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EDITORIAL 87 Editorial A s well as its technological aspects, innovation is a social process, whether it involves ne...

Author: Tudor Rickards and Susan Moger (Editors)

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EDITORIAL

87

Editorial

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s well as its technological aspects, innovation is a social process, whether it involves new product development or the introduction of new work practices. In this issue of Creativity and Innovation Management we present a series of articles which investigate the various aspects of this process. In their article, Geir Ottesen, Kjell Gronhaug and Oddrun Johnsen investigate the factors which influence the use of commissioned research. They argue that the gulf between the expectations and experience of the researchers carrying out the work, and the practitioners who use the results, mean that much commissioned research is often neglected and misunderstood. They suggest that closer cooperation between commissioners and users may enhance research utilization. The theme of cooperation and the sharing of knowledge between those involved in the innovation process is echoed in the work of Mohamed Zain, Stanley Richardson and Mohamed Nazri Khan Adam. They examine the innovation initiatives followed by two subsidiaries of the same company and note that whilst both firms follow similar innovation processes they experienced different types of problems and different critical success factors were applicable to both organizations. Issues involving lack of knowledge faced both companies. Bill Becker suggests a way in which the social aspects of the innovation process may be addressed. In his three dimensional model, the sociotechnical processes involved, the dis-

# Blackwell Publishers Ltd 2002. 108 Cowley Road, Oxford OX4 1JF and 350 Main St, Malden, MA 02148, USA.

covery process employed and the core competencies of the organisation are merged to create a stakeholders’ view of competitive advantage. The process is designed to help communication across organizational groups and to emphasise the importance of the human aspects of organizational change. Christina and Tomas Hellstro¨m argue that the communication processes in organizations can be characterized as ‘highways, alleys and by-lanes. Interviews with key personnel involved in the innovation process in a Swedish telecommunications company suggested that idea development is aided by the recognition that there are several routes for ideas to be accepted, formal and informal. An understanding of these routes can aid idea development. In their article, Zoe Radnor and Hannah Noke introduce the concept of the innovation compass, a diagnostic tool to aid the innovation process. The compass supports other mechanisms in new product development, such as the Stage Gate model. Combining qualitative and quantitative methodologies, the compass allows the benchmarking of fundamental innovation processes. Such benchmarking exercises can permit further discussion within the organizations about the innovation process. Tudor Rickards, Susan Moger Co-editors Creativity and Innovation Management

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Benefiting from Commissioned Research: The Role of Researcher – Client Cooperation Geir Grundva˚g Ottesen, Kjell Grønhaug and Oddrun Johnsen This paper discusses why commissioned research is often neglected and misunderstood, as well as how its use can be enhanced. We argue that the lack of use of such research can be attributed to differences in researchers’ and practitioners’ knowledge and expectations regarding research problems, solutions, interpretations, and applications. Two hypotheses are proposed, which link the use of research to cooperation between researchers and users during the production of the research, and to assistance in interpreting and applying the research results. The hypotheses were tested on a sample of 65 buyers of 86 research projects in the seafood industry. The reported findings reveal that collaboration fosters research utilisation, but also that close cooperation between the providers and the users of research may substitute assistance in enhancing research utilisation.

Introduction

F

irms embedded in everchanging and hostile environments need continuously to acquire and utilise timely and relevant information to discover and take advantage of opportunities, and to avoid threats that may arise. Firms may learn about their surrounding environment in a variety of ways. For example, through interactions with customers and other constituencies, firms may come across relevant information. Organisations and their management can also observe and reflect over the outcomes of their own decisions and activities, and thus they can learn by ‘trial and error’, even though such learning can be imperfect (Levinthal & March, 1993). They may also learn from the observation of competitors, as dealt with in the extensive literature on imitation and mimetic processes (see e.g., Galaskiewicz & Wasserman, 1989; Haveman, 1993). The importance of firms’ ability to learn has been emphasised in the research literature. For example, the literature on market orientation primarily reflects that by focusing on customers and other important constituencies, firms may acquire information which makes it possible to survive and prosper (see e.g., Kohli & Jaworski, 1990; Slater & Narver, 1995).

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In addition to getting insights through interactions, observations, imitations and trial and errors, organisations may also gain insights in a more systematic fashion by conducting research. Research is often carried out in order to answer and shed light on specific problems. The research is commonly organised and conducted as projects, i.e. specific tasks to be solved within a given time and resource frame. Firms often outsource their research tasks due to limited time and resources or the lack of research competence. Commissioned research is costly, but may produce timely, relevant and highly reliable information. Thus, buyers of commissioned research should be highly motivated to utilise the acquired information. It is however a common observation that commissioned research frequently is neglected, misused or not understood at all (see e.g., Caplan et al. 1975; Deshpande´ & Zaltman, 1983; Grønhaug & Haukedal, 1997; Knorr, 1977). The purpose of the present study is to enhance our insights regarding the use of commissioned research. In so doing, we draw on insights from cognitive psychology to argue that researchers and users often differ in their knowledge of and expectations to research, which may lead to the production of # Blackwell Publishers Ltd 2002. 108 Cowley Road, Oxford OX4 1JF and 350 Main St, Malden, MA 02148, USA.

BENEFITING FROM COMMISSIONED RESEARCH

less useful research and/or impair its utilisation. Furthermore, we argue that collaboration between researchers and users during the production of research will enhance both researchers’ and users’ understanding of the research context and of central concepts involved, as well as calibrating expectations about the outcome of the research. This serves to reduce the ‘gap’ in understanding and expectations between researchers and users, and is thus expected to lead to the production of more useful research, and to enhanced utilisation of the research. We also suggest that if the research providers assist in interpreting and applying the research findings, this will enhance its use. The topic of research use has been investigated before. For example, several studies of research utilisation and knowledge transfer in public policy making processes have shown that information generated through research has had little influence on decisions and seems to be underutilised (Deshpande´ & Zaltman, 1983). Within marketing, a range of studies has investigated marketing managers’ use of research (e.g., Deshpande´ & Zaltman, 1982; Deshpande´ & Zaltman, 1984; Lee et al., 1987). An interesting finding in some of the earlier studies was that marketing managers reported that much of the research they received was not applicable or sufficiently convincing to be used in critical decisions (Lee et al., 1987). Other studies within marketing have focused on factors that might influence the use of marketing research. For example, Deshpande´ and Zaltman (1982) in a study of brand managers, found that the more decentralised the organisation was, the greater the tendency was to use market research in decision making. Other studies have identified trust between providers and users of market research as an important factor affecting the use of research (Moorman et al., 1992; Zaltman & Moorman, 1988). It should also be noted that action researchers, who work closely with organisations which go through some planned change, have long advocated collaboration between researchers and users to enhance research utilisation (e.g., Eden & Huxham, 1996; Elden & Chisholm, 1993). However, there has been little systematic examination of the effect of collaboration and assistance when the researcher is not playing an action-oriented interventionist role (Mohrman et al., 2001). The remainder of the paper is organised as follows: In the next section, we explain the theoretical rationale underlying our hypotheses. We then describe our research, a surveybased study of the buyers of commissioned research from a national research institute

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which serves a wide range of actors in the seafood industry. Then we report our findings, draw conclusions, and highlight their implications.

From Research Data to Knowledge Use Why is it apparently so difficult to make use of commissioned research? There are probably many answers to this intricate question. Our approach begins with the important distinction between data and information (or knowledge) proposed by Daft and Macintosh (1981). According to these scholars, information is data that changes how one understands the external world, i.e.: ‘To qualify as information, the data must effect a change in the individual’s understanding of reality’ (p.210). This implies that for data (e.g. a research report) to become information it must be interpreted and understood, and it must be new to the user. How then do people interpret data? The answer to this question is closely related to how individuals, often subconsciously, develop and apply mental models, i.e. mentally constructed ‘road maps’ of what works and how to act (cf. JohnsonLaird, 1983). Mental models consist of interrelated categories or concepts that help managers, and others, to organise and process information effectively. This is so because mental models give focus, direct people’s attention and thus contribute to what and how they perceive the external world. This relates to cognitive processes involved in categorisation, i.e. basic cognitive activities related to conceptualisation and understanding (Rosch, 1978). Categorisation influences the noticing and interpretation of data as well as what data are noted and how it is structured. An important point is that actors’ categories mainly develop through interactions with their environment (Rosch et al., 1976). This means that, over time, mental models and the inherent concepts become more or less suited to the context in which the actor is embedded and operates (Day & Nedungadi, 1994; Rosch, 1978). Because researchers and practitioners operate in partly different environments, their mental models and inherent concepts are likely to differ, which implies that they may interpret and understand ‘reality’ differently. For example, researchers’ understanding of concepts may only partly overlap with how practitioners understand the same concept. Consider for instance the concept of ‘market orientation’. Whereas researchers probably adopt their understanding of that concept from the

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research literature (e.g. the definition of market orientation provided by Kohli & Jaworski, 1990), research findings indicate that practitioners develop their personal understanding of this concept to fit the realities of their competitive context (Ottesen & Grønhaug, 2001). This indicates that practitioners’ understanding of ‘market orientation’ is likely to deviate from that of the researcher. Thus, if the researcher makes recommendations, without explicating them in detail, e.g. ‘to increase profitability – become more market-oriented’, then the practitioner may implement such advice in a different manner than intended, or s/he may neglect the advice because it is not understood. This indicates that careful coding of research data might be necessary to make it available to users. However, to carry out such coding the researcher must have a very good understanding of the user and his or her context and research requirements. Differences in thinking and understanding between researchers and practitioners give rise to other types of misunderstandings as well. For example, they may perceive research problems and solutions differently (Andreasen, 1985). They may also differ in their understanding of what constitutes new (or useful) knowledge. Whereas a researcher might value basic or conceptual research that display theoretical and methodological rigor, a practitioner might value applicable or instrumental knowledge as more useful. Such differences in understanding and expectations between researchers and practitioners may prevent researchers from understanding and appreciating what constitutes useful commissioned research. This in turn, may lead to the production of trivial or irrelevant research, which will not be considered new (useful) by the user and will thus not be applied. Researchers and practitioners are experts in their domains. To become true experts individuals must go through extensive training and learning. This often lasts more than 10 years (Simon, 1991). Because researchers and practitioners operate in partly different environments, with partly different demands (e.g. in terms of required skills and knowledge), they are likely to differ in terms of their area of knowledge (expertise). An important area in which they are likely to differ is in their ability to conduct, evaluate and understand research (Lee et al., 1987). Whereas such skills are at the heart of researchers’ expertise, practitioners can not be expected to have the same skills and knowledge. This is easy to understand because practitioners need to spend their limited time and capacity on a variety of other tasks, and they lack the

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necessary education and training. Thus, practitioners may find it difficult to comprehend research findings presented to them. On the other hand, researchers might not have sufficient knowledge about the users, i.e. about their context and expectations to the research, and how they will utilise the research. Another relevant point related to differences in knowledge between researchers and practitioners is that buyers of commissioned research may lack the ability to formulate precise and manageable research questions and thus to request timely and relevant research. One reason for this is a lack of training and education, as noted above. Another reason is that research results can be characterised as ‘experience goods’, which means that the outcome is experienced after the research has been conducted (cf. Nelson, 1970). It should also be noted that the firm’s knowledge of and expectations to how it may benefit from the research might be unclear. For example, at the outset, firms may hold naive and unrealistic expectations regarding the outcome of the research, which may result in dissatisfaction with the research supplier and the outcome of the research. The above discussion indicates that a difference in knowledge and expectations between researchers and practitioners may lead to the production of less useful research and/or impair the utilisation of research. We therefore suggest that reducing the ‘gap’ in knowledge and expectations between researchers and users may lead to the production of more relevant research, which can be understood and used by practitioners. More specifically, researchers and practitioners may benefit from developing a shared understanding of the research context, the research problems/tasks, the meaning of central concepts involved, as well as their expectations to the research (Andreasen, 1985; Deshpande´ & Zaltman, 1984; Grønhaug & Haukedal, 1997). How can this be accomplished, if at all? Insights from the literature on teams and group decision-making show that when people interact socially with each other, their views and insights become more similar (see e.g., Bettenhausen & Murnighan, 1985; Chattopadhyay et al., 1999; Geletkanycz & Hambrick, 1997). This builds on the observation that social interaction leads to conformity in perspectives. It is thus expected that communication and interaction about a particular research task may help clarify the many issues discussed above, which may lead to the production of useful research that is likely to be utilised by the buyer of commissioned research.



Commissioned research implies conducting a specific research task. The work often results in a research report. To become useful, i.e. to serve as valuable input for further actions, the report must be read and understood. However, the buyers of research often have a rather limited ability to read, understand, and make use of research reports. In such cases, assistance in interpreting and making use of the reported research may be useful. Through explanations from and discussions with the researcher, the buyer of the research may gradually gain new insights which enables him or her to change their present thinking about an issue and thereby to benefit from the contracted research. Based on the above discussion we suggest two hypotheses, i.e.: Hypothesis 1: The degree of cooperation between research providers and users covary positively with the utilisation of commissioned research. Hypothesis 2: Researchers’ assistance in interpreting and applying the research results co-vary positively with the utilisation of commissioned research.

Research Methodology In this section, we describe the research setting, data collection and the measures used to test our research hypotheses.

Research Setting and Data Collection The empirical setting chosen is the buyers of commissioned research from a national research institute operating in the Norwegian seafood industry. The research institute serves a wide range of different types of actors, which include manufacturing firms, trade organisations, and governmental bodies. It has some 80 researchers working in such diverse disciplines as marketing, economics, production technology, and biotechnology. This diversity is reflected in the types of research projects included in the present study. Included in the study were the buyers of research projects which were completed during the years 1999 and 2000. These include 113 projects conducted for 80 organisations. Due to a lack of secondary data, we collected primary data by means of a questionnaire. The questionnaire was sent to the person who had been in charge of the project in the buyer organisation. After two phone calls to those organisations which did not return the questionnaire, 65 organisations had responded


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(81% of the total number of organisations), representing 86 research projects (76% of the total number of projects). The responding organisations were mostly made of small- and medium sized enterprises. Some 75% of the organisations had less than 100 employees. The average turnover is 538 million NOK (58 mill US$). The 65 responding organisations represent different types of organisations: 61.5% are business firms, 18.5% are governmental bodies, 7.7% are research institutions and 6.2% are trade organisations. The remaining 6.2% are other types of organisations.

Measurement The constructs included in this study are research use (USE), cooperation (COOP), and assistance (ASSIST). Although much has been written about research use, no standardised measures for the constructs employed here have been developed so far. Thus, we had to construct appropriate measures for our study. In this process, we relied heavily on the relevant research literature to see how other researchers had defined the same or similar constructs. In line with Churchill’s (1979) procedure for measurement development, we first specify the domain of each construct. We then proceed to describe how we generated valid and reliable measures to capture the theoretical constructs as specified. Research use: A review of the literature on research use revealed great diversity in the way research use has been defined and measured (Menon & Varadarajan, 1992). Thus, a standard definition of research use does not appear to exist (Menon & Varadarajan, 1992; Moorman et al., 1992). In the present study, we focus on the impact dimension of the research, i.e., whether the completed research influences the users’ thinking, decisions and actions (cf. Deshpande´, 1982; Dunn, 1986). Furthermore, we emphasise that research use can be both of a conceptual and instrumental type. Instrumental use refers to the direct application of research results to solve a specific problem or to guide concrete decisions and actions (Caplan et al., 1975). Conceptual use involves using research results for ‘general enlightenment’ (Beyer & Trice, 1982, p.598), i.e. research information that changes the user’s knowledge without being applied directly for specific decisions and actions. Cooperation: Regarding the construct of ‘cooperation’, we emphasise the importance of interactions and involvement during the project. We also focus on the ability of the research provider to solve problems and challenges which emerge during the project.

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We focus on personal communication because it makes it possible to immediately clarify and elaborate unclear issues, and to discover possible differences in interpretations (Daft & Weick, 1984). More specifically, we emphasise the extent to which the researcher and user has an ongoing dialog during the project, as well as the availability of the research provider’s project managers during the project. Assistance: Regarding assistance, we focus on researchers’ assistance in interpreting the results and clarifying their significance for the user’s organisation, as well as how the results could be applied. To measure these constructs, we developed a pool of items that seems to reflect the theoretical constructs. In addition to examining previous research, we made use of the authors’ extensive experience as providers of commissioned research in our effort to formulate items that reflect the specified domain for each of the theoretical constructs. The items were pretested on eight researchers with extensive experience with commissioned research. After this procedure, we ended up with 12 items which are assumed to measure the constructs included, i.e., 4 items which reflect research use, 5 items which reflect cooperation, and 3 items which reflect assistance. These items are shown in Appendix 1. All items were rated on a 7-point Likert scale with end-points 1 = ‘strongly disagree’ and 7 =

‘strongly agree’. Each measure was arrived at by dividing the sum of the scores for each item by the number of items included in the measure. The reliability of the scales for the measures were found to meet Nunnally’s (1978) recommendations, as the Chronbach’s alfa (a) exceeded 0.70 for all of the constructs (presented in Appendix I). To determine the dimensionality underlying these measures, we used exploratory factor analysis on the items which are assumed to reflect each measure (cf. Churchill, 1979). Exploratory factor analysis was applied due to a lack of prior testing of the measures. This procedure showed that two of the measures, i.e. cooperation and assistance, displayed a unidimensional structure, representing 73% and 87% of the variance in the items, respectively (see Appendixes 2 and 3). Our measure of research use displayed a twofactor solution reflecting instrumental and conceptual research use (see Appendix 4). However, in estimating the discriminant validity for the three measures (with the cutoff point eigenvalue = 1), as discussed below, a clear three-factor solution emerged. Thus, we decided to consider USE a one-dimensional construct. An examination of the correlation coefficients between the items included in the USE-measure showed that they all were positive and high, and that the intercorrelations also were higher than correlations with indicators which measure the other con-

Table 1. Assessment of Discriminant Validity for the Measures Items: (for description of items, see Appendix 1) COOP1 COOP2 COOP3 COOP4 COOP5 ASSIST1 ASSIST2 ASSIST3 USE1 USE2 USE3 USE4 Variance explained Eigen Values

Communalities

Factor 1: COOP

.795 .662 .676 .701 .780 .905 .839 .725 .660 .664 .607 .405

.873 .796 .792 .773 .714 .060 .080 .294 .170 .062 .369 .211

– –

39.4% 4.73

Factor 2: ASSIST

Factor 3: USE

.052 .169 .088 .091 .395 .938 .912 .799 7.115 7.249 .167 .388

.176 7.010 .205 .309 .340 7.147 7.012 7.010 .786 .774 .666 .458

21.2% 2.55

9.6% 1.15

Exploratory factor analysis with varimax rotation. Three-factor solution with cut-off point at eigenvalue = 1.

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Table 2. Descriptive Statistics and Correlation Coefficients for the Measures

1. USE 2. COOP 3. ASSIST

N

Mean (SD)

1.

2.

3.

52 72 59

4.70 (1.22) 5.70 (1.15) 4.73 (1.34)

1.00 .516** .075

1.00 .493**

1.00

** = p5.01

structs. Thus according to the idea of M(ulti) T(raits) M(ulti) M(ethods), (see, Campbell & Fiske, 1959) our choice seems appropriate. To determine whether the measures reflected distinct constructs we conducted a factor analysis using varimax rotation on the 12 items that represent the three constructs in the research model (cf. Churchill, 1979). Table 1 reports communalities, factor loadings, variance explained, and eigenvalues for the measures. Table 1 shows that with a cut-off point at eigenvalue = 1, the factor analysis extracted three factors. Factor 1 represents cooperation (COOP), factor 2 assistance (ASSIST), and factor 3 research use (USE). The three factors represent 70% of the variance in the 12 items. We see that all factor loadings are greater than 0.457 and that all cross-construct loadings are smaller than the corresponding ownconstruct loading. Jointly these facts indicate that the three measures are sufficiently distinct.

Results In this section, we report the findings of our study. Table 2 provides some descriptive statistics as well as correlation coefficients between the measures. Table 2 shows that the two independent measures are positively correlated (r = 0.493, p5.01) and thus collinarity problems may

Table 3. Regression Analysis: Dependent Variable: Research Use (USE) Stand. b (t-values) COOP ASSIST

.556 (3.827)*** 7.149 (71.009) R2 = 0.260**

** = p5.01, *** = p5.001, n = 45


exist. Tests for collinarity revealed that the tolerance measures (50.815) and VIF-values (51.228) for the two independent measures were well below the threshold values recommended by Hair et al. (1998). Therefore, collinarity appears not to be a serious problem here. To test the two hypotheses, regression analysis was applied to estimate the effects of cooperation (COOP) and assistance (ASSIST) on research use (USE). The result of the regression analysis is shown in Table 31. Table 3 shows that the regression model explained 26% of the variance in the dependent variable (p50.01). The data here also shows that H1 is supported, i.e. that the degree of cooperation between research providers and users co-varies positively with the use of commissioned research. Furthermore, Table 3 shows that H2 is not supported, i.e. that assistance in interpreting and applying the research results does not co-vary with its use. The latter finding is surprising and against our theoretical arguments. We elaborate and discuss this at more detail in the next section.

Discussion In the theoretical discussion at the beginning of this article, we argued that researchers and users of research are likely to differ in their knowledge of and expectations to (commissioned) research. We also maintained that this ‘gap’ might lead to the production of irrelevant research and/or impair the utilisation of research. Empirical support was found for the argument that cooperation during the production of the research enhances its use. Our results did, however, not support the argument that researchers’ assistance in interpreting and applying the research results enhances its use. Because this was a rather surprising result, we carefully reconsidered our approach, including the measures and how they relate to each other. More specifically, we went back to our original USE measure

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Table 4. Descriptive Statistics, and Correlation Coefficients for the Measures

1. 2. 3. 4.

INSTUSE CONUSE COOP ASSIST

N

Mean (SD)

55 72 72 55

3.67 5.67 5.70 4.73

(1.72) (1.16) (1.15) (1.34)

1.

2.

3.

4.

1.00 .407** .336* 7.147

1.00 .511*** .287*

1.00 .493***

1.00

* = p5.05, ** = p5.01, *** = p5.001

and examined how its two components, i.e. instrumental (INSTUSE) and conceptual (CONUSE) use (see Appendix 4), relate to our measures of cooperation and assistance. In Table 4, we report the correlation coefficients between these measures. The correlation matrix presented in Table 4 reveals that cooperation correlates positively with both instrumental and conceptual research uses. We also see that assistance is negatively related to instrumental use, though the results are not statistically significant. In sum, this indicates that assistance is less important to well-understood and ‘clear-cut’ use, but also that cooperation enhances (instrumental knowledge) use and may make subsequent assistance unnecessary. To test whether cooperation may substitute assistance, we computed the partial correlation coefficient between instrumental use and assistance, controlling for the effect of cooperation on instrumental use. The partial correlation between instrumental use and assistance, controlling for cooperation, is negative, i.e. r INSTUSE, ASSIST. COOP = 7.3025 (p5.05). Compared to the zero-order correlation between instrumental research use and assistance (cf. Table 4), the partial correlation coefficient is larger. This supports our above argument and suggests that cooperation may substitute subsequent assistance. The finding can be explained as follows: Through cooperation during the production of research, users may acquire the insights which are needed in order to understand and apply the final research results. Through cooperation during the production of the research, users also have the possibility to influence the research itself and thus make it more useful – which should enhance its use. Jointly these factors may explain why subsequent assistance in understanding and applying the research results might be unnecessary. What about conceptual use – is assistance necessary? The partial correlation between conceptual use and assistance controlled for cooperation, is rather small, i.e. r CONUSE,

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ASSIST. COOP = .0652 (not significant), and substantially smaller than the zero-order correlation between conceptual use and assistance, i.e. r = .287 (cf. Table 4). The large reduction in the correlation coefficient between the two measures indicates that cooperation may reduce the need for assistance also when it concerns the use of conceptual research. Another interesting finding is that the negative partial correlation between instrumental use and assistance (7.3025, p5.05), compared to the weak positive partial correlation between conceptual use and assistance (.0652, not significant), indicates that conceptual research use is perceived as more demanding by the user.

Implications Our study provides empirical support for the often assumed, but little examined assumption that cooperation during the production of the research enhances its use. The practical implication of this finding is that both researchers and buyers of research projects should try to organise their relationship in a manner which facilitates all necessary cooperation in commissioned research. Note that this includes a constant personal dialog, which serves to focus the research effort and to clarify and elaborate ambiguous issues. Cooperation also includes researchers’ accessibility and active involvement in the project, as well as the effective handling of problems and challenges that typically emerge during a project. An additional and important contribution of the present study is the finding that cooperation may substitute assistance in enhancing research use. This finding is new and has several interesting practical implications. First, when the cooperation between researchers and users has worked well, subsequent assistance may be superfluous. Second, if cooperation during the production of the research, for some reason or other, was insufficient, subsequent assistance may – to some extent – compensate



for the lack of cooperation. It should, however, be noted that because assistance occurs after the research has been produced, it can not help improve the usefulness of the research, as can cooperation. Thus, the research provider should not focus on assistance as a pure substitute for cooperation; rather, assistance can be very useful when cooperation – for some reason – is insufficient or fails. In terms of providing assistance, two factors should be emphasised. First, highly qualified personnel should be readily available for the buyer of the research. Second, researchers providing assistance must, in addition to research competence, have sufficient knowledge of the research user and his or her context and requirements.

Note 1. Note that in this study we develop measures and test hypotheses using the same data. Although this is a rather common practise, it may lead to an artificially high ’fit’ with the data. It is therefore appropriate to use a ’holdout’ sample to test the hypotheses. In the present case, however, substracting sub-samples from a data set with relatively few observations (86) will lead to less sigificant findings due to small sample sizes. Tentative tests did, however, indicate similar findings as those reported in Table 3, but are not reported here.

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information processing in organizational work units. Administrative Science Quarterly, 26, 207– 224. Daft, R.L. and Weick, K.E. (1984) Toward a model of organizations as interpretation systems. Academy of Management Journal, 9, 2, 284–295. Day, G.S. and Nedungadi, P. (1994) Managerial representations of competitive advantage. Journal of Marketing, 58, 31–44. Deshpande´, R. (1982) The organizational context of market research use. Journal of Marketing, 46, Fall, 91–101. Deshpande´, R. and Zaltman, G. (1982) Factors affecting the use of market research: a path analysis. Journal of Marketing Research, XIX, 14-31. Deshpande´, R. and Zaltman, G. (1983) Patterns of research use in private and public sectors. Knowledge: Creation, Diffusion, Utilization, 4, 561– 575. Deshpande´, R. and Zaltman, G. (1984) A comparison of factors affecting researcher and manager perceptions of market research use. Journal of Marketing Research, 21, 32–38. Dunn, W.N. (1986) Conceptualizing knowledge use. In G.M. Beal, W. Dissanayake and S. Konoshima (Eds.), Knowledge Generation, Exchange, and Utilization. (pp. 325–343). Boulder: Westview Press. Eden, C. and Huxham, C., (1996) Action research for the study of organizations. In S.R. Glegg, C. Hardy and W.R. Nord (Eds.), Handbook of Organization Studies. (pp. 526–542). London: Sage. Elden, M. and Chisholm, R.F. (1993) Emerging varieties of action research: introduction to the special issue. Human Relations, 46, 2, 121–142. Galaskiewicz, J. and Wasserman, S. (1989) Mimetic processes within an interorganizational field: an empirical test. Administrative Science Quarterly, 34, 454–479. Geletkanycz, M.A. and Hambrick, D.C. (1997) The external ties of top executives: implications for strategic choice and performance. Administrative Science Quarterly, 42, 654–681. Grønhaug, K. and Haukedal, W. (1997) The cumbersome route from research data to knowledge use. Creativity and Innovation management, 6, 3, 151–160. Hair, J.F.J., Anderson, R.E., Tatham, R.L. and Black, W.C. (1998) Multivariate Data Analysis. New Jersey: Prentice Hall. Haveman, H.A. (1993) Follow the leader: mimetic isomorphism and entry into new markets. Administrative Science Quarterly, 38, 593–627. Johnson-Laird, P.N. (1983) Mental Models: Towards a Cognitive Science of Language, Inference, and Consciousness. Cambridge: Cambridge University Press. Knorr, K.D. (1977) Policymakers’ use of social science knowledge – symbolic or instrumental. In C.H. Weiss (Eds.), Using Research in Policy Making. (pp. 165–182). Lexington: LexingtonHeath. Kohli, A.K. and Jaworski, B.J. (1990) Market orientation: the construct, research propositions, and managerial implications. Journal of Marketing, 54, 1–18.

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Lee, H., Acito, F. and Day, R.L. (1987) Evaluation and use of marketing research by decision makers: a behavioral simulation. Journal of Marketing Research, XXIV, 187–196. Levinthal, D.A. and March, J.G. (1993) The myopia of learning. Strategic Management Journal, 14, 95– 112. Menon, A. and Varadarajan, R.P. (1992) A model of marketing knowledge use within firms. Journal of Marketing, 56, 53–71. Mohrman, S.A., Gibson, C.B. and Mohrman, A.M. (2001) Doing research that is useful to practice: A model and empirical exploration. Academy of Management Journal, 44, 2, 357–375. Moorman, C., Zaltman, G. and Deshpande, R. (1992) Relationships between providers and users of market research: the dynamics of trust within and between organisations. Journal of Marketing Research, XXIX, 314–328. Nelson, P. (1970) Information and consumer behavior, Journal of Political Economy, 78, 311–329. Nunnally, J.C. (1978) Psychometric Theory. New York: McGraw-Hill. Ottesen, G.G. and Grønhaug, K. (2001) Managers’ understanding of concepts: the case of market orientation. Forthcoming in European Journal of Marketing. Rosch, E. (1978) Principles of categorization. In E. Rosch and B.B. Lloyds (Eds.), Cognition and

Categorization. (pp. 27–48). Hillsdale, New Jersey: Lawrence Erlbaum Associates. Rosch, E., Mervis, C.B., Gray, W.D. and Johnson, D.M. (1976) Basic objects in natural categories. Cognitive Psychology, 8, 382–439. Simon, H.A. (1991) Bounded rationality and organizational learning. Organization Science, 2, 1, 125–134. Slater, S.F. and Narver, J.C. (1995) Market orientation and the learning organization. Journal of Marketing, 59, 63–74. Zaltman, G. and Moorman, C. (1988) The importance of personal trust in the use of research. Journal of Advertising Research, 28, 5, 16–24.

Geir Grundva˚g Ottesen is a Senior Researcher at the Department of Economics and Marketing, Norwegian Institute of Fisheries and Aquaculture Research, Tromsø, Norway. Kjell Grønhaug is Professor in the Department of Strategy and Management, Norwegian School of Economics and Business Administration, Bergen, Norway. Oddrun Johnsen is a Researcher at the Department of Economics and Marketing, Norwegian Institute of Fisheries and Aquaculture Research, Tromsø, Norway.

Appendix 1. Description of Items for the Constructs Constructs: Items:

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COOP a = 0.90

1. 2. 3. 4. 5.

ASSIST a = 0.92

1. Alfa’s researchers helped us understand the significance of the results for our company 2. Alfa’s researchers helped us understand how the results from the project could be applied by our company 3. Alfa’s researchers helped us interpret the results from the project

USE a = 0.72

1. 2. 3. 4.

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We had an ongoing dialog with Alfa during the project It was easy to get in contact with Alfa’s manager for the current project The cooperation between Alfa and ourselves worked well during the project Alfa actively contacted us to follow up on the project Alfa’s employees showed a good ability to solve different problems and challenges that emerged during the project

The results from the project have led to concrete changes in our company Through the project we have enhanced our competitiveness The results from the project make an important basis for our decisions The results from the project have enhanced our insights into the relevant domain



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Appendix 2. Assessment of Unidimensionality: COOP Items: (for description of items, see Appendix 1)

Communalities

COOP

.782 .692 .687 .718 .756

.885 .832 .829 .847 .869

– –

72.7% 3.64

COOP1 COOP2 COOP3 COOP4 COOP5 Variance explained Eigenvalue

Exploratory factor analysis with varimax rotation. One-factor solution with cut-off point at eigenvalue = 1.

Appendix 3. Assessment of Unidimensionality: ASSIST Items: (for description of items, see Appendix 1)

Communalities

ASSIST

.919 .897 .790

.959 .947 .889

– –

86.9% 2.61

ASSIST1 ASSIST2 ASSIST3 Variance explained Eigenvalue

Exploratory factor analysis with varimax rotation. One-factor solution with cut-off point at eigenvalue = 1.

Appendix 4. Assessment of Unidimensionality: USE Items: (for description of items, see Appendix 1) USE1 USE2 USE3 USE4 Variance explained Eigenvalues

Communalities

Factor 1: INSTUSE

Factor 2: CONUSE

.772 .820 .718 .868

.848 .905 .467 .000

.230 .004 .707 .932

– –

43.9% 2.17

35.6% 1.00

Exploratory factor analysis with varimax rotation. Two-factor solution with cut-off point at eigenvalue = 1.


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The Implementation of Innovation by a Multinational Operating in Two Different Environments: A Comparative Study Mohamed Zain, Stanley Richardson and Mohd Nazri Khan Adam The aim of the paper is to examine the innovation initiatives and processes followed by two subsidiaries of a German multinational company operating in Europe and Asia and to compare the innovativeness of their operations in these two locations. The study examined the innovation processes followed by the two subsidiary firms operating in Germany and Malaysia, the actual problems faced by them, the critical success factors involved in the implementation, and the work climates of the firms. Interestingly, it was found that both firms followed similar innovation processes. Nevertheless, different types of problems and critical success factors were applicable to both firms. The results showed that the Malaysian subsidiary faced more behavioural problems while the German subsidiary encountered more technical problems. Further, the study showed that a lack of knowledge was the common problem faced equally by both firms. The study demonstrated that the German subsidiary had better working climate compared to its counterpart in Malaysia. Finally, the German subsidiary was found to be more innovation-active than the Malaysian subsidiary as it introduced more types of innovation, interacted with more types of entity in the external environment and introduced more types of training.

Introduction

M

any definitions of innovation can be found in the literature (see Rickards & Moger, 1991; Nystrom, 1990; Vrakking, 1990; West & Farr, 1990). One of the most repeatedly used definitions is by Zaltman et al. (1973) which said that an innovation is ’an idea, practice, or material artefact perceived to be new by the relevant adoption unit’. In fact, the same definition is used by other researchers such as Daft (1982), Damanpour and Evan (1984), Damanpour (1991) and Freeman (1982). The term is constantly regarded by some as analogous with invention while others consider the term as commercialisation of invention or the process of converting a discovery into a marketable products (Freeman, 1973, 1982; Rickards, 1985). This study takes a broad definition of the concept of innovation by defining it as ’the process of matching organisational and environmental means and needs’

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since the outputs of the successful matching of the two items are the innovation products in the form of new ideas to be adopted by the organisation (Zain, 1993). There is no simple or single way to describe innovative companies and identify their attributes. In this study, Zain’s attributes were adopted to describe innovative companies. He believed that innovative companies are those that introduce many types of incremental and technological innovation, have interaction with many types of entity in the environment and conduct many training programmes for their employees. It is worth noting that Zain (1995) and Zain and Rickards (1996) preferred not to dichotomise firms into the classification favoured by earlier scholars including Ekvall (1983): ‘more innovative’ and ‘less innovative’ (or ‘stagnant’). He believed that it is more adequate to use ‘more innovation-active’ and ‘less innovation-active’ to describe firms that adopt many types of innovation. # Blackwell Publishers Ltd 2002. 108 Cowley Road, Oxford OX4 1JF and 350 Main St, Malden, MA 02148, USA.

IMPLEMENTING INNOVATION IN TWO ENVIRONMENTS

Abbey (1983) said work climate is ‘a relatively enduring quality of an organisation’s internal environment that results from the behaviour and policies of members of the organisation, especially its top management’. Further, he stated that work climate is ‘more of an attitude or culture which must be fostered by top management and must eventually permeate downward throughout the whole organisation’. Ekvall et al. (1983) made a major attempt at measuring the creative organisational climate. They defined organisational climate as ‘a conglomerate of the attitudes, feelings and behaviour which characterise life in an organisation’. This definition was based on the assumption that each employee in the organisation has his own perception of the climate. Ekvall et al. constructed and validated an instrument to measure work climate known as the Creative Climate Questionnaire (CCQ). In this study, CCQ was used to assess the work climate in Germany and Malaysia. The issue of implementation has drawn much interest from researchers (Rickards, 1988). It is crucial that organisations understand the factors and problems involved in the implementation processes so as to optimise benefits from investment in the innovation (Cooper, 1998). There are many critical factors that contribute to successful implementation of innovation. Drucker (1993) emphasised entrepreneurship and customerfocus to ensure successful innovation. Kanter (1983) described specific circumstances under which innovation can flourish in the organisation. She wrote that the key to the United States corporate renaissance lies in innovation, open organisational environment and the practice of participative management that welcomes and encourages new ideas arising in the organisation. Angle and Van De Ven (1989) said that the implementation period begins when application and adoption activities are carried out for an innovation. Once the innovation is created, the next implementation process is to introduce the innovation to the market, moving it to the operating sides or distributing it to potential users. The implementation takes a different process when the innovation is developed elsewhere. In such a situation, the activities involve the host organisation carrying out certain activities to introduce and adopt the innovation. Further, Van De Ven (1986) argued that there are four types of problems which are faced during the implementation of innovation namely the human problems (e.g., managing change resistance), the process problems (e.g., converting new ideas into profitable operation, communi-


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cation), the strategic problems (e.g., leadership transition, knowledge management) and finally the structural problems (e.g., managing relationship between functions). Zain (1995) categorised the main problem into four types: knowledge problems, general problems, technical problems and market problems. While more innovation-active firms had greater technical problems, less innovationactive firms were discovered to have greater human problems.

Objective of the Study The main objective of the study was to examine the innovation initiatives and processes followed by a German multinational company (MNC) in two different locations and environments (Germany and Malaysia) and to compare the innovativeness of the firm in these two locations. Considering that the two countries are very different, i.e., a developed Germany and a developing Malaysia, it would be interesting for us to determine and compare the innovativeness of the same firm operating in these different geographical, social, and cultural environments. The German MNC is one of the most reputable and largest electrical, electronic and engineering company in the world (ranked in the top 30 of the Fortune Global 500 as at 3 May 2001). Two subsidiaries of a German multinational company (MNC), each is involved information and communication network business, were investigated namely: a Germany subsidiary and a Malaysian subsidiary. The objective was divided into the following sub-aims: 1. To identify the stages involved in the implementation processes of innovation in both firms. 2. To identify the types of problems that both firms faced in the implementation processes. 3. To identify the key factors that influence the success of the innovation processes. 4. To investigate the working climate that exists in both firms. 5. To determine the innovativeness of each firm based on Zain’s (1995) attributes of innovative companies.

Justification for Choosing the German MNC Subsidiary Firms The focus of this study is on the two subsidiary firms of the German MNC which are involved in information and communication network business in Germany and

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Malaysia (henceforth, for convenience purpose, both firms will be referred to as ‘Germany’ and ‘Malaysia’, respectively). The German MNC was chosen for the study as it is well known for its successful innovations (The company’s official web page, 2000). The information and communication network is a business segment within the German MNC, established in 1997 and has customers in more than 150 countries. Currently the German MNC’s information and communication network business is the world’s number one supplier of voice and data networks (company Annual Report, 2000). The company is therefore considered as well established due to its long history and experience in industrial innovations (company Bulletin, June 2000). It should be noted here that all research and development (R&D) activities by the company were carried out in Germany and not in Malaysia.

Research Hypotheses Based on the purpose of this study, five alternate hypotheses were developed : HA1 : Germany follows different implementation processes from Malaysia HA2 : Germany faces more technical problems than Malaysia HA3 : Germany has different favourable factors to innovation than Malaysia HA4 : Germany has better working climate than Malaysia HA5 : Germany is more innovation-active than Malaysia

Population and Samples The population was the total employees in each of the two subsidiary firms (Germany and Malaysia). Each had a workforce of approximately 9,111 and 135, respectively. A total of 20 interviewees and 60 questionnaire respondents (i.e. 10 interviewees and 30 respondents from each firm) were selected for the research.

Methodology Firstly, interviews were conducted to obtain preliminary information on various types and stages of innovation projects. Zain’s (1995) Interview Schedule, which consisted of 20 openended questions, was used in the interview to investigate fifteen types of innovations. Each interview lasted about 30 minutes. Ten interviewees were selected randomly from various departments and levels in each firm. Next, Zain’s (1995) Innovation Inventory Questionnaire was distributed to 30 respondents from various departments and levels. The levels ranged from top level managers (Managing Director, General Manager), middle level managers (MIS Manager, Sales Manager) and lower level managers and non-managers (Consultants, Assistant Managers, Blue Collar Workers). Each questionnaire took about 10 minutes to complete. The questionnaire has 20 structured questions directed at various stages, factors and problems involved in the innovation processes. The same respondents were then asked to complete Ekvall’s (1983) Creative Climate Questionnaire (CCQ) which

Table 1. Ekvall’s Dimensions of Creative Climate Dimensions

Descriptions

Freedom

The independence in behaviour exerted by the people in the organisation. The emotional involvement of the members of the organisation in its operations and goals. The emotional safety in relationship. The eventfulness of the life in the organisation. The amount of time people use to elaborate ideas. The presence of personal and emotional tensions in the organisation. The spontaneity and ease that is displayed in the organisation. The occurrence of encounters and clashes between viewpoints, ideas and different experience or knowledge. The extent to which new ideas are treated constructively. The promptness of response to emerging opportunities.

Challenge Trust / Openness Dynamism / Liveliness Idea Time Conflicts Playfulness / Humour Debates Idea Support Risk Taking

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Table 2. Innovation Initiatives and Sources of Innovation Ideas STAGES

GERMANY

MALAYSIA

2.6831 3.367 3.367 3.3 3.267 3.567 3.367 3.4 2.75

2.717 3.233 3.133 3.117 3.050 3.433 3.2 3.233 2.95

New ideas originates from top management New ideas originates from all levels of the organisation New ideas are deliberated on by a special committee Committee members are selected from relevant departments in the organisation A feasibility study to determine its viability is carried out by the committee The final decision on the adoption is made by the top management Management approves appropriate resources Feedback on the use of the innovation are sought by the management Any innovations that has been adopted but later found not beneficial to the organisation is disposed off

consists of 50 structured questions. The questionnaire investigated ten dimensions of creative climate (shown in Table 1) (Talbot et al., 1992) and lasted about fifteen minutes.

Hence, the first alternate hypothesis is rejected which indicates that Germany and Malaysia followed similar innovation implementation initiatives and processes.

Results

Problems in Implementation

The results below were based on the responses from questionnaires responses. First, F-test was conducted to test whether Germany’s and Malaysia’s populations have equal variability. Since no evidence was found to suggest differences in variances (based on F-test, F statistics = 1.25 ; p50.05), t-test is considered appropriate to compare means between the two populations. The following results were derived based on t-test at p50.01:

Table 3 shows that four types of problems were unexpectedly faced by both firms, based on their experience in handling innovation projects. The most obvious problem faced by both firms was lack of knowledge. Further, Germany was found to have more technical than behavioural problems while the reverse was true for Malaysia. Hence, the second alternate hypothesis is accepted which means that Germany faced more technical than behavioural problems when implementing innovation while the reverse was true for Malaysia.

Implementation Processes A list of steps followed by the two firms during the implementation process is in Table 2. The results show that both firms actually follow similar steps and stages in the implementation process (note that insignificant t-values were derived for all items in Table 2 at p50.01).

Factors Favourable to Implementation of Innovation The various factors perceived to be favourable to the implementation of innovation are summarised in Table 4 (a tick refers to favour-

Table 3. Responses on the Unexpected Problems Encountered During Innovation Project (T-Test Results) Unexpected Problems

Knowledge : Lack of ideas, information and experience Technical : problem with technological skill, lack of time, problems with fund Behavioural : Difficulties in managing behaviour and attitudes of employees Markets : Difficulties in understanding markets and customers


Germany

Malaysia

Significance Level

3.5171 3.15 2.733 2.517

3.133 2.9 3.35 2.467

p50.01 p50.01 p50.01 p50.05

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Table 4. Responses on the Factors Favourable to Successful Implementation of Innovation Favourable Factors

Germany

Management openness to new ideas Top management support and commitment to innovation Well designed project schedule and plan Proper rewards system to encourage ideas and innovation Qualified staff, skills and expertise Having awareness that innovations are important to the organisational survival and competitiveness Adequate monitoring and feedback Customer acceptance, participation and commitment Having clear project mission, vision, strategies, objectives and direction Organisational structure that is less hierarchical Need to constantly scan the external environment Good communication among affected parties Use of effective management techniques Ability to handle crisis and surprise Gradual approach to innovation Human approach to innovation Appropriate leadership style Progressive corporate culture Organisational adaptability

[ [ [ [ [ [

3.2831 3.283 3.333 3.467 3.467 3.283

[ X [ [ [ [

3.217 2.933 3.133 3.333 3.367 3.1

[ [ [ [ [ [ [ X X [ [ [ [

3.333 3.5 3.333 3.283 3.333 3.333 3.333 2.983 2.933 3.25 3.317 3.367 3.3

[ [ [ X X [ [ [ [ [ [ [ [

3.283 3.3 3.1 2.933 2.933 3.283 3.25 3.1 3.283 3.0 3.233 3.1 3.133

able factors and a cross refers to non-favourable factors). It can be noted that not all factors are applicable to each firms (t-value is significant at p50.01 for all factors). Further, some factors were found favourable to Germany but not to Malaysia and vice versa. Based on these results, the third alternate hypothesis is accepted which means that Germany had different

Malaysia

favourable factors to innovation implementation than Malaysia. Some interesting observations in the Malaysian operations could be seen from Table 4 where there was lack of top management commitment to innovation, more hierarchical organizational structure, and less environmental scanning carried out by the firm.

Table 5. Work Climate of Firms Based on Ekvalls’ Method of Assessment Dimensions of Work Climate Challenge / Motivation Freedom Idea Support Liveliness / Dynamism Playfulness / Humour Debate Trust / Openness Conflict (Reverse Scored) Risk Taking Idea Time Overall Index Standard Deviation

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Germany

Malaysia

2.262 2.23 2.1 2.36 2.27 2.0 2.0 1.61 1.92 1.90 2.07 0.37

1.86 1.85 1.70 1.86 1.73 1.73 1.58 1.41 1.57 1.49 1.68 0.34



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Table 6. Types of Innovation Implemented in Both Firms No

Types of Innovation

Germany

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Product Product Quality Market Marketing Strategy Methods of Financing Organisational Structure Ways of Managing Information Perception on General Attitude Towards Innovation Ways of Managing Technical Function Employment Practice Industrial Relation Practice Ways of Dealing With The Government or External Institutions Method of Operation Supply Sources

[ [ [ [ [ [ [ [ [ [ [ [ [ [

Work Climate Between Firms The results obtained on work climate are shown in Table 5. Overall, Germany had a better work climate as compared to Malaysia in all dimensions of Ekvall’s CCQ (t-value is significant at p50.01 for all items). Hence, the fourth alternate hypothesis is accepted.

Innovativeness Between Firms Based on Zain’s (1995) attributes of innovativeness, the results showed that Germany is more innovative or innovation-active than Malaysia. It was found that Germany intro-

Malaysia

1.9333 1.933 1.683 1.45 1.15 1.933 1.817 1.867 1.683 1.633 1.75 1.717 1.867 1.583

[ [ [ [ X [ [ X [ X [ [ [ [

1.367 1.433 1.15 1.2 0.92 ( less than 1) 1.2 1.3 0.96 ( less than 1) 1.0 0.96 ( less than 1) 1.117 1.067 1.2 1.067

duced more types of innovation, interacted with more types of entity in the environment and implemented more types of training programs as compared to Malaysia. The fifth alternate hypothesis is therefore accepted. Table 6 shows that Germany perceived all types of innovation as ‘present’ while Malaysia reported only 11 as ‘present’ and 3 as ‘absent’ 4 (a tick refers to ‘presence’ and a cross refers to ‘absence’; t-value is significant at p50.01 for all items). Table 7 shows that Germany perceived more interaction of the firm with regard to the external environment as compared to Malaysia (t-value is significant at p50.01). Table 8 indicates that Germany perceived more introduction of training programmes as

Table 7. Perception on the Interaction of Firms with External Environment Question

Germany

Malaysia

3.734

3.30

How do you perceive the interaction of your company with regard to the external environment?

Table 8. Perception on Training Programmes Question How do you perceive the introduction of training programme in your firm?


Germany

Malaysia

3.705

3.13

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compared to Malaysia (t-value is significant at p50.01).

Discussion Table 4 shows that both firms follow similar implementation processes. With respect to the source of ideas, both firms indicate that new ideas comes from all levels rather than management (Table 2 row 1 score less than 3; row 2 score more than 3). This shows that ideas are welcomed from all employees in both firms. Based on rows 3 to 8 of Table 2, both firms carry out similar innovation initiatives although the extent of evidence obtained varied slightly (Germany has a slightly higher mean score, i.e., respondents in Germany show stronger agreement on the innovation initiatives and processes they followed than respondents in Malaysia). This suggests that Germany employees are more aware of the implementation initiatives and processes and perhaps have better communication among themselves during the innovation processes than their colleagues in Malaysia. The fact that both firms emanate from the same top level management (both report to their headquarters in Munich, Germany and hence, both have to follow a similar innovation policy directed from the headquarters) may be the best reasons for such similarities in the implementation initiatives and processes followed by Germany and Malaysia. From Table 3, it can be interestingly noted that there were four types of problems unexpectedly faced by both firms based on their experience in handling innovation projects. The most obvious problems of both firms are lack of knowledge (the highest score for both firms). This sheds some interesting point and may lend support to the proponents of knowledge management in implementing innovation (Nonaka et al., 2000). The variability in the magnitudes of the problems was not unexpected considering the fact that both firms are within the same company but operating in different cultures. We may assert that there is a cultural effect that account for the difference in the types of problem faced by both firms. Table 4 shows that Germany has more technical problems while Malaysia has more behavioural problems. One possible reason that may account for the difference in problems is that both countries have different education systems with different values and priorities. It is possible that more emphasis is given in the German education system to solve human / interpersonal problems as compared to Malaysia. Further, both countries have

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different stages of social development, which may influence the societal values. Given that Germany is more advanced economically and technologically, it is likely that German society views change more positively than Malaysian society. Malaysian society may be more conservative, have higher resistance to change and therefore have more behavioural problems in the implementation of innovation. Since many firms in Germany have a longer industrial history than in Malaysia, it is possible that German employees are more experienced in managing innovations, more knowledgeable in mobilising resources for innovation (including the human resource) and therefore more adept at handling people problems in innovation projects than Malaysian employees. Table 4 shows that different favourable factors are perceived in the implementation of innovation in both firms. It can be noted that not all factors are applicable to each firms (t-value is significant at p50.01 for all factors). While Germany perceived top management support, flexible structure and continuous environmental scan as more favourable, Malaysia perceived crisis management and gradual approach as more critical than Germany. The sophistication and complexities of technologies involved in the innovation processes are different depending on the type and scale of innovation project. For example, we would expect that technology used in small departmental office systems is much simpler than organisational wide computer networks. Further, there are different level of uncertainties associated with different types of innovation. Hence, it may be, that because Germany and Malaysia have different types of innovation projects of a different scale and business environment, factors favourable to the implementation of innovation might also be different. Table 5 shows that Germany has a higher score for each dimension of Ekvall’s Creative Climate Questionnaire (t-value is significant at p50.01 for all items). This shows that Germany reported a better creative climate than Malaysia (overall index for Germany is 2.07 while Malaysia: 1.68). Hence, it can be said that Germany perceived : more independence in action (freedom), more emotional commitment to organisational goals (challenge), more confidence in work relationship (trust), more liveliness at workplace (dynamism), more time to develop ideas (idea time), less tension at workplace (conflict), more spontaneity in working (playfulness), more pluralism in work views (debates), more encouragement for new ideas (idea support) and more promptness to new opportunities (risk taking). The fact that Germany has a better work



climate may be a reason for its higher innovativeness than Malaysia (see Tables 6, 7 and 8). However, it must be noted that the method (Ekvall’s CCQ) used was entirely based on individual perceptions. Perception is only a part of studying work climate (Ekvall, 1983). Hence, further research is suggested to study work climate by other means to support this results (such as observation by a panel of qualified assessors). Finally, the study demonstrated that both Germany and Malaysia were innovationactive in the sense that both introduced many types of innovation (Table 6), interacted with reasonable amount of entity in external environment (Table 7) and implemented many training programmes (Table 8). However, the results indicate that Germany was more innovation-active than Malaysia (t-value is significant at p50.01) as it perceived more types of innovations for future needs (Table 6). Further, Germany was found to have a better perception (t-value is significant at p50.01) of their company’s overall performance with regard to training programmes (Table 7) and interaction with the external environment (Table 8). This is an important finding as it shows that the firm with the higher score of creative climate tended to be more innovationactive, and vice versa. Hence, it can be deduced that a favourable working climate is important to facilitate the implementation of innovations. There were several limitations of this research, most of which are concerned with the use of perceptions to derive results (note that these limitations do not deny the significance of the results, they only caution the researchers against excessive statistical confidence in the findings). The research was conducted in a natural environment with no control groups. Hence, the subjects in this study might be liable to various factors, which may confound the results (e.g. varying language skills, cultural differences and individual work experience). We also need to note that, judging from the number of employees, the German operation was much bigger than the Malaysian operation which might also contribute to the differences in the findings. Further, this study compared two specific German MNC subsidiary firms: Germany and Malaysia. The results, therefore, may not be widely generalizable to other firms. However, it should be noted that the German MNC represents a major player in the global manufacturing industry (Fortune Global 500, May 2001). Thus, the results may be applicable to some multinationals operating in the same manufacturing industry.


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Conclusion This research was conducted to compare the implementation processes in Germany and Malaysia. Firstly, it indicates that the processes followed are similar in both firms. However, different critical success factors are applicable to both firms. Further, there are notable differences in the type of problems faced by both firms during the implementation processes. Overall, Germany was found to have more technical problems and less behavioural problems. Interestingly, the study showed that lack of knowledge was a common problem faced by both firms. This supports the significance of knowledge management in implementing innovation. Further, Germany was found to have a higher score for creative climate as compared to Malaysia. Finally, the result demonstrates that Germany was more innovation-active than Malaysia as it introduced more types of innovation, interacted with more types of entity in its external environment and introduced more types of training.

Notes 1. calculated by using a 4 point scale where 1 = Strongly Disagree 2 = Disagree 3 = Agree 4 = Strongly Agree. 2. calculated by using a 4 point scale where 0 = Not at All Applicable, 1 = Applicable to Some Extent, 2 = Fairly Applicable, 3 = Applicable to a High Degree. 3. calculated by using a 3 point scale where 0 = Absence of Innovation, 1 = Presence of Minor Innovation, 2 = Presence of Major Innovation. 4. calculated by using a 3 point scale where 1 = The company has interacted with very few external entities, 2 = The company has interacted with few entities, 3 = The company has interacted with fair amount of entities, 4 = The company has interacted with many entities, 5 = The company has interacted with too many entities. 5. calculated by using a 3 point scale where 1 = Very few programmes have been introduced, 2 = Few programme have been introduced, 3 = Fair amount of programmes have been introduced, 4 = Many programmes have been introduced, 5 = Too many programmes have been introduced

References Abbey, A. and Dickson, J. W. (1983) Work climate and innovation in semiconductors. Academy of Management Journal, 26, 362–368. Angle, H. L. and Van De Ven, A. H. (1989) Suggestion for managing the innovation journey. In Van De Ven et al. (eds.), Research on The

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Management of the Innovation Process: The Minnesota Studies. Harper and Row, New York. Cooper, J. A. (1998) Multidimensional approach to the adoption of innovation. Management Decision, 36, 8. Daft, R. L. (1982) Bureaucratic versus bon bureaucratic structure and the process of innovation and change. In S.B. Bacharach (ed.), Research in The Sociology of Organisation. JAI Press, Greenwich, CT. 1, 129–166. Damanpour, F. and Evan, W. M. (1984) Organisational innovation and performance: The problem of organisational lag. Administrative Science Quarterly. Damanpour, F. (1991) Organisational innovation: a meta-analysis of effects of determinants and moderators. Academy of Management Journal, 555– 590. Drucker, P. (1993) Innovation and Entrepreneurship. Harper Business. Ekvall, G., Arvonen, J. and Waldenstrom-Linblad, I. (1983) Creative organisational climate. Construction and validation of a measuring instrument. Report 2. The Swedish Council for Management and Work Life Issue Faradet, Stockholm. Fortune Global 500, (WWW document). (N.D./ May 2001) URL: http://www.fortune.com Freeman, C. A. (1982) The Economics of Industrial Innovation. 2nd. Edition. Frances Pinter, London. Freeman, C. A. (1973) A study of success and failure in industrial innovation. In B. R. Williams (eds), Science and Technology in Economic Growth. Halsted, New York. 227–245. Kanter, R. (1983) Change Masters. Simon and Schuster. Nystrom, H. (1990) Technological and Market Innovation; Strategies for Product and Company Development. Wiley, Chichester. Rickards, T. (1985) Stimulating Innovation. Frances Pinter, London. Rickards, T. and Moger, S. (1991) Innovation questionnaire used in the EUROSPACE study. Manchester Business School, UK. Rickards, T. (1988) Creativity and innovation: a transatlantic perspective. In T. Rickards and

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S. Moger, Creativity and Innovation Yearbook, Manchester Business School, Manchester, UK. 1, 69–77. Talbot, R. Cooper, C. and Barrows, S. (1992) Creativity and Stress. Creativity and Innovation Management, 1, 183–193. van de Van, A. (1986) Central Issues in the Management of Innovation. Management Science, 32, 590–607. Vrakking, W. J. (1990) The innovative organisation. Long Range Planning, 23, 94–102. West, M. A. and Farr, J. L. (eds.) (1990) Innovation and Creativity at Work: Psychological and Organisational Strategies. John Wiley & Sons, Chichester. Zain, M. M. (1993) A Field Study of Adoption and Implementation of Innovation by Manufacturing Firms in Malaysia. Ph.D. Dissertation, Manchester University, United Kingdom. Zain, M. M. (1995) Innovation implementation in Malaysian firms: process, problems, critical success factors and working climate. Technovation, 15, 375–385. Zain, M. M. and Rickards, T. (1996) Assessing and comparing the innovativeness and creative climate of firms. Scandinavian Journal of Management, 12, 109–121. Zaltman, G., Duncan, R. and Holbek, J. (1973) Innovations and Organisations. Wiley, New York.

Mohamed Zain is Professor of Innovation and Technology Management at the Graduate School of Management, University Putra Malaysia, 43400 UPM, Serdang, Selangor, Malaysia. Stanley Richardson is an Associate Professor at the Faculty of Management, Multimedia University, 63100 Cyberjaya, Selangor, Malaysia and Mohd Nazri Khan Adam is a Lecturer at the Faculty of Management, Multimedia University, 63100 Cyberjaya, Selangor, Malaysia.


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Highways, Alleys and By-lanes: Charting the Pathways for Ideas and Innovation in Organizations Christina Hellstro¨m and Tomas Hellstro¨m The present paper introduces a view of how ideas develop in organizations that goes beyond the traditional focus on either individual or structural conditions for creativity and innovation. An interview study was conducted with key actors in a large Swedish telecom company. A model was then constructed where idea development is viewed as a process of combining and integrating various informal, yet powerful qualities of the organization. The paper argues that successful idea development depends on the capacity of actors and ideas to move on ‘organizational highways, alleys and by-lanes’. A number of suggestions are presented for how to stimulate the processes of creativity and innovation from this perspective.

Introduction

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he question of how creativity is facilitated in organizations has been on the research agenda of creativity studies for some time. This research is growing in importance with the rising prevalence of knowledge intensive innovation, as well as in so far as it presents theoretically fruitful propositions pertaining to knowledge and the firm, corporate venturing research and discussions of future organizational forms (Tidd et al., 1997; Hitt et al., 2000). Issues core to the creativity tradition now seem to drive certain research trajectories in organizational studies at large. Thus, it is of importance for creativity research to continuously attempt to generate more comprehensive and integrative models of the role of creativity and idea development (ideation) in organizations, and the interplay between the ‘act of creation’ and organizational form. Previous research on creativity in organizations has not neglected either the creative actor or the organizational conditions thought to stimulate creativity. However, the relative emphasis has mostly been on either the subjective conditions which facilitate a creative drive in individuals, or on the organizational enablers/impediments for creativity and innovation. Thereby research on these issues has sometimes tended to create a split in theory between the ideating agent and its organizational context. The bridging of the rift between # Blackwell Publishers Ltd 2002. 108 Cowley Road, Oxford OX4 1JF and 350 Main St, Malden, MA 02148, USA.

agency and structure is a problem of some significance in social theory (e.g. Giddens, 1984; Archer, 1996), and is certainly outside of the scope of this paper. Still it should be of interest for creativity and innovation research to pursue this general problem broadly within its own research traditions. In this spirit, the present paper addresses the questions of how individual and organizational aspects interact in the process of idea development within a large telecom company (from hereon ‘organizational ideation’), the purpose of this question being to arrive at a general, tentative model that suggests a number of mechanisms affecting these processes. The paper is based on an interview study with 34 members of a large Swedish telecom corporation, who were all central to the company’s ideation/innovation process. The indepth interviews with these key persons centred on the question of ‘how stimulation of new ideas comes about and what pathways they take through the organization’. The results of the interviews revealed that this question cannot be answered by focusing only on single actors, on ‘acts of creation’ or on the facilitative structure of the organization. Rather focus must be put on the continuous interaction of both, where the flow of ideas and the distribution of creative agents in the company is the centre of attention. In order to argue this point and eventually arrive at a model which better describes these

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relationships, the paper will proceed in the following way: First we will outline a number of key points made in the literature on organizational ideation. These are typically characterized by either individual agency or organizational structure, and the overview is an illustration of this. Second, the method of the study will be described. Third, we will delineate the results including a hypothesized model of the involved agency and the pathways of organizational ideation. Finally the paper will conclude with a number of reflections on how this model adds to current understanding of the issues of organizational ideation and its management.

Theoretical overview The phenomenon that we are interested in is that of organizational ideation. Formally stated, we take organizational ideation to be the process of creating useful conceptual novelty, and the circulation and taking on of that novelty in an organization, i.e. the organization’s ability to create and retain new ideas for the purpose of survival and growth. Two streams of reasoning as to what stimulates this process may be identified in the literature; the individual/team orientation and the organizational structure orientation. We will briefly review a number of tenets of each of these.

Individuals and Teams While individual creativity has been much documented, we are primarily concerned with the individual as part of an organization, i.e. where creativity is viewed as a kind of ‘organizational action’ (Ford & Gioia, 1995). Organizational creativity and ideation has been studies by among others Abbey and Dickson (1983), who suggested that the work climate of innovative, knowledge intensive organizations is characterized by the willingness to take risk, and by experimenting with new ideas and proposals. Individual willingness to take risk and to make suggestions seems to go hand in hand, and is also necessary for ideas to have a chance to be taken up in the organization (Bommer & Jalajas, 1999). Not unexpectedly, motivation by fear, for instance when organizational members feel that their jobs might be at stake, has a negative correlation with ideation (Ryan & Oestriech, 1991; Amabile, 1996). The organization should not deny the risk involved in taking new ideas seriously, i.e. with respect to possible resource waste etc., rather a commitment to calculated risk taking with respect to

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new ideas seems to spur innovation (Saleh & Wang, 1993). With respect to the work climate, there seems to be a consensus that challenge, or having to work hard on tasks (Amabile & Gryskiewicz, 1989), in combination with a personal interest in the tasks (West, 1987), are closely connected to individuals’ tendency to ideate. When it comes to teams, many the same drivers are involved as in the case of individuals (Mumford, 2000). With teams however, these variables become more complex. Team ability with respect to creativity also includes the capacity of the team to internalize trust, confidence and fluent task execution (e.g. Leonard-Barton, 1992). Another complex variable with a bearing on creativity and ideation is team comprehension, which refers to the extent to which team members understand the objective of a project, e.g. it’s internal and external cause-effect relationships (Nerkar et al., 1997). Several authors have explored an individual organizational role, the function of which is to transfer knowledge, make innovative connections and facilitate ideation. Certain individuals may for instance transfer knowledge between sites of organizational knowledge creation, i.e. between laboratories and projects, as is done by the so-called ‘technical gatekeeper’ (Allen, 1970; Tushman & Katz, 1980). Special ‘boundary-spanning individuals’ may fill an important function in organizational ideation, by crossing boundaries between departments thereby activating the organization’s hidden capacity for innovation (Tushman & Scanlan, 1981). Boundary spanning may also include creating channels to the outside world in order to keep up to date with market and technological developments (Tushman, 1977). As a recent contribution to this line of thinking, Prusak and Cohen (1998) have developed the concept of the ‘knowledge broker’, who works in a kind of organizational knowledge market place, where he/ she connects buyers and sellers of knowledge, listen to knowledge price signals and utilizes the knowledge scarcity found in various locations. These brokers may become ‘process triggers’ for knowledge creation and ideation, and themselves create the context and space for ideation, as is the case of the so-called ‘knowledge activist’ (von Krogh et al., 1997). With these last categories we are already treading close to the organizational aspects of the ideation process.

Organizational Level Organizational structure has often been taken as a point of departure in finding drivers and



facilitating conditions for ideation and creativity (e.g. Hitt et al., 2000). Such studies have sometimes yielded contradictory results depending on whether the ideation process deals with technical or administrative creativity (a distinction not made in this paper), however a number of general patterns seem to prevail. For instance, while high centralization and large size often have negative impacts on the creation of new ideas, resource slack and specialization show positive impacts (Subramanian & Nilakanta, 1996). This insight has led some firms who are challenged with complex product innovation, which requires continuous problem solving, to construct organizational structures composed of many multi-functional teams, each in charge of a part of the general project. Some authors have shown how these structures are incomplete in themselves, and tend to periodically lead to crises; yet how such crises occasionally given rise to new ideas (Kazanjian et al., 2000). These limits to a decentralized structure in terms of ability to ideate may be related to the fact that organizations are social communities (Kogut & Zander, 1996), the ‘cutting up’ of which needs to be compensated for. Nahapiet and Ghoshal (1998) develop the concept of ‘social capital’ to account for such communities, and argue that a high density of the social fabric facilitate innovativeness in organizations. While decentralization as a concept draws towards the organizational market metaphor, ‘social capital’ emphasizes the shared language and codes, the common narratives, and the mutual expectations existent in the organization (e.g. Starbuck, 1992). The recent attention to trust as an organizational facilitator or driver for networking and ultimately knowledge creation draws further on this interpretation (Newell & Swann, 2000). The reason that shared culture, trust and networking are necessary for complex achievements of novelty is not only to do with the need to coordinate those units which are specialized and yet decentralized. It also has to do with the enabling effect of having units themselves select which type of ties they need vis-a`-vis other units. As Granovetter (1973) and Hansen (1999) have argued, weak inter-unit ties help the search for knowledge, but impede the transfer of complex knowledge, the latter of which seems to require a stronger tie between units. Stronger ties however are more costly to maintain. The insight for this paper pertains to the enabling effects of letting units themselves select the type of ties, conduct their own networking etc., depending on what kind of novelty/ knowledge they are seeking at the moment.


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No doubt, as we will see below, these ties and network paths will take on forms quite independent of the choosing of the unit itself. What seems to be missing in theory is a comprehensive attempt to integrate individual and structure with the concept of organizational ideation thereby providing an account of this relationship which is sensitive to situations and processes. Hints have already been made that this may be done by looking at creativity and ideation as a form of organizational action, i.e. as creativity in context (see Amabile, 1996). We will now review the method employed in this study and thereafter present a number of results, which extends the reasoning above to a more integrative model of organizational ideation.

Method Participants The selected company is a large Swedish telecom, focusing on delivering network capacity and new network services. 34 participants were selected through purposive sampling, with the main inclusion criterion that they should all be central to the company’s ideation/innovation process. The group had approximately the same gender and age distribution as the company at large.

Procedure The participants were interviewed in their company by 2 interviewers at a time. The interviews were semi-structured and lasted for 1–1,5 hours. Interviews proceeded in a light conversational manner. All the participants were asked the following broad and open questions: (1) If you get an idea of relevance to the company, to whom would you go? (2) What do you think of rewards, evaluation of performance and incentives? (3) Where do you perceive the biggest obstacles/enablers for communication of ideas to lie within the company? The interviews were documented in detail by note taking in the course of the interviews and transcribed into protocol immediately after the interview sessions, then cross-read by both interviewers.

Data Analysis The interview protocols were read and reread for interviewer concordance, and in order to identify common threads of meaning. The units of analysis were sentences and expressions grouped into themes which could, in a

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broad sense, be taken as answers to the interview questions. Linguistically, these themes could consist of a simple sentence, or parts of sentence. Codes were analytically developed and inductively identified in the data and affixed to sets of notes. Codes were then conceptually transformed into categorical labels of themes. The development of inductive categories allowed to link these categories to the data from which they emerged/derived. The material was sorted by these categories, identifying similar patterns, relationships, and commonalities as well as disparities. Sorted material was examined in order to isolate meaningful patterns and processes. These patterns were clustered into some few master factors, which each subsumed a number of categories. The factors and the categories were then displayed in a conceptual model (figure 1).

Results The results consisted of four higher-order, interconnected factors including 12 subsumed categories, which related to the creation and communication process of ‘a creative idea’ in the organizational system (see Figure 1). The factors and their categories, with their interconnections (pathways), are described below and illustrated by excerpts from the interviews.

Factor I: Idea inducement This factor is mainly grounded in the expression of needs by those who generate creative ideas (on individual as well as on team level) with respect to the need for personal feedback. Such feedback is perceived as a motivating force, especially when it carries a compensatory and emotional quality. The interview material yielded five subcategories related to this phenomenon. Simple need of positive feedback on innovative performance (1a). The respondents expressed an urge to receive attention and compensation for good innovative performance. For instance it was expressed that: ‘It’s really important to give the original inventors due credit!’ This may also be illustrated by a negative example: ‘With regard to spontaneous rewards, one usually only gets substantial feedback from the boss when there has been a screw-up.’ Many of the interviewees however were ambivalent to monetary rewards: ‘It’s good with minor monetary rewards, but most important is acknowledgement.’ Or: ‘Making results at work count,

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that’s important. It means more than money [. . .] freedom to act, to play a role in developing an idea, that’s more valuable.’ Emotional-social gratification (1b). This category reflects the interviewees’ need for informal and spontaneous praise and credit from leaders and colleagues, i.e. the need to be recognized as an ideating actor. A typical report included: ‘I find appreciation from the boss to be central. Apart from that it is also extremely valuable when co-workers acknowledge what you’ve done’. Appreciation for creative potential (1c). This category depicts the individuals’ need to be appreciated in initial phases of the creative process, before any ‘effect’ has been generated from the new idea. This means that even those novel ideas which never were implemented should be valued. Some quotes will illustrate this: ‘. . . creativity is stimulated through recognition [. . .] by encouraging people to formulate their own ideas [. . .] in that sense it creates an ‘inner’ capacity.’ And: ’New ideas can open up fresh paths of thinking and therefore new ideas should be rewarded even when they’re never implemented.’ Need for competitive self-compensation (1d). This need is fulfilled by outdoing competing colleagues and thereby getting experiences of triumph. Such experiences emanated from a within-group feeling of having ‘won the game’. Preferably such success should be publicized. The following quotes illustrate this category: ‘The ‘‘madcaps’’ at our department want to show off to the people next door, and that’s the drive.’ And: ‘Attention is the impelling force behind what we do. Rewards have to be very public.’ Idea herding (1e). For several reasons, some ideas never leave the originator and embark on its path through the organization. This may be due to issues such as experienced self efficacy, but the interviews also reveal a more opportunistic side, namely that the ideator sees ideas as being of potential personal utility if capitalized on outside of the company. ‘It [the idea] stays with us [. . .] maybe eventually one can take out one’s own patent.’ Or: ‘If one believes the idea to be of significant future value, it will probably not be communicated in the company.’

Factor II: Transfer of an innovative idea – The pathways The next factor is made up of the transfer mechanisms for novel ideas. An important



issue in the communication chain of innovative ideas is ‘where to go’ with creative drafts and projects, i.e. the channels or paths for communicating ideas. These pathways are sometimes clearly perceived by the individuals in the organization, and sometimes fuzzy and difficult to recognize. Several types of pathways emerged in the interviews. Highways (2a). This category depicts formally established fora, or fast lanes, for communication of ideas, such as team meetings or decision committees for R&D programs. For example: ’We have a fixed system of templates and procedures to develop new ideas. I’ll write an ‘idea memo’ which is standardized.’ However, these highways are often perceived to be ‘reserved’ for topics already agreed upon by top-management; for ideas ‘following the program’, and as such are almost completely closed off for truly novel ideas. ‘Our team meetings are not for idea generation. That’s for strategists. We only discuss issues that are ‘on the programme’.’ Alleys and by-lanes (2b). These pathways are more informal, such as the coffee-room or the corridor; some of which may be fairly efficient in getting ideas through and formally acknowledged. In order to utilize these pathways certain knowledge of the right ‘routes’ of embarkation is needed. E.g. ‘There are always informal meetings going on in the corridor and in common spaces [. . .] some information is spread at the coffee machine, but that requires you to know the person in question.’ These narrow paths, if found at all, may however be difficult to penetrate. They can be like mazes and lead a person off track, i.e. people may get lost along the path. ‘. . .this is difficult as there are no telephone books or intranet addresses to search in [. . .] the relevant informal forum are mainly in the contact networks of the product executives. I think these should be extended. [. . .] I don’t know what is going on at [department]. The physical environment is difficult to penetrate.’

Factor III: Rules of the road This category reflects the respondents’ perception of certain rules of the road, or ‘traffic regulations’, for transferring creative ideas via the pathways. Speed restriction (3a). This is the habitual rate of ideational flow or the organization’s readiness to throughput ideas. Most of the respondents perceive these ‘rules’ as a hindrance and a threat to ideational novelty: ‘If I come up


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with a useful idea I go through the company’s [xxx]-model. This takes about a year, but the goal is three months.’ Also: ‘There is no functioning system today. You are dependent on quick feed-back [. . .] ideas are perishable goods. . .’ On the other hand the skilful awareness and management of the ‘speed limits’ can facilitate successful transfer of a creative idea. In our case this often translates into the strategy of moving step by step (3b). Illustrative of this category, one respondent reported that: ‘First I would bounce my idea off on [business department], and if the response was positive I would dig deeper.’ There are also some deviations from established rules and informal norms with respect to idea transfer. One of these is the ‘kidnapping’ of ideas (3c), i.e. when someone steals your concept. This is illustrated by the following quote: ‘These ’kidnappers’ bag your idea for their own benefit. That’s bad for information sharing.’ And: ‘It is common that people, bosses, take other’s ideas for their own career building.’

Factor IV: The ‘Gate-control’ This component is key to the ‘ideation system’ described so far. Here the idea arrives at its goal, a kind of station, where actors decide whether it will be acknowledged and permitted to pass through the ‘gate’ for further development and implementation. This decision is performed by an actor serving as a ‘gate-control’, which by power of hierarchal position or by informally acknowledged competence has the authority to open or close the gate. The ‘gate-control’ factor includes two significant categories: The gate-controller (4a): Most of the respondents identify the gate-controller as their closest superior, but at the same time many express a lack of confidence in the leader’s capacity to make an adequate judgment with regard to novel ideas. For instance: ‘I send a proposal memo to my unit head. This is a lousy structure as he is in no position to evaluate my idea should it fall outside of our area of responsibility.’ And: ‘I would go to my nearest boss, but if I get an idea that is outside of our area, I wouldn’t know where to go.’ Others responded that they would turn to additional significant actors in the organization such as the parties ultimately concerned with the idea/innovation, or to an earlier mentor. E.g. ‘I would turn to my boss if it concerns our department. Otherwise I would go to friends in the relevant departments, and not necessarily to the person with the ‘correct’ work description.’

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Gate opening/gate closing (4b): ‘Gate opening’ refers to forces/localities which facilitate the passing through of ideas, and ‘gate closing’ represents forces/localities hampering, slowing down, or stopping ideas. These functions are not mutually exclusive, but may be at work at the same time at the same place, and receive their respective strength in relation to each other as well as to other factors. The category is grounded on expressions referring to one of these two processes, however the respondents mostly mentioned those which influenced the closing of the gate. Further, they tended identify limited status and trustworthiness of the person or group who presents the idea to be a significant factor contributing to the closing of the gate, e.g. ‘It is difficult to find a ready listener if you don’t come in from the right direction, and if you don’t have many, or the right, connections.’ Structural and processual factors in the organization were also perceived as contributing to opening/ closing of the gate. Examples mentioned by the respondents in this regard were bureaucratic, time-consuming and slow routines, e.g. ’[. . .] today there is an idea suggestion function whose structure is too fussy, tricky and cumbersome.’. Or: ‘Good and ‘big’ ideas can be very difficult for the organization to accept’; ‘it is not difficult to get recognized, it is rather the long, tedious processes that is a bother.’

Some respondents perceived that the demands on ideators were too tough, e.g. ‘It can be very tough to respond to a command like – ‘select your six best ideas and develop them to world leading solutions’ [. . .] set reasonable targets!’. Small-mindedness is another hampering factor for creative ideas to get through the gate, e.g. ‘[. . .] the idea proposal function is too small-minded [. . .] it’s not difficult to get minor ideas through, but it is very hard to get people to see the total contribution of a more important idea.’ The flow of feedback from the gate-control to the ideator was also seen to be of outmost importance. In a sense this feedback function closes the circuit of the ideation system and keeps the process going by filling those motivating needs which are described in factor I. To the extent that this is supplied the chain as a whole is activated and develops through the interventions by the gate-control actors. If these feedback needs are not met, there is a risk that the interest and commitment of the creative people disappears. A quote to this effect is that ‘the poor response from key persons makes one lose interest in suggesting new ideas.’ The factors and the categories described above may be conceived of as a model of organizational ideation system, where the gate-control(er) represents the active agents

Figure 1. A Model of Organizational Ideation

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or the interactive dimension of the ideator and the active interpretative and affective role of the organization qua evaluator/demoter/ promoter of the idea. Thus the conceptual graph emerges from our factors and categories (see Figure 1).

Discussion In the first part of the model, the idea inducement factor connects back to previous work by Amabile and Geyskiewicz (1989) and West (1987) on challenge and personal interest in tasks being important drivers for ideation. The ‘simple positive feed-back’ and ‘emotional-social gratification’ categories, as well as the ‘appreciation of creative potential’, are reminiscent of both Amabile (1996) and Leonard-Barton (1992) who discuss the negative impact of distrust and fear in the work setting, and the importance of an experience of contributory engagement for ideation. However, the categories of ‘competitive selfcompensation’ and ‘idea herding’ presented here suggest that there is a retentive function on the individual level with respect to idea generation; that the motivation to contribute has a more dialectical relation to idea inducement, which may sometimes lead to the temporary retention of ideas, and even to an apparently negative performance in ideation (i.e. idea herding behavior). Against the background of the interviews, we would argue that this ‘deviance’ may be an expression of the individual’s meaningful and value creating engagement with his/her surrounding structure, and not just a simple expression of poorly internalised need for achievement. It is interesting to note that the ‘rules of the road’ for transporting these ideas through the organization, also involves a herding feature in the category of ‘kidnapping ideas’. Ideas are herded possibly because it is expected that they may become ‘herded by others’ whom they have to pass at a later stage. This is another ways that the ideator affects the informal structure of idea transfer, and possibly one that reduces trust in the system. This process obviously affects both the principles for idea inducement as for the rules of the road, and illustrates our initial suggestion that agency and structure interacts and informs each other in the organizational process of ideation. The ‘gate-controller’ fills a particularly interesting function in this regard. This actor seems to be a more passive version of the boundary-spanning individual (Tushman, 1977) or the knowledge broker (Prusak & Cohen, 1998), an is distributed throughout the


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system, restricting ‘speed-limits’, providing feed-back, imposing demands and conferring trustworthiness. In this capacity the ‘gatecontroller’ can take an enabling or disabling role vis-a`-vis the ideator or the flow of ideas. Rather than a positive gate-keeper in Allen’s (1970) sense, this actor may close gates and display a measure of small-mindedness. Also the role seems to be taken up on the basis of organizational location of an actor and through incremental role assignment (i.e. depending on where a person happens to be at the moment along the ‘highways’ or the ‘by-lanes’) rather than as previous authors have argued, on the basis of personality and skill (e.g. Tushman & Scanlan, 1981). In addition, the degree of centralization in a certain context also seems to be related to how and when gates will open and close to an idea, rather than the gate-controller’s personal disposition. Similarly, the quality of inter-unit ties (Hansen, 1999) appear to affect how the herding or letting go of ideas develops, and that this behavior concomitantly affects trust (Newell & Swann, 2000) and in extension the shape of by-lanes and highways for idea transfer. We will end this paper by presenting a number of reflections on ‘ideation management’, drawing on the model elaborated above.

Conclusion: Routes for ideation management A central aspect of the informal, integrative ideation process in the company studied is the mutual peer-review like way of promoting or demoting one’s own and other’s ideas. This informal and distributed peer-review function should be formalized throughout the organization, thereby stimulating gatecontrollers and ideators to take on open, collaborative and substantive roles in discussing the practical implications of ideas, and what ‘roads’ they ought to take towards possible realization. It is important in this regard to openly acknowledge that new ideas are often unclear and possible implementation strategies fuzzy, and that this insight is used as an organizational enabling mechanism, providing distributed ownership and creative flexibility to new concepts, rather than as more often seems to be the case, as a means for ‘kidnapping’ or scrapping ideas. Non-clarity of ideas and fuzziness of implementation structures are rather important qualities of the interactive process of organizational ideation and should be used as assets in order to progressively refine, test, and evaluate ideas among a larger number of actors.

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The lack of organizational formalization observed in the present case in seems to impede the perceived value of ideation some ways. The above model however suggests that an alternative exist, namely that the multitude of goals and motives may be used to stimulate creative and informal management rather than to present themselves as forbidding and fixed evaluative standards. If, these informal qualities could be described and recognized, a middle path may be treaded between the ambiguous contexts that creative ideation requires, and the positive evaluative pressure that organizations need to innovate.

References Abbey, A. and Dickson, J. W. (1983) R&D work climate and innovation in semiconductors. Academy of Management Journal, 26, 362–368. Allen, T. J. (1970) Communication networks in R&D labs. R&D Management, 1, 14–21. Amabile, T. M. (1996) Creativity in Context. Westview Press, Boulder, CO. Amabile, T. M. (1996) Unlimited genius. Success, 43, 36–37. Amabile, T. M. and Gryskiewicz, N. D (1989) The creative environment scales: The work environment inventory. Creativity Research Journal, 2, 231–254. Archer, M. S. (1996) Agency and Culture. Cambridge University Press, Cambridge, UK. Bommer, M. and Jalajas, D. S. (1999) The threat of organizational downsizing on the innovative propensity of R&D professionals. R&D Management, 29, 27–34. Ford, C. M. and Gioia, D. A. Eds. (1995) Creative Action in Organizations. Sage Publications, Thousand Oaks, CA. Giddens, A. (1984) The Constitution of Society. Polity, Oxford, UK. Granovetter, M. S. (1973) The strength of weak ties. American Journal of Sociology, 78, 1360–1380. Hansen, M. T. (1999) The search-transfer problem: The role of weak ties in sharing knowledge across organization subunits. Administrative Science Quarterly, 44, 82–111. 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, 231–246. Kazanjian, R. K., Drazin, R. and Glynn, M. A. (2000) Creativity and technological learning: The roles of organization architecture and crises in large-scale projects. Journal of Engineering and Technology Management, 17, 273–298. Kogut, B. and Zander, U. (1996) What do firms do? Coordination, identity and learning. Organizational Science, 7, 502–518. Leonard-Barton, D. (1992) Core capabilities and core rigidities: A paradox in managing new product development. Strategic Management Journal, 13, 111–125.

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Mumford, M. D. (2000) Managing creative people: Strategies and tactics for innovation. Human Resource Management Review, 10, 313–351. Nahapiet, J. & Ghoshal, S. (1998) Social capital, intellectual capital, and the organizational advantage. Academy of Management Review, 23, 242–266. Nerkar, A. A., McGrath, R. and MacMillan, I. (1996) Three facets of satisfaction and their influence on the performance of innovation teams. Journal of Business Venturing, 11, 167–188. Newell, S. and Swann, J. (2000) Trust and interorganizational networking. Human Relations, 53, 1287–1328. Prusak, L. and Cohen, D. (1998) Knowledge buyers, sellers, and brokers: The political economy of knowledge. In D. Neef, A. G. Seisfeld, and J. Cefola (Ed) The Economic Impact of Knowledge (pp. 137–159), Butterworth-Heinemann, Woburn. Ryan, K. D. and Oestreich, D. K. (1991) Driving Fear Out of the Workplace: How to Overcome the Invisible Barriers to Quality. Jossey-Bass, San Francisco. Saleh, S. D. and Wang, C. K. (1993) The management of innovation: Strategy, structure and organizational climate. IEEE Transactions on Engineering Management, 40, 14–20. Starbuck, W. H. (1992) Learning in knowledge intensive firms. Journal of Management Studies, 29, 713–740. Subramanian, A. and Nilakanta, S. (1996) Organizational innovativeness: Exploring the relationship between organizational determinants of innovation, types of innovations, and measures of organizational performance. Omega, 24, 631– 647. Tidd, J., Bessant J. and Pavitt, K. (1997) Managing Innovation – Integrating Technological, Market and Organizational Change. John Wiley & Sons, Chichester. Tushman M. L. and Scanlan, T. J. (1981) Boundary spanning individuals: Their role in information transfer and their antecedents. Academy of Management Journal, 24, 289–305. Tushman, M. L (1977) Special boundary roles in the innovation process. Administrative Science Quarterly, 22, 587–605. Tushman, M. L and Katz, R. (1980) External communication and project performance: An investigation into the role of gatekeepers. Management Science, 26, 1071–1985. Von Krogh, G., Nonaka, I. and Ichijo, K. (1997) Develop knowledge activists!. European Management Journal, 15, 475–483. West, M. A. (1987) Role innovation in the world of work. British Journal of Social Psychology, 26, 305–315.

Christina Hellstro¨m is a Senior Lecturer at the Department of Psychology, Goteborg University, Sweden. Tomas Hellstro¨m is a Visiting Professor at the Department of Management, Politics and Philosophy, Copenhagen Business School, Denmark.


THE ALIGNMENT CONFERENCE

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The Alignment Conference: A Stakeholder’s Way to Create a Competitive Advantage Bill Becker The Alignment Conference is a process anchored in three components that are each significant and effective in their individual application. Implementation of this integrated approach addresses the strategic concerns of key organizational stakeholders, allowing them to reach new agreements about what they will do and how they will do it, relative to the organization’s core organizational competencies. It can be a particularly useful process in helping staff change-agents help senior leaders and line managers understand that the human side of the equation is equally important as the technical side, and provides a technology that allows the social side to address business results and processes, for current and future conditions.

Introduction

S

ociotechnical Guru, William Pasmore, notes that:

The environment, regardless of its level of complexity and turbulence, remains the final judge of organizational success . . . Most importantly, they [organizations] are capable of being transformed at will by their members. The Alignment Conference is one technique by which organizational stakeholders can initiate transformation of their organization, ‘at will.’ Training in and experimentation as an OD Practitioner has shown me that collective learning experiences as a well designed and focused conference can be a catalyst for change. One of the premises of learning theory I gathered early on in my career is that we all learn by doing, even though some of us prefer to take in information by listening, or reading, and some by watching. However, when we do things we all have a better chance to understand and remember how to perform whatever it is we are doing. And, when we ‘do’ together, our learning can be even greater. When I began to work with stakeholders in improving, changing, and transforming their organizations, I soon discovered that without balancing focus on the technical side of the task with equal attention to the people side, # Blackwell Publishers Ltd 2002. 108 Cowley Road, Oxford OX4 1JF and 350 Main St, Malden, MA 02148, USA.

the solutions were often weak and temporary. Therefore, as with the Alignment Conference, when transforming our own and others’ organizations, it is more efficient and effective to collectively: 1) Consider internal and external environments 2) Look at the technical and human side of the endeavor, 3) Use a collective stakeholder experiential process to ‘do’ together. Another way to say it is: Together look at market-driven factors that impact what and how we do our work through an experiential process. In Gestalt theory terms, we create the capacity to understand and act not only with our intellect but also with our emotions and senses, thus giving us a feeling of control and therefore ownership over our own destiny.

A Three Component Model As with most innovations, the generative circumstances for creating the Alignment Conference was serendipitous. It began with a shadow consulting dialogue with a colleague, Vicki Axelrod, about how to focus her client group’s senior management team on future based business results. Having just attended Marvin Weisbord’s and Sandra

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Janoff’s initial Cape Cod Institute offering on how to conduct a Future Search, and having recently integrated into my practice the principles outlined by C.K. Prahalad’s and Gary Hammel’s early articles on Strategic Intent and Core Competencies, I suggested combining the two in some way. There was a need to further bond Vicki’s client group’s senior management team, have them determine their primary business problem, get them to listen to their key stakeholders, and to help them discover their unique strengths and to focus them on specific future business results. It seemed a good way to do it would be to integrate the Strategic Intent and Core Competencies concept with the Future Search process. Together Vicki and I developed a process that eventually led to the Alignment Conference. William Pasmore’s notion about the need for people to define and come to agreements about the problem they are trying to solve was part of the sociotechnical approach that helps the Alignment Conference be effective. The following paraphrasing of his idea makes the point: Organizations are legal fictions, created by people who have formed agreements for the basic purpose of solving ill-defined problems that individuals cannot accomplish alone. Organizations are at best temporary solutions ... Therefore, essential to the Alignment Conference model is the understanding that successful organizations have long-term ori-

Output: – – – –

entations, and adapt to the changes in their environment (open systems) by assessing how people (the social system) use tools, techniques and knowledge (the technical system). Further, being aware that it is the agreements people form that direct their social and technical interactions is critical to successfully using the other two components, the technologies of Future Search and the theory of Strategic Intent and Core Competencies. In simple terms, you’ve got to look out and forward and be ready to be flexible in what and how you agree to do business if you want to stick around for a while! The conceptual components that make up the Model are graphically displayed in Figure 1.

Sociotechnical Component In addition to the absence of a long-term orientation, many change processes fail because they are not systemic and are non-integrated initiatives launched by well-intending senior executives. Unfortunately, the executives often are not willing (nor often their managers) to pay the price of admission for transformation. Surprisingly, it’s not the financial price as much as the price of energy and time of the executives and their managers as well as their willingness to take a stand and be accountable that is without commitment. This lack of commitment results in the rest of the organization not being energized to implement the changes required. Organizational members

Macro Alignment Performance Improvement Competitive Edge Industry Leadership

Figure 1. Components of the Alignment Conference Model

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are not involved, empowered, rewarded, nor protected for taking the risk of transformational change. Of course Edgar Schein, the distinguished organizational practitioner and theorists, reminded us about being aware that cultural assumptions are tacit agreements among organizational members, of which they have absolutely no awareness. It is those gaps between the observable artifacts (dress codes, conflict management process, working hours, decision processes, etc) and the organization’s espoused values that begin to reveal those tacit agreements. It is often the tacit agreements that prohibit management from committing to change. It is not so much their resistance to change as much as fear of having to face the taboo of having broken those tacit agreements. It is not unlike the child’s fear of the monster in the closet at night. By keeping the light on the monster dare not show itself. By managers not committing to transformation the ‘tacit agreement monsters’ stay hidden. The odd part is that transformation (even if it is atrophy) of some kind will happen anyway, given that most business environments change at a rapid rate today. One would think that this rate of change would be a wakeup call to stimulate senior executives to want to direct their own destiny! But then, a weakness of our western reward system is our focus on results based upon short-term standards and measurements. Our destiny envelope is about 90 days. Then, as in the movie ‘Groundhog Day’, we begin the nightmare over again. Further, one of the reasons that performance improvement efforts as TQM and reengineering initiatives often fall short is that too much emphasis is put on the technical aspect of work. Conversely, human relations approaches, social engineering, T-groups all have had too little focus on the technical and too much on the social! In fact, most topdown, unintegrated, cascading processes lack an ability to build a shared mindset. However, sociotechnical approaches tap the diverse perspectives of everyone at all levels within the internal and external system via all key stakeholders (organizational members, customers, vendors, community leaders, etc.). This creates a common vision for the organization and the context in which it performs. I have even experienced the phenomena of some of the tacit culture assumptions surfacing and having to be dealt with just because such a strong cross-section of stakeholders are present, and the process is structured enough to withstand such challenges. This all leads toward a symbiotic system that promotes survivability through support of the agree-


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ments reached by stakeholders in its macro environment.

The Future Search Component The technologies used in the Weisbord and Janoff model of Future Searches offer a highly social approach to collectively allow people to explore and discover their values, vision, mission and capacity to take action. It creates a common ground from which to look at their external and internal worlds – as they are and as they have the potential to be. It is experiential, with the control of the outcome in the hands of the internal and external stakeholders involved in the Search. The Alignment Conference model is not a replacement for a Future Search Conference. It is a focused process that enables stakeholders to explore their essential and unique, competitive business capabilities through a structured dialogue, resulting in a blend of agreements around social and technical business issues that can be acted upon. Very effective for its purpose, it is a net that is thrown out to catch technical, social and business issues. However, many of the same steps in preparing for and conducting the Alignment Conference are derived from their Future Search Model. For instance, to varying degrees, we: 1) Work with the key decision makers of the sponsoring organization to help them create a committee to plan the purpose, theme, and stakeholders who should attend the conference. 2) Have learned that 35 to 40 people are an optimal number for efficient and effective processing (though we have had good results with as many as 62 participants). 3) Prefer a two and one-half day event (but occasionally abbreviate it to two days). 4) Conduct the conference with 6 to 8 people at round tables, in a variety of homogeneous and heterogeneous stakeholder groups, which are in charge of their own discoveries and results. 5) Use the techniques of time lines, mindmapping and Implementation Teams. There are four basic actions to the Alignment Conference. We: 1) Look at the Past to build the common ground, 2) Look at current issues/concerns to build mutual understanding and appreciation for what ‘is’ 3) Identify end and core products and core business competencies

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4) Create self-directed Implementation Teams to follow-up on a desired future Actions 1–4 are taken during the conference. There is one other post-conference action taken within a week of the completion of the conference. That action is to train Implementation Team leaders in the processes and techniques to achieve their team’s goals Actions 1, 2, and 4 above are similar to, though done slightly different, the Future Search process. Most of the differences have to do with how we go about preparing to focus on core products and competencies.

Core Competency Component In the second action, when looking at current issues/concerns, we begin to integrate the Hammel/Prahalad Strategic Intent and Core Competencies model. We have the group consider the marketplace, global trends, and future needs of their customers. Then, in the third action, we have them identify their end products and core products, as well as the core organizational competencies that differentiate them from their competitors. This is a key concept. Core competencies of an organization are an integration of individual competencies – they are the discrete knowledge and learning of the organization that integrate and are communicated and processed in a way that is very difficult, if not impossible (and perhaps not useful), for competitors to copy. Core organizational competencies are the results of culture, leadership, quality of material and human resources, practice, rewards and recognition, vision and mission and other factors. The Core Competency Component is a key to integrating the technical and human side of the conferees’ endeavor.

The matrix in Figure 2 shows how the four actions in the Alignment Conference are integrated by the three theoretical/conceptual open system driven components. As is show, actions 1&3 are the drivers. In actions 2,3,&4 all three components are engaged. The power of Action Three is key to paving the way for the organizations’ leaders and their key stakeholders to shape their destiny. It is one of the reasons why the three models of Sociotechnical, Future Search, and Strategic Intent and Core Competencies integrate so neatly.

How the Conference Works Following are definitions of End and Core Products and Core Competencies and an overview of how they are integrated into the conference process so that they influence the conference outcomes. C.K. Prahalad, Professor of Corporate Strategy and International Business at the University of Michigan and Gary Hammel, who is a lecturer in business policy and management at London Business School, together have created a flexible model that allows organizations to leverage their core organizational competencies to a competitive advantage. The following excerpt from their book, Competing for the Future, will provide insight in how their strategy is used in the Alignment Conference: Our premise is that a company can control its own destiny only if it understands how to control the destiny of its industry. Organizational transformation is a secondary challenge. The primary challenge is to become the author of industry transformation . . . It is a view of strategy that

Actions

Future Search

Socio-Technical

Core Competencies

One

Looking at the Past to build a common ground

Identifying agreements

Two

Determining the Present

Exploring the Internal/External Environments

Marketplace, Global Trends, Customer Needs, Internal concerns

Three

Creating a desired Future

Identifying mechanisms and processes from all stakeholder perspectives

Identifying End, Core Products and Core Competencies

Four

Action Teams

Establishing new agreements

Implementing preferred future by creating Implementation Teams based on core organizational competencies.

Figure 2. Integration of the Three Models

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recognizes . . . that a company must ultimately preempt competitors in critical global markets; that the issue is not so much time to market, but time to global preemption . . . imagination is the only limiting factor. It is commonly accepted that when solving a problem two heads are better than one. More so, when one has all of the key stakeholders present in a room at the same time for several days, all focusing on the same problem using their knowledge of the variables with which they are familiar, ‘imagination’ is in a rich environment in which to grow industry influencing ideas and actions. Recognition of core products and how to leverage them as well as how to innovate based on core organizational competencies all lead to opportunities to preempt an industry’s direction.

End Products Core Products and Core Competencies Just as in the Future Search, the theme of the conference serves as the context for all of the elements of the event. Therefore, while looking at the Past and the Present, the exercises are carefully designed to provide results that help participants to later discover their core competencies. For instance, skills, processes and capabilities are highlighted in looking at the past, as these are intrinsic in identifying core organizational competencies. End Products These are the products that our customers buy: Golf Clubs, Loaf of Bread, Engines, Pencils, Computers, etc. Core Products A core product (the term is core platform in the case of services) is most often an intermediate product somewhere between core competencies and the end product. An example would be Cannon. It sells laser printer engines to Apple, Hewlett-Packard and others that produce laser printers. As a result, Cannon’s laser printer engine core product share is much greater than its own brand share in laser printers. Cannon leverages its competitor’s distribution and marketing power, thereby being able to focus on other products and competencies. Core Competencies A core competence is a collection of skills and technologies as opposed to a single skill or technology. Here an example would be


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Motorola’s competence in quick cycle-time production (shortest time between an order and delivery of the order). For a yogurt manufacturer it can be the ability of the research department, development group, and production to work closely as a team to be efficient and creative in a way that allows development of industry changing food products.

Discovery of Core Products and Competencies Prior to the conference, participants are provided a brief, written overview of the Prahalad/Hammel concept. In the third element of the conference, this description is reviewed. Participants then work through several exercises in small heterogeneous groups (various levels, functions, company longevity, external stakeholders, etc.) to understand how to apply the concept. The participants then continue to work in small heterogeneous group work to identify end products, core products and core competencies, and eventually come to total group consensus on each.

Application of the Alignment Conference Model Successful application of the model include companies such as a global, non-profit leader in executive and management seminars, a premier, global, fast-food organization, and a world market leader in a highly nutritional product, the brand of which is synonymous with the basic product consumed in most American and European households. Following is a brief description of each case.

The Management Seminar Institute Case The CEO of this institute wanted to achieve three key objectives: 1) Create a one-stop Customer Service Operation for the varied products and services offered to customers. 2) Eliminate divisions from acting like ‘independent republics’. 3) Build a common future business strategy among the management team. Following work with the senior management group where they identified global marketplace trends, core end products, core products and core competencies, two Alignment Conference were conducted with a crosssection of the organization’s stakeholders. They

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represented all divisions, both domestically and international, all management and employee levels, and outside stakeholders. Results were impressive. Six key initiatives resulting from the Alignment Conferences were included in the following year’s business plans, including two additional Future Search Conferences for two divisions (one with 100 stakeholders and the other for about 65 stakeholders), restructuring of the organization to be responsive to current and future market demands, including the decision to create a whole new line of business based on one of its core products (its intellectual assets).

The Fast Food Company Case For the fast food leader, the key objective was to identify the key issues that would impact the required competencies of the top two levels of management for corporate and franchised owned stores over the next six years. Prior to the conference, the participants were provided a thorough description, with examples, of end and core products and core competencies At the conference, they confirmed the core competencies of the top two levels of management (which had taken them 18 months, through a job analysis and focus group process), and identified the market driven issues that would challenge the competencies they would have to master. Follow-up activities led to their publishing their desired future scenarios, and creating quantitative and qualitative customer and employee satisfaction measures to see how well their managers were achieving the results in their franchises.

The Nutritional Food Manufacturer Case The scope of the intent of the Alignment Conferences was broadened in a project for a production facility of a major manufacturer of a highly recognized nutritional food product. The plant had to increase its productivity by 12 percent in six months, or be in jeopardy of being closed down in favor of a new and larger plant just completed. In addition, there were issues around quality, safety, and customer service. There were longer-term issues around defining a strategy that would keep them ahead of a fast growing competitor. After a series of interviews with people from all levels in the organization, we knew that the answers were inside the organization, the leadership appeared to be committed, and the work-force had pent up energy they were

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looking to use. Favorably, their OD Director had secured state funding for training and development, and was in the midst of a variety of technical and supervisory training. In other words, the organization was open to learning and trying something new. Our strategy was to use the Alignment Conference as the platform from which to provide both short- and long-term results, using a four-phase process to address key objectives. The results of conference provided enough information for action teams to begin work. They leveraged their core competencies in a way that realized achievement of shortterm goals (through phase three they had already increased productivity by 14% in five months) and laying the foundation for achievement of longer-term goals. They eventually became the flagship operation for innovation for the company.

As a Practitioner’s Tool Working as an internal change agent there are many forces with which one has to struggle: level of authority, cultural do’s and don’ts, politics, tangential access to influence but not to power, and of course that one is ‘part of the problem’ because he/she is an organizational member not the person who is an outsider and lives 50 miles away. Only rarely did I find the opportunity to work with a complete system. I mostly felt like a field medic putting bandages on wounds. Basically, I found it difficult to turn the wheel upon which I was being turned. As I learned how to conduct Future Search Conference from Marvin Weisbord and Sandra Janoff, began to experiment with Hammel and Prahalad’s theories on core organizational competencies, and took the risk of blending the two within the framework of sociotechnical systems, it was as if I had climbed a mountain and could see the whole organizational life below. It gave me the sense of getting all the citizens of Dodge together to decide on how they were going to together get rid of the ‘bad guys’. There was a palpable spirit and excitement that seemed to bond people together, which theretofore I had only experienced in small group work. It relieved me of being the expert with solutions to give to others and allowed them to use their own expertise to solve their problems and take advantage of opportunities they envisioned. It also gave me the time to mentally run up the mountain to see the whole view and then run back down and be part of the action, as well as allowing me to exert my real expertise as a facilitator of direction, clarity, understanding, mutual



respect and practical business results for the organization’s present and the future. In all, it has been a very fulfilling discovery and experience.

References Margolis, F. (1977) Adult Learning Theory and Practice Workshop. Pasmore, W. A. (1988) Designing Effective Organizations: The Sociotechnical Systems Perspective, Wiley, New York. Hammel, G. and Prahalad, C. (1994) Competing for the Future. Harvard Business School Press, Boston: 20–21 Simkin, J. (circa 1963, unpublished) Introduction to Gestalt Therapy. Schein, E. H. (1999) The Corporate Culture Survival Guide. Jossey-Bass, Inc.


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Weisbord, M. and Janoff, S. (1995) Future Search: An Action Guide to Finding Common Ground in Organizations and Communities. Berette-Koehler Publishers, Inc., San Francisco

Bill Becker is the CEO of Strategic Business Resources in Manhattan, which focuses on helping organizations align their operational performance with their strategic intent and core organizational competencies. He is an OD practitioner with over 25 years of domestic and international experience. He is a founding member of Future Search Network, former adjunct Professor at the New School’s advance OD studies, and recently authored How To OD and Live to Tell About It, A Practitioner’s Guide to Organization Development.

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Innovation Compass: A Self-audit Tool for the New Product Development Process Zoe J. Radnor and Hannah Noke This paper presents a diagnostic tool referred to as the innovation ‘compass’. The innovation compass uses self-audit methodology to identify gaps between current and desired performance of individual organisations. The innovation compass aids organisations in identifying where problems lie within the organisation. This information can then be used in developing an action plan to improve their new product development performance. The compass acts as a support tool to the linear and mechanistic processes of managing new product development, such as the Stage Gate Model. The compass comprises of five core themes; structure, leadership, output, teams and context representing the fundamentals of the innovation process. A combined methodological approach was used, by means of both qualitative and quantitative techniques with organisations. The methodology adopted has allowed for benchmarking of these themes to occur, with additional depth added from the qualitative semi-structured interviews. This paper discusses the rationale for a tool such as the compass.

Introduction

T

he existence of a strong and positive relationship between a company’s tendency to innovate and its continued market prosperity underpins the vast literature in new product development and innovation (Hart, 1993). Research into new product development is vibrant and varied, yet fragmented. The literature covers a myriad of disciplines associated with new product development. These include marketing, management, economics, engineering, and design. Brown and Eisenhardt (1995) present two classifications based on the work of Adler (1989). Firstly the economics based enquiries, which examine the differences in the patterns of innovation across countries and industrial sectors, and intrasector differences in the propensity of firms to innovate (Schumpeter, 1950; Nelson & Winter, 1977; Dosi, 1988; Urabe et al., 1988). The research described in this paper falls into the second classification which considers new product development from an organisational perspective (Brown & Eisenhardt, 1995). This could be described as focusing at a micro level regarding the specifics of how new products are developed (Cooper & Kleinschmidt, 1988; Zirger & Maidique, 1990; Clark &

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Fujimoto, 1991; Ancona & Caldwell, 1992; Rothwell, 1992; Cooper, 1996). The research discussed in this paper is based on an EPSRC1 grant which aimed to bridge the gap in innovation design support systems by developing a diagnostic learning tool based on the Stage Gate Model (Cooper, 1996). The particular research has, therefore, been guided by two research objectives: . To create a ‘best practice’ new product

development diagnostic framework . To map the functioning of effective char-

acteristics within the innovation process. We acknowledge the shared ideas that have arisen in the numerous discussions within the wider project team. So, in this paper we have tried to reflect a view based to some degree on the authors’ particular interests, for example in the implications of mixed methodologies and the rationale for the research and diagnostic tool developed which structured the wider project. The research and diagnostic tool that has been developed is referred to as the ‘innovation compass’. The compass has been designed to assist organisations in identifying the gaps between their current new product develop# Blackwell Publishers Ltd 2002. 108 Cowley Road, Oxford OX4 1JF and 350 Main St, Malden, MA 02148, USA.

INNOVATION COMPASS

ment performance and desired performance. It is an attempt to provide practioners with a support mechanism to the standard linear new product development process, for example a stage gate model (Cooper, 1996). From the information provided by the compass an individual action plan can be developed aiding the organisation to meet their desired performance. What is different about the compass is that it attempts to move away from a model dictating a particular course of action where an organisation’s strength may not lie by considering, in particular, the ‘context’ of the new product development or innovation process.

Background to the Innovation Compass The process of innovation could be referred to as a ‘journey of innovation’ (Van de Ven et al., 2000). What may be argued is how that journey of innovation is navigated is largely dependent on the approach of each individual organisation. The different approaches to the innovation journey that could be taken by organisations have been discussed by a number of authors (Wheelwright & Sasser Jr., 1989; Cooper, 1996). Arguably the innovation or new product development process used by organisations may be guided by models, frameworks, and diagnostic tools or, simply as a reaction to the external and internal pressures of the business environment. It is suggested in this paper that to survive in today’s turbulent and uncertain business environment organisations need tools to help them to find their way more clearly. This is supported by Cooper (1999) who stated that ‘new products are critical to the success, growth and prosperity of the modern corporation. But successful product innovation has been an elusive goal for many companies’. Therefore, in order for organisations to reach their goal it could be argued that they require tools that support them in achieving their corporate goals. There are various models designed to assist organisations in executing the process of new product development (Wheelwright & Sasser Jr., 1989; Cooper, 1996; Hughes & Chafin, 1996; Barclay et al., 2001). To date many of these models have attempted to represent the key stages which should occur in the generic process of new product development. Cooper (1996), in particular, created the Stage Gate Model which was marketed as a model that was described as ‘a blueprint for managing the new product process to improve effectiveness and efficiency.’ Arguably the Stage Gate Model can be deemed to be the one of the most popular


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models for new product development utilised in companies today. This is supported by a survey conducted by Griffin (1997) where she determined that nearly 60 per cent of US firms used a cross-functional stage gate process for new product development. However, it could be suggested that the Stage Gate Model presents a view of the new product development process as being linear, static and mechanistic. Today, the rules of the game in new product development are changing (Takeuchi & Nonaka, 1986). Takeuchi and Nonaka (1986) explain that many companies have now discovered that it takes more than the accepted basics to excel in today’s competitive market. Organisations have now had to understand the role of innovation to survive (Wah, 1989; Taylor, 1990; Kiernan, 1996). The research described in this paper has attempted to respond to this change in the way organisations approach new product development. It provides organisations with a self-audit tool that supports the traditional models of managing the new product development process. The tool presented within this paper draws on work from previous audit tools (Rickards & Bessant, 1980; Burgelman et al., 1988; Chiesa et al., 1996) and, the analogy that a compass helps a traveler to navigate their journey. Previous audit tools considered included the ‘Technical Innovation Audit’, which proposed a model for auditing a firm’s innovation capability based on a process model of technical innovation (Chiesa et al., 1996). An outdoor traveler, when using a compass, can navigate their journey in more a straightforward manner particularly when the ultimate destination is known. A compass is still a tried and tested aid or tool to the ‘trusting’ traveler. It is a simple and effective device which helps the traveler to orientate and guide them on their journey. It is based upon this concept, together with previous research on innovation audit tools, that the diagnostic, self-audit tool the innovation compass was developed for the project. It is also hoped that the innovation compass will not only address the process behind the formulation of innovation strategies but also consider the capabilities of firm in implementing such strategies and, their ability to adapt practices of innovation in response to changing contexts. Drazin and Schoonhoven (1996) through their editorial role for a special edition of the Academy Management Journal on Innovation and Organizations linked four papers together that concentrated on the contextual factors on innovation. Their editorial highlighted that the four papers iterated that context was an important element particularly

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when examining innovation (Drazin & Schoonhoven, 1996). They felt that a point clearly illustrated by all four papers was that context can and does impact on an organisations ability to innovate and that these contexts are important to understand. So, although literature appears to agree that context is an important and valid construct, little has been written on the subject. Therefore, the innovation compass, presented below, has five core themes; structure, leadership, outputs, teams (SLOT) and context which were felt to represent the elements most cited in the literature when the process of innovation is presented. It is worth stating that the compass is designed to focus on the individual new product development processes occurring within the organisation. The innovation compass endeavors to provide practitioners and organisations with an instrument that supports them in mapping their own new product development practice. It is intended that the compass could provide companies with an aid to understanding their process by recording their actual characteristics. They could then draw their conclusions that could aid them to formulate an action plan. The intention is not to create a tool that dictates an ideal solution, which has the potential in leading an organisation down a route where their strengths may not lie. In this paper we present the rationale for such a tool and draw on a case study to illustrate the innovation compass in its populated form.

Methodology The research began by trying to understand the underlying characteristics that contribute to the degrees of success of new product development. A detailed literature analysis, together with previous research findings were used in identifying the important elements within the new product development process. The following section (development of the Innovation Compass) will describe these. These elements which then formed the innovation compass had to be ‘tested’ and so, a quantitative and qualitative methodology was combined to gain a broad and detailed understanding of the findings. The former allowed access to a large sample group whilst the latter offered rich data through interpretive means. An inventory titled ‘Innovation Factors Inventory’ (IFI) which was based on 42 statements was the main quantitative collection tool employed to collect the quantitative data for the project. Each of the 42 statements called for a response on a five point Likert

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scale (strongly agree/disagree). The context theme was omitted from the inventory therefore only four of the five themes: teams, outputs, structure and leadership were addressed in the inventory. The IFI was often completed by a number of people within the same project team and the results of this would then become a ‘trial’ within the IFI database. The IFI database has, to date, a total of approximately 50 trials of data that can then be used for ‘benchmarking’ purposes. The qualitative data was predominantly collected in the form of semi-structured interviews. The interview instruments were designed to capture all five of the themes. The nature of qualitative research dictated that further factors within the main themes emerged of their own accord. As a consequence of the diverse range of people interviewed, the semi-structured interview facilitated the necessary flexibility to delve into the relevant experiences of the interviewees. In addition to the semi-structured interviews and inventories, to gain a fuller understanding of the organisation, tours of their facilities were conducted. Subsequent to the case study the organisation was presented with a corporate report. This provided the opportunity for validation of the research findings. The organisation were permitted the opportunity to observe the researchers interpretation of the findings in relation to their organisation and either agree or disagree accordingly. Access can be a major barrier to any case study research along with tight time limits. Therefore the case studies emerged from a convenience sample rather than rigid criteria. However, the primary criteria used used to select the case studies were that the companies were within the manufacturing sector and involved in developing new products. A triangulation of the case material and the IFI further validated the findings. The IFI acted as a confirmatory tool permitting access to a large perspective to be sought. This enabled us to identify any general patterns or trends in the organisation. This was subsequently correlated against the qualitative data to substantiate the findings, as will be shown by the completed compass in the discussion section. The project gathered a vast amount of data from the case studies, therefore a methodical approach to analysis and interpretation was required. The analysis and interpretation of the data was completed using Radnor’s (2002) six-stage technique. This technique includes a method of rigorous coding and classification (similar to that often used by NUD*ST) which can lead to rich qualitative data. However, the Radnor (2002) approach allows a primary aim


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Figure 1. Radnor’s (2002) Six-step Approach to Data Analysis to ensure a logical coding of data/marshalling of evidence, whilst eschewing the dangers of inaccuracy which might arise from an over mechanistic approach. Therefore, once the data had been finally coded, the approach seeks to maximise the degree and speed by which the data can be analysed and reanalysed through using the full benefits that an integrated suite of office computer software can bring. Working from a copy of a taped transcript as the database, Radnor (2002) advocates a six-step approach to data analysis, as summarised in figure 1. This approach allowed an effective means to correlate the findings from the IFI inventory with the data collected from the case study interviews.

base. An average of the database is derived from calculating the mean using all the data collated from the research project to date, the individual organisation is then charted against the mean. The research database comprise of all the data generated from the IFI. This ability to benchmark was identified as an important function of the compass to the companies involved in the research. The middle circle (Circle B) of the compass presents the qualitative research, generated from the case study itself. Here quotations and qualitative data is presented which attempts to support, or reject, the findings from the quantitative analysis (Circle A). This circle is designed to give a rich picture or understand why and/ or how some of the scores in Circle A.

The Development of the Innovation Compass The development of the innovation compass originated from five themes identified from the literature, representing the characteristics of successful innovation. The themes consist of; structure, leadership, outputs, teams (SLOT) and context (see figure 2).

The Inner Circles It is the themes of structure, leadership, outputs, teams (SLOT) which dominate the inner circles (circle A and B). The inner circle (Circle A) charts the data from the Innovation Factors Inventory (IFI). The inner circle offers the opportunity for an organisation to benchmark themselves on a quantitative basis against other groups from the research data-


Figure 2. The Compass (a Working Model)

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The data relating to each of the themes (SLOT), particularly the quantitative element, consist of a number of factors which are discussed below generally before each are described in detail. The themes of teams and leadership arose predominantly from the work of Rickards and Moger (2000). This work explored what led to superior creative performance. Conversely the research explored what happened to teams that under performed to a near catastrophic extent. From the research Rickards and Moger (2000) developed a team factor inventory that can be used to examine the relationship amongst the factors they proposed. The work of Cooper (1996) contributed to teams and leadership themes, but to a lesser degree than the reminding themes. Cooper (1996) established from a benchmarking study that there were three critical success factors for drivers of new product performance, which are referred to as cornerstones of performance; . High quality new product process; this

process whether explicit or implicit includes those steps and activities in a new product project from idea to launch. The better performers have a quality process. . Resource commitment; adequate resources for new products. . New product strategy; a clear and wellcommunicated new product strategy for the business unit. The themes of output and structure predominantly were developed from Cooper’s (1996) cornerstones of performance, as well as the work of Rothwell (1992) who identified features that determine ‘the characteristics of technically progressive firms and the factors associated with success or failure in innovation’. Rothwell (1992) argues that the factors, which are summarized below, have emerged from the literature in various forms. Therefore these have also contributed to the themes within the compass: . Good internal and external communication. . Treating innovation as a corporate wide

task. . Implementing careful planning and project

control procedures. . Efficiency in development work and high

quality production. . Strong market orientation. . Providing good technical service to cus-

tomers. . Presence of certain key individuals; effec-

tive product champions and technological gatekeepers. . High quality management.

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Now each of the themes and the associated factors within them will be discussed in turn from the perspective of what was seen to be important in relation to the project. Structure Dedicated teams (TEAMS): This attempts to assess the structuring of working teams. It endeavours to understand whether teams are coherent and permanent, or contingently changing teams during the project. Decision autonomy (DEC): Identifies whether the management structure permits people working on the project the autonomy regarding their decisions. Creativity (CREA): Seeks to understand the organisational structure in place, as to whether it allows for creative ideas to flow through the project and indeed the organisation. Novelty (NOV): This label is aimed at understanding if the project is new to the organisation perhaps radical. Formality of structure (STR): Organisations approach to new product development process varies. This factor endeavours to understand whether the structuring of change processes with particular reference to new product development. Where possible is the structure formalized into stages, decision points, with established procedures (rule books etc), formal and rigid, or fluid and ad-hoc. NP’s proximity (PROXY): Attempts to measure how close is a project to a new development project. This factor immediately splits the data received into ‘close to new development and ‘not close to NP’. This helps us to study where new development projects differ from other projects. Maturity (IMM): This factor is concerned with distinguishing the maturity or immaturity of new product development projects in the organisation. Leadership Two leadership items were included to identify transformational leadership, and two items included to identify transactional leadership. Transformational leadership (TRANSF): The team leader tends to be inspirational who relies on personal charisma and on gaining trust in leader’s abilities, and who empowers team members to act out of selfgenerated enthusiasm and interests. Transactional leadership (TRANSAC): The team leader tends to keep the team focus on tasks necessary for success, using implicit and explicit instrumental rewards as motivational and control mechanisms.


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Output Innovation (INNO): This term innovation is used to assess perceived creative and innovative productivity, in contrast to routine productivity. Dependent upon the context of the organisation the meaning attributed to creativity or innovation varies. Knowledge (KNOW): This is a measure of the team’s perception of intellectual property produced. It has been included for secondary research purposes and may throw light on its association with the other two output measures. Productivity (PROD): This is intended to assess routine as opposed to non-routine outputs. However it is to be analysed in comparison with a teams assessment of nonroutine outputs. The interviews provide the richer insights into what might be understood by differing ratings on the measures. Teams Platform of Understanding (POU): In the research we proposed that team members should attempt to identify shared knowledge, beliefs, and assumptions. These elements comprise a platform of understanding or shared knowledge base from which new ideas develop. The terminology emerged in explanation of the rationale underpinning such techniques as mind mapping. The concept has similarities with the model of knowledge management developed by (Nonaka & Takeuchi, 1995), and specifically their identification of the importance of processes permitting tacit-explicit knowledge conversion. Shared Vision (SV): The dominant perspective of a team amounts to a shared vision. The standard view is one mostly constrained by habit and assumptions. The exceptional team will break out of the old view to espouse an unexpected (creative) shared vision for the future (Beckhard, 1979; Ohmae, 1982; Senge, 1990). Shared vision may be regarded as a particularly significant kind of perspective. Climate (CLI): To generate a successful team the emphasis should be placed on the importance of a positive climate. The components of a creative climate have been repeatedly found to be associated with innovative outputs of teams (Ekvall et al., 1983; Nystrom, 1990; Amabile et al., 1996). Creative techniques encourage team building in various ways – for example rejecting dichotomous evaluations (win-lose) in favour of constructive conflict resolution (de Bono, 1990; Rickards, 1990; Rickards & Moger, 1999) Resilience (RES): This is premised on the approach to creativity as challenging self-


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imposed constraints and of managing the tensions between resilience and flexibility. Idea Owners (IO): The team leader encourages deliberations designed to align the ideas within regions over which team members have know-how and control. Idea ownership is associated with concepts of empowerment, personal commitment, and entrepreneurship. The creative problem-solving approach has consistently emphasised the importance of intrinsic motivation (Amabile et al., 1996). Network Activators (NA): This factor was derived from interviews with organisational leaders (Rickards & Moger, 1999). The concept has resonance with earlier notions of boundary-spanning activities, liaison roles (Mintzberg, 1979) and resource investigator (Belbin, 1981). However, it is a knowledgeenhancing role, and unlike the informationrestricting role attributed to gatekeepers. Learning from Experience (LFE): The creative leadership interventions have been explained as a means of achieving experiential learning (Rickards, 1990). Without learning from experience, structures to support new ideas become rigidly applied, with little prospects of repeated success in stimulating creativity.

The Outer Circle This could be argued as the ‘different’ theme or element compared to other work carried out so far on new product development and what draws the innovation compass away from being just another linear or mechanistic tool. It builds on the work of Pettigrew (1985) who suggests that when attempting to understand an organisation it should be done by contextualist inquiry and ‘involve the continuous interplay of ideas about the context of change, the process of change, and content of change, together with skill in regulating the relations among all three.’ Figure 3, gives his broad framework which starts with the notion that for analysis of strategic change or organisational change formulating the content of any new strategy inevitably entails managing its context and process. Within our research we have developed this definition further suggesting that this could also take into account any new strategy, approach or innovation developed by the organisation. Pettigrew (1987) defines that the: . Outer context refers to the social, econ-

omic, political, and competitive environment which the firm operates. (The ’why’ of change). . Inner context refers to the structure, corporate culture, and political context within

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Figure 3. Broad Framework guiding Contextualist Research (Pettigrew, 1987) the firm through which ideas for change have to proceed. (The ’why’ of change). . Content refers to the particular areas of transformation under examination. (The ’what’ of change). . Process of change refers to the actions, reactions, and interactions from the various interested parties as they seek to move the firm from its present to its future state. (The ’how’ of change). By considering this frame of reference (figure 3) the transformation of the firm is seen as an iterative, multilevel process, with outcomes emerging not merely bound by rational debates, but also shaped by the interests and commitments of individuals and groups, changes in the environment, and the manipulation of the structural context around decisions (Pettigrew, 1987). In the same paper he goes on to suggest that context affects the phenomena that researchers are studying (Pettigrew, 1987). He argues that this is something that should not be ignored as the context of what is being measured/studied tells us a story just as much as what we are trying to study (Pettigrew, 1987). This is linked to a Special Research Forum on Innovation and Organizations which linked four papers together that concentrated on the contextual factors on innovation (Drazin & Schoonhoven, 1996). Drazin and Schoonhoven (1996) in their editorial argue that the contextual factors that have been studied are numerous but generally represent organisation level features that create contexts that can be considered as enabling or inhibiting. Relating it to Pettigrew (1985) Drazin and Schoonhoven (1996) feel that the research on the management of innovation has remained focused mainly on internal (inner) context but feel that the combined effect of the four articles gives a more soundly integrated and expanded view of the factors leading to innovation. The article by Hitt and Hoskisson (1996) examine the impact of corporate strategy on

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innovation. This article maintains that mergers and acquisitions and divestitures are a major component of the strategies of large firms and, firms that are active in the market for corporate control often create contexts inside their organisations that are detrimental to internally generated innovations (Hitt & Hoskisson, 1996). The article from Nohria and Gulati (1996) investigates how resources promote innovation. The authors argue that there is an inverse U-shaped relationship between the degree of slack available to organisational subunits and the extent of innovation these units produce (Nohria & Gulati, 1996). The inverted U-shape that they propose is a resolution of the apparent contradiction between the two proposed arguments; slack is essential for innovation and slack leads to wasteful, undirected behaviour. Thereby the model supports the view that both are valid to a point (Nohria & Gulati, 1996). The article by Dougherty and Hardy (1996) aims to determine if large organisations developed an ability to sustain innovation over a long period of time and examines multilevel contextual effects on innovation. Dougherty and Hardy (1996) argue that there are two levels of problems associated with innovation: those affecting a particular project and those affecting the organisational context. Considering the organisational context they suggest that structures and strategies in mature organisations reinforce existing practices and can, therefore, be ‘hostile to creativity’. Therefore, the inertia of current practice can overwhelm concerted efforts to change (Dougherty & Hardy, 1996). The fourth article by Amabile et al., (1996) devotes their attention to the psychological context that promotes or inhibits individual creativity. To these authors creativity is a necessary but not significant condition for innovation; for innovation to occur, a psychological context must exist that allows individuals to be creative. Creativity is the missing link between context and innovation as an outcome (Amabile et al., 1996). Therefore, the outer circle (Circle C) presents the contextual data, dedicated to the specifics of the individual firm ensuing from the qualitative data. The theme has been developed to include dimensions discussed as an important driver for innovation in the literature, (Rothwell, 1992; Amabile et al., 1996) e.g. culture, business environment, strategy and current practices. The rationale for a theme for context was to acknowledge that the innovation process is not a generic process applicable to all organisations but an attempt to understand it at the organisational level. As a consequence this circle was found to be dynamic and changed according to the


INNOVATION COMPASS

individual organisation being studied. The section was generated solely from the qualitative data generated from the case study. The context circle was made to encompass both the inner and middle circles reflecting that context transcends all the dimensions of innovation on the compass. From the literature discussed above it can be argued that the context is the internal being of an organisation as it impacts the organisations ability and willingness to develop new products. Arguably though similar factors that allow for successful new product development could exist and understanding the context may help in identifying these.

Discussion and Conclusion This paper has presented the research diagnostic tool referred to as the innovation compass, which has been argued as a possible self-audit tool for organisations engaged in new product development. The paper provides the rationale for such a tool through the background and development section of this paper. A populated version of the compass is presented in figure 4, to illustrate how a final compass is presented to organisations. The compass presents a case study, which is referred to as Bearings. Bearings manufactured clutch and brake systems for use in industrial machinery. In 1999 Bearings was sold, the company now acts as an independent SME. The initial visit encompassed interviewing a cross-section of employees from product design to the factory floor as well as differing levels within the organisation. To aid the researchers’ appreciation of Bearings and its operations a tour of the factory and offices was undertaken. The inner circle of the compass for Bearings shows that they deviated from the average on three of the four comparable themes, these being teams, leadership and output. Bearings scored lower than the average on ‘learning from understanding’ within the team section of the compass. It would appear this stems from the changes experienced in the new management system, and their desire to be proactive in new product development. The theme of leadership illustrated that Bearings perceived that their leadership was not transformational in nature, and scoring low on the transactional factor as well. The output dimension allowed Bearings to understand that in terms of the ‘innovation’ factor the organisation did not perceive themselves to produce innovative products. The results for structure illustrated Bearings deviated little from the average.


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The middle and outer circle in figure 2 substantiate and elaborate on the characteristics highlighted in the quantitative data. This provides the organisation with the opportunity to understand in more detail all aspects of the compass. The qualitative data verifies the quantitative data illustrating that the interviewees did not perceive Bearings as an innovative organisations. The qualitative data allowed the researchers to determine why this might be the case. The contributing factor to Bearings perception of its lack of innovation discovered in the case study was that Bearings had recently been acquired. Therefore the remnants of the old management styles were still in place, with new product development not having been actively encouraged. This was recognised to be changing, it was proving to be a slow process, with people struggling with the changes from the new management. The populated compass in figure 4 illustrates that the compass helps the individual organisation to identify gaps between current and desired performance, as the inner circle demonstrates. The compass aids in two distinct ways in helping organisations to understand their new product development process. Firstly, it facilitates organisations in understanding how new product development is carried out in their organisation and importantly the context in which it occurs. Secondly, the tool provides the organisations with the ability to benchmark their performance in the same broad areas as others. The populated compass (figure 4) has been used to illustrate the tools usefulness to practioners and academics. The compass allows the organisation to participate in the process of self-audit as opposed to following a rigid prescriptive model. The middle and outer circle (as can be seen in figure 2 and figure 4) substantiate and elaborate on the characteristics highlighted in the quantitative data. This provides the organisation with the opportunity to understand in more detail all aspects of their new product development process including the context they are operating within. As a direct consequence of the richness of qualitative data it hoped that it will be possible to identify any patterns of new product development practice. The research has found that the compass has been particularly useful for SME companies who have a good understanding of their new product development process but not necessarily their context. The innovation compass has allowed them to carry out a ‘health check’ on their innovation process which gives them a visual tool to question any ‘gaps’. This means that the compass guides organisations

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Figure 4. A Populated Compass for Bearings rather than them blindly following or investing in new product development when other elements require development. For example Bearings (figure 4) have an understanding the impact new management is having on the workforce. From this Bearings are in a position to reflect on this information and develop their own action plan that will enable the company to combat these issues, and then they use new product development in a more positive way throughout the organisation. Finally, the research has attempted to address the issue of context within innovation. Drazin and Schoonhoven (1996) iterated the point that a large group of researchers feel that context is an important part of a research study. The four papers in the special research forum highlight this point perfectly by examining innovation and the context which it takes place. The point is clearly illustrated that context can and does impact on an organisations ability to innovate and that these

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contexts are important to understand. The literature appears to agree that context is an important and valid construct, but little has been written on the subject (Drazin & Schoohoven, 1996). Hence, the innovation compass emphasises the need to understand this relationship by considering the fifth element to be context or, to put it another way, the other four elements need to SLOT into context! Future research in this area will involve further case studies that will allow for cross case and statistical analysis. The cross case and statistical analysis may be used to investigate the effect, if any, that the stages of new product development have on the factors. Also, it might be possible to attempt to identify any ‘critical’ factors which would be important for organisations to address. Finally, some attempt may also be made, through the statistical analysis, to identify the relationships between the various factors


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within the compass. It is hoped that this further analysis together with the compass provides a richer understanding of new product development within particular organisational contexts.

Note 1. EPSRC grant number GR/N21833. The authors would like to acknowledge co-researchers on the grant; Professor Tudor Rickards, Dr Qi Xu and Dina Akhmetova.

References Adler, P. (1989) Technology strategy: A guide to the literature. Research on technological innovation, management, and policy. R. Rosenbloom and R. Burglemann. JAI Press, Greenwich, CT, 4, 25– 151. Amabile, T. M., Conti, R., Coon, H., Lazenby, J. and Herron, M. (1996) Assessing the work environment for creativity. Academy of Management, 395, 1154–1184. Ancona, D. G. and Caldwell, D. F. (1992) Bridging the boundary: External process and performance in organisational teams. Administrative Science Quarterly, 37, 634–665. Barclay, I., Dann, Z. and Holroyd, P. (2001) New Product Development: A Practical Workbook for Improving Performance. Butterworth-Heinemann, Oxford, UK. Beckhard, R. (1979) Strategies for Large System Change. Organisational Psychology: A Book of Readings. J. M. McIntyre. Prentice-Hall, New Jersey, 461–472. Belbin, M. (1981) Management Teams: Why They Succeed or Fail. Heineman, London. de Bono, E. (1990) I am Right You Are Wrong. Viking, London. Brown, S. L. and Eisenhardt, K. M. (1995) Product development: Past research, present findings and future directions. Academy of Management Review, 202, 343–378. Burgelman, R. A., Kosnik, T. J. and Poel, M. v. d. (1988) Toward an innovative capability audit framework. Strategic Management of Technology and Innovation. R. A. Burgelman and M. A. Maidique. Homewood, 31–34. Chiesa, V., Coughlan, P. and Voss, C. A. (1996) Development of a Technical Innovation Audit. Journal of Product Innovation Management, 13, 105– 136. Clark, K. B. and Fujimoto, T. (1991) Product Development Performance. Harvard Business School Press, Boston. Cooper, R. (1999) New Product Leadership: Building in the Success Factors. New Product Development and Innovation Management, 12, 125–140. Cooper, R. G. (1996) Overhauling the New Product Process. Industrial Marketing Management, 25, 465–482. Cooper, R. G. and Kleinschmidt, E. J. (1988) Resource allocation in new product success and


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failure. Industrial Marketing Management, 173, 249–262. Dosi, G. (1988) Sources, procedures and microeconomic effects of innovation. Journal of Economic Literature, 26, 1120–1171. Dougherty, D. and Hardy, C. (1996) Sustained product innovation in large, mature organisations: Overcoming innovation to organisation problems. Academy of Management Journal, 395, 1120–1153. Drazin, R. and Schoonhoven, C. (1996) Community, Population and Organisation Effects on Innovation: A Multilevel Perspective. Academy of Management Journal, 395, 1065–1083. Ekvall, G., Arvonen, J. and Waldenstron-Lindblad, I. (1983) Creative organisational climate. Construction and validation of a measuring instrument, The Swedish Council for Management and Work Issues. Griffin, A. (1997) PDMA Research on New Product Development Practices: Updating Trends and Benchmarking Best Practices. Journal of Product Innovation Management, 14, 429–458. Hart, S. (1993) Dimensions of Success in New Product Development: an Exploratory Investigation. Journal of Marketing Management, 9, 23– 41. Hughes, G. D. and Chafin, D. C. (1996) Turning New Product Development into a Continuous Learning Process. Journal of Product Innovation Management, 13, 89–104. Hitt, M. A. and Hoskisson, R. E. (1996) The market for corporate control and firm innovation. Academy of Management Journal, 39, 5, 1084 Kiernan, M. J. (1996) Get innovative or get dead. Business Quarterly, London. Mintzberg, H. (1979) The Structuring of Organisations. Prentice Hall International Editions, New Jersey. Nelson, R. and Winter, S. (1977) An evolutionary theory of economic change. Belknap Press, Cambridge, England. Nohria, N. and Gulati, R. (1996) Is Slack Good or Bad for Innovation? Academy of Management Journal, 39, 5, 1245–1264 Nonaka, I. and Takeuchi, H. (1995) The Knowledge Creating Company: How Japanese Companies Create the Dynamics of Innovation. Oxford University Press, Oxford. Nystrom, H. (1990) Technological and Market Innovation: Strategies for Product and Company Development. Wiley, Chichester, UK. Ohmae, K. (1982) The Mind of the Strategist: The Art of Japanese Management. McGraw-Hill, New York. Pettigrew, A. M. (1985) The Awakening Giant: Continuity and Change in ICI. Blackwell, Oxford. Pettigrew, A. M. (1987) Context and action in the transformation of the form. Journal of Management Studies, 246, 649–670. Radnor, H. A. (2002) Researching your own professional practice: Doing interpretive research. Oxford University Press. Rickards, T. (1990) Creativity and Problem-Solving at Work. Gower, Farnborough, UK. Rickards, T. and Bessant, J. (1980) The creativity audit: Introduction of a new research measure

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during programmes for facilitating organisational change. R&D Management, 102, 67–75. Rickards, T. and Moger, S. (1999) The Development of Benign Structures: Towards a Framework for Understanding Exceptional Performance in Project Teams. Journal of New Product Development and Innovation Management, 12, 115–128. Rickards, T. and Moger, S. (1999) Handbook for Creative Team Leaders. Gower, Aldershoot, Hants. Rickards, T. and Moger, S. (2000) Team development revisited: Preliminary evidence supporting a two barrier model. Global Business Review, 11, 51–65. Rothwell, R. (1992) Successful industrial innovation: critical factors for the 1990’s. R&D Management, 223, 221–239. Schumpeter, J. (1950) Capitalism, Socialism and democracy. Harper & Row, New York. Senge, P. M. (1990) The Fifth Discipline: The Art and Practice of the Learning Organisation. Double Day, New York. Takeuchi, H. and Nonaka, I. (1986) The new product development game. Harvard Business Review, January–February, 138–146. Taylor, W. (1990) The business of innovation: An interview with Paul Cook. Harvard Business Review.

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Urabe, K., Child, J. and Kagono, T. (1988) Innovation and management: International comparisons. de Gruyter, Berlin. Van de Ven, A. H., Angle, H. L. and Poole, M. S. Eds. (2000) Research on the Management of Innovation. Oxford University Press Oxford. Wah, L. (1989) Ultimate manufacturing. Management Review New York. Wheelwright, S. C. and Sasser, W. E. S. Jr. (1989) The new product development map. Harvard Business Review. Zirger, B. J. and Maidique, M. (1990) A model of new product development: An empirical test. Management Science, 36, 867–883.

Dr Zoe J. Radnor is a Lecturer in Operations Management and Ms Hannah Noke is a Research Assistant. Both are at Bradford University School of Management, Emm Lane, Bradford, BD9 4JL.


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