage. Academy of Management Review, 23(2), 242–66. Napier, N.K. (in press) 3-D Creativity. In Davila, A., Epstein, M., and Shelton, R. (eds.), Praeger, Greenwich, CT. Nelson, R.R. and Winter, S.G. (1982) An Evolutionary Theory of Economic Change. Belknap Press/Harvard University Press, Cambridge MA. Nijstad, B.A. and Paulus, P.B. (2003) Group Creativity: Common Themes and Future Directions. In Paulus, P.B. and Nijstad, B.A. (eds.), Group

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Creativity: Innovation through Collaboration. Oxford University Press, Oxford pp. 326–40. Porter, M.E. (1990) The Competitive Advantage of Nations. Free Press, New York. Prahalad, C.K. and Hamel, G. (1990) The Core Competence of the Corporation. Harvard Business Review, May-June, 79–91. Prahalad, C.K. and Ramaswamy, V. (2004) The Future of Competition: Co-creating unique value with customers. Harvard Business School Publishing, Boston. Runco, M.A. (2004) Creativity. Annual Review of Psychology, 55, 657–87. Shane, S. (2003) A General Theory of Entrepreneurship. Edward Elgar, Cheltenham. Srivastava, R.K., Shervani, T.A. and Fahey, L. (1998) Market-Based Assets and Shareholder Value: A Framework for Analysis. Journal of Marketing, 62 (January), 2–18. Starkey, K., Barnatt, C. and Tempest, S. (2000) Beyond Networks and Hierarchies: Latent Organizations in the U.K. Television Industry. Organization Science, 11(3), 299–305. Sternberg, R.J. (ed.) (1999) Handbook of Creativity. Cambridge University Press, Cambridge. Sutton, R.I. and Hargadon, A. (1996) Brainstorming Groups in Context: Effectiveness in a Product Design Firm. Administrative Science Quarterly, 41, 685–718. Teece, D.J., Pisano, G. and Shuen, A. (1997) Dynamic Capabilities and Strategic Management. Strategic Management Journal, 18(7), 509–33. Tushman, M.L. and Nelson, R.R. (1990) Introduction: Technology, Organizations, and Innovation. Administrative Science Quarterly, 35, 1–8. Wheelwright, S.C. and Clark, K.B. (1992) RevolutionizingPproduct Development: Quantum Leaps to Speed, Efficiency and Quality. The Free Press, New York. Woodman, R.W., Sawyer, J.E. and Griffin, R.W. (1993) Toward a Theory of Organizational Cre-

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ativity. Academy of Management Review, 18, 293– 321. Yin, R.K. (2003) Case Study Research, 3rd edn. Sage, Newbury Park, CA. Zhou, J. and Shalley, C.E. (2003) Research on Employee Creativity: A Critical Review and Directions for Future Research. In Martocchio, J.J. and Ferris, G.R. (eds.), Research in Personnel and Human Resources Management, vol. 22. Elsevier, Amsterdam pp. 165–217. Zolla, M. and Winter, S.G. (2002) Deliberate Learning and the Evolution of Dynamic Capabilities. Organization Science, 13(3), 339–52.

Nancy K. Napier ([email protected]) is a professor of international business and executive director of the Global Business Consortium, Boise State University, Boise, Idaho (USA). Her current research interests include creativity in organizations and knowledge flow between developed and emerging economies. Mikael Nilsson ([email protected]) is a program manager at the Knowledge Foundation, a Stockholm-based foundation tasked to enhance Sweden’s competitiveness by supporting research, competence development in industry, and the promotion of IT. His focus is on strategic change where innovation, creativity and social change are key components. He is also instrumental in the design and management of programs within the foundation’s focus areas.


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Innovation Speed in Small and Medium-Sized Enterprises Michael A. Allocca and Eric H. Kessler In this era of fast-paced technological change companies are frequently forced to quickly bring innovative products to a competitive marketplace. Small and medium-sized enterprises (SMEs) play a key role in innovative contribution and growth of the global economy, yet face unique challenges with regard to new product development. To date scholars disagree on the effect of firm size on the antecedents and outcomes for innovation speed. We review the relevant literature, develop a conceptual model of innovation speed for SMEs and test it with 158 projects across several technology-related industries. Results revealed that SMEs had different speed antecedents from large firms, had their antecedents vary by radicalness and found speed to be synergistic with efficiency, quality and project success. Implications for managers and scholars are discussed.

Introduction uccess in a competitive, high-technology environment requires an ability to understand the market and satisfy user needs using the latest technology. The ability to develop and launch innovative new products quickly before global competitors, or soon thereafter, is a key factor for gaining first-mover advantages (Lieberman & Montgomery, 1988), achieving product success (Griffin & Hauser, 1992), capturing market share (Clark, 1989), extending life cycles (Ali, Krapfel & LaBahn, 1995), creating economies of scale (Smith & Reinertsen, 1992) and increasing return on investment and long-term viability (Fallow, 1999; Shapiro & Varian, 1998). In this article we focus on small and medium-sized enterprises (SMEs), defined as companies with 500 or fewer employees. SMEs represent the root of economic activity in the USA, comprising 95 percent of all American businesses and accounting for approximately two-thirds of new jobs (Capell, 1995) as well as provide a substantial share of employment and growth prospects (Organization for Economic Co-operation and Development, 1997; Oviatt & McDougall, 1994; United Nations, 1993). Moreover, they account for between 25 and 35 percent of exports from developed countries and in some cases contribute as much as 60 percent of national

S


exports. As such, research on SMEs has been increasing (Cragg & King, 1988; Ibrahim & Goodwin, 1986). There appears to be an appreciable and growing amount of academic research on innovation speed, defined as the time elapsed between initial conception and ultimate introduction of a new product into the marketplace (Kessler & Chakrabarti, 1996). There is also a similar amount on the subject of enterprise size (e.g. Ettlie & Rubenstein, 1987). What is lacking, however, is the synthesis of these streams – research on innovation speed as a function of enterprise size. Since most NPD research has examined the process only in large organizations (Cooper & Kleinschmidt, 1994, 1995), and SMEs are different from large firms in several important areas of innovation management, is not clear whether this research can be applied to SMEs (Huang, Soutar & Brown, 2002). Moreover, much of the research for SMEs is based on case studies (e.g. Latona & LaVan, 1993; Price & Chen, 1993) and therefore of limited generalizability. SMEs are increasingly faced with shortening product life cycles and the need to provide a constant stream of new products to remain competitive. As a result, speed is critical in their strategy and operations. Because the factors influencing innovation speed are complex (Blau, 1994; Crawford, 1992), SMEs must properly manage limited financial and management resources to remain competitive

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(Page, 1993; Smith & Reinertsen, 1992; Vesey, 1991). Thus this article poses the following research question: What are the critical factors that differentiate fast innovators from their slower counterparts in small-to-medium sized technology firms? We will seek to answer this question by exploring the relationship between the factors unique to SMEs and those identified for large firms. It will be our general assertion that the factors proposed in the Kessler and Chakrabarti (1996, 1999) model are more acute for SMEs and that several of their empirical results will therefore be different than those from a similar survey of SMEs. Specifically, we contend that several unique characteristics of SMEs as compared to larger firms carry special significance for innovation speed.

Capital Resources SMEs have comparatively limited resources (Ghobadian & Gallear, 1996; Rothwell, 1989; Vossen, 1998), greater difficulty accessing funding sources, are more dependant on a single product, have less adequate budgetary control, lack economies of scale (MorenoLuzon, 1993), are less bureaucratic, are faster to react and are more willing to take risks (Dhawan, 2001; Mitchell & Singh,1993; Tornatzky & Fleischer, 1990). As a result, SMEs would tend to have limited funds to apply to R&D or to speed-up products, can move relatively faster and will be less reluctance to explore new technologies.

SMEs tend to have limited managerial expertise, focus primarily on technological concerns (Miles, Preece & Baetz, 1999), lack the ‘professional’ management of larger corporations, lack the management training and standard procedures and guidelines, are characterized by the unique personality traits/behaviour of owners and operators (Begley & Boyd, 1986), adopt a different management perspective (short versus long-term) (Ghobadian & Gallear, 1996) and follow a less-systematic management style (Ghobadian & Gallear, 1996).

NPD Process SMEs tend to have less-formal processes, fewer resources and informal strategic planning and strategy communication, if any (Ackelsberg & Arlow, 1983; Gibb & Scott, 1985; Schwenk, & Shrader, 1993; Shuman, Show & Sussman, 1985). As a result, the completeness of the NPD process can affect the timely performance of the new products (Cooper & Kleinschmidt, 1987).

Organization SMEs tend to be more flexible and collectively motivated (Nooteboom, 1994), promote less organizational learning, less experience, less bureaucratization, experience less structural change (Kimberly, 1976; Weber, 1958) and possess huge differences in the administrative structure (Gagnon, Sicogge & Posade 2000; Penrose 1959).

Marketing and Technical Resources

Strategy and Planning

SMEs tend to have less marketing and technical resources, do less market research (Ghobadian & Gallear, 1996), possess fewer incentive and reward programmes, lack presence in large readily accessible markets and have less well-recognized brands (Penzer, 1991).

SMEs tend to establish less-clear goals and less-defined tasks (Mo & Chan 1997). As a result, strategic planning in SMEs may not be very formalized (Gibb & Scott 1985; Schwenk & Shrader 1993), as well as unique, varying significantly between firms (Ackelsberg & Arlow 1983; Shuman, Show & Sussman, 1985). Because planning is a useful proxy that might reveal the degree of formality of the managerial tasks and processes that take place in SMEs (Atkins & Lowe, 1997), it has special significance for innovation speed.

Ability to Innovate Scholars differ in assessing this (Acs & Audretsch, 1991; Baldwin & Scott 1987; Cohen & Levin, 1989) but recognize that historically, major innovations have come from both large and small firms. Notwithstanding, there exists evidence to suggest that SMEs face unique speed-related challenges related to limited capital and human resources, firm culture, non-professional and less-experienced management, and the general ability to develop and manage valuable alliances (Ali, 1994; Galbraith, 1952, 1968; Pavitt, 1990).

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Importance of Alliances SMEs generally differ from large firms insofar as alliances offer SMEs a unique opportunity to fill important human and capital resource gaps and may be the only way to compete adequately with larger firms (Miles, Preece & Baetz, 1999). This is of special significance for © 2006 The Authors Journal compilation © 2006 Blackwell Publishing


innovation speed because, properly utilized, alliances can provide a number of advantages over traditional organizations: sharing of financial risk, technology transfer, increased production efficiencies and practical vehicles for developing competencies and overcoming weaknesses.

Research Hypotheses Overall, the preceding identifies several factors as having a significant influence on a firm’s ability to accelerate innovation processes. They can be categorized in accordance with the model presented by Kessler and Chakrabarti (1996, 1999) for larger firms. Our main premise is that, given strategic and organizational differences, the effective leveraging of these factors are simply more critical to SMEs in executing a speedy process.

Strategic Orientation, Criteria-Related Factors These include variables that determine the criteria of projects, which includes the fundamental policies, directions and goals of the project. The factors relate to the importance placed on speed, the clarity of time-based goals and the level of top-management support. Speed and the creation of a ‘speed culture’, clear time goals and reward for speed for all projects, both radical and incremental, are more important to SMEs than to larger firms who have access to greater capital and human resources. Product concept clarity based upon a coherent business/product strategy is more important to SMEs than to larger firms. It is generally agreed that both large and small firms that align their competitive strategies with the requirements of their environment outperform firms that fail to achieve such alignment (Beal, 2000). SMEs cannot afford the cost associated with redefining the product while it is being designed as a result of poor or misguided strategies, and thereby lose valuable time in the process. SMEs suffer a far greater loss when a new product misses its mark in the marketplace. Interest of top management in the NPD project and top management involvement are more important to SMEs than to larger firms. SMEs cannot afford the cost associated with lack of focus and direction, poor management and inadequate support. H1: Strategic orientation, criteria-related factors will influence the speed of new product innovations in SMEs. Projects will be faster when speed is a high priority, product and © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

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project goals are clear and management support is strong.

Strategic Orientation, Scope-Related Factors These include those decision variables that define the difficulty and number of tasks to be undertaken. Included in this category are the number of projects, the project’s radicalness and the use of external resources, ideas and technologies. Strategic planning in SMEs may not be formalized (Gibb & Scott, 1985; Schwenk and Shrader 1993) and SME planning practices are unique (Ackelsberg & Arlow, 1983; Shuman, Show & Sussman, 1985). Atkins and Lowe (1997) suggested that planning is a useful proxy for the nature of the managerial tasks and processes that take place in SMEs. However, little research has explored the relationship between the existence of a product strategy leading to the selection of product development projects and the quantity and quality of an SME’s NPD activities. Bolton (1993) and Hausler & Lutz (1994) in a case study assert that achieving faster new product introduction is commonly cited as one of the most important reasons why firms participate in new product alliances. By combining the skills and resources of multiple firms, alliances may create a synergistic environment, which enhances the ability of individual firms to shorten the time required for new product development. Properly utilized, alliances can provide a number of advantages over traditional organizational arrangements, including faster market penetration (GomesCasseres, 1989), the sharing of financial risk (Jorde & Teece, 1989), possibilities for technology transfer (Lei & Slocum, 1992) and increased production efficiencies (Datta, 1988). Such arrangements may be particularly suited to early-stage, technology-based firms (ESTBFs). These firms generally have innovative ideas and products, but often lack the resources and experience (available to large firms) to fully capitalize on them in a timely fashion. Alliances can work to benefit ESTBFs by allowing them to build on their strengths and overcome their weaknesses (Miles, Preece & Baetz; 1999). As compared to their larger counterparts, SMEs cannot afford the cost associated with projects competing for resources. Projects involving new technology present a greater challenge for smaller firms that lack the technical depth and capital of larger firms. SMEs face the issue of large gaps between the capital and human resources they possess, and those required to develop innovative new products in a timely way. The need of SMEs for the development of strategic alliances to fill in these gaps is greater than that for larger corporations, who

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possess greater depth of resource resulting in smaller gaps between what they need and what they possess. It is expected that empirical findings will show a correlation between innovation speed and all of the strategic-orientation scope-related factors for all projects, both radical and incremental. H2: Strategic orientation, scope-related factors will influence the speed of new product innovations in SMEs. Projects will be faster when the relationship between business strategy and product/technology strategy is well-defined and communicated, market requirements are well understood, there are few competing projects, changes are incremental and outsourcing and alliances are used.

Organizational Capability, Staffing-Related Factors These include those variables related to characteristics describing the people assigned to projects. Organizational capability, staffingrelated factors are more critical to smaller than larger firms. SMEs have far fewer slack resources and must therefore use their limited human and capital resources in the most effective way if they are to compete effectively. As compared to large firms, SMEs operate with a lean staff that must be competent, directed, empowered and motivated. In many instances organizations evolve from an innovative firm with little or no competition into a mature entity existing in a competitively rich environment (Stanworth & Curran, 1976). The proportion of administrator types (versus entrepreneurs) grows with the size of the firm (Gagnon, Sicotte & Posade, 2000). Small emerging firms lack organizational learning and, therefore, have less experience on which to draw. As the market emerges, production expands, bringing the need for more employees and a higher level of management competency (Dodge, Fullerston & Robbins, 1994; Steinmetz, 1969). H3: Organizational capability, staffing-related factors will influence the speed of new product innovations in SMEs. Projects will be faster when leaders are strong, members are capable and motivated, influential champions are present and interests are represented.

Organizational Capability, Structure-Related Factors These relate to procedures and processes that define the relationships between people with a team and those among teams. The notion of the relationship of entrepreneurship and small business development to decentralization has

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a long history. Schumpeter (1939, 1942) argued the point strongly. Schumacher (1973), from a very different standpoint, reinforced this. Bennett and McCoshan, in their definitive work (1993), have argued that the local environment is a key ingredient in business success. It is therefore postulated that the results in this category achieved for innovation speed for large firms by Kessler and Chakrabarti will be modified when the same variables are tested for SMEs. Dyer, Gupta and Wilemon (1999) surveyed PDMA members from technology-based companies in which new product development played an important role in their growth. The results of their study suggested that dedicated teams, although used less often, enjoy the highest perceived success, while project coordinator and matrix structures result in much lower success ratings. Decentralizing the decision-making in a project and empowering team members can speed its development by increasing workers’ involvement, awareness and commitment to a project (Damanpour, 1991). Cross-functional teams must work together closely throughout the project, avoid turf-guarding and improve communication. Silo mentality precludes the benefits systems thinking and design for manufacturability. A myriad of empirical studies and a substantial amount of literature on the subject of the importance of integration and communication among the team members exists, in particular, those of R&D, marketing and operations. A recent study by Olson, Walker, Ruekert and Bonner (2001) investigates the patterns of cooperation during new product development between marketing, operations and R&D, and the related implications for project performance. The findings of the study suggest that higher project performance, irrespective of the level of project innovation, is demonstrated when co-operation between marketing and R&D, and between operations and R&D, is high during early stages of the project. H4: Organizational capability, structuringrelated factors will influence the speed of new product innovations in SMEs. Projects will be faster when teams are empowered, projects are well-integrated, NPD processes are wellorganized and monitored, there are clearly defined milestones and dedicated project teams are used.

Radical versus Incremental Projects Factors that influence innovation speed will be affected by the degree of radicalness or change attempted by the project. As indicated in the foregoing, SMEs are particularly sensitive to © 2006 The Authors Journal compilation © 2006 Blackwell Publishing


the influence of these factors. Obvious factors that tend to distinguish a radical innovation from an incremental one include importance of technology skill level and experience, risk acceptance and comfort level of management and project members, turf-guarding (old technology versus new, make/buy decisions, external sourcing of ideas and technologies, need to investigate/consider alliances, learning curve factors, cultural factors that could enable/disable change and need for design automation and need for testing. Research exists that supports this assertion (Damanpour, 1991; Dewar & Dutton, 1986). Kessler and Chakrabarti similarly found that strategic orientation and organizational capability antecedents had different effects on the speed of radical and incremental new product innovations. H5: Antecedents will have different effects on the speed of radical and incremental new product innovation speed in SMEs.

Speed and Innovation Outcomes in SMEs As discussed earlier, the ability to develop and launch new products quickly give an SME an advantage over its competitors and this factor is particularly important in the fast-paced dynamic environment that small, hightechnology companies operate in (Griffin & Hauser, 1992; Wheelwright & Clark, 1992). A concerted effort in this direction typically results in improvements in product quality as well as lower product-development costs. Another positive result is the increase in sales and market share that can result from cost advantages coupled with technically better and timelier product introductions. There are several factors identified as being positively related to a firm’s ability to accelerate innovation speed (Kessler & Bierly, 2002), including cost, quality and sales success for large firms. These factors should similarly be important for SMEs if not more so, because of the relative resource constraints and limited room for error for SMEs. Therefore: H6: Innovation speed in SMEs will have a positive relationship with cost, quality, sales success and minimal product changes after launch.

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respondents were asked to answer questions regarding previously discussed antecedent variables and outcome factors. The unit of analysis is the new product development project. The project was reviewed in the context of different organizational, social and individual factors, consistent with Downs and Mohr’s (1976) prescription for innovative design. This allowed the comparison of one project to another in a way that identified those factors that tend to enable or disable innovation speed within the organization. The research used a survey of President/Chief Executive Officer or senior-level management in Marketing or R&D who was intimately involved in product development projects.

Variables The dependent variables are innovation speed and related project outcomes of quality standards, budget expectations, sales expectations and product changes after launch. Similar to Kessler and Chakrabarti (1999), we measured innovation speed in three ways: relative to pre-set schedules or on-time performance (Mc Donough & Barczak, 1991), similar past projects (Crawford, 1992; Vesey, 1991) and similar competitive projects (Birnbaum-More, 1990; Millson, Raj & Wilemon, 1992). Time goal achievement was requested for each in a questionnaire using five-point Likert scales. The three speed variables defined above were aggregated into a single variable using principal component statistical analysis. Procedures were undertaken to aggregate similar metrics of quality and of cost. The success of a new product development project was measured by the extent to which the new product’s sales levels met the firm’s predetermined objectives. The independent variables related to innovation speed are those antecedents that may facilitate or impede innovation speed in SMEs. They closely parallel those of the Kessler and Chakrabarti (1996) model, which organizes factors into strategic orientation (criteria- and scope-related) and organizational capability (staffing- and structuring-related) categories. The variables were measured using a survey that included questions regarding each variable and an associated five-point Likert scale response. A list of variables is provided in Table 1.

Methodology

Sample

The study surveyed a sample of small and medium-sized high-technology firms in several industries that are facing fast-moving, dynamic environments in which innovation speed is often a critical success factor. Survey

Industries were selected from Research Data Design Inc. (RDD) and Standard & Poor’s Net Advantage Corporation Records databases of SME manufacturers. Both databases allowed the necessary selection criteria and RDD also


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Table 1. Variables and Descriptive Statistics Variable

All Proj STD DEV

MEAN

STD DEV

MEAN

STD DEV

3.0 3.5 3.5

1.5 1.4 1.2

3.5 4.1 3.8

1.3 1.1 0.9

2.5 2.9 3.1

1.5 1.3 1.3

4.1 3.4 3.9 3.6

1.0 1.3 1.0 1.3

4.2 3.7 4.0 3.8

0.9 1.1 0.9 1.3

4.1 3.1 3.8 3.3

1.1 1.4 1.1 1.3

3.5 4.4 4.3 3.8 3.2 3.9 3.0 2.8 4.0 3.0 3.8 2.7 3.6 3.6 3.6 3.8 3.5 3.6 4.2 3.7 4.2 3.5 3.3 3.3 3.5 3.9 3.4 3.3 2.8 3.2 3.7 4.3

1.3 1.0 0.9 1.1 1.3 1.1 1.2 1.3 1.1 1.3 1.1 1.3 1.2 1.3 1.1 1.1 1.1 1.0 0.9 1.0 0.8 1.2 1.1 1.3 1.3 1.0 1.2 1.4 1.4 1.3 1.2 1.1

3.8 4.4 4.2 4.1 3.2 4.2 3.3 2.8 4.1 3.0 4.0 2.9 3.9 3.9 3.8 3.8 3.7 3.9 4.4 3.9 4.3 4.0 3.6 3.3 3.4 4.1 3.7 3.2 2.7 3.3 3.7 4.3

1.1 0.8 0.8 0.9 1.3 0.7 1.1 1.4 1.0 1.3 0.9 1.4 1.0 1.2 0.9 0.9 0.9 0.9 0.7 0.8 0.7 1.1 1.0 1.3 1.3 0.8 1.1 1.4 1.4 1.3 1.2 0.9

3.1 4.3 4.3 3.5 3.1 3.6 2.6 2.8 3.9 2.9 3.5 2.4 3.2 3.3 3.3 3.7 3.4 3.4 4.1 3.5 4.2 3.2 3.2 3.3 3.6 3.6 3.1 3.2 2.9 3.0 3.6 4.2

1.4 1.1 0.9 1.2 1.3 1.3 1.2 1.3 1.2 1.3 1.2 1.2 1.3 1.4 1.2 1.2 1.1 1.0 1.0 1.2 0.9 1.2 1.1 1.3 1.3 1.0 1.2 1.4 1.4 1.3 1.2 1.2

provided telemarketing services for telephone surveys. Industries were chosen to include those of manufacturers with short product life-cycles that have incorporated advanced

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MEAN

Speed Faster than schedule Faster than past projects Faster than competition Outcomes Project quality standards were met Project budget expectations were met Sales expectations were met Product changes minimal after launch Antecedents Speed culture Senior management support Project important to business strategy Speed was a priority Alliances used extensively Project goals were clear Speed was rewarded Outsourcing used extensively Good market knowledge Radical technology used Project milestones were clear Minimal competition with other projects Specifications remained steady Dedicated project team Teamwork Frequent testing Functional group involvement Project champion Project leader technically strong Project leader strong manager Project members strong technically Champion beside project leader Team was autonomous Customers involved Vendors involved Project team empowered Development process Design automation used Internet used Parallel/concurrent development Design for manufacturing Project for external customer

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technologies in their products and that have produced well-known product innovations in recent years. Firms with less than 500 employees were chosen. In order to ensure that firms © 2006 The Authors Journal compilation © 2006 Blackwell Publishing


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Table 2. Manufacturing SIC Codes of Firms Included in the Sample SIC

28 30 35 36 37 38

INDUSTRY

NUMBER OF PROJECTS

Chemical and Allied Products Manufacturing Plastics and Rubber Products Manufacturing Industrial and Commercial Machinery and Computing Equipment Electronic and Electrical Equipment and Components Except Transportation Equipment Medical, Analysing and Controlling Instruments, Photographical, Medical and Optical, Clocks

14 16 64 38 18 8

contacted would have a history of both ‘fast’ and ‘slow’ projects for comparison, and to increase the likelihood that institutionalized rather than idiosyncratic product development processes were examined, a criterion was established that the selected firms had to have been in business for at least five years. Table 2 lists the SIC codes of firms used in the sample and analysed in the regressions. Targeted respondents for the sample were key informants that were CEOs and/or seniorlevel managers in Marketing or R&D for each company under consideration. CEOs have a broad overview of product development projects, and technically oriented and marketing-oriented managers from these two broadly defined areas of projects emphasize different aspects of projects and sometimes see them differently (Souder & Chakrabarti, 1980). Lukas and Ferrell (2000) and Podsakoff and Organ (1986) found that managers rely on their own self-reports and tend to provide reliable and objective data. To address the concern that respondents might be overly optimistic, they were asked to rate both a fast and slow project.

Procedure A questionnaire was presented to the CEO or senior managers who significantly influence the product development process in an SME. The specific individuals were selected from the databases provided by Research Data Design and Standard & Poor’s Net Advantage. Data were collected via mailed, personally distributed and telephone survey techniques. Both regular and Bonferroni criteria for the Kruskal-Wallace Multiple-Comparison Z-Value test indicate that there are no differences in the median values for aggregated speed for the three response methods. In addition to the specific questions relating to innovation speed antecedents and outcomes, © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

open-ended questions were asked at the end of the survey. Respondents were asked to identify the factors that were the most significant contributors to the speed of a fast project and the delay of a slow project.

Analyses and Results A multiple regression analysis was used to test the stated hypotheses. The specific approach to the analysis of the empirical data collected was similar to that taken by the Kessler and Chakrabarti (1999) study. That study, like this one, dealt with a large number of independent variables to be analysed. The task of defining the optimal set of variables for the regression model was therefore accomplished by using a stepwise regression procedure. Stepwise regression analysis was also used to define those factors associated with incremental/radical technology employed that influence innovation speed. A logistic regression analysis was also done for the following categories of projects: (a) Fast or slow as defined by the two parts of the questionnaire, representing the perception of the respondents; (b) Fast or slow as defined by the principal components analysis factor for the aggregated speed variable. In addition to the previously described antecedents, the analysis also explored relationships between innovation speed and the outcome factors defined in the Kessler and Bierly (2002) research, identified as project cost, success and product quality. In addition, this study used an approach described by Creswell (1998) in which quantitative and qualitative methods are used simultaneously. This approach combines the rigour and precision of experimental designs and quantitative data with the depth and understanding of qualitative methods. Qualitative data was collected in the form of responses to open-ended questions relating to the factors most responsible for a

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project’s timeliness or delay. The qualitative data analysis used was similar to that described by Moustakas (1994) and Marshall and Rossman (1999). Table 1 presents the mean Likert Scale values of the survey data collected. It can be seen that for most of the variables, the value was higher for the fast projects as compared to the slow. The exceptions include outsourcing, customers involved, vendors involved, design automation used and Internet used.

The statistically significant results of the stepwise multiple regression analysis for the category of all projects is shown in Table 3. For this analysis, having clear project goals, crossfunctional teamwork, a champion other that the project leader, a clear development process with stage gates, design for manufacturing and a product designed for an external customer correlated positively to innovation speed. Outsourcing, functional group involvement and design automation correlated nega-

Table 3. Stepwise Multiple Regression Analyses Antecedents with Speed as the Dependent Variable All Projects (R2 = 0.5541, F = 9.9429***) Antecedent

Regression Coefficient

Standardized Coefficient

T-Value

0.18 −0.15 0.37 −0.33 0.23 0.21 −0.23 0.17 0.17

0.20 0.22 0.42 0.37 0.29 0.25 0.31 0.22 0.20

2.19* −2.84** 4.27*** 3.68*** 3.52*** 2.82** −3.44*** 2.66** 2.51

Clear Project Goals Outsourcing Used Xfunctional Teamwork Functional Group Involvement NPL Champion Development Process Design Automation Design For Manufacturing External Customer

Radical Projects (R2 = 0.6086, F = 9.3283***) Antecedent



T-Value

−0.41 0.46 −0.25 0.41

0.41 0.54 0.30 0.46

−3.44** 4.64*** −2.52* 3.98***

Functional Group Involvement NPL Champion Design Automation Design for Manufacturing

Incremental Projects (R2 = 0.5096, F = 6.0870***) Antecedent



T-Value

0.25 −0.27 0.50 0.52 −0.44 −0.30 0.32

0.31 0.34 0.27 0.61 0.45 0.36 0.38

2.27* −2.95** 2.36* 4.14*** −3.25** −2.21* 2.87**

Clear Project Goals Outsourcing Used Radical Xfunctional Teamwork Champion Functional Involvement Clear Develop’t Process Significance levels: ***p < .001, **p < .01, *p < .05.

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tively. The projects are then organized to show the split-sample results for radical and incremental innovations. For this analysis, having a champion other than the project leader and design for manufacturing correlated positively to the aggregated representation of innovation speed. Functional group involvement and design automation correlated negatively. For incremental projects, having clear project goals, radical technology employed, cross functional teamwork and a clear development process correlated positively to the aggregated representation of innovation speed. Use of the outsourcing, a project champion, and functional group involvement correlated negatively. Table 4a represents the results of a logistic regression comparing fast and slow projects ranked by the principal component analysis. For this case, cross-functional teamwork and development for an external customer corre-

lated positively. Use of outsourcing and steady specifications correlated negatively. The survey questionnaire asked respondents to consider two projects, one faster and one slower than the norm. Table 4b represents the results of a logistic regression analysis for the category of respondent perception of fast/slow projects. For this regression, a clear development process, use of radical technology, having a champion other than the project leader and having speed as a priority correlated positively. Frequent testing, customer involvement and a product based on market knowledge correlated negatively. Table 5 represents the results of the multiple regressions for performance of all projects with the aggregated speed variable as the independent variable and the outcome factors as the dependent variables. All outcome factors correlated positively with innovation speed. The table is then organized to show the

Table 4a. Logistic Regression Fastest/Slowest PCA-Ranked Projects Antecedents with Speed as the Dependent Variable Antecedent Xfunctional Teamwork Outsourcing Used External Customer Steady Specification


Chi-Square Beta = 0

1.40 −0.71 1.14 −0.91

9.98*** 6.93** 6.67** 4.39*

Number of projects = 40 Slow/40 Fast. Significance levels: ***p < 0.001, **p < 0.01, *p < 0.05. % Correctly Classified by model = 77.5. Model Chi-Square = 41.2***.

Table 4b. Logistic Regression Perception of Fast/Slow Projects Antecedents With Speed as the Dependent Variable Antecedent


Speed a Priority Clear Development Process Frequent Testing Customer Involvement Radical Technology Based on Market Knowledge Champion Besides PL

1.05 0.63 −1.33 −0.58 0.46 −1.00 0.59

Chi-Square Beta = 0 9.12** 4.31* 12.65*** 5.66* 4.03* 5.71* 4.12*

Number of projects = 51 Slow/53 Fast. Significance levels: ***p < 0.001, **p < 0.01, *p < 0.05. % Correctly Classified by model = 79.81. Model Chi-Square = 58.67***. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

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Table 5. Outcome Factors Multiple Regressions Aggregated Speed as the Independent Variable Outcome Factor



T Value

R2

F Ratio

Number of Observations

Quality Cost Sales Product Changes

0.29 0.56 0.36 0.32

0.30 0.42 0.34 0.24

3.68*** 5.53*** 4.19*** 2.35**

0.09 0.18 0.12 0.06

13.57*** 30.57*** 17.59*** 8.09**

140 144 133 137

Radical Projects Outcome Factor

Sales



T Value

R2

F Ratio


0.62

0.59

4.74***

0.35

22.45***

45

Incremental Projects Outcome Factor

Cost Quality



T Value

R2

F Ratio


0.44 0.26

0.34 0.28

2.71** 2.18*

0.11 0.08

7.34** 4.74*

59 58

Significance levels: ***p < 0.001, **p < 0.01, *p < 0.05.

results for both radical and incremental projects. For radical projects, sales success and project budget performance correlated positively with innovation speed. For incremental projects, cost and quality correlated positively with innovation speed. In summary, the results from this study of SMEs and their relationship to the large-firm studies by Kessler and Chakrabarti (1999) and Kessler and Bierly (2002) appear in Table 6. It can be seen from this table that there is little overlap in the antecedents to speed between large firms and SMEs, although speed remains functional for both in terms of major project outcomes.

Discussion This study showed that the antecedents to innovation speed found for large firms should not be generalized to small and medium-sized firms. In fact, the two comparison studies produced few factors in common. The research also found a difference between the factors for radical and incremental projects, suggesting a contingency approach to innovation speed in

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SMEs, and confirmed the findings of Kessler and Bierly (2002) regarding the positive influence of innovation speed on the project outcome factors of success, cost and quality.

Hypothesis 1 With regard to strategic orientation, criteriarelated factors, the study confirmed that projects were faster when speed was a high priority and no other factor received greater emphasis. We also confirmed the relationship between speed and clear project goals; SMEs often suffer from unclear goals and tasks (Mo & Chan, 1997). The study found a negative relationship between speed and steady product specification, perhaps because less-rigid specifications allow managers to ‘think out of the box’, encouraging more creative solutions and enabling them to react favourably in uncertain and turbulent technology contexts (Iansiti & Mac Cormack, 1997). There was no indication that reward for speed was a significant factor. Time, staffing and resource constraints often make it difficult for SME’s to develop and administer reward programmes (Penzer, 1991). The absence of strong manage© 2006 The Authors Journal compilation © 2006 Blackwell Publishing


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Table 6. Summary of SME Results and Comparison to Large-Firm Findings SMEs

Large Firms

Strategic Orientation, Criteria-Related Factors ALL Speed was well known to be a high priority Product concept remained steady (NEG) Design based upon market knowledge (NEG) Project goals were clear RADICAL Speed was well known to be a high priority INCREMENTAL Project goals were clear

Strategic Orientation, Scope-Related Factors ALL New technology employed was radical

RADICAL INCREMENTAL

Outsourcing was used extensively (NEG) Outsourcing was used extensively (NEG) New technology employed was radical

External sourcing of ideas/technologies (NEG) Organizational Orientation, Staffing-Related Factors ALL Influential champion beside project leader Customers were involved (NEG) Involvement of internal functions (NEG) RADICAL Influential champion beside project leader Involvement of internal functions (NEG)

INCREMENTAL

Influential Champion (NEG) Involvement of internal functions (NEG)

Organizational Orientation, Structuring-Related Factors ALL Exceptional cross-functional teamwork Use of design automation (NEG) Use of well defined stage-gates Clear milestones

RADICAL

Design for manufacturability Use of design automation (NEG)

INCREMENTAL

Use of well-defined stage-gates Exceptional cross-functional teamwork

Outcome Factors All Projects Success Cost Quality


Time-goal clarity

Product concept clarity Importance of speed Speed was rewarded Speed was part of the company culture Time-goal clarity Product concept clarity (NEG) Top management interest in the project (NEG) External sourcing of ideas/technologies (NEG) Project stream breadth External sourcing of ideas/technologies (NEG)

Project member’s tenure

Product champion’s presence Product champion’s influence Project leader’s position Project leader’s tenure (NEG) Project member’s tenure Product champion’s presence (NEG) Product champion’s influence Project leader’s position (NEG) Project member’s education (NEG) Project member’s experience Project member’s tenure Project member’s involvement Testing frequency (NEG) Overlap Design for manufacturability (NEG) Use of CAD systems (NEG) Frequent testing (NEG) Design for manufacturability Team autonomy Turf guarding Team proximity Milestone frequency Testing frequency Use of CAD systems (NEG) Team proximity (NEG) Design for manufacturability Testing frequency (NEG) Success Cost Quality

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ment support as an antecedent may indicate that for SMEs the often low management skills (Freel, 2000) may be such that hands-on management constitutes more time-consuming meddling and interruption than functional contribution (Spender & Kessler, 1995). When compared to large-firms, SMEs are often cited as being more motivated, efficient and fastreacting (Vossen, 1998) as well as being more flexible, efficient and entrepreneurial. Perhaps these qualities make management support less critical. In terms of project type, we confirmed that there is no strong relationship between innovation speed and these factors. As noted earlier, SMEs are generally more flexible and can overcome the complexity of radical product and project goals. Only clear project goals were confirmed as a positive antecedent for incremental projects, and this differs from the large-firm study that found several strategic orientation criteria-related factors associated with innovation speed. For SMEs these projects are often less strategic and involve tasks that are more familiar. Under such conditions, SMEs having clear project goals can often capitalize on their shorter decision chains, rapid communication and fast reaction to changing marketing requirements (Vossen, 1998), making priority placed upon speed, product clarity and management support less necessary.

Hypothesis 2 With regard to strategic orientation, scoperelated factors, the study surprisingly found that departure from familiar technology had a positive effect on innovation speed. Perhaps this is radical projects are often more critical to a small firm and thus receive a greater emphasis placed upon speed. The radical departure may actually create an environment favourable to SMEs, reflecting much of the literature that discusses the advantages of small firms regarding their R&D efficiency (Vossen, 1998) and their ability innovate (Acs & Audretsch, 1991). Consistently Schumpeter (1939, 1942) and Christensen (1997) emphasized small firms’ ability to develop an entrepreneurial spirit. Communication between business strategy and product/technology/market strategies did not correlate with innovation speed. Perhaps SMEs, as a result of their size and limited resources, are forced to choose market niches and less-complex strategies, reducing the importance of this factor. The expected positive relationship between speed and few competing projects also did not materialize, although Kessler and Chakrabarti (1999) did

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find the relationship with large firms dealing with radical projects. Large firms have more people, bigger projects and more bureaucracy (Swink, 2002) and these factors become exacerbated when the number of projects grows. SMEs lack the resources and economies of scale (Moreno-Luzon, 1993) that can enable them to take on several projects simultaneously. Interestingly, use of alliances was not found to be a significant antecedent for speed. Perhaps it is the lack of management skill and sophistication in SMEs that eliminates alliances as a useful factor for increasing innovation speed (Doz & Hamel, 1998). Another explanation is the efficiency and advantages of internal versus external learning (Bierly & Chakrabarti, 1996). In a related manner, for both all projects and radical projects, outsourcing actually slowed down innovation. Perhaps the ability to achieve successful outsourcing and alliance relationships provides unique challenges for SMEs. In terms of project type, there were no significant factors influencing innovation speed of radical projects for SMEs. While it might be expected that SMEs would utilize external sources for ideas, this was not evident. However, this is consistent with the findings of Kessler and Chakrabarti (1999) that the utilization of external sources of ideas slowed innovation, and this may be because new external knowledge is harder to absorb (Cohen & Levinthal, 1990). For incremental projects, departure from known technology was the only antecedent to predict innovation speed in SMEs, indicating that any departure from familiar technology had a positive effect on the dynamics of the project. Kessler and Chakrabarti (1999) found no correlation with innovation speed for antecedents in this category.

Hypothesis 3 With regard to organizational capability, staffing-related factors, the study found that an influential champion was the only significant positive factor for innovation speed. In an SME, where resources are scarce, a champion with influence over those resources could be instrumental in steering critical resources and support to the project. The research also found that customer involvement was a negative factor associated with innovation speed. A possible explanation is that, because SMEs have limited marketing and technical resources, increased customer involvement may serve to spread those resources thin and slowing down projects. The involvement of functional groups throughout the project had a negative influence on innovation speed despite the fact © 2006 The Authors Journal compilation © 2006 Blackwell Publishing


that in the large-firm study (Kessler & Chakrabarti, 1999) it showed no influence. Despite sound intents, many high-technology firms find that cross-functional teams do not deliver all that they promise (Jassawalla & Sashittal, 2001). The successful utilization of crossfunctional teams depends upon the presence of strong management guidance that may be lacking in many SMEs, and may also be a luxury that SMEs can ill afford because of their limited resources. Also, SMEs may be able to work more efficiently with a ‘hand-off’ mentality because of their rapid internal communications, shorter decision chains and fast reaction to requests for changes to product (Vossen, 1998). In agreement, the study found that exceptional cross-functional teamwork contributed to project speed for all and incremental project categories. In terms of project type, for radical projects only an influential champion beside the project leader was significant. In comparison, the Kessler and Chakrabarti (1999) study found product champion presence and influence, project leader’s position and tenure (negative) and project member’s tenure as significant factors. Perhaps the constraint of limited resources for SMEs results in their being more selective in their staffing in general, making the category of staffing-related issues less influential in their ability to attain innovation speed when compared to large firms. In addition, Vossen (1998) credits SMEs with having motivated labour. When project members are capable and motivated, perhaps strong leadership is not as important. For incremental projects, there were no staffing factors identified as antecedents to speed. Considering the similar results for all projects and radical projects, this is not surprising. In terms of project type, design for manufacturability was found to be a significant positive factor for radical projects. Use of a well-defined development process was not an antecedent to speed. There are fewer uncertainties and complexities in incremental projects, making the application of structured project management processes easier. Radical projects have more uncertainty and need for flexibility, making structured processes difficult to apply (Lynn & Akgun, 1998). Crossfunctional teamwork was not confirmed as an antecedent to project speed for radical projects, while it was for the all project and incremental project categories. Perhaps it is more difficult to manage them in an uncertain environment. Despite sound intents, many high-technology firms find that cross-functional teams rife with finger-pointing and turf battles that contribute to cost escalations and delays (Jassawalla & Sashittal, 2001). For incre© 2006 The Authors Journal compilation © 2006 Blackwell Publishing

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mental projects, exceptional cross-functional teamwork was found to be a significant factor for incremental projects while it was not a significant factor for radical projects. Crossfunctional teamwork may be easier in a less uncertain environment.

Hypothesis 4 With regard to organizational capability, structuring-related factors, the study found that for SMEs exceptional cross-functional teamwork was a significant factor, differing from large firms. Teamwork would seem to be a more important factor for SMEs, who often have less structure and formality. The study found that a well-defined development process was a significant factor, but not for radical projects. In SMEs, where rapid communications channels and little bureaucracy give it an important advantage over larger firms (Vossen, 1998), perhaps a less-structured process enables them to act faster for radical projects. Team empowerment was not found to be significant, perhaps because decentralization may be most appropriate when the tasks are more of a departure (Anthony & McKay, 1992; Damanpour, 1991). Perhaps because of resource scarcity, the strategic importance of radical projects, a lack of middle-management sophistication, a lack of formal procedures and the associated risks involved, top managers in SMEs are more directly involved in the projects and less willing to grant teams autonomy. The research also found, consistent with that of large firms, that frequent testing was a negative factor, perhaps signalling that project members were concerned with elegance at the expense of innovation speed. Design for manufacturability (DFM) was found to be a positive factor and design automation a negative one. The first factor can lead to manufacturing simplicity and fast start-up of the manufacturing process (Herrmann & Chincholkar, 2002). Regarding automation, perhaps SMEs do not posses the technical sophistication to use CAD systems productively. Concerning the different results for DFM for SMEs and large firms, this could perhaps be attributed to closer and more efficient communications between the design team and manufacturing engineering unit in an SME. The study did not find the use of a dedicated project team to be a significant factor. Perhaps it is too much to ask for in SMEs which have a scarcity of marketing and technical staffing. In terms of project type, design for manufacturability was found to be a significant positive factor also for radical projects. Use of a well-defined development process was not an antecedent to speed. There are fewer uncer-

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tainties and complexities in incremental projects, making the application of structured project management processes easier. Radical projects have more uncertainty and need for flexibility, making structured processes difficult to apply (Lynn & Akgun, 1998). Crossfunctional teamwork was not confirmed as an antecedent to project speed for radical projects, while it was for the all project and incremental project categories. Perhaps it is more difficult to manage them in an uncertain environment. Despite sound intents, many high-technology firms find that crossfunctional teams rife with finger-pointing and turf battles that contribute to cost escalations and delays (Jassawalla & Sashittal, 2001). For incremental projects, exceptional crossfunctional teamwork was found to be a significant factor for incremental projects while it was not a significant factor for radical projects. Cross-functional teamwork may be easier in a less uncertain environment.

Hypotheses 5 and 6 With regard to radical versus incremental projects, the previous discussion highlights several areas where the study found significant divergences between speed antecedents for the two types of innovations. With regard to outcomes factors, we found that for SMEs project success, cost and quality correlated positively to project speed. Innovation speed contributed to project cost performance for both radical and incremental projects. In addition, it contributed to the sales success of only radical projects and quality of only incremental projects. The difference is understandable. For radical projects where more uncertainty exists, quality is more difficult to achieve. The benefits of innovation speed are greater to successful radical projects where substantial gains are made by being first to market with dramatically new and innovative products. It is conceivable that the relationship between speed and efficiency is stronger for SMEs than for large firms as a result of the advantages of rapid decision-making, shorter decision chains, faster reaction time, rapid communications, motivated labour and capability for fast learning and adaptation.

Implications and Conclusion All in all, this study shines new light on innovation speed antecedents to SMEs by highlighting factors that contribute to and detract from innovation speed. It also increases understanding of the unique attributes possessed by SMEs compared to large firms, con-

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firms the positive outcomes of speed and supports a contingency approach to new product development related to firm size. Notwithstanding, it is important to note some limitations of the study. First, it includes only American firms, so future research should consider difference in national cultures and norms that may contribute to innovation speed. Also, notwithstanding a general similarity, there are some differences between the methodologies used by this study and by Kessler and Chakrabarti (1999). Furthermore, the study draws no distinction between firms employing 5 people and those employing 500. Lastly, some results were the opposite of what was expected, for example regarding specification stability, outsourcing, radicalness, customer involvement, testing and the use of automation tools. These issues provide opportunities for future research. In terms of practical managerial implications, these findings can encourage SMEs to take specific actions that are likely to improve their innovation speed performance. The increased understanding of the development process in SMEs and defining those activities that are critical in decreasing time to market will enable managers to best prioritize their scarce resources and to focus their efforts on factors that will make the maximum return on invested capital. Managers can compare their existing new product development process antecedents with those that were found by this study to make projects faster and to be more selective in how they focus their efforts. A meaningful and actionable exercise for an SME manager reviewing this report might be: (1) fill out the survey questionnaire for a fast and for a slow project; (2) review the conclusions reached in this study; (3) identify the differences and gaps between the findings and their existing NPD process and; (4) choose those antecedents that offer the most improvement over existing processes. One are that managers might focus on is that antecedents which tended to increase the uncertainty of a NPD actually speed up the process. SMEs create an environment of little bureaucracy, rapid and effective communication, fast reaction time, risk-taking, rapid decision-making and motivated labour that enables them to deal with uncertainty. Relating this situation to the resource-based view of the firm (Pfeffer & Salancik, 1978), while SMEs lack the quantity of capital and human resources compared to large firms, they create an internal environment that compensates for their deficiencies. The advantages of such an environment, for example, can be used to attract the best technical and marketing talent. Lastly, confirming the positive relationship © 2006 The Authors Journal compilation © 2006 Blackwell Publishing


between innovation speed and the outcomes of project success, cost and quality, should encourage SME management to strive for speed without undue concern for negatively affecting these factors. For scholars, the findings of this study raise many questions with related opportunities for future research. The following questions provide a starting point for future research on product development in SMEs: (a) How do SMEs research their markets?; (b) Why might a changing product concept actually increase project speed?; (c) Why might involvement of functional groups and outsourcing produce negative results?; (d) Why might involvement of customers slow down the NPD process? and; (e) Why might design automation slow down the NPD process? And lastly, the research did not show a positive correlation between innovation speed and the formation of alliances. Strategic partnerships have become central to competitive success in fastchanging global markets (Doz & Hamel, 1998). Identification of strategies that work and those that do not may help SMEs to overcome the serious disadvantage of resource scarcity.

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Dr Michael A. Allocca (DPS Pace University, [email protected]) is former President and Chief Executive Officer of AHMS North America, a manufacturer and distributor of microprocessor and PC-based mailing equipment and systems with revenues of over US$100 million and over 300 employees. Previously he was a Vice President and General Manager in Pitney Bowes and Director of Product Management and Planning at Perkin Elmer Data Systems. His research interests are in the area of small business management and technological innovation. Dr Eric H. Kessler (Ph.D. Rutgers University, [email protected]) is a Professor of Management and founding Director of the Lubin Leaders and Scholars Program at Pace University. He is also President of the Eastern Academy of Management, a member of several editorial and professional boards, and has served with the National Security Education Program. Dr. Kessler’s research, widely published in leading academic journals and book series, focuses on decision-making in organizations, particularly as applied to innovation and emerging technology. He is the lead editor for the forthcoming Handbook of Organizational and Managerial Wisdom.

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Creativity (Ideas) Management in Industrial R&D Organizations: A Crea-Political Process Model and an Empirical Illustration of Corus RD&T Han Bakker, Kees Boersma and Sytse Oreel Creativity management is a crucial topic to consider in the debate about the innovative research department. Against the background of discussions about individual creativity and organizational commitment, this article argues that the creative process in organizations is a matter of political strategies. The ideator literally has to sell his/her idea. The article therefore comes up with a crea-political process model in which there is ample room for the thought that ideas emerge and survive within a social-political context. In addition, the crea-political process model is used to analyse the way in which the Corus Group Research Development and Technology (RD&T) department has implemented an electronic idea-management system. The system, called eureka!, has been designed as a straightforward platform to capture, review, evaluate and select creative ideas. The findings challenge the literature on idea management in organizations to consider the political activities of ideators in the whole process of creativity.

Introduction

M

ost industrial R&D managers emphasize the necessity of an innovative environment in which creativity can prosper. While innovation in this respect is not a random process, R&D managers often argue that this process of knowledge creation is hard to manage (Argyres & Silverman, 2004; Tell, 2004; Thamhain, 2003; Verhaeghe & Kfir, 2002). More precisely, R&D managers struggle with questions of individual freedom in research and organizational commitment (Van Dijk & Van den Ende, 2002) and with matters of individual flexibility (Georgdottir & Getz, 2004). Given local circumstances (such as the nature, size and market-context of the firm) they have to find a balance between the scientific ambitions of professionals (the key actors within this process) and organizational goals such as product development. In a more usual sense the question of individual freedom and organizational demands can be problematized as the connection between the actor (agent) and structure, which has been a important issue in social research since decades (e.g. Bourdieu, 1992; Giddens,

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1984). Over recent years this problem has received increasing attention within the field of organization and management studies (see, for example, Orlikowski, 2000). What is important for the present article in this respect is the notion that the R&D organization can profit from knowledge creation only if the individual action and knowledge (idea) generation is embedded in organizational routines and local research agendas, as previous empirical research has shown (Berends, Boersma & Weggeman, 2003; Saari & Miettinen, 2001). Strategic and active knowledge management that can influence the innovative and creative capacity of the firm is therefore a crucial topic to consider. Recent research in organization management studies has shown the relevance of information systems (e.g. intranets) to steer creativity knowledge/ideas exchange among members of the organization (Curry & Stancich, 2000; Damsgaard & Scheepers, 2001). Information systems can become a leading tool in shaping a community of practice in the firm, which enables practitioners to share knowledge and to create a link between learning and performance (Wenger, 1998; Wenger, © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

CREATIVITY MANAGEMENT IN INDUSTRIAL R&D ORGANIZATIONS

McDermott & Snyder, 2002). Such a community is formed by people who engage in a process of collective learning in a shared domain of human endeavour such as the R&D organization. For a community of practice to function it needs to generate and appropriate a shared repertoire of ideas and creativity. ICT (in the sense of an electronic idea system) can be seen as an important tool in this respect. As we will see in this article, such a tool is not neutral, but as a mediator – and because of its specific technical script (Akrich, 1992) – it also partly shapes the creative idea. In this article we will address this problem, by focusing on creativity management within the Research, Development & Technology (RD&T) department of the Corus Group (an international metals company).1 The idea is not, however, to study the Corus RD&T knowledge management in detail, since this embraces more than just creativity management. In the following, we want to limit ourselves to the question of how, in the context of Corus RD&T’s creativity management, individual researchers come up with creative ideas using an ICT-tool, and how these ideas are judged by their peers and management. In this respect, we see a creative idea as a new and adequate contribution (see Henry, 2005) in the specific context of Corus RD&T. The ideator then, is the person who comes up with a new idea. In contrast to static models, we study the creative idea management as a process, which: . . . focuses our inquiry on how individuals attempt to orient themselves to, and make creative action in, situations or events that are complex, ambiguous, and ill defined. In other words, this is an issue of how individuals engage in sensemaking in organizations. (Drazin, Glynn and Kazanjian, 1999, p. 287) Therefore, we will come up with a model for creativity management through which we can understand this process of sensemaking. The objective of this article is twofold. First, following previous (theoretical) research, we want to show how the process of creativity can be managed (and modelled) within organizational R&D practices. In this part we will reflect upon the question of individual creative action versus organizational rules.

1

We would like to thank the Innovation Manager and the Manager Communication and Publicity of the Corus RD&T for their co-operation, providing the information about Corus in this article and for their useful suggestions and comments on earlier drafts. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

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Second, we want to study the development, implementation and adaptation of an idea management system within the context of the Corus RD&T department. In this empirical part of the article, we will unravel how eureka!, an intranet tool based upon Lotus Notes, is embedded into the creativity (ideas) management (as part of the knowledge management) at Corus RD&T. The main question is how we can understand eureka! in the process of creativity management at Corus RD&T and how the researchers are actually using this system. We will study the implications for the researchers working with the program. We are interested in how this system affects the generation and evaluation of ideas within Corus – how was eureka! defined and how is it used by researchers to get support for their ideas? In what follows, we first will give a brief overview of the literature on creativity management analysing two different models of creativity management. We will present a new research model with which we will analyse creativity management as a crea-political activity. Next, we will use this model to sketch the context of Corus RD&T management and its motivation to implement eureka!. In doing so, we will analyse the process of sensemaking within Corus RD&T. In the conclusion of this article we will discuss the value of our creativity management model and reflect upon the use of eureka! at Corus in the light of this model.

Models of Creativity Management and R&D Over the years, scholars have come up with different theories about creativity, the management of creativity, and its relation to knowledge generation within (R&D) organizations. In this section, we will present two leading models from the field of management of creativity that have been recently published in international journals: (a) the model of Van Dijk and Van den Ende (2002) and (b) the model of Hellström and Hellström (2002). Both models address the connection of the individual actor and organization we have raised in the introduction of this article and are therefore interesting for us in understanding the process of creativity management in R&D settings. We will discuss the background of each model separately, taking the theoretical starting points into consideration before coming up with an alternative model. In the early 1980s Theresa Amabile stressed the importance of creativity among school children. Because of her background as a psychologist, she opted for an individual, cogni-

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tive approach in analysing creative processes. Later on, while working at Harvard, she also paid attention to the urgency of creativity management for the innovativeness of organizations and leadership (Amabile, 1998). Many authors in the field of creativity management have been inspired by Amabile’s ideas of intrinsic motivation. The Creativity Transformation model by Van Dijk and Van den Ende, published in R&D Management (2002), is an important example. It can be interpreted as a reaction to the rather naïve idea of the uni-lateral relationship between cultural and structural elements. In the model, shown in Figure 1 below, the cultural and structural aspects are two overlapping domains of the organization. The theoretical perspective of this model is based upon individually related factors and organizationally related factors (e.g. Tropman, 1998). Van Dijk and Van den Ende’s model suggests mutual influence of both factors and elements, with the main focus on the organizational part (2002, p. 388). The authors have developed a so-called three-step model, distinguishing between ‘idea extraction’, ‘idea landing’ and ‘idea follow-up’ (Van Dijk and Van den Ende, 2002, p. 390). This model is practical and the distinguished variables are recognizable in organizational contexts. As we can see, Van Dijk and Van den Ende stress the mutual relation between cultural and structural factors and the multilaterality of the process. The focus seems to be on the manager (considering terms such as idea extraction). Likewise, in a critical reaction on the unilateral flow of ideas in organizations, Hellström and Hellström introduced a management of

creativity process model. The title of their article: ‘Highways, Alleys and By-lanes: Charting the Pathways for Ideas and Innovations in Organizations’ is indicative of their opinion that it is impossible to regard idea processes as unilateral. Based upon an in-depth interview study with 34 members of a large Swedish telecoms corporation, the authors tried to find out how creativity is facilitated in organizations. The main question of this study was ‘how stimulation of new ideas comes about and what pathways they take through the organization’ (2002, p. 107). The authors have labelled the process as organizational ideation. They combined the individual/team orientation (e.g. Leonard-Barton, 1992) and the concept of the knowledge broker (Prusak & Cohen, 1998) on the one hand and the organizational structure orientation (e.g. Hitt, Ireland & Lee, 2000; Kogut & Zander, 1996) on the other hand to study the involved agency and the pathways of organizational ideation. The process of ‘organizational ideation’ is sub-divided into four factors: idea inducement, the pathways, the rules of the road and ‘gate control’ (Hellström & Hellström, 2002), as is shown in the Figure 2. This model is interesting because it shifts the attention to structures that include ambiguity and informal management, which are assets in the unpredictable processes of organizational ideation. Words such as ‘highways’, ‘alleys’, ‘bylanes’, ‘pathways’, ‘rules of the road’ and ‘gate control’ clearly indicate that these authors have found their inspiration in the modern traffic situation. In the two models presented above, the authors also interpret the role of the man-

Culture Idea extraction Encouragement

- Alignment - Possibility of reflection - Emancipation of idea receptiveness

Structure Idea landing Organization Support

- Idea responsiveness - Accessibility of the systems - Broadness 7 of the scope

Idea followup Committed Resources

- Intensity of evaluation - Use of rewards - Processing of ideas

Figure 1. Phases and Factors in the Transfer of Creativity to Practicable Ideas Source: Van Dijk & Van den Ende, 2002.

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Gate controller

Factors affecting opening/ closing:

Gate opening

- Status/ trustworthiness of the ideator - Structural and process factors in organization - Toughness of demands on ideator - Small-mindedness - The flow of feedback

Gate closing

299

Alleys and By-lanes

Idea inducement: - Simple positive feedback - Emotional-social gratification - Appreciation of creative potential - Competitive self-compensation - Idea herding

Highways

Rules of the road: - Speed restrictions - Moving incrementally

Figure 2. A Model of Organizational Ideation Source: Hellström & Hellström, 2002.

ager in the whole process of creativity. In the first model, Van Dijk and Van den Ende, the focus is on the manager, who is presented as an industrial entrepreneur, whereas in the second, that of Hellström and Hellström, there is more space for both the employee and the manager, the manager being a road builder, rule-maker and gate-controller, whereas the employee is looking for the best routes. It is a way to focus upon the managerial aspect of the organizational-creativity process. However, what is missing in these two models is an indication of how the manager can deal with the tension between creativity as expression on the one hand and creativity as purposeful action on the other hand. Many ideas that arise in an organizational context are hardly free from interpretations, expectations and other experiences that ideators have developed in their working life – these are the people, operating within different organizational cultural contexts, who give meaning to the ideas (Drazin, Glynn & Kazanjian, 1999; Weick, 1995). Their cognitive filters, or frames as Goffman would call them, enable but also can easily limit their creative expressions and hence the organization’s potential creative reservoir. Instead of ‘black-boxing’ the organizational culture (as Van Dijk and Van den Ende do in their model in which culture is assumed to be an organization-wide, shared phenomenon that is manageable to a considerable extent), we see culture as part and parcel of the entire organization, affecting all kinds of actions and relations (Alvesson, 2002), especially © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

political actions, as we will see below. For that reason, culture in our model is not added as a separate variable. Ideas are complex wholes of interrelated elements that form part of larger wholes. Idea evolution is strongly shaped (and judged) by the organizational context; in the end not all ideas are equal. In order to understand this phenomenon, we will introduce the political metaphor to study the creativity process in organizations. We no longer perceive this as a creative activity per se but merely as a ‘creapolitical’ process. It is a matter of liminality (Turner, 1967); an inter-structural situation that occurs when people exist outside the classificatory schemes (in our case political and creativity) of daily organizational practices.

A New Research Model While studying the wide range of literature it becomes clear that creativity has long been claimed by psychologists. At present it is obvious that creativity can no longer be seen as a characteristic of an individual alone. Creativity is not only the result of the genius of a person; it always takes place within a specific context (Feldman, Csikszentmihalyi & Gardner, 1994). Gardner (1994, p. 71) states that people are never creative in general. Creativity is always related to so-called domains of which a person has a certain amount of knowledge. Apart from that, nothing and nobody is creative in essence, it is always about the judgements of others. This view is also pre-

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sented by Amabile (1983, p. 32), who states that creativity is a subjective notion and that it is impossible to see creativity as a dichotomy. It is better to say that someone or something is more or less creative compared to somebody or something else. According to us, the management of creative expression within an organization is a matter of political strategies. Actors not only have to come up with innovative ideas based upon research in the research department (or elsewhere), but they have to ‘sell’ these ideas to their colleagues, peers and managers. In the end, this is a difficult process of justification (Latour & Woolgar, 1986; Tell, 2004) in which the ideators have to translate their ideas from the individual level to the level of the R&D department. Bringing up ideas is a matter of concern rather than a matter of fact, and these matters must be liked, justified and do-able (Latour, 1987). Next, on the level of the R&D department, the ideas of the ideators are being re-interpreted by organization actors such as the R&D manager. This is not a uni-linear cognitive process, but an activity that needs a careful political strategy of shaping coalitions within the organization. It is during such organizational processes that actors develop all kinds of power strategies in order to influence their organizational environments (Hardy & Clegg, 1999). In this respect, power not only has to do with the individual ability to ‘get things done’, to influence decision outcomes, but, as Swan and Scarbrough argued in a recent article in which they refer to the work of Steve Lukes, also with more ‘hidden’ forms of power that involve (de)legitimation of particular activities (Swan & Scarbrough, 2005). (See also the ideas of Cross & Parker, 2004, about (the) hidden power in organizational networks). This is not to say that we want to overemphasize politics and political processes. For example, it is important to consider the sociocognitive processes in which individual ideas are transformed into collective practices. This is another process that includes both the micro level of the individual cognition and the organizational routines, i.e. shared cognition (Garud & Rappa, 1994). Moreover, under equal circumstances some people come up with more creative ideas than others and show more creative behaviour than others. In this article, however, we want to focus on the idea that organizational members often search for information and support haphazardly and opportunistically because of the existence of cognitive limits (this point has been discussed earlier in terms of bounded rationality, see Eisenhardt & Zbaracki, 1992). It is this focus that justifies the presentation of

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a creativity management model in which there is room for the political part of the creative process.

A Crea-Political Process Model There is a thin blue line between where mental aggregates become expressed or evolve from the ideators’ perspective and where they evolve from other organizational actors’ perspective (see Simonton, 1988). There are good reasons to analyse this as a continuum, from the creative process at one extreme to the political process at the other, because at any time during the process the ideator shows both creative and (intentional or unintentional) political behaviour. However, we want to distinguish three separate phases or modalities in this continuum: the creative process, the crea-political process and the political process, because we want to focus on the process in which the creative and political dynamics become interlinked – this happens particularly and foremost in what we call the crea-political phase. In this phase, the new knowledge representations (as an outcome of this process of sensemaking) come into play at both the individual and the collective level, ‘. . . while new objectives concerning knowledge accumulation and knowledge preservation enter the organizational level’ (Lazaric, Mangolte & Massué, 2003). The model must be seen as an action model in which the individual political strategies are incorporated. Part of this process can be understood by using the models of Van Dijk and Van den Ende (Figure 1) and Hellström and Hellström (Figure 2). In our model, however, we focus more on the political strategies of the ideator and R&D manager. The way in which individual researchers operate within the crea-political phase is visualized in Figure 3 below. Of course, as in all other models, the figure is a simplification of reality (for example, the different phases and circles in the model are overlapping in daily practice), but one that can help us to understand in a more systematic way – in the Weberian ideal-typical sense – how in the crea-political phase the individual and organizational levels are interconnected.

Rationale Behind the Model The idea behind this model is twofold. In the first place, the model fills the gap we have discovered in the literature – the idea that creativity and the activities of the ideator can be seen as a crea-political process. The model can best © 2006 The Authors Journal compilation © 2006 Blackwell Publishing


301

Crea-Political Phase

Creating of ideas

Selling of ideas

Intimate circle

Professional circle

Funding of ideas

Managerial circle

Figure 3. The Crea-Political Process Model

be seen as a sensitizing model for cases in which one tries to understand how a creative individual uses political strategies to get his/ her idea funded in the organization. In the second place the model gives a structure to our empirical findings – the use of a creativity knowledge system at Corus RD&T – that we will present in the sections below. In other words, with the model we try to bridge the gap between abstract theory and the practice of organizing creativity. This figure must be read as follows. It first of all describes the various (bureaucratic) organizational circles in which the ideator operates and in which the political strategies take place. Because an idea never comes up in isolation (i.e. ideas are always embedded in local circumstances), we start with the intimate circle in which the ideator tries to convince a few trustworthy researchers (inside or outside the organization) or even lay people about the usefulness of an idea. In the professional circle the idea is tested against a group of knowledgeable others, for example in a peer review process or by end-users of the idea (in the case of Corus RD&T, these people are mainly working in the business units, i.e. the production and not the research site of the company). In the managerial circle the ideator tries to get the commitment of the management to develop his/her idea into a workable research plan. In this way, an idea becomes ‘do-able’ (a term borrowed from Fujimura, 1987) within a specific organizational context. This part of the model describes the travelling of ideas through (local) organizational contexts during which the ideas are transformed in various phases of © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

the creative process (see also Czarniawska & Joerges, 1996).2 Parallel to this are the actions of the individual researcher, which are divided into the creating, selling and funding of ideas. This process describes the route of an idea from the individual’s mind to the organizational practice (knowledge routines). It is especially in the selling of ideas phase that the individual researcher has to find support for his or her idea. This is an entrepreneurial activity that has been labelled before as internal corporate venturing, which takes place at different levels of the organization (Burgelman, 1983; Garud & Van de Ven, 1992). It indicates how situated individuals try to persuade influential others at the level of the corporation. Of course, these processes do not follow a unidirectional route, in the sense that an idea simply runs from an individual towards an organization-wide realm. For that reason, we have used feedback arrows (pointing to the left in the figure) in our model, which stand for the interactions between the different phases in the whole crea-political process.

2

While travelling, the ideas undergo a constant process of translation giving then different meanings as a result of changing contexts. It is outside the scope of this article to describe the epistemological implications of this process (i.e. like Latour and Woolgar did in Laboratory Life, 1986). Instead, we want to focus more on the social interactions and strategies of Corus (research) employees.

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The Crea-Political Process Model and the Use of ICT-Systems as a Tool Traditionally, classical creativity systems such as suggestion boxes are being used as a coordinating tool in managing creativity (Ekvall, 1971). Such systems have been followed more recently followed by more advanced knowledge management systems, that is, by electronic spaces such as intranets (and in the example case, eureka!) in which ideas can be captured, enhanced and selected. These systems can function as management tools after the early stages of the innovation process (the fuzzy front end, see: Boeddrich, 2004). Ideally, the R&D information system will create an electronic infrastructure and knowledge pool, thus becoming part of the creativity management process. In our model, it plays a vital role in the whole crea-political process. While using information and communication technologies (ICT) in R&D environments, such as intranet platforms and other knowledge management systems, the researchers produce and reproduce their social relations and communication patterns within the research setting (Orlikowski, 2000, in a study about the implementation of Lotus Notes in different organizational settings). As said before in the introduction, the Lotus Notes intranet tool eureka! plays an important role in our empirical study of the process of managing creativity within Corus RD&T. Although this was not the first motivation for the Corus R&D management to start with eureka!, the use of the program can lead to an environment where creativity can prosper. The use of the system implies that the management must have the skills and competence to select the appropriate explicit knowledge and the ability to ‘translate’ this knowledge into organizational terms. After all, the creativity is not in the computer system eureka! but within human beings. Earlier empirical research has shown that the implementation and use of an ICT tool is a complicated process of sensemaking (Boersma & Kingma, 2005). The knowledge system (as a tool for idea management) can only facilitate the capturing, selection and enhancing of ideas among members of the organization. The starting point is that the knowledge (ideas) put on the knowledge system is explicit knowledge – in the terms of Michael Polanyi – that can easily be shared and evaluated by members of the user group. For this reason, Curry and Stancich (2000) state that ‘To obtain maximum value from an intranet, both the “soft” cultural issues of information sharing and change in work processes must be addressed alongside the “hard”

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systems issues of managing the Intranet as an information system and a business recourse’ (Curry & Stancich, 2000, p. 255).

Research Methods In what follows we want to present our empirical case study into the idea management system of Corus RD&T. Our research into the Corus eureka! system is based upon a survey, interviews and secondary data that describe the initiation, development, operation and local impact of this knowledge management system. The survey consisted of questions about the ideator (his/her motives, reputation, network), the screening of ideas and the role of the management and the funding-process. The questionnaire was sent by mail to about 850 people; 550 of whom were researchers. We got a response of 173, which is about 33 per cent of the population; see the table in Appendix 1 below. In our research, the survey functions as a first step in the analysis and should not be seen as an attempt to figure out causal relationships between certain research variables. The outcome of the questionnaire will be used as a quantitative illustration of the way eureka! is judged by different researchers and managers of Corus RD&T (see Appendix 2). We have used the outcome of the survey to develop relevant topics that we used during our interviews. We conducted in-depth interview sessions with eight researchers who had experience with eureka!. The interviews we carried out at two Corus RD&T sites (one in The Netherlands and one in the UK) were semistructured. We analysed the interviews in terms of technology management, organizational culture, communication processes and power relations. We paid special attention to communication patterns and working routines and the way eureka! was used by individual researchers. The collected data are related to the process of R&D knowledge creation. In addition, we have consulted some eureka! key personnel, such as the Programme Manager Innovation who set up the system, in order to understand the managerial problems and dilemmas. In addition to the interviews and the survey, we obtained access to relevant documents such as the ‘eureka! Ideas Management System User Manual Lotus Notes’ to reconstruct the (technical) script of eureka! (see also Figure 4). The data we gathered were analysed in terms of (a) the social behaviour of the ideator, (b) the role of the evaluator during the selection process and (c) the lobby-activities © 2006 The Authors Journal compilation © 2006 Blackwell Publishing


that surround the funding process. In what follows, we will black-box both the cognitive, inter-personal activity and the organizational implementation process after the funding. We will focus on the question ‘what happens in between’; in the crea-political phase.

Ideas Management at Corus RD&T The Use of Eureka! Corus Group is an international metals company, formed on 6 October 1999, through the merger of British Steel (UK) and Koninklijke Hoogovens (The Netherlands). The headquarters are situated in London, with four divisions and operations worldwide. Corus presents itself as a customer-focused, innovative solutions-driven company, which manufactures, processes and distributes metal products (www.corusgroup.com – April/May 2005). The company has manufacturing operations in many countries, with major plants in the UK, The Netherlands, Germany, France, Norway and the USA, and also provides design, technology and consultancy services. Corus is divided into four main Divisions – strip products, long products, distributions & building systems and aluminium – each of them contains several business units (22 in total). Some business units have idea management systems and pools of their own (separate from RD&T), but a discussion of these systems is beyond the scope of this article. Corus has a research department at which about 900 people are working; about 500 in The Netherlands and 400 in the UK. Corus RD&T plays an important and strategic role in the entire process of innovation at Corus. Recently, the Corus RD&T management introduced a new idea management system, eureka!, to handle creative ideas. Eureka! was introduced with a promising rhetoric statement: ‘We have to generate a continuous stream of market winners by developing new processes, products, product applications and new business concepts. The start will be building up our portfolio of Ideas’ (eureka! User Manual, p. 2). It is part of the Corus intranet. Figure 4 (below) shows us the formal route of an idea throughout the eureka! system. In 2004 about 250 ideas were put in eureka!, 20 per cent of which were funded. Since most of Corus’s products are the outcome of massproduction, one single idea can lead to an enormous saving. Besides, some of the eureka! ideas in 2004 resulted in patentable outcomes. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

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Ideally, the eureka! system works as follows (see also Figure 4). In the ‘ideas capture’ map all Corus RD&T workers are invited to come up with ideas – the map can easily be opened via the Corus intranet. Only a superficial description of the idea is enough at this stage. Parallel to this the Corus business units can give an idea of their needs in the ‘opportunities capture’ place. During the ‘first screen’ phase, the idea is judged by experts (peers) who are selected by the ideator him/herself. (S)he has to consult at least one programme manager and one resource manger. In the ‘idea enhancement’ phase, a successful idea (first screen) can be worked out by the ideator. In this phase the ideator has to give information with regard to the following topics: ‘objectives and deliverables’, ‘probability of success’, ‘business unit needs that will be met’, ‘recourses’, ‘key go/no go decisions’, ‘intellectual properties’. After enhancement the idea will be put forward into the ‘second screen’ phase; if not, the idea will be kept in the eureka! archive. In the second screen phase the idea is put into the ‘adoption phase’ map where it can be picked up by one of the Corus funding managers. If it has not been picked up after a period of time, the idea will be put into the archive in any case. The route described above only mirrors the formal route of an idea throughout eureka!. The aim of the system is to cover more and better ideas within a shorter amount of time. Furthermore, according to us, it can be interpreted as an attempt by the R&D managers to limit the subjective judgement of ideas. In daily

Opportunities Capture

Ideas Capture

Create Linked Ideas No Yes Enrich Idea

1st Screen Enhancement & Evaluation

Match Criteria? No Yes

IDEAS Archive

Fast - track Idea

2nd Screen Adoption Funding

Figure 4. The Formal Structure of eureka! Source: Corus RD&T

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practice, however, we found out that researchers take alternative routes to get an idea funded – or, in other words, that the way ideas ‘travel’ through the organization is much more complicated. In the sections below, we will show how in the context of eureka! the Corus researchers not only come up with ideas, but also try to sell ideas in order to get them funded.

Crea-Political Strategies of Researchers at Corus RD&T After an idea has been put into the eureka! system, the ideator has to select at least one programme manager, at least one resource manager and optionally some colleagues (researchers). All have to judge the idea; if the resource (department) manager or the programme manager is positive about the idea, the ideator can continue to work on it. At this point, the manager who has given permission has to commit him/herself to the idea to stimulate it. Most respondents argued that it is hard to select evaluators if the idea should be applied in a field not well known to the ideator. Therefore, what they want is to have a range of people as evaluators (from the intimate and later the professional circle in our model), selected from various areas of knowledge, to have the appropriate persons comment on the idea. When the selected evaluators are not positive about the idea they will vote ‘no’. In that case they have to provide a reason. Because in this phase the evaluators do not always have enough in-depth knowledge and expertise, according to our respondents some of the ideas are not very well evaluated. Although the evaluator has to give comments ono the idea with respect to the content, we found out that most of the ideators decide not to resubmit the idea. The remark of a respondent below is illustrative: The system might be improved by having an option to automatically resubmit an idea that has been modified in response to specific comments – evaluators who have voted ‘No’ should, in such cases, receive a notification that their concerns have been addressed and that the idea should be re-evaluated in the light of these modifications. From the discussions we had with the research people (during the interview sessions) we could deduce that particularly the social, political activities parallel to the formal route are a condition for success. This corresponds with our model, in which the actions

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of the ideator and the interactions between the different phases in the crea-political process are central. Researchers literally were selling the idea – the most important phase in our model, since it refers to the crea-political activities – even if for them it is obviously an excellent one. One respondent, for example, told us: The system is only facilitating; you have to do the lobby-work yourself. Therefore it is always difficult to get funding for a new project, because it is not so much the technological innovation, but the lobby-work and the organizational skills that count. The value of eureka! lies in the formal structure and transparency. It is in this process that the ideator tries to convince the knowledgeable other of the usefulness of the idea. Maybe even more important, it is the business unit people who must be convinced about the usefulness of an idea (especially those in the professional circle). If the production people do not commit themselves to the outcomes of research, an idea will fail in an early stage. Thus it is necessary for the researchers to know whether the business unit will be interested in a certain idea or not. In the whole process of this ‘technology ideas transfer’, social activities – such as informal contacts and meetings – are crucial. This idea was confirmed by the Programme Manager Innovation who told us: If you are familiar with someone you can call to discuss your idea, and if you have worked together, he knows that you are capable of good research. That is different to the situation in which one receives the idea electronically without knowing about the background of the researcher. What is important in the lobby process (the selling of ideas phase) is to find and contact people with specific knowledge and commitment to the idea who can give quick and adequate comments. The respondents expressed an urge to receive remarks and comments to an idea within a relatively short period of time. This is illustrated by the case in Figure 5 below. In practice, the ideator often consults a former R&D colleague who has changed over from the RD&T department to a business unit. Such a person is not only part of an informal network within Corus, but also has the expert knowledge (of both research and production) to judge the relative quality of an idea. The quality of inter-unit ties seems to be very important. In this respect, most of our respondents indicated that the reputation of the ide© 2006 The Authors Journal compilation © 2006 Blackwell Publishing


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The use of eureka! Mr Janssen is working at Corus RD&T IJmuiden My idea was inspired by developments in Germany. My plan to develop the idea was justified by the committee that gave me a one-year budget to develop the idea. This is the way it should work according to me. At any time, the idea has been recorded in the system of the Business Unit and there it was finally rejected. Next, I visited the Business Unite to figure out why the idea had been rejected. The reason was the lack of information about the implications of the idea for the Business Unit. Moreover, they argued, the idea was already in use by other companies and therefore not innovative enough. At that time I continued my lobby activities to get funding for the idea, which was a hard thing to do, because I had to convince people who had rejected the idea in an earlier stage. It is often argued by R&D people that the Business Units don’t have a focus. However, I think that we cannot always convince them of the importance of our ideas. At a certain moment I went to the Business Unit to talk with the people who seemed to be interested in the idea after all. So, my lesson was not to stop the lobby process after a ‘no’ of a single person, but to convince others of the importance of my idea. Of course then you can also come to the conclusion that you have had a bad idea, but the argument that the Business Units cannot focus is too easy. Also the argument of budget problems is not decisive according to me – try to implement the idea with a smaller budget. So, what I did, and I think this is a success factor, is not to talk first of all with the Product Manager (which is the ‘normal’ way to do it) but I went directly to the commercial people. After all they have feeling with the market and have reasons to say: this is interesting for us or not. After our meeting the commercial person went to the Product Managers with the message: ‘This is important for us!’. The influence of the commercial person on the Product Manager was of a great importance.

Figure 5. The use of eureka!, Case Janssen Source: interview by the authors.

ator is a crucial success factor – the higher the reputation of an individual researcher, the greater the chance that a project will be approved. What is important for the overall success of an idea in eureka! is adequate feedback fromthe manager(s) to the ideator (to facilitate the interactions between the creating, selling and funding phases). For the ideator, moreover, a transparent schedule of the funding-process is crucial. It is in this phase that (s)he is supposed to get the (financial) means to develop and elaborate on the idea. However, we found that researchers at Corus are de-motivated by the idea that positive comments from the commentators in the second screening round do not always (automatically) lead to funding. In the whole process of selection it is important for the ideator to notice that an idea can differ in quality as a result of the company’s strategy. The content manager of eureka! told us that he makes a distinction between ideas that ‘should be done’, ideas that ‘could be done’, and ideas that ‘do not fit within the strategy’ (which is an extra selection – that takes place in the funding phase of the model – in the whole process of creativity). That means that even if an idea can be potentially useful, it can still be rejected (by people in the corresponding managerial circle) at any time because of the lack of money available to fund all ideas. To avoid ideas of which the contents are out© 2006 The Authors Journal compilation © 2006 Blackwell Publishing

side the scope of Corus’ production plans, eureka! offers a section (the Opportunities Capture Map) in which the production strategy of each business unit is clarified. A (technical and/or market) opportunity can be used as inspiration for one or more ideas. But even if an idea has been rejected (in the managerial circle), it is put into the eureka! archive and in a way becomes part of the research department’s ‘memory’. The archive is important for at least two reasons. In the first place it can function as a back-up of rejected ideas with which new ideas can be compared. Until now the archive has not been used for this reason, because of capacity problems and lack of time. In the second place, the content manager found out that it can be useful to re-evaluate some of the rejected ideas at a later time, because the ideas can become useful because of changing technologies in production, the raise of the research budget and/of contextual factors (i.e. developments in the market). In other words, there is a possibility that an idea goes back from the funding of ideas-phase to the selling of ideas-phase (represented by the arrow that points left in our model). However, at any time it is the ideator who has to be alert in order to breathe new life into the idea – the eureka! archive will not do that automatically. Again, it is the person and not the system that has to take actions.

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Discussion and Conclusion In this article we have first discussed two different models of creativity (idea) management. It appears that within each of these models there is room for the notion that creativity is not so much in the mind of the individual but that it is a social process. However, even with the help of these models it is hard to find out how the individual behaviour of the ideator must be seen in the light of the political strategies of the individual within the organization. Therefore, we have come up with an alternative model in which we call attention to what we call the crea-political phase in the process of creativity (idea) management. The theoretical contribution of this article to the field of creativity management is the idea that the success of a creative idea is above all a matter of political activities and strategies of the ideator. It pays attention to the notion that organizational creativity is an individual expression on the one hand and organizational commitment on the other. The major implications of this model for the understanding of creativity (idea) management are discussed in what follows. First, the model gives ample room for the notion that an idea does not come up in isolation, but is the outcome of negotiation. Creativity in an organizational context emerges from a process of sharing information with other people within the organization. Of course, an idea is produced by individuals with inner creative impulses and ambitions, but such an idea only gets meaning in the social. In the daily reality and practice of the organization, people of different backgrounds will identify the quality of an idea. In this way, the model gives rise to the idea we raised in the introduction to this article, namely that organizations (such as, in our case, Corus) can profit from knowledge creation only if the individual creative action and idea generation (within the different creating, selling and funding phases) is embedded in organizational routines and local research agendas (represented by the different intimate, professional and managerial circles). Apparently, not every creative expression will result into a valuable or problem-solving idea. Ideas can be rejected for reasons regarding the content (i.e. an idea is impracticable for technical reasons) or – and even more likely – for reasons related the organizational context of an idea (i.e. budget problems, priority of other ideas, organizational policy, competition and so on). In order to anticipate on the idea selection, the ideator has to put effort in the propagation of his/her idea (the selling of ideas

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phase). For the manager, this demonstrates the need for organizational structures (such as strategic knowledge platforms) that stimulate and facilitate possibilities for information sharing and exchange. For the ideator it shows the importance of ‘political’ strategies in order to put an idea forward successfully. Second, we paid attention to electronic idea management (ICT) systems, which play a crucial and growing role in the whole process of idea generation and selection within organizations. Electronic idea management systems that are used in the crea-political phase have both an enabling and a constraining effect upon the success of an idea. Possible thresholds for new innovative ideas are lowered because of the easy accessibility of electronic databases (especially in a situation in which employees have equal possibilities to make use of the system). In this way the system enables the ideator to develop ideas that otherwise would not have come up. However, a system can also lead to indolence if the ideator thinks that it is the system that will do the hard work and that (s)he can lean back, which is an unintended consequence of the use of electronic knowledge systems. Thus, the systemin-use can easily create the idea that there is an ‘automatic and one way route’ from a creative moment to a viable idea (i.e. an idea that will be funded by the organization). Accordingly, as we have argued, the system must be seen in the context of creativity as a political (sensemaking) activity. The management must be aware of the fact that an electronic idea management system is not a neutral element in the process of creativity management, but one that produces an effect within a context in which creative ideas must be transformed into practicable ideas. In addition to the model, we presented a case study of the idea management at Corus RD&T, which is only the first start to ‘test’ the strength of the model. The Corus R&D management has implemented an electronic idea management system in order to enable researchers to submit ideas and to ensure that no ideas are lost. That means that the interactions between the creating of ideas and the funding of ideas funding phases are facilitated by an electronic management system. The system, eureka!, thus functions as an important element in the creativity (idea) management. Commonly speaking, we found out that researchers at Corus judge eureka! as an enabling tool during the interactions with others in the company. It is interesting to note that the respondents indicate that the lobby work (during the selling of ideas phase in our model) is the most explanatory factor in the funding process. In other words, the more © 2006 The Authors Journal compilation © 2006 Blackwell Publishing


people you are familiar with within the company with whom you can discuss the idea, the more likely it is that an idea will be funded in the end. While this concept would hardly be surprising to practitioners, it is seldom explicitly included in models of creativity management. The above case is an illustration of how the crea-political phase works in daily practice. Further research into the crea-political phase is needed in order to understand the different strategies that are possible, the influence of contextual factors during the process of negotiation and circumstances in which the different strategies can be used. Moreover, in this article we have not taken issues of gender and diversity (e.g. aging, identity, professional backgrounds and so on) on the one hand, and organizational structures (such as hierarchies, firm size, company structures and so on) on the other hand, into consideration. Instead we have presented a sensitizing model, which links creative and political processes, and understands the management of creativity as part of these multi-faceted and interrelated processes.

Acknowledgements Earlier versions of this article were presented at (1) the ECCI-Conference, Lodz Poland, September 2005 by Han Bakker, (2) the IKON seminar series in Warwick, UK, November 2005 by Kees Boersma and (3) the ESIC seminar series in Eindhoven, The Netherlands, December 2005 by Kees Boersma. We would like to thank the contributors of these seminars and the two anonymous referees of this journal for their comments on earlier drafts of this article.

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Berends, H., Boersma, F.K. and Weggeman, M. (2003) The Structuration of Organizational Learning. Human Relations, 56(9), 1035–56. Boeddrich, H.J. (2004) Ideas in the Workplace: A New Approach Towards Organizing the Fuzzy Front End of the Innovation Process. Creativity and Innovation Management, 13(4), 274–85. Boersma, F.K. and Kingma, S.F. (2005) From Means to Ends: The Transformation of ERP in a Manufacturing Company. Journal of Strategic Information Systems, 14, 197–219. Bourdieu, P. (1992) The Logic of Practice. Stanford University Press, Chicago. Burgelman, R.A. (1983) A Process Model of Internal Corporate Venturing in the Diversified Major Firm. Administrative Science Quarterly, 28, 223–44. Curry, A. and Stancich, L. (2000) The Intranet – an Intrinsic Component of Strategic Information Management? International Journal of Information Management, 20, 249–68. Cross, R. and Parker, A. (2004) The Hidden Power of Social Networks. Understanding How Work Really Gets Done in Organizations. Harvard Business School Press, Harvard. Czarniawska, B. and Joerges, B. (1996) Travel of ideas. In Czarniawska B. and Sevon, G. (eds), Translating Organizational Change. Walter de Gruyter, Berlin pp. 13–48. Damsgaard, J. and Scheepers, R. (2001) Harnessing Intranet Technology for Organizational Knowledge Creation. Australian Journal of Information Systems, December 2001, 4–15. Drazin, R., Glynn, M.A. and Kazanjian, R.K. (1999) Multilevel Theorizing about Creativity in Organizations: a Sensemaking Perspective. Academy of Management Review, 24(2), 286–307. Eisenhardt, K.M. and Zbaracki, M.J. (1992) Strategic Decision Making. Strategic Management Journal, 13, 17–37. Ekvall, G. (1971) Creativity at the Place of Work. Reklamlito Stockholm. Feldman, D.H., Csikszentmihalyi, M. and Gardner, H. (1994) Changing the World. A Framework for the Study of Creativity. Praeger Publishers, Westport. Fujimura, J.H. (1987) Constructing ‘Do-able’ Problems in Cancer Research: Articulating Alignment. Social Studies of Science, 17, 257–93. Gardner, H. (1994) The Creators’ Patterns. In: Feldman, D.H., Csikszentmihalyi, M. and Gardner, H. (eds) Changing the World. A Framework for the Study of Creativity. Praeger Publishers, Westport pp. 69–84. Garud, R., and Ven, A.H. van de (1992) An Empirical Evaluation of the Internal Corporate Venturing Process. Strategic Management Journal, 13, 93– 109. Garud, R. and Rappa, M.A. (1994) A SocioCognitive Model of Technology Evolution: The Case of Cochlear Implants. Organization Science, 5(3), 344–62. Georgdottir, A.S. and Getz, I. (2004) How Flexibility Facilitates Innovation and Ways to Manage it in Organizations. Creativity and Innovation Management, 13(3), 166–75. Giddens, A. (1984) The Constitution of Society. Polity Press, Cambridge.

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Hardy, C. and Clegg, S.R. (1999) Some Dare Call It Power. In: Clegg, S.R. and Hardy C. (eds), Studying Organization: Theory & Method. Sage, London pp. 368–87. Hellström, C. and Hellström, T. (2002) Highways, Alleys and By-lanes: Charting the Pathways for Ideas and Innovation in Organizations. Creativity and Innovation Management, 11(2), 107–14. Henry, J. (2005) Creative Management. Sage, London. Hitt, M.A., Ireland, D.R. and Lee, H-U. (2000) Technological Learning, Knowledge Management and Performance: An Introductory Essay. Journal of Engineering and Technology Management, 17, 231–46. Kogut, B. and Zander, U. (1996) What do Firms do? Coordination, Identity and Learning. Organizational Science, 7, 502–18. Latour, B. and Woolgar, S. (1986) Laboratory Life. The Construction of Scientific Facts. Princeton University Press, Princeton. Latour, B. (1987) Science in Action. How to Follow Scientist and Engineers Through Society. Harvard University Press, Cambridge MA. Lazaric, N., Mangolte, P.A. and Massué, M.L. (2003) Articulation and Codification of Collective Know-how in the Steel Industry: Evidence from Blast Furnace Control in France. Research Policy, 32, 1829–47. Leonard-Barton, D. (1992) Core Capabilities and Core Rigidities: A Paradox in Managing New Product Development. Strategic Management Journal, 13, 111–25. Orlikowski, W.J. (2000) Using Technology and Constituting Structures: A Practice Lens for Studying Technology in Organizations. Organization Science, 11(4), 404–28. Prusak, L. and Cohen, D. (1998) Knowledge Buyers, Sellers, and Brokers: the Political Economy of Knowledge. In: Neef, D., Seisfeld, A.G. and Cefola, J. (eds), The Impact of Knowledge. Butterworth-Heinemann, Woburn pp. 137–59. Saari, E. and Miettinen, R. (2001) Dynamics of Change in Research Work: Constructing a New Research Area in a Research Group. Science, Technology and Human Values, 26(3), 300–21. Simonton, D.K. (1988) Creativity, Leadership, and Chance. In: Sternberg, R.J. (ed.), The Nature of Creativity. Contemporary Psychological Perspectives. Cambridge University Press, Cambridge pp. 386– 426. Swan, J. and Scarbrough, H. (2005) The Politics of Networked Innovation. Human Relations, 58(7), 913–43. Tell, F. (2004) What Do Organizations Know? Dynamics of Justification Context in R&D Activities. Organization, 11(4), 443–71. Thamhain, H.J. (2003) Managing Innovative R&D Teams. R&D Management, 33(3), 297–311. Tropman, J. (1998) The Management of Ideas. Quorum London. Turner, V. (1967) Betwixt and Between: The Liminal Period in Rites the Passage. In: Turner, V. (ed.),

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The forest of symbols: Aspects of Ndembu ritual. Cornell University Press, Ithaca, pp. 93–111. Van Dijk, C. and Van den Ende, J. (2002) Suggestion Systems: Transferring Employee Creativity into Practicable Ideas. R&D Management, 32(5), 387– 95. Verhaeghe, A. and Kfir, R. (2002) Managing Innovation in a Knowledge Intensive Technology Organization (KITO). R&D Management, 32(5), 409–17. Wenger, E. (1998) Communities of Practice. Learning, Meaning and Identity. Cambridge University Press, Cambridge. Wenger, E., McDermott, R. and Snyder, W. (2002) Cultivating Communities of Practice. A Guide to Managing Knowledge. Harvard Business School Press, Boston. Weick, K.E. (1995) Sensemaking in Organizations. Sage, London.

Drs. Han Bakker ([email protected]) is Lecturer at the Hogeschool Rotterdam in the Rotterdam Institute of Social Education (RISO). His research interest is in ‘creativity’, ‘management of creativity’ and ‘idea management’. He is author of a current introduction on Creative Thinking. Currently, he is working on his Ph.D. on Idea Management in Organizations – the Corus case is part of this work. Amongst others he is teacher in the courses Creative Thinking and Cultural Research. Dr.ir. Kees Boersma ([email protected]. nl) is Associate Professor at the Vrije Universiteit Amsterdam in the group of Culture, Organization and Management. His research interest is in ‘science and technology studies’, ‘business history and history of technology’, and in ‘organization, culture and power’. He published widely on R&D history, organizational learning, and organizational culture. His publications appeared amongst others in journals as Enterprise and Society, History and Technology, Human Relations and Journal of Strategic Information Systems. He is teacher in the courses Organizational Behavior, Organizational Politics and Technology and Culture. Drs. Sytse Oreel ([email protected]) is currently working as a manager in a Dutch steel company (SME) and interested in culture, organization and innovation. He studied Culture, Organization and Management at the Vrije Universiteit in Amsterdam. His master-thesis (2004) was about creativity and innovation management at Corus.



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Appendix 1 Table A1. Number and Functions of Respondents Function of respondent Department Manager Programme Manager Knowledge Group Leader Principal Scientist Principal Engineer Project Coordinator Senior Researcher Researcher Senior Research Assistant Research Assistant Member MT Other: Total

Number

Percentage

3 3 18 7 3 12 50 49 3 11 0 14 173

1.7 1.7 10.4 4.1 1.7 6.9 28.9 28.3 1.7 6.4 0.0 8.1 100.0

Appendix 2 Table A2. Outcome of the Questionnaire Research cluster The role of the ideator

Question

1 2 3

The role of the evaluator

1 2 3

4 The lobby and funding process

1

2 3 4

My reputation within the organization influences the chances of success of my idea I appreciate it when judges point out alternative possibilities for my idea I appreciate the support of peolple from the marketing and financial department important Sometimes the evaluator does not take the time to give thorough and adequate comments I understand that the evaluators are too busy with their own tasks The evaluators use other than just the formal criteria in the recommendation to select an idea for adoption or funding Business Units not always benefit by new, radical ideas When I look for “funding” for my idea I have to show initiative to a “funder”; you cannot expect the system to do this for you I do not like to annoy acquaintances with extra work of judgment in order to gain financing People in my network can help me to bring my idea further After the year plans for the projects have been made it is impossible to get funding for ideas


Agree (%)

Disagree (%)

65

35

89

11

89

11

74.5

25.5

72.7

27.3

86.7

13.3

60.7

39.3

73.9

26.1

37.8

62.2

68

32

81

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Innovation and the Post-Original: On Moral Stances and Reproduction Alf Rehn and Sheena Vachhani This article represents an inquiry into the ontology of innovation, that is, the foundational issues of innovation and how we conceive of the nature of innovation and creativity. By juxtaposing the notions of novelty and copying, the article introduces the concept of ‘postoriginality’ as a way to understand how time and reproductive acts can be understood in relation to the innovative. Looking at how innovation and creativity are hailed as the highest forms of economic action, while copying and derivation have often been viewed as somewhat lesser forms, the article thus discusses how moralizations affect the way in which we view the economic. Specifically building on the works of German polymath Walter Benjamin and his theories of time, ruin and redemption, the article connects with the philosophy of history, and by way of three mini-cases, presents three tentative modes of the post-original (derivation, knock-offs and remixes), showing how these can each in their own way raise interesting issues regarding the role of copying in creating the new. We end with a reflection on the notion of the event in innovation, inspired by the French philosopher Alain Badiou and his engagement with the truth of the event.

Introduction

I

nnovation and innovation management have commonly been seen as dealing with how the ‘new’ is brought into the world, and thus dealing with the creation of truly original objects. One of the authors of this article recently edited a special issue in Creativity and Innovation Management’s June 2006 issue (15.2) with Christian de Cock, titled ‘Explorations of the New’, and the argument below might be understood as an extension of the discussions in it, as the fundamental issue in both is that of innovation and ontology. Although many researchers in innovation management have shown that there are epistemological problems with essentializing innovation, thus on the surface arguing for a critique of novelty in innovation management, the ontological element of innovation has received almost no consideration. A positivist understanding would of course conflate these, disregarding ontological issues as empty metaphysics, but we contend that this is a scientist fallacy, which serves mainly as a way conveniently to ignore criticisms that one is uncomfortable with. Thus, we will in this article posit a number of ontological questions regarding innovation. These questions may seem strange or

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even incomprehensible to people accustomed to more ‘pragmatic’ approaches to innovation. They may also seem overly critical, or as an attempt to reduce the field into a straw man. At the same time, they should be understood not as a new model or a new theory, but rather as an intervention through which the field might probe the way it uses its concepts and the way in which certain moral presuppositions have become defining for the field. Consequently, our aim is not to make totalizing claims regarding innovation management, nor to reduce it to a set number of claims, but rather to invite an engagement with ontological issues in the field. The innovator is in the common narrative of economic development a heroic figure, one who opposes old regimes and creates a rift in the weave of economic time, ushering in the new. In the chasm between the old and the new, standing there in the ‘gales of creative destruction’, the innovator is a herald and the creator without a primogenitor (cf. Elliott, 1980). Such creation has commonly been seen as both the primary process with which management studies should be concerned and the very foundation of market economy (Baumol, 2002; Edquist, 2004; von Hippel, 1988). However, implicit in this view of innovation and © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

INNOVATION AND THE POST-ORIGINAL

economy is a notion of the original as being ontologically secure, stable in its position as a value-creating event. Furthermore, this specific event, based on a temporally delineated space as the singular origination of the production of value, implicitly positions reproduction and the post-original as bleak copies of the original, as mere echoes of value. This notion that an entrepreneur, seemingly through the sheer force of her personality, can conjure up something fundamentally novel and ontologically different into the world, may be politically expedient, but it is philosophically suspect. It builds on the fallacy of innovation being a break with history, and although for example the field of innovation management has flirted with the notion of innovation as processual and developmental, the ontological issue of novelty remains insufficiently explored and often conveniently ignored. Whereas the study of innovation has been inundated with epistemological frippery on historical linkages and the difficulty of stating when an innovation comes into being, the very problem of having a field that gets its legitimacy by assuming that one can talk about innovation in a sensible and ontologically grounded way has yet to be dealt with. It is possible that the common view of innovation, and consequently innovation management itself, essentializes originality and oversimplifies the origination of value in the ‘original’. Rather than studying such ‘original value events’, we argue for a more complex conceptualization of innovation, one that is less grounded in simple temporally grounded origination and that rather attends to the valorization thereof – that is, the way in which something is defined as valuable. Although the notion of an event in which value enters the world in a pure, non-contextual form might be expedient, it lacks in analytical rigour. It also hinders our thinking of how value is created through less grandiose breaks with the past, because the romantic fantasy of innovation management as controlled revolution has been the dominant narrative (see Christensen, 1997; Utterback, 1994). Note that we are not referring merely to a more processual view of innovation, a move deployed quite frequently in for instance actor-network theory or science and technology studies. Admittedly, such approaches do tend to look at the problem of value events, and emphasize the unfolding of innovation as taking place over time. However, rather than fundamentally challenging the issue of origins, such approaches usually temporally extend the original value event, rather than challenging it. What we are arguing against is not the fact that innovation occurs, nor that © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

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this can happen in many ways, but rather the moralization that takes place in the discourse of innovation. The moral stance of deigning to signify certain things as ‘innovations’ and other things as ‘something else’ is a necessary aspect of language, but the reification that occurs through this is a problem for innovation studies, and should be reflected on. Put somewhat differently, as innovation clearly is an abstract concept, it should be dealt with as one, rather than falling into the idealist fallacy that innovation can be treated as a locked ontological category. This artice is consequently an attempt to think innovation outside the essentialist framework, and thus an inquiry into the ontology of innovation, with a particular emphasis on issues of repetition and afterlives as inspired by Walter Benjamin (1985, 1998, 1999). Rather than conceptualizing innovation as belonging to a pre-set structure of old versus new, the article tries to position notions of reproduction and the post-original into theorizing on innovation. By problematizing the inherent essentialism in taken-for-granted notions of innovation management, the article thus attempts a recasting of our thinking of valorizing events.

Original Value Events and the Echoes of Value Central to our argument is the notion of an ‘original value event’. Although not in common usage as a term, we argue that this is in fact an important, if implicit and subconscious, foundational concept in innovation management, and one that has to be critically re-evaluated. Furthermore, it is the belief in such an event that makes traditional thinking of innovation essentialist. We will elucidate these claims in the following. When does an innovation take place? The answer from traditional innovation management is neatly twofold: either when something new has been developed (the invention perspective) or when an innovation is successfully introduced on a market (the commercialization perspective). Even though there are some alternative positions to these ‘solid’ perspectives to innovation, with those that draw on the history of technology (see e.g. David, 1985, 2001; Van den Ende & Kemp, 1999) being perhaps most influential, there has been little problematization of the fundamental issue of the origination in discussing these. This fundamentally philosophical issue has perhaps been viewed as too abstruse and too metaphysical to be of practical interest, but at

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the same time this lack of engagement has made us blind to a number of issues. The view of innovation as an event, or the eventness of innovation, speaks to the feeling that we can clearly sense a before and an after when talking thereof, and is thus clearly tied not only to a linear view of time but also to a notion of ontologically secured positions in a time-value continuum. The first part is the least problematic. Although one can criticize management studies for depending too much on a simplified view of time (cf. Whipp, Adam & Sabelis, 2002) and for idealizing progress, these are simply symptoms of a much larger problem. What is problematic, and the main concern here, is the tendency to ascribe ontological certainty to specific processes of valorization, resulting in the fixation of valueproduction to specific instances in time. This creates a fallacious view in which value is seen as something that ‘sticks’ to a specific instant or a definable set of circumstances. It is this view that Joseph Schumpeter (1934, 1942) turns into dogma when he makes the entrepreneur and specifically his (sic) innovation into icons. This can be described as the ideology of origin or the desire for the event, and this is not negated by calls for a more processual view. A process view may on some level seem more ‘fluid’ than an avowedly static one, but will in fact mostly just extend the notion of the value event temporally rather than criticize it. Our concern is not to quibble about whether an innovation occurred on 14 November or whether it in fact occurred over a period of some weeks, months or years, but rather to question how something can be called an innovation, and what this reification rests on. The event, as a specific phenomenon, has of late become central in philosophy and social theory. It is at the heart of the philosophy of Gilles Deleuze (see Deleuze 1994, cf. Creativity and Innovation Management 15(2)) and Alain Badiou (see Badiou, 1988, 2002), and the actuality that can only emerge in the specificity of the event is of course a highly important issue for any social science, as it captures both the possibility for a lived ethic and the space within which the political can be actualized. What we are discussing here, however, is not that event within which Badiou has seen the potential for revolution and transfiguration, but rather the ascribed notion of there being a specific event of value that can be fixed, essentialized. This is in fact not an event of the kind a Deleuze or a Badiou are talking about, but rather its opposite (we will return to Badiou’s understanding of the even in the conclusion to this article t). Whereas the event as an actuality cannot be captured and made into an edifice, as it can only be fully understood in its becoming (any

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later retelling will by definition lose some of the energy of the ‘being there’ of the event), the idea of innovation as an original value event is one where value and action can be ascribed to a specific position and ‘locked in’, i.e. where actuality ceases to matter. In this thinking, regardless of what matters, innovation has always already taken place at a specific point in time (even though this can be an extended period), and this has positioned value as an eternal object. This is for instance the kind of thinking that drives much of the debate in intellectual property, where the ‘creative moment’ is seen as the sole or main value-producing event, and all manipulation or utilization of that which derives from this is seen as parasitic, as mere repetition. Thus, innovation as a dynamic of breaks and rifts is turned into a relation of ownership, where the unfolding of creative energies is turned, by way of valorizing reduction, into a claim of property. Innovation is here no longer an issue of creating, but one of recreating the property as the necessary condition of exchange-value – and thus removed from the very fact of innovating. This can also be understood as a specific case of fetishism, structurally similar to commodity fetishism as this was discussed by Marx in the first volume of Capital. In this, the manifold of social relations that form the value of a thing are reduced to that of another thing, money. Thus, commodity fetishism essentializes one part of a network of relations – from which value emerges processually – and creates the illusion that value is something that belongs to this specificity through the mechanism of pricing (cf. Zizek, 1989). In a similar way, innovation management has fetishized the moment of innovation (the assumed ‘original value event’) as having an essential value that can be understood as freed from the process of valorization. In order to investigate this thinking, we would suggest that the temporal nature of value needs to be highlighted and probed. As it stands, innovation management assumes that the value occupies a specific position in the flow of economy, and that the fundamental nexus thereof lies in the break between the old and the new (as postulated by Schumpeter) that we commonly signify by the term ‘innovation’. This, however, fundamentally ignores the process of valorization, that is, the social and cultural act of ascribing value, and thus the political dimension of even using a term such as ‘innovation’. Clearly, this could be investigated by studying how innovation management valorizes the New, and how economic discourse endlessly repeats and reiterates its praises of e.g. entrepreneurship (cf. Jones & Spicer, 2005; Rehn & Taalas, 2004). © 2006 The Authors Journal compilation © 2006 Blackwell Publishing


Even though it is obvious that it is the valorization of the moment of the New that drives much of the theory of innovation, our interest lies elsewhere, specifically in what we call ‘echoes of value’. One result of the valorization of the original value event is the corresponding disregard for that which follows from this. If value is assumed to originate in a specific instance of creation, unassailable and eternal, anything that postdates this would seem a mere continuation and an echo. A view of innovation that turns away from such essentialism would open up to understanding that which comes after the assumptive origin, and enable us to study some of the Others of innovation.

On the Status of the Post-Original The valorization of the original has created a state where the post-original, that which is not part of the event of the object of value, has been viewed as generally uninteresting and specifically irrelevant to innovation management. Even though the latter might seem commonsensical, the former is clearly a fallacy. The question is whether the latter is too. At the heart of the issue is the question of how we should understand the role of reproduction in economy, and the forms that it takes. The possibilities that are opened by taking the copy seriously, by not being mesmerized by the original, is in our view of central interest when querying what innovation management can be. Clearly, reproduction is not only an important part of economy, it is the central aspect thereof. On a very basic level, economy is reproduction, as even production in and of itself is a question of copying. The industrial revolution was little more than harnessing technology in order to reproduce things more efficiently, and the ‘new economy’ is built on the fact that digital goods can be perfectly copied almost without cost or effort. Without the possibility of reproduction – whether this is mass-production or producing single units as reproductions of an idea – economy becomes almost impossible to think. So the valorization of innovation can be seen as a dreamworld of sorts, one where the mundane aspects of economic life are hidden behind a continuous iteration of the primary fantasy, the origin of value as an event (cf. Zizek, 1989). Still, copies are seen as intellectually uninteresting, or interesting merely as an optimization problem (as in ‘how to copy efficiently’). The reasons for this are manifold. In part, we may still be wedded to a fundamentally male logic, where reproduction is deigned insignif© 2006 The Authors Journal compilation © 2006 Blackwell Publishing

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icant because of its feminine connotations. In part, the production of the post-original seems to take less effort than producing the new, creating a hierarchy of production. In yet another take on the same issue, a copy may seem like a question answered – if copies can be made, what is the problem? Quite often, our strive to find ‘significant’ problems tends to turn us away from the subtle riddles of the mundane, and as there seems little actually to query in the copy, the post-original has been greatly ignored in discussions of economy and management, regardless of its obvious importance in the economy. In innovation management, which fetishizes the original, this tendency has been elevated to definitional dogma. Innovations are assumed a priori to be original, and the condition of post-originality is seen as, at best, an afterthought. Although the notion of ‘incremental innovation’ is well known (see e.g. Henderson & Clark, 1990), as is the processual analysis of innovation, this is often presented merely as an assignation for a move that requires little analysis, and subsequently, incremental and processual innovation remains under-theorized. Furthermore, even though the discussion thereof has attempted to introduce tweaking and the post-original into the debate, it has never managed to free itself from the lure of the original value event, though it has tried to de-dramatize it. What a post-original perspective attempts to do is different. Rather than conceptualize the problem of innovation and time by way of ever-minor value events, the post-original points us towards a way of understanding innovation where the problem of localizing the same is seen as unsolvable and possibly antithetical. We could, following the thinking of Ludwig Wittgenstein, state that there is no point in searching for the ‘source’ or ‘meaning’ of innovation, but that we rather should occupy ourselves with inquiries into the use of and family resemblances between different forms of innovative behaviour. But in doing so we must also rid ourselves of the notion that there would be some specific basic form that must be adhered to, some origination that must be present. Another way to state this would be to note that the moralization inherent in calling some things ‘innovations’ is at the same time a way to negatively categorize their Others, and that this moralization needs to be reflected on – and that although innovation studies has managed to discuss variations of innovation, it has paid less attention to what non-innovation might be and what such (often implicit) assignations would mean. A move towards the post-original breaks with the original as valorized original, even though it

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acknowledges a history and a genealogy to the studied phenomena. In this way it follows the method of Michel Serres (see e.g. Serres, 1995), where analysis is seen as less of a reduction to essences, and more of a travel between modes of understanding. Consequently, in the following we will introduce the thinking of German social theorist Walter Benjamin and then go on to analyse three specific modes of the post-original – derivation, knock-offs and post-production – and discuss how these relate to innovation.

Walter Benjamin and the Afterlife of Objects The post-original is the unfolding of innovation. It is an unstable tuft of a concept, something that cannot be investigated in the case itself, but rather in the movement away from the case. It is the shadow cast by the light of the lamp as the real nature of light, or something like an echo. But not an echo as the lesser of a clarion call, but as that which signifies the impermanence of the assumed original. It is memory, scent, light (for any light is always removed from that which is illuminated). It is the afterlife of the object. One of the main thinkers of such afterlives would be the idiosyncratic polymath Walter Benjamin. Obviously, this is not the place to summarize the thinking of a major European thinker, and we will not. Instead, we want to discuss some points in his thinking, his ways to detour traditional mores, and to show how this can lead us down new avenues in innovation studies. Much of his ambling, diverse oeuvre can be read as an engagement with a specific form of emergent creativity, namely the afterlife of objects and the way in which transformational forces actualize and reposition things and contexts. By way of a dialectic engagement with the movement of the world, Benjamin strove towards an emergent critique, one where the truth of an object could only be divulged by way of its life, the ways in which the thing in between constellations slowly accrued meaning. Afterlife refers to the patient process of disintegration and ruination in which the object emerges from earlier contexts, shorn of some of its original features but with new accretions upon it. Afterlife is the period in which the pure but deceptive surfaces of the object are eroded, in which hidden meanings are unfolded and truth is ultimately disclosed. It is the time in which the object is subject to transformations and interventions which re-cognize its significance

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and ’actualize’ its potential: translation, transcription, imitation, criticism, appropriation, (re)construction, reproduction, rememberance, redemption. (Gilloch, 2001, p. 4) For Benjamin (1985, p. 32), the ‘art of interruption’ is at the very core of philosophical, innovative thinking. But this interruption is not the fracture of Schumpeter, but a continuous, dialectical engagement not merely with the outside world, but also the tendency of thinking to limit itself to the deduced solution. What Benjamin thus, in his roundabout way, is talking about is creativity as it takes place both in the world and in thinking. Thus the afterlife, the life after our immediate act of valorization, is in his thinking the true space of innovation – the post-original. At the same time, Benjamin has been understood as a staunch defender of the original, and his essay ‘The Work of Art in the Age of Mechanical Reproduction’ (Benjamin, 1999) has at times been read as a directly romantic defense of art. However, even though he begins his essay with some remarks on the difference between art and reproduction, he brilliantly follows this by showing how new forms of reproduction create new understandings of art, thus dialectically turning the question of reproduction into not merely a move that follows original creation, but which develops with it. What Benjamin thus does is highlight not only how the work of art changes by being subjected to the possibility of reproduction, but also how new forms of reproduction redefine what we can understand with art, or engagement generally. The age of reproduction (for clearly ‘mechanical’ represents just one age) is thus an age of redefinition, where innovative ways of replicating – recasting phenomena – create an innovation in the way we can understand the world. For instance, the invention of photography did not merely create a new niche, nor just a new way to copy the visual (think painting versus photograph) but a new way to relate to the visual, a new way to think what it means to see. These things, that develop in culture, out of reproduction, are not yet present in the invention of photography, but emerge out of the ways of reproducing it. What Benjamin thus presents is a way for thinking to break with simple commodity fetishism. Specifically, we should pay heed to three modes of being that are central to Benjamin’s work: ruin, remembrance and redemption. For him, the slow dissolution of the world is not a fault lodged in the world, but a natural progression, ruination as life. Also, in his thinking ruin is not merely a negative. Rather, it is the © 2006 The Authors Journal compilation © 2006 Blackwell Publishing


way in which reality comes into being. By being turned towards ruin, empty metaphysics is turned into living things, an inversion of the Platonic ideal, and close in thinking to his friend Bertol Brecht’s ‘plumpes Denken’ (a notion of how thinking that strives to create change in the world needs to be blunt in order to have an impact, see Benjamin, 1998). In relation to innovation this same could be posed thus: When we stare at the moment of innovation, we merely see a phantasmagoria of innovation, and implicitly read in our own dreams and hopes into the object. In fact, the innovation does not become itself until it has undergone a period of ruination, during which the shiny surface of an ideology of the origin has been stripped off of it, and an amount of the grime of lived reality has gathered in its place. It is this ruination that creates the possibility of talking of the innovation rather than the ideology surrounding it. Here, the art of interruption is central, for it is in the process of pausing, of giving pause, that things can develop. Innovation must, paradoxically, be interrupted in order to become meaningful. This process also brings in the importance of memory. The implicit notion of the original value event does not require a memory. Assuming there to be an event within which value and creativity itself is crystallized means that remembrance is unnecessary simply because the moment will carry itself through time. However, reading Benjamin it becomes clear that he views memory not simply as a process of reproduction, but as active creation (the parallel here to Deleuze, and Jeanes (2006) in Creativity and Innovation Management 15(2) is obvious). It is in remembrance that we can find both actualization and the fetish of the commodity form, and it is thus in this mental recasting that we can find the path that an object’s afterlife takes. Through this we are presented with a possibility to rethink the notion of innovation as commercialization, as Benjamin highlights just how the dreamworld of the commodity-form works as actualization. But it also opens up to the notion of redemption, for specifically by realizing the political power of remembrance can the forgotten and discarded – the scary Other of innovation – be brought back and thus enrich our understanding of the afterlife, life as a post-original state. An actively wielded memory can bring about redemption for the forgotten. And it is this, the care for that only half-remembered, which drives Benjamin. What Benjamin, in all his works, drives towards is the development of a critique. Such a critique can never be fixed or ended, but must be understood as a continuous engage© 2006 The Authors Journal compilation © 2006 Blackwell Publishing

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ment. Rather than accepting the state of the world, it will try to recast and recontextualize, never letting history be. It is always postoriginal, always following the echoes. Benjamin thus poses an alternative to the search of the original, by arguing that the way in which things become real is not, in fact, through innovation, but through their afterlives. Whereas innovation or novelty are important, the reality and truth of innovation is not inherent in the process of innovation but in the way in which the assumed original lives on. The truth of the innovation thus lies in the way it becomes post-original, in the way it realizes an afterlife. When Benjamin tries to formulate a critique of history, he engages directly with the extended view on innovation and value that we try to represent with the concept of the post-original. He shows how there is little point in searching for a primal meaning or truth, and that in order to fully comprehend the nature of value, we need to let go of our tendency to essentialize specific moments (or periods) of time. Rather, Benjamin argues for a dialectic engagement with the life of the object, one where there is no final point, nor any point that deserves valorization above another. In order to exemplify such a dialectic move, we will now turn to three variations on the theme of post-originality. They all represent a remembrance and a ruination of sorts, but our reading of these three is fundamentally optimistic. Although one could condemn all three for ‘not being innovations’, we believe that they show us exactly the ways in which things that could be read as innovations are excluded primarily on moral grounds. In a way similar to that in which Benjamin reads the afterlife of the city, we want to highlight the way in which the afterlife of value can be read and probed, not to argue for a ‘new’ form of innovation, but to query the very ontology of innovation itself.

First Variation: Derivation – BratzMania! In later years, Barbie has fallen on hard times. Sales for this eponymous doll have suffered greatly, and Mattel has been forced to invest a lot of work into recapturing something of the lustre of the Barbie brand. Some have explained this stagnation by casting doubt on the virtue of Barbie, as she of late has dumped long-time beau Ken and taken up with a rather shady Australian by the name of Blaine, but the real reason seems to be the success of Bratz.

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Figure 1. Five Bratz Dolls

Bratz are a series of dolls (Figure 1) produced by MGA Entertainment (and distributed by Hasbro), and they have been an immediate worldwide success. Fundamentally, Bratz are dress-up dolls with a bewildering array of accessories, clothes and similar add-ons. Characteristic for Bratz is their slightly animeinspired look with oversized heads, lips and eyes, as well as pronounced makeup and almost non-existent noses. They are positioned as highly fashion-conscious (one of the latest collections is called ‘Pretty ‘n’ Punk’) as well as ‘hip’ and ‘street’, and flaunt their youth and wealth quite aggressively. They have further been attacked for being too sexualized, as their makeup and general demeanour is far removed from the comparatively demure and virginal Barbie. Regardless, the Bratz line has been fantastically successful, effectively dethroning Barbie as the queens of the hill. Now, what are Bratz? One interpretation of these dolls is that they are, in fact, derivations of Barbie – the original doll, Barbie the innovation. They reproduce many of the central elements of Barbie: the recognizable basic form that can be varied by dress and accessories, the emphasis on theming (from Surf Party Barbie to Karaoke Kool Yasmin) and the aspect of collecting. Their look is slightly different, they are shorter, look younger, and have the aforementioned distinct ‘anime’-look, but fundamentally they are dress-up dolls and belong to a very specific idea of ‘girl’s play’ that was pioneered by Barbie. The question regarding originality, derivation, and dependence in cases such as this has always been central to the discussion about intellectual property. Clearly, in order to be legal, derivation cannot be total – one can uti-

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lize similar ideas but not the same expression of the idea. In order to be taken as a new product one has to show that one does not interfere with someone else’s intellectual property, at least not to an illegal degree. At the same time, it seems obvious that the degree of innovation behind a Bratz-doll is limited. Although they have a different look, the logic is essentially the same, and a number of themes are shared between all similar dolls (Mattel has responded to the Bratz by introducing a series known as ‘My Scene’, a younger and more stylized interpretation of Barbie, and ‘Shorties’, which look like short Bratz with baby-fat, thus presenting us with a repetition of the repetition). With regards to innovation management this all might seem fairly uninteresting. However, Bratz have been a major innovation in the toy business, clearly changing the playing field for selling fashion dolls. The ‘actual’ innovations here might be fairly small, even incremental, and we are referring to this as a derivation (a remembrance of Barbie, the afterlife thereof) – a word normally viewed as a negative. What is important, though, is that this post-original move has had such an impact. Although not valorized by innovation management scholars, who would probably claim that ‘real’ innovation demands something much more, we can in such subtle, almost imitative moves, find aspects of analytic interest. Rather than chasing the elusive perfect innovation event, we would like to propose that the various derivative moves that can be discerned when paying heed to the postoriginal would highlight innovation as an unfolding and an emergence rather than as © 2006 The Authors Journal compilation © 2006 Blackwell Publishing


essentialized acts. Derivation is in such a view not simple mimetics, but rather a gradual reinscribing on the social body of an innovation – innovation as palimpsest. What is important to note that such derivation is not mere mechanics, but an engagement that requires both an active performing of the post-original move, and a degree of creativity in repeating the already performed (cf. Deleuze, 1994). Bratz are in this light not just a recasting of Barbie, if we by recasting mean something removed from creativity and innovation. Rather, by actively re-performing the innovation of Barbie, the creators of Bratz have in fact made Barbie new again. Suitably enough, one of the ways in which the ‘original’ has been recast is by recreating an illustrious past by way of exorbitantly expensive replicas of the first dolls. Although clearly a post-original move, a specific derivation of the eponymous fashion-doll is not to be understood as unimportant for innovation studies. Instead, the way in which Bratz can be understood, as a repetition that is critical for the new to exist, may free us from the conflating of the innovation event with the value event. By recasting the fashion-doll logic into a new form, Bratz can serve as an illustration of how the afterlife of an innovation takes many forms, and that there are post-original ‘returns’ to bear in mind in thinking about innovation. Rather than viewing the fashiondoll as a stable entity, the value of which is established in the first iteration thereof, a view of innovative derivation can help us conceptualize novelty as memory and innovation as something that has to be repeated.

Second Variation: Knock-Offs – Innovation in the Big House One common definition of innovation is ‘an invention brought to market’ (see e.g. Baumol, 2002). The obvious problem of such a definition is that it assumes that the category of ‘market’ is a simple and homogeneous one, something which is clearly a false assumption (cf. Callon, 1998; Yang, 2000). Although the observation that what constitutes an innovation in one market might be something quite different in another is trite, it still opens up to thinking about radically different markets. Such as jail. A lot of what would be considered commodities or even necessities in the outside world, are considered contraband or otherwise impossible to get hold of on the inside of a prison (NB: prisons vary greatly, both from country to country, and within a prison system. Our example is taken from a US context, © 2006 The Authors Journal compilation © 2006 Blackwell Publishing

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but could have been taken from any country.). Consequently, products that would otherwise be bought from stores may in prison be unavailable unless recreated. For instance, as prisoners clearly should not have access to weapons, and are thus denied, for example sharp knives, one can in a prison setting find quite remarkable improvised weapons such as sharpened toothbrushes or retrofitted metal shards (a.k.a. ‘shivs’). Clearly, such weapons are inferior copies of the exemplar upon which they are modelled. However, these knock-offs show an ingenuity that seems to be lacking in the original, starting our problematization. The pictured invention is a primitive cigarette-lighter (Figure 2). Built from a safetyrazor, a wire filament, and paper-clips, with a saline solution acting as a resistor, it can serve as a replacement for a confiscated lighter provided the user gets it to work and does not electrocute himself trying. Quite clearly, this is not something one would use if better solutions are available – which is precisely the point. In the specific context where this innovation exists, this may well be the best available solution at a given time. Nor is it without economic value. In the very specific market that is established in the restricted confines of a total institution such as a prison, this contraption may well be valuable, even though it clearly is a jerry-rigged knock-off of a better product. Knock-offs, that is, inferior copies of the existing, may seem like the opposite of innovation. But we argue this is a question of context rather than content. In the context of a prison, a knock-off of a lighter or a knife may well be an innovation of some importance. Innovation management has normally assumed the market to be homogenous, without friction, into which the new is entered. But all markets are not created equal. In the constricted circumstances of a total institution, other laws apply. Creative reinterpretations of the existing, imperfect variations of a ‘Platonic ideal’ may not fit the mold of regular commercialization, but this very fact is what should drive us towards more reflection regarding the cultural economics of innovation. (And, lest we forget, fakes are actually big business: according to Business Week 7 February 2005), the trade in knock-offs is estimated at around 7 percent of world merchandise trade, or approximately €390 billion.) Clearly, a knock-off is a very specific form of the post-original. If a derivative product is an incremental variation of the original, the knock-off is a complete re-casting. It might be an inferior one, but this post-original move is not without interest. The ways in which reproduction can occur in less optimal circumstances, and because of this create innovative

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Figure 2. A knock-off lighter, prison-style Image taken from Angelo 2000 variations, is almost completely unstudied. Yet it is clear that quite a number of people live in circumstances – the developing world, ghettos, in a state of war – where such innovation is not only the primary mode (and the only possible one), it might well be a matter of life and death. To ignore the ways in which innovation occurs in circumstances where ‘original value events’ are not even thinkable would clearly limit the field, make it into an idealization. This is also a mode that is becoming increasingly important in the contemporary global economy. While it is obvious that many businesses suffer from piracy and the counterfeit industries, it would seem an odd claim that these forms could not be studied by innovation management. For instance, what exactly is the analytical difference between creating a system for developing toys and creating a new

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and more efficient system to counterfeit them? A lot of what is happening in the burgeoning industry of counterfeiting seems to open up new and interesting avenues for studying innovation management, yet these aspects remain unstudied. Arguably, this is a case of moralization, of preferring not to study things that one finds objectionable, but such limitations are against every scientific criteria and have to be challenged.

Third Variation: Post-Production – the Mash-Up In 2004, an artist going by the name of DJ Danger Mouse created a ‘mash-up’ of two well-loved, but very different albums – ‘The White Album’ by the Beatles and ‘The Black Album’ by Brooklyn rapper Jay-Z. The result© 2006 The Authors Journal compilation © 2006 Blackwell Publishing


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Figure 3. Cover of DJ Danger Mouse: The Grey Album See 5.

ing album, fittingly entitled ‘The Gray Album’, consisted of the lyrics from the latter and a cut ‘n’ mix version of sounds from the former. Effectively, the album features Jay-Z rapping over Beatles samples, and a number of promos were distributed (Figure 3). It was in all likelihood (the auteur is somewhat unclear on the matter) meant primarily as a showcase of Danger Mouse’s mixing prowess. It was also the subject of a major legal fracas, as EMI opposed the album and sent a cease-and-desist letter, only to realize that it had already been widely distributed on the Internet and was practically unstoppable. As improbable as it sounds, the album is actually very listenable and it is considered a major work in the blooming mashup movement. A mash-up is a specific kind of remix, specifically a form of music in which two, seemingly incompatible pieces of music, are combined to create a completely new piece. For instance, a troupe called The Kleptones released an entire album of Queen’s music laced with rap lyrics, called ‘A Night at the Hip-Hopera’, while the somewhat oddly titled ‘Smells Like Booty’ features an alternative universe where Destiny’s Child sings lead vocals for Nirvana. In a sense this is merely a continuation of the sampling strategies of hip-hop, which has always depended on utilizing sur© 2006 The Authors Journal compilation © 2006 Blackwell Publishing

prising sources, only taken to another level. On another level, it is a ironic strategy made popular by punk rock, such as when Sid Vicious sang ‘My Way’. On yet another, it is a movement made possible by increasing technological development, where complex musical production no longer requires a professional studio, but can be achieved with a laptop and off-the-shelf software. The art of the mash-up lies in taking two well-known musical expressions, juxtaposing these, and managing to restructure them in a way that seems original. Simply taking two tracks and forcibly mating these does not a mash-up make, as quality in this genre is measured in how personal and natural one can make such a artificial combination. Listening to a mash-up is supposed to be the sensation of a new song, albeit one with surprising familiarities. In a very real way, the mash-up is taking the old and creating something new. But what is particularly interesting is the way in which it problematizes the locus of creation. Post-production is a well-known and developed art in the field of e.g. film-making and popular music, and includes all those aspects that follow principal production (recording music, filming). It consists of things such as editing, cutting, adding and removing effects, running music of images through filters and

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forms an important aspect of post-industrial production processes. What we now argue is that this can also serve as a powerful concept for problematizing innovation (cf. Bourriaud, 2002). What post-production shows is that there is more to finalizing e.g. a record than merely ‘creating’. In the culture industries producers, who earlier were seen more or less as technical assistants, are the new superstars – the mainstream success of the Neptunes being perhaps the best proof. This also means that the value-creation in these industries has been recast. Hiring a superstar producer, that is, investing in post-production, is now seen as an important part of creating a hit. But what does this mean for innovation management? Returning to ‘The Gray Album’, we can ask when the ‘actual’ innovative act took place. Was it in 1968, when the Beatles recorded their original album? And how does this relate to the recording of ‘The Black Album’ in 2003? And was the mash-up created by DJ Danger Mouse in 2004 an original, innovative act? EMI claimed it was not, that the original value event could be localized to 1968, and that anything stemming from this was merely an echo of that. Not surprisingly, Danger Mouse claimed that innovation can act long after the fact, and that we must tend to the ways in which new technologies creates new forms of innovative recasting, creating whole new possibilities for reproduction. Post-production thus stands as another example of how the eventness of innovation can be questioned, as a processual alternative to the fetish of the original in innovation management. Postproduction assumes ‘originals’, but does not essentialize these. Rather, it sees the very notion of an original as merely a starting point, something from which the innovative can be coaxed out.

After-Thoughts None of the forms discussed above are mere repetitions of some original act. Rather, they show us how the post-original must always be performed and understood as an afterlife. At the same time, this should not be understood as a concept ‘at rest’, but rather as a device for questioning the often dogmatically accepted concepts of innovation and creativity. Benjamin’s concepts of ruin, remembrance and redemption could thus be seen as critical commentaries on the moralization of innovation and the way in which we laud those aspects of the new that fit best with our ideas about what should be accepted as ‘new’. What we have tried to show by bringing in such post-original concepts is that the valori-

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zation of the non-actualized event which drives much of innovation management should at least be probed for weaknesses, and that the question regarding value needs to be revisited in innovation management. Most theories of innovation management still ascribe to a form of value fetishism, or assume that valorization is a non-problem in innovation management (see e.g. von Hippel, 1988; Slappendel, 1996; Van de Ven, 1986). What our post-original meditation thus tries to achieve is a return to the prime question of innovation, namely that of how value is created through juxtapositions, but to do this in a way that does not strive for essentialization of the networks and temporalities in which these unfoldings take place. By studying ways in which innovation remembers and derives, such as in the case of Bratz, we could open up the debate about incremental innovation and for more subtle analyses of how the echoes of value function in the economic nexus. By studying knockoffs, which could be understood as a ruination of sorts, we can not only open up a new field of empirical study (such as analysing innovation in counterfeiting and creating ‘look-alikes’), but also query the moralization innovation management represents. Lastly, post-production can help us study the continuous recasting and reproduction of value, turning every innovation into potentiality, and affirming creativity rather than property as what innovation management should deal with. All of these should be understood as attempts to break with preconceived notions in innovation management, as critiques of implicit moralization and as provocations, but our point should not be seen as an aggressive attack. The importance of the post-original is not that it stands as an antithesis to the original, a new dogma, just as Benjamin did not try to overthrow history. Instead, it is a form of plumpes Denken, a blunt critique or even a naïve questioning regarding those processes of becoming that Deleuze and Badiou have tried to theorize, a way to play with the notion of the new/original and to query for ways to go beyond the rigidity of such ideas. In a very real sense, it is an ironic move, a way to pervert the search for the original. The postoriginal is not a theory, it is an attempt at the less grandiose form of thinking. Returning to the way in which Alain Badiou (1988, 2002) has discussed the event as a moment of truth, it is important to understand how he in fact conceptualizes this. Truth, for Badiou, emerges in a break with the ordinary, in an event where the new – often understood as truth – can emerge as singular innovation. None of this should be odd or problematic for © 2006 The Authors Journal compilation © 2006 Blackwell Publishing


innovation management, as in fact it coincides well with the normal way we understand the matter. But it is Badiou’s next turn that changes things. The innovation, says Badiou, can never be proven in the event, as the event simply does not have any objective content. Rather, the event must be affirmed and repeated by those who believe in it, those who stay true. This is the way in which innovations come into being, by way of fidelity. What innovation management has tended to do, however, is to look for the provable content of the event – paradoxically the part of innovation that cannot be proven. By investigating a specific casting of the event, one where the value thereof is assumed to be part of some verifiable set of objective conditions that can be identified in the event, innovation management may in fact be locked into an eternal repetition of a fetish – the iconic original value event. What we suggest, by way of the lesser category of the post-original, is a way to study fidelities, the becoming of innovations. Rather than assuming that recasting, repetition and derivation are moves away from the innovation, we argue that they are ways to stay true to it, ways of affirmation. By repeating the truth of the innovation, this truth stays fresh, keeps its potential to change and reaffirm. The post-original would thus stand not as the enemy of innovation, but as its staunchest companion.

References Angelo (2000) Prisoners’ inventions. WhiteWalls, Chicago. Badiou, A. (1988) L’etre et l’evénement – l’ordre philosophique. Seuil, Paris. Badiou, A. (2002) Ethics – an essay on the understanding of evil. Verso, London. Baumol, W. (2002) The free-market innovation machine. Princeton University Press, Princeton. Benjamin, W. (1985) The origin of German tragic drama. Verso, London. Benjamin, W. (1998) Understanding Brecht. Verso, London. Benjamin, W. (1999) Illuminations. Pimlico, London. Bourriaud, N. (2002) Postproduction. Lukas & Sternberg, New York. Callon, M. (ed.) (1998) The laws of the markets. Blackwell, Oxford. Christensen, C. (1997) The innovator’s dilemma: When new technologies cause great firms to fail. Harvard University Press, Boston. David, P.A. (1985), Clio and the economics of QWERTY. American Economic Review, 75, 332–37.


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David, P.A. (2001) Path dependence, its critics and the quest for ‘historical economics’. In Garrouste, P. and Ionnides, S. (eds), Evolution and path dependence in economic ideas: Past and present. Edward Elgar, Cheltenham, pp. 15–40. Deleuze, G. (1994) Difference and repetition. Columbia University Press, New York. Edquist, C. (2004) Systems of innovation: Perspectives and challenges. In Fagerberg, J., Mowery, D. and Nelson, R. (eds), Handbook of innovation. Oxford University Press, Oxford, 181–208. Elliott, J. (1980) Marx and Schumpeter on Capitalism’s Creative Destruction: A Comparative Restatement. Quarterly Journal of Economics, 95, 45–68. Gilloch, G. (2001) Walter Benjamin – critical constellations. Polity, Cambridge. Henderson, R. and Clark, K.B. (1990) Architectural innovations: The reconfiguration of existing product technologies and the failure of established firms. Administrative Science Quarterly, 35, 9–30. von Hippel, E. (1988) The sources of innovation. Oxford University Press, New York. Jeanes, E. (2006) ‘Resisting Creativity, Creating the New’. A Deleuzian Perspective on Creativity. Creativity and Innovation Management, 15, 127–134. Jones, C. and Spicer, A. (2005) The sublime object of entrepreneurship. Organization, 12, 223–46. Rehn, A. and Taalas, S. (2004) ‘Znakomstva i svyazi’ (Acquaintances and connections) – blat, the Soviet Union, and mundane entrepreneurship. Entrepreneurship and Regional Development, 16, 235–50. Schumpeter, J. (1934) The theory of economic development. Harvard University Press, Cambridge, MA. Schumpeter, J.A. (1942) Capitalism, socialism and democracy. Harper, New York. Serres, M. (1995) Genesis. University of Michigan Press, Ann Arbor. Slappendel, C. (1996) Perspectives on innovation in organizations. Organization Studies, 17, 107– 29. Utterback, J.M. (1994) Mastering the dynamics of innovation. Harvard Business School, Boston. Van den Ende, J. and Kemp, R. (1999) Technological transformations in history: How the computer regime grew out of existing computing regimes. Research Policy, 28, 833–51. Van de Ven, A.H. (1986) Central problems in the management of innovation. Management Science, 32, 590–607. Whipp, R., Adam, B. and Sabelis, I. (eds) (2002) Making time – time and management in modern organizations. Oxford University Press, Oxford. Yang, M. (2000) Putting global capitalism in its place: Economic hybridity, Bataille and ritual expenditure. Current Anthropology, 41, 477–509. Zizek, S. (1989) The sublime object of ideology. Verso, London.

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Alf Rehn ([email protected]) is a professor of innovation and entrepreneurship at the Royal Institute of Technology, Sweden, as well as chair of management and organization at Åbo Akademi University, Finland. His research focuses on issues of moralization, ideology and culture in the general economy. Sheena J Vachhani (s.vachhani-2@ postgrad.manchester.ac.uk), University of Manchester, United Kingdom, is currently completing a doctorate in organisation theory subjecting the themes of identity, difference and the work of Luce Irigaray to critical interrogation. Her research interests include feminist interpretations of organisation, the body and visceral organisation. She hopes to extend her research on the body by examining feminist interpretations of medical interventions.

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Book Reviews Richard Florida (2002), The Rise of the Creative Class: And How It’s Transforming Work, Leisure, Community and Everyday Life. New York, Basic Books. 416 pp, ISBN 0465024769. Richard Florida (2005), The Flight of the Creative Class: The New Global Competition for Talent. New York, Harper Collins. 320 pp, ISBN 006075690X.

What is the main source of economic growth in the twenty-first century? If we listen to today’s analysts and politicians, the answer to this question comprises something like ‘competition’, ‘knowledge’ or ‘technology’. According to the American economist Richard Florida, however, none of these three factors are fundamental growth drivers: in the end, he says, economic growth is driven by human creativity – and because creativity flourishes best in an urban environment, it is a vibrant city that will be the ultimate powerhouse of future economic development. Roughly speaking, this is the main message of the two international bestsellers under review. Since the publication of his first book, The Rise of the Creative Class, Florida has been on the road across the world. Mayors, policy makers and scientists ... they all ask him for his vision on the city. The popularity of Florida has only grown with the publication of his second book, The Flight of the Creative Class, in which he takes a more global perspective on the relationship between creativity, cities and economic growth.

The Rise of the Creative Class Interestingly, Richard Florida tells the reader that he got inspired for his theory on the creative class in his native old-industrial city of Pittsburgh when he helped to get the city’s impoverished economy out of the dumps. One day he read, much to his surprise, in the local newspaper that the Internet search engine Lycos, a successful Pittsburgh university spinoff, had decided to move to Boston – despite all the efforts of the city of Pittsburgh, the university and investors to build a sound infrastructure for R&D and start-ups. The main reason for Lycos leaving, however, turned out to be the lack of talent. The company wanted to have access to a large pool of creative spirits © 2006 The Author Journal compilation © 2006 Blackwell Publishing

and that was what Boston – in contrast to Pittsburgh – could offer. Extensive research into other American cities brought Florida to the conclusion that today’s economy is largely built on creativity which is found in people who favour the city as the place to be. This socalled ‘creative class’ includes writers, innovators, scientists, engineers, consultants, media people, authors, architects, designers, musicians and artists – in short: people that earn their money with creative thinking, designing and producing. Creativity, in turn, results in the well-known Schumpeterian ‘creative destruction’ process, leading to innovation and subsequent economic growth. According to Florida, the creative class meanwhile comprises more than 30 per cent of the American workforce. In order to test the attractivity of a city for members of the creative class, Florida comes up with a Creativity Index. He finds that the cities that prosper economically in the index (such as Boston, Austin and Seattle) all have a mix of Talent, Technology and Tolerance. Florida regards these three Ts therefore as the determinants of urban competitiveness in the Creative Age. This means that there is not only the hardware (technology) side to cities, but also the software (talent) side. In the creative economy, cities need a healthy business climate and a vibrant people climate with an exciting night life, cultural facilities and other lifestyle amenities that match the tastes of the creative class. In such open environments, entry barriers to outsiders are low and the development of creative ideas is stimulated. For policy makers this argument may imply a complete turn of thought: urban competitiveness is served by a liberal cultural policy rather than a conventional policy of subsidizing business R&D and supporting local spin-offs. Unsurprisingly, Florida’s argument has caused a great deal of controversery, which may explain the popularity of his theory.

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The Flight of the Creative Class Three years after The Rise Richard Florida published The Flight of the Creative Class. In this book Florida, meanwhile a professor at George Mason University in Washington (as a member of the creative class he left boring Pittsburgh), writes about the new ‘global competition for talent’. In his view, the main competitive threat to the United States does not come from low-wage countries, but from tolerant and liberal places across the globe that are able to attract and keep creative people. As a result of post-September 11th immigration restrictions and growing conservatism in the United States, Florida fears that ‘our country – for generations known around the world as the land of opportunity and innovation – may well be on the verge of losing its creative competitive edge’. To ground his argument he cites statistical and anecdotal evidence. For example, over the last two years visa delays have cost US companies $30 billion, while the Bush administration quasi-ban on public stem-cell research has chased away biotechnology scientists to countries such as the United Kingdom, where governments fund their research. To be sure, in Florida’s ‘Global Creativity Index’ – assuming that Talent, Technology and Tolerance induce economic growth – the United States still ranks fourth behind Sweden, Japan and Finland. If we may believe the author, however, this score will not last if the American government sticks to its restrictive immigration policies and culture wars. Florida expects the creative class to move to both ‘global talent magnets’ and ‘global Austins’. The first group of urban centres is likely to compete with New York and includes tolerant cities with a high percentage of immigrants, such as London, Toronto, Sydney and Amsterdam. The second group of places – after the success of Austin in Texas called ‘global Austins’ – comprises cities such as Tel Aviv, Singapore, Bangalore and Shanghai, which all aggresively invest in R&D, higher education, culture and lifestyle amenities. These creative cities increasingly succeed in retaining homegrown talent that in previous years would have gone to the United States for study and career. In order to turn the tide in this global competition for talent, Florida recommends that the US government should adopt more liberal policies, such as less strict immigration visas (to attract, for example, Indian computer scientists), the allowance of same-sex marriage (to recruit, for example, gay designers from Australia) and support to stem-cell research (to prevent the

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further brain drain of bio-tech researchers to Western Europe). Only with such radical solutions, Florida writes, can ‘the flight of the creative class’ from America to other places be stopped.

Praise, Criticism and Recommendation Although it is far too early to denote the two books by Richard Florida on the creative class as classics, they undoubtedly have had a large impact, both in scientific circles and in policy making. This wide attention to Florida’s work is justified: after all, he convincingly shows that economic growth is not just a matter of production factors such as capital, resources and knowledge. In the end, Florida says, economic activities take place somewhere and depend upon men of flesh and blood, their creativity and their tastes. To him, economics is a social science par excellence. That is a refreshing voice in a time in which the best economists are seen as the ones that are capable to master the most sophisticated mathematical techniques. At the same time, one may criticize Florida for his misty definition of the creative class. It is unclear which professions are part of this group and which not. This conceptual elasticity and the associated measurement problems hamper research on creativity, cities and economic growth. Another point of criticism is Florida’s lack of attention to the image a city evokes in people’s mind. For years, many cities, especially in old industrial regions, have invested in amenities to attract and please the creative class, but still the people have not and do not come. Perhaps creative cities are only creative if people perceive them as creative. Therefore it might be useful to add a fourth ‘T’ to Florida’s (Global) Creativity Index: besides Talent, Technology and Tolerance an urban centre should also have a positive Trademark. These critical remarks, however, do not alter the fact that the work of Florida touches important points that should get more attention in science and policy. And even if policy makers will not like Florida’s statement that the best innovation strategy is a liberal immigration and cultural policy, they should buy the books and study them. In short, the works of Richard Florida deserve a wide audience, not for the agreement or disagreement they provoke, but for their sparkling thoughts. Gert-Jan Hospers University of Twente, The Netherlands


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