Professional Documents
Culture Documents
and
dynamics
lnnovation
processes
knowledge
Introduction
Gharacterizinginnovation processes
Thedeliberate or transformation,
modification, processes,
of itsproducts/services.
by an organization
0r structures.
ldea
:r_ Conception
,-
.t Appraisalof\
\_r_ Needs
-__,/
Design/Buy
lmplementaion
F i g . 1 1 . 1 . T y p i c a lc o m p o n e n t s i n s t a g e m o d e l o f i n n o v a t i o n
I N N O V A T I OANN D K N O W L E D GMEA N A G E M E N T
Utilizationof Diversebodies
i n t e r n aal n d of knowledge
external typically
networks
The insight that innovating organizationsneed to interact with external actors is not
totallynew (Lundvall 1988;Pavitt 1984;von Hippel rg76,19gg). But, a number of factors
that emergedduring the 1980smean that the extent and intensity of such interactions
has increased significantly. Swan et ar. (1999), for example, argue that advancesin ICTs
and the move to virtual and network forms of organization mean that innovations are
increasinglybecoming organization-widein scope,requiring intra-organizationalinter-
actions between different functions and businessunits. Meeuset al. (2001) suggestthat
the growing complexity of innovations contributes to the increasinginteractivenessof
innovation processes, as the more complex an innovation, the more likely it is that all
relevantknowledgewill not be internally possessed. Finally,Jacquier-Rouxand Bourgeois
(2002),drawing on the influential work of Gibbons et al. (rg94), suggestthat
the chang-
ing nature of knowledge production in society, from narrow, disciplinary basedinnova-
tions, to trans-disciplinaryinnovations helps explain the increasinginteractivenessof
innovation processes.
Nonaka and Takeuchi(1995)usefully capturethe characteristicsof the stageand inter-
active innovations model, and the contrastsbetween them, through the use of sports
metaphors.For them, the 'stagemodel' of innovation processes is comparableto a relay
race where the baton (innovation) is dealt with in separatediscretestagesby isolated
individuals/groups,beforebeing passedon to those responsiblefor successive stages.By
contrast, interactive innovation processesare compared to the use of a ball in a rugby
match, with the ball (innovation) being moved towards the try line through collaborative
I N N O V A T I OANN D K N O W L E D GPER O C E S S E S @
team-working, and continued interaction (such as passingor moving) between all the
team's players. More formally, Meeus et al. (2001) define interactive learning as the
continuous exchange and sharing of knowledge resources conducive to innovation
processes, between an innovating firm and its customersand suppliers.This is a useful
deflnition exceptfor the unnecessarilynarrow focus on customersand suppliers.As will
be seen,innovation processes involve organizationsinteractingwith a much wider range
of organizations.
processes
whichare most importantin makinginnovation
Of allthe diversefactorsidentified,
moreinteractive?
The need for extensive and repeated interactions between organizations during
innovation processesquestionsthe linearity of the stagemodel, and suggeststhat the
notion of innovation processes involving discrete,sequentialstagesis oversimplistic.As
innovation processes becomemore interactivethe more likely it is that there will be over-
laps betweendifferent stages.One of the most visible ways in which this occursis in the
blurring of the boundary between design and implementation activities. Thus a number
of writers suggestthat the implementation of innovations can produce important
changesto the characteristics of the innovation being implemented (Badhamet aI. 1997;
LeonardBarton 1995;Swan et al. 1,999).An important consequenceof such dynamicsis
that innovations require to be understoodasmalleableand adaptablerather than having
fixed and objective properties.Thus, different organizationsmay adapt similar innova-
tions in quite different ways. For example, two organizations may utilize the same
ICT-basedknowledgesystems(suchas intranets,data-warehouses, etc.)in quite different
ways,with one using it'as designed'without modification, while the other customizesit
signiflcantly through collaborating with the systemsdesigner.
In conclusion, this section has shown that one of the key characteristicsof contemporary
innovation processesis their typically interactive nature/ requiring innovating companies
to intensively work with a wide and diverse range of organizations, gloups, and indi-
viduals. This characteristicof innovation processesthus links closely with the other key
elementsof innovation processes examined:the importance of networksand knowledge
processes.However,aswill be seen,and aswas discussedin Chapter 6, this type of working
relationship is by no means straightforward to manage. Firstly, there is a need for some
common knowledge to exist (or be developed) between collaborating partners. Second,
such work can involve collaboration between communities that may have distinctive and
divergent cultures or values. Thirdly, the type of trust-based social relations that are
conducive to knowledge-sharingmay not initially exist. Finally, the tacit, context-specifrc,
structurally and contextually embedded character of much organizational knowledge
makes it difficult to share.These issueswill be examined in detail in the following two
sections.
This section examines the way the contemporary literature on innovation processes
increasinglyacknowledgesthe importance of knowledge.Their interrelatednessmeans
that it is quite uncontroversialto suggestthat innovation processesare fundamentally
knowledge processes,involving the creation, utilization, management,and manipula-
tion of knowledge. This is done in two contrasting ways, by examining firstly the influ-
ential work of Nonaka and his collaboratorson knowledge creation, and secondlyhow
the general characteristicsof knowledge affect the dynamics of innovation processes.
However,the interrelatednessof knowledge and networking issuesmeans that totally
>eparatingthem into discretesectionsis impossible.Thus, some networking issuesare
lealt with here and, equally,some knowledgeprocesses are consideredin the following
iection on networks.
Knowledge creation
\onaka and Takeuchi(1995) somewhatambitiously develop a theory of organizational
{nowledge creation that both explains why certain Japanesecompanies have been
.uccessfulinnovators, and which attemptsto blend togetherthe best aspectsof Japanese
.nd Westernbusinesspractices.This work has been developedand clarifiedprimarily by
\onaka, along with a numbel of collaborators(Nonaka 1994, 1998;Nonaka et al. 2000,
1001). While_their theory is centrally concerned with the dynamics of knowledge
::eation, they also considerimportant contextual factors such as the most applopliate
However,here the focusis primarily on
, rganilational forms and managementstrategies.
:reir conceptualizationof knowledgeprocesses.
I N N O V A T I OAN
N D K N O W L E D GMEA N A G E M E N T
(platformsfor knowledge
ba
Originating D i a l o g u i nbga Systematizing E x e r c i s i nbga i s
A physical lhi6r ^6re^n.l
r,,Lv, vv,rv"v' ba is a virtual the location
locationwhere interactron, ratherthana where people
^4.,^i^^l ^l^^^ actuallycarry
face-to-face thoughnot pIyJruor vrous,
interaction face-
necessarily Forexample,new out theirwork
occurs. to-face,where (lCTs)facilitate tasksand
mentalmodels, the transferral, activities.
andtacitvalues andabsorption of
^^^
t,dil
a^
uu
^h^"^i
Jt totEu. explicitknowledge
usedin innovatton
do to reducethe complexityof the knowledge
What,if anythlng,can organizations
processes?|scomplexknow|edgesomethingthat,byitsnature,isirreducibletoasimp|erform?
of
different ways to examine the importance
In conclusion, this section has shown two
processes:through examining the knowledge
knowledge to the dynamics of innovation the
the characteristicsof knowledge' what
processesinvolved, and through examining
chapterhasalsoshowistheinterrelatednessofknowledgeandnetworkingissues.For
example,thetypicallytacitnatureofmuchorganizationalknowledgemeansthatgaining
of networks with people who possess
accessto such knowledge requires the development
relevantknowledge(Hislopetal.2000;powell1998).Equally,thissectionhastouched
uponhowthechalactelofknowledgeaffectsthetlpeofsocialrelationshipnecessaryfor
and the characterof social relations within
effectively sharing it. Theseissuesof networks,
section'
them, are the central focus of the next
Relations
Subcontract Short-MediumTerm Canvarytrom short-term,market-based
relations,
contractual relatlons
to longer-term
innovation
suchas collaborative development.
Alliances
Strategic MediumTerm A medium-term whichcan
relationship,
involvetwo or morecompanies, with a
definedremit,suchas the
specifically
development of a specificproduct.
capacity (Cohen and Levinthal 1990). The results of an empirical survey conducted by
Tsai (2001) suggeststhat absorptive capacity is of fundamental importance to innovation
processes/with organizational innovativenessbeing directly correlatedwith levels of
absorptive capacity.
(search)
recognize
Theabiliryto (integrate)
andabsorb external thatlsimportantt0
knowledge
innovation
orocesses.
for enhancing
Table11.3.Mechanisms absorptive
organizational (adapted
capacity f rom
LeonardBarton1995)
D i a m o n dP e n s i o ni s o n e o f t h e U K ' sl a r g e s p
t e n s i o na n d a s s u r a n c ce o m p a n i e sI.n t h e l a t e1 9 9 0 s ,
for a varietyof strategicreasons,it decidedto changethe way that f ield salesstaff were managed
and supported.The core of these changesinvolvedreplacinga manual,paper-based
salessupport
system with an automatedone. This would allow salesmanagementstaff to more effectivelyset
targets for staff, monitor their progress towards achievingthem, and make comparing the
performanceof staff substantially team responsiblefor this proj-
easier.However,the three-person
ect quicklyrealizedthat no existingsoftwaresystemswere totallysuitablefor their requirements.
I N N O V A T I OANN D K N O W L E D GPER O C E S S E S
@
However, oneveryseniorsalesmanager founda systemthathe liked,andwasextremely keento
haveit customized for DiamondPension's purposes. After variousnegotiations involvingthe
projectteamandthe systemsdesigners a collaborative development was undertaken. Diamond
Pension agreedto givethe softwarecompanythe knowledge necessary to designthe system,
whilethe softwarecompany wouldthenundertake the development work.Theyalsoagreedthat
oncethis hadbeendonethe softwarecompanywouldbe ableto sellthisnew productto other
pension companies, with Diamond Pension benefitingf inanciallyfromeveryadditional salemade.
The systemmodification work requiredthe DiamondPensionprojectteamto communtcate a
substantial amountof knowledgeregarding the company's workingpractices so that the new
systemcouldbe designed to be compatible with it.
Problemsemergedduringthis work largelydue to differences in the cultureand working
practicesof the companies. DiamondPensionutilizedrelatively formalprojectmanagement
methods,wheresubstantial amountsof documentation were required to keeptrackof allagree-
mentsmade,progress on prolectdevelopment, andongoingchangesto the systemsspecifica-
tion, etc. The softwarecompany,by contrast,which was relatively small,had a much more
informal, ad hocculturewheredocumenting allworkwas deemednotveryimportant.
Overtime,however,largely throughextensive communication betweenthe projectteamand
the softwaredevelopers, whichoccurred throughbothface-to-face meetings, andmanylengthy
telephone conversations,anagreedwayof workingwas negotiated. Ultimately
Diamond pension
gotthe producttheywanted,although it was delivered laterthantheyhadoriginally planned.
Table11.4. Orlikowski's
boundary-span
ningpractices
Conclusion
W. Orlikowski(2002).'Knowjngln Practice:
Enacting
a Collective
Capability
in Distributed
Organlzing',Organization
Science,1313249-73.
lllustrateshow organizationalpractices can be used to facilitateintra-organizational
knowledge-sharrngin a dispersedsoftware company.
'Learning
W. Powell(1998). FromCollaboration:Knowledgeand Networksin Biotechnology
and Pharmaceuticals , CaliforniaManagementReview,4013228-40.
Industries'
lllustrates the importanceand dynamics of interorganizationalnetwork relationsin the US.
pharmaceuticaland biotechnologyindustries.
'Patterns
M. Meeus,L. Oerlemans, andJ. Hage(2001). Learningin a High-Tech
of lnteractive
Region',OrganizationStudies, 2211: 145-l 2.
lllustrates the interactivenessof contemporaryinnovationprocesses, focusingcentrallyon
customerand suoplierrelations.