Managing Innovation

The following sections are included:

• Dedication
• About the Editors
• List of Contributors
• Contents

This volume explores innovation success factors by examining new product and service development through three parts: Innovation Management, Critical Factors in New Product Development and Tools for NPD.

To survive competition, it is vital for firms to be innovative. As a firm’s cultural predisposition, organisational innovativeness provides an environment that fosters innovations and thus actively supports new product or service development. The purpose of this study is to measure organisational innovativeness and its multiple dimensions from a cultural-strategic perspective on a multifaceted formative scale which we develop theoretically and by means of qualitative interviews. Furthermore, we empirically validate the newly developed construct by investigating how innovativeness and its dimensions translate into innovation success by examining the relationship between innovativeness and innovation performance in depth. Our findings suggest that a strategic focus on innovations, an extrinsic motivation system, openness in communication, as well as management encouragement are all dimensions of organisational innovativeness. Further, our results support the need for a proficient innovation process as a mechanism to systematically and continuously translate innovativeness into successful innovations. Innovation process proficiency fully mediates the relationship between innovativeness and innovation performance, while the contingency factor competitive intensity enhances this performance impact.

New product development is considered as one of the survival strategies for organisations with high risk which is related to extreme failure rate that should not be neglected. Among internal and contextual factors which affect winning or losing in new product development (NPD), the role of top management team as key decision makers is critical. The objective of our research is to explore managerial factors influencing success in new product development. To find out these factors, relevant literature was reviewed and specific top managers were interviewed. Afterwards, a survey was administrated to elicit the opinions of managers involved in NPD in accordance to the degree of each factor’s importance. This study examined six factors assumed to be critical in top management level to achieve success in NPD including commitment, regulatory focus, entrepreneurial orientation, social capital, international orientation and tendency of top managers to future study.

Management literature prescribes innovation as a stimulus for sustained competitive advantage in companies; however, the nature of the development in this field has resulted in the literature being broad and fragmented. This paper focuses on the body of literature concerned with the factors which influence innovation management in organisations. The aim of this research is to present a holistic view of the factors that affect innovation management. Using a systematic literature review approach, using over 100 papers, this research identifies nine key factors that impact on an organisation’s ability to manage innovation. These nine factors have been identified as management style and leadership, resources, organisational structure, corporate strategy, technology, knowledge management, employees and innovation process. This paper then discusses the inductively derived model that presents the important relationships identified between the factors to present a holistic view of innovation management. From this, we open up the debate on innovation management as a systemic approach rather than being focused on the singular factors. We can therefore conclude that a number of dominant relationships exist between the factors with the innovation process being the only endogenous factor within the model.

New product sales are hard to predict. Our analysis of sales performance two years after market launch reveals that three groups of factors do not increase the accuracy of predicting new product sales: (1) A firm’s general experience and experience with innovation; (2) High technological competences and strong knowledge networks; (3) Customer involvement in new product development. R&D managers should realise that experience with innovation as well as high technological competences, while possibly helpful during the development stage, do not necessarily enhance an accurate prediction of new product sales. Moreover, other than intuitively expected, networking can be ambiguous: It reduces uncertainty about future sales performance by providing information; but it may also enhance knowledge leaking to competitors, thus increasing probabilities of unexpected failure.

Our research examines the relationships among four factors thought to be important to new product developing organizations. Those factors include the speed with which product developers produce new products and bring them to market; the degree of integration among the various groups participating in the New Product Development (NPD) process; the proficiency with which the product developers perform their tasks; and the degree of success attained upon the completion of the NPD process. Market dynamism, or the degree of customer changeability, and market hostility, or the degree of market competitiveness, are thought to moderate the relationships among the four previously noted factors.

The research questions driving our investigation include: (1) Does NPD project success vary with NPD process speed?; (2) Does NPD speed vary across innovation types (new-to-the-world products, line extensions, etc.)?; (3) Does the strength of the relationships among NPD speed, organizational integration, NPD proficiency (overall and Fuzzy Front End [FFE]), and success vary with the degree of environmental dynamism (changing customer needs)?; and (4) Does the strength of the relationships among NPD speed, organizational integration, NPD proficiency (overall and FFE), and success vary with the degree of market hostility (competition)? We probed the electrical equipment, medical device, and heavy construction equipment industries to provide the data to address our research questions.

Our research suggests that the speed with which projects were completed in our sample did not vary between projects that were more or less successful. We also found that the speed with which projects were completed did not vary across various product categories (new-to-the-world, line extensions, etc.) of newly developed products for the industries studied. Primarily, we found that market dynamism moderates the relationship between NPD speed and NPD proficiency whereas environmental hostility mediates NPD speed and NPD proficiency, NPD speed and organizational integration, and NPD speed and new product market success.

Our data indicate that speed is not associated with NPD proficiency, degree of organizational integration, and new product success in less dynamic markets whereas speed has an inverse relationship with successfully entering new markets, the proficiency with which development and launch activities are performed, and the proficiency with which new product marketing strategies were implemented in more dynamic markets. Finally, we found that speed is inversely related to successfully entering new markets, overall NPD proficiency and organizational integration, pre-development stage proficiency and organizational integration, and development and launch proficiency and organizational integration in non-hostile (competitive) environments whereas we found no significant relationships between these factors and speed in hostile environments. We provide several implications for both scholars and NPD managers.

Innovation could be recognised as a key success factor in an increasingly competitive, global economy. The purpose of this paper is to examine the relations among market orientation, innovation strategy, innovative capability and innovation success in small and medium-sized business in developing countries. This study builds a model related to the most important factors that influence mostly innovative capability of firms, such as market orientation, technological orientation and innovation strategy. Then it examines the relationships between these factors and the innovative capability. A practical research was carried out in the Turkish software industry. Analysis, futurity and proactiveness dimensions of innovation strategy influence the innovative capability of software firms. Also, only customer orientation component of market orientation influences the innovative capability of the firms. Effects of other factors are not significant. Results of this study could lead to effective management of innovation for the software firms and benefits for the firms’ managers.

The concept or paradigm of open innovation has gained more and more attention over the last couple of years. Firms see open innovation nowadays as an important capability to build and maintain innovativeness, even in dynamic global markets. Nevertheless, there is still a lot of uncertainty regarding the question which factors determine successful innovation within the open innovation environment. In this regard, based on the dynamic capabilities view, we hypothesise that a firm’s openness, its absorptive capacity and its flexibility primarily determine innovation success in in-bound open innovation environments. To test these hypotheses, we analyse a large scale survey sample of 496 German manufacturing companies from different industries by applying structural equation modelling. As a main result, we find evidence for a positive association between the three mentioned constructs and innovation success.

The purpose of this study is to examine the effects of factors of environmental uncertainty on the innovativeness of small and medium enterprises (SMEs). Innovativeness is widely accepted as an important characteristic for firm competitiveness and it has been studied by both researchers as well as business managers. Environmental uncertainty is a measure of the complexity of changing external forces faced by an organisation and it crucially impacts the responses of organisations in order to stay competitive. Based on approaches in existing literature, this study conceptualises environmental uncertainty comprised three separate dimensions — competitive intensity, market/demand turbulence, technological turbulence. Data for the study were collected from 156 SMEs in Turkey. SMEs are regarded as an important ingredient in the economic growth of nations and especially so in developing nations such as Turkey. The findings of the study reveal that market/demand turbulence and technological turbulence have a positive effect on the innovativeness of SMEs. Interestingly and contrary to popular belief, competitive intensity was not found to have significant effect on an SME’s innovativeness. The implication of the results from this research is that the degree of organisational innovativeness for SMEs tends to increase and therefore should be supported in environments with greater technological and market/demand turbulence. This research makes an important contribution to the developing body of innovation literature and provides directions for managers and researchers in influencing innovativeness of firms.

Facilitating the company’s competitive advantage building as well as enhancing its financial performance, the fitness between one company’s technology strategy and its corporate strategy plays a significant role of ensuring the deployment of the company’s technological capability and technological resources. In order to analyze the factors which influence the fitness between a company’s technological capabilities and its corporate strategy, this study introduces four factors based on the former relevant studies. They are the external environment, top management, firm’s technological resources and the organizational convergence ability. Moreover, this study has creatively utilized technology attitude, product innovation and process innovation as three indicators to measure the studying object: the fitness between a company’s technology strategy and corporate strategy. After empirical research, a model is constructed, with all the detailed influencing factors and their functional mechanism included. Finally, the limitations and future expectations are discussed.

Why do scientists and engineers in government laboratories and private companies cooperate and exchange and commercialize technology? What are the factors that impact the propensity to commercialize and the success of such collaborations? These research questions were explored in the extant literature, but the focus has mainly been on the impacts of incentives that employees of public technology laboratories received from their management. This paper reports the findings from a study of 43 government laboratories and 51 industrial companies in the United States. The study expanded the focus of previous research by considering the set of managerial, economic, cultural, and organizational factors as well as the impacts of internal entrepreneurship — in both the public laboratories and private industry. The study also contributed to the literature on internal entrepreneurship by expanding and empirically testing the integrative concept of intrapreneurship. The results show that internal entrepreneurship of the scientific and technical workforce in both types of organizations is the most powerful predictor of commercialization and technology transfer in the public–private cooperation. Other factors found to impact the success of the commercialization effort are senior management support and a culture that encourages cooperation across organizational boundaries. This paper contributes to the state of knowledge in that it establishes empirically that the incentives most likely to work to improve cooperation between public and private technology organizations are those that create a supportive environment for internal entrepreneurs within these organizations, rather than a basket of the usual incentives designed to foster a specific behavior. These findings also contribute to the making of technology policy in developed countries as well as in the emerging world, where the need to encourage cooperation between public and private technology enterprise is increasingly recognized as a powerful economic and technological foundation for growth and prosperity.

The need for effective and efficient product innovation (PI) is a great challenge for organisations in today’s hypercompetitive global markets. Many research studies addressed problems/obstacles to successful PI from various perspectives. Many other - studies proposed factors to help companies mitigate such problems. Here, the primary objective is to propose an integrated model, to empirically test this model, and get insights about which factors, if managed appropriately, will help reduce the obstacles to PI in practice. A questionnaire was developed, pilot tested, and used to collect data from 47 PI managers. The results support the theoretical importance of a formal PI process, characteristics of the company environment, and the availability of specific resources as important factors to reduce obstacles to company PI. Based on the results recommendations are made to practitioners and researchers in this important area.

Changes in the duration of product life cycles (PLCs) have been identified as a driving factor for increasing the speed of new product development (NPD). However, the facilitating potential of increasing the speed to market of new products regarding their success has been subject to extensive debate. In this paper, we shed light on the long-run dynamics between PLC and key innovation performance indicators. A large secondary data set allows us to investigate long-run within-company differences. We observe significantly shrinking PLC on the one hand and significantly increasing NPD speed on the other. A change in the length of the PLC is positively linked to changes in time to market (Ttmarket) and time to volume. Also, we confirm a positive empirical relationship between shorter Ttmarket and quicker implementation of targeted quality and productivity. However, we cannot confirm a positive relationship between shorter Ttmarket and shorter time to break-even of investments.

Entrepreneurial technology-based new venture constitutes a dominant proportion of incubated firms. Often, such firms are established by engineering graduates. This paper investigates a methodology for assessing the potential for success of new ventures set up at an early stage by engineering students via an evaluation of the entrepreneurial personalities of engineering students. The survey of 215 students of Manufacturing Engineering indicates particular traits have a strong predictive impact on the proclivity towards the different ‘idea factors on innovation’ suggested by Goldenberg et al. (1999). In particular, ‘risk-taking propensity’ and ‘need to achieve’ are two critical characteristics that significantly influence the selection of ‘success-intended’ idea factors whereas ‘external locus of control’ influences the selection of ‘failure-intended’ idea factors. The findings have important implications for researchers, business incubators, and policy makers inside and outside universities. Based on the extensive literature and successful result in demonstrating entrepreneurial characteristics as predictors of sustainable competitive advantage of future entrepreneurs by identifying types of idea factor adopter, the results of this study can be used either as a self-evaluation (self-screening) before starting a new venture that has a higher success probability. Specifically, the results indicate that the classification of idea factor adopters, in terms of entrepreneurial behavior, the incubator may be better able to identify the go or no-go decision for applicants. For instance, incubators could try to base their selection process for business incubation programme partly on information provided by applicants about personality traits and preferences regarding entrepreneurship.

The following section is included:

• Index