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Long Range Planning

41/4 August 2008

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Charles Baden-Fuller Editorial

Innovation and Management

I am pleased to introduce four articles that focus on the managerial challenges of innovation. Roger Miller, Xavier Olleros and Luis Molinie´ draw up a typology of seven innovation games that firms can successfully play, and focus on how they are manifest in the dimensions of market creation, market maintenance and innovator support. They argue that innovation rules are neither universal nor narrow industry-specific recipes. Instead, distinct contexts call for specific strategies and rules to create and capture market value that leave ample room for creative competition. This piece has great value for both academics and practitioners.
It is widely recognized that strategic alliances enable knowledge to be combined to stimulate innovation, but we also know that alliances are costly and differ greatly in the type and quality of their contributions. Giovanna Padula explains how firms and their managers can improve innovativeness by exploiting the complementarity between densely clustered alliances and those between previously poorly connected entities. The dynamics of getting the best is carefully unpicked, with lessons for academics who teach and research alliance managers.
Generating creativity in mature organisations involves getting the morality of the organisation sorted out. When Ajit Nayak investigated creativity in one of UK’s larger supermarkets he found that the usual factors were at work: the balance between intrinsic-extrinsic motivation, organizational politics and pleasure. But the morality dimension seems to be overlooked, although it seems a critical factor: researchers and managers need to take note.
Conventional wisdom suggests that you start with a small firm, grow in stages, and become international after you have developed your local presence successfully. In the increasingly global, connected economy a new type of entrepreneur is emerging: the one who starts by thinking and acting globally. Neri Karra, Nelson Phillips and Paul Tracey examine what being ‘born global’ means and how international opportunity identification, institutional bridging, and a capacity and preference for cross-cultural collaboration are key success factors for such entrepreneurs. This is an eye opening piece for those who advise or assist young firms as well as for the academic who studies entrepreneurship.

 

Roger Miller, Xavier Olleros and Luis Molinié Innovation Games: A New Approach to the Competitive Challenge  roger.miller@polymtl.ca

Firms need to be innovative to stay ahead of the competition. But what form does innovation take in today's fast-moving world? The conventional view is that innovation is confined to the R&D departments of large firms, where boffins labour to perfect new products that meet presently unmet customer needs, and patents and copyrights protect market supremacy. In this ‘closed system’ scenario, all managers are striving to follow universal best practices, and as a consequence can find themselves trapped in competition that ultimately gets no one very far. The authors argue that in reality, 21st century innovation is a much more fluid affair. For example, rather than being released as a finished product, the first generation of a new product may be a prototype with corners still to be rubbed off when it enters the market: adventurous early customers themselves help to hone performance over time. Similarly, rather than R&D being an internal business, an entire ecosystem of smaller firms may collaborate and interact, under the direction of the lead company, in the innovation process. Analysing data collected from a large number of firms across different industry sectors, the authors set out to create a more holistic, multi-dimensional approach to understanding innovation. To this end, they draw up a typology of seven ‘games of innovation’ with different characteristics; games cut across industries and sectors, and different firms may play one or more. Their empirical findings highlight the fact that ‘design rules’ are not always drawn up in R&D laboratories but in many cases emerge as a result of negotiations and competition between many players. Rather than imitating competitors, managers should focus on identifying the games their own firm is playing and the strategic issues that shape those games.

 

Giovanna Padula Enhancing the Innovation Performance of Firms by Balancing Cohesiveness and Bridging Ties giovanna.padula@uni-bocconi.it

Which kinds of alliance produce the best results for firm innovation? Cohesive alliances sponsor a normative and trusted environment of highly-connected partners which can help ensure innovative ideas are actually brought to fruition. But how can they avoid redundancy of knowledge flows - and how do new ideas make it into established clusters? Sparser alliances enable firms to be more open to new ideas and market trends – but by themselves may lack the mutual resources or experience to execute the ideas. The authors propose a dual alliance structure as the normative ideal for innovation, and conduct an empirical analysis of the US mobile phone industry during the 1990s to substantiate their point. They note how bridging ties (‘shortcuts’) allow ideas to flow from one cluster to another, where they may be successfully exploited, or can act as the core of a new group of partnerships, leading to the reorganisation of established clusters.

 

Ajit Nayak Experiencing Creativity in Organisations: A Practice Approach a.nayak@bath.ac.uk

Few managers are known for their creative genius, yet managers are often required to respond creatively to organisational situations. While, traditionally, creativity is thought of as a person's ability to produce something novel and appropriate, creativity for individuals in organisations is something that gets a job done: managers accomplish something in a novel and appropriate way. This paper provides insights into managers' creativity by drawing on two avenues. First, the author draws from theories from the “practice” approach and then he empirically draws from insights gained from a study within the supermarket retailing industry. While this sector is generally associated with innovations in supply chains and distribution, the case study examines the three-year programme at a major supermarket to transform itself into a creative organisation in order to meet its competitive challenges. This study reveals how managers experience four distinct but interrelated tensions and contestations: motivation; organisational politics; pleasure; and personal morality. While the author says that previous studies in creativity have tended to overlook the issue of morality, in this paper he argues that it is this factor that enables managers to make a judgment and decide what to do. His findings show that in a creative organisation, the role of organisational ethics diminishes and managers rely on their own values and beliefs. Awareness of personal morality as an important dimension of experiencing organisational creativity can contribute towards a better understanding of how and why a reconstruction of an organisation along creative lines may succeed or fail.

 

Neri Karra, Nelson Phillips and Paul Tracey Building the Born Global Firm: Developing Entrepreneurial Capabilities for International New Venture Success n.phillips@imperial.ac.uk

While many firms build new international enterprises on the back of domestic success, some significant contemporary success stories – such as EasyJet, Logitech and Skype - have involved ‘born global’ firms, who conceive of an international landscape from their very inception. But what kind of entrepreneur is involved here? This article traces the history of how Ismail Karov, a Bulgarian national forced to flee to Turkey, combined his knowledge of these two domestic contexts with his ability to sense international market opportunities in post-socialist Russia and Eastern Europe. The result has been the development of two successful businesses - Jenni and Neroli – incorporating Italian design, Turkish manufacture and Russian retailing. This entrepreneurial energy led on to the first up-market Russian menswear chain-store, now involving 77 stores and over 750 people, with further expansion across Eastern Europe, North America and the Middle East in prospect. The authors propose three entrepreneurial capabilities as particularly important for successful international new venture creation – international opportunity identification, institutional bridging, and a capacity and preference for cross-cultural collaboration, while also noting the significance of entrepreneurial creativity and imagination. They discuss how budding international entrepreneurs can develop such capabilities and the implications of their findings for entrepreneurship research and practice.

 

This issue is available in full on-line at www.sciencedirect.com

 
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