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Success and Failure of Innovation: A Literature Review

Article  in  International Journal of Innovation Management · September 2003


DOI: 10.1142/S1363919603000830

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International Journal of Innovation Management
Vol. 7, No. 3 (September 2003) pp.1–30
© Imperial College Press

SUCCESS AND FAILURE OF INNOVATION:


A LITERATURE REVIEW

GERBEN van der PANNE, CEES van BEERS and


ALFRED KLEINKNECHT*
Dept. Economics of Innovation, Delft University of Technology
The Netherlands
*a.kleinknecht@tbm.tudelft.nl

Received 7 January 2003


Revised 16 June 2003
Accepted 17 June 2003

This review examines 43 recent papers about factors behind success and failure of
innovative projects. Nine out of the 43 papers report a larger number of possible causes
for success or failure and provide some rank ordering. Analyzing these rankings we find
that the nine studies have a significant degree of similarity among the ten highest-ranking
success factors; however, there is little similarity among lower ranking factors. The various
studies remain either inconsistent or inconclusive with respect to factors such as strength
of competition, R&D intensity, the degree to which a project is “innovative” or
“technologically advanced” and top management support. Agreement exists, however,
about the positive impact on innovative success of factors such as firm culture, experience
with innovation, the multidisciplinary character of the R&D team and explicit recognition
of the collective character of the innovation process or the advantages of the matrix
organization.

“But in capitalist reality as distinguished from its textbook


picture, it is not…(price) competition which counts but the
competition from the new commodity, the new source of
supply, the new type of organization…competition which
commands a decisive cost or quality advantage and which
strikes not at the margins of the profits…of the existing
firms but at their very lives. This kind of competition is as
much more effective than the other as a bombardment is in
comparison with forcing a door.”

(Schumpeter 1943: 84)

Keywords: Innovation; success factors; viability.

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2 G. van der Panne, C. van Beers & A. Kleinknecht

Introduction
Why does not everybody innovate? It is widely recognized that innovation is key
to the economic performance of firms. Innovative firms grow more quickly and
make higher profits (see for example the econometric studies by Geroski et al.,
1993; or Kleinknecht et al., 1997). If nonetheless many firms do not dare to
innovate, this has to do with several types of risks and uncertainties that lead to
high failure rates. For example, Asplund and Sandin (1999) and Cozijnsen et al.
(2000) argue that only one out of every five projects ever initiated is viable.
Against this background, there is an obvious need to assess more systematically
factors behind success (and more often) failure of innovation. Not surprisingly,
a considerable literature has emerged during the past 20 years. However, at first
view, it seems as if this literature is far from providing a conclusive picture of the
most important factors that determine success and failure. Given the pressing need
for systematic knowledge, this paper investigates whether, in spite of a seemingly
large diversity, some common insights can be distilled from recent contributions.
During our literature review, we found different views regarding the relevance
of factors behind innovative success. While some studies claim a certain group
of factors being crucial, other studies ignore the very same factors and claim
very different factors to be decisive. Moreover, studies can differ in terms of
causal links. This dispersion of outcomes may have several reasons. One may be
the heterogeneity regarding samples as well as methods. Samples differ as some
studies investigate one specific industry, whereas others cover several industries.
Methods differ, as some studies are qualitative while others adopt a quantitative
approach. Also, different ways of assessing (degrees of) success are applied. Such
heterogeneity adds to divergent views. Moreover, there tends to be little effort
among the various contributors to assess (causes of) differences between their
studies, or as Crawford (1987: 22) puts it: “None tried to compare, except to
themselves”. A more general problem is that success or failure of projects is likely
to have an impact on personal careers. People responsible for a successful project
may tend to give the credits primarily to themselves, while in the case of failed
projects one may try to shift responsibilities to others (or to circumstances
below one’s own control). In other words, personal motives may favor a biased
presentation, which may be misleading to researchers that take in-depth interviews.
A somehow diverse and flawed picture may be the result.
The first major investigation of factors affecting viability of innovation projects
has been the SAPPHO-study (Scientific Activity Predictor from Patterns with
Heuristic Origins), conducted in the early 1970s in the United Kingdom. The study
compared 29 successful with 29 unsuccessful innovations in chemicals and
scientific instruments and found 27 characteristics of the innovation process that

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Success and Failure of Innovation: A Literature Review 3

discriminated between success and failure. These relate to the innovator’s feeling
for customer needs, to marketing capabilities, to the efficiency of the development
process, the extent to which the firm is able to absorb external information
adequately and general managerial capabilities (Freeman et al., 1972).
The SAPPHO-study was followed by Coopers (1980) study Project NewProd.
Based on 200 Canadian innovations, it was found that viability is determined by
three factors. Of primary importance is the degree to which the product is unique
and superior compared to existing alternatives. The innovator’s knowledge of the
market and feeling of future market developments is the second most important
factor. Along with the product’s synergy with the firm’s overall technological-
and manufacturing resources, these factors determine half of a product’s viability
(Cooper, 1980). Another major study is Maidique and Zirger’s (1984) Stanford
Innovation Project. They argue that success is the outcome of a wide range of
firm and project related factors; a single magical factor does not seem to exist
(Maidique & Zirger, 1984).
In addition to these explorative studies, there is a larger literature investigating
a wide variety of factors that are likely to affect a new product’s viability —
technologically as well as commercially. Our review of these studies leads us to a
classification of these factors under four major headings:

(1) Firm-related factors;


(2) Project-related factors;
(3) Product-related factors; and
(4) Market-related factors.

A classification is given in Fig. 1.


In their assessment of the literature, some authors have engaged in meta-
analyses, estimating “regressions on regressions” (e.g. Henard & Szymanski,
2001). Given the nature of the literature to be reviewed, we have chosen in favor
of a qualitative overview of studies as a first step. In order to arrive at a more
systematic assessment, we undertake, in a second step, a rank correlation analysis
that is based on those studies that give a more comprehensive number of factors
behind success and failure. We round up, in Appendix A, with a stylized overview
of all studies reviewed in this paper. The qualitative review in Secs. 2 and 3 follows
the categories exhibited in Fig. 1. Section 2 refers to factors of success or failure
whose relevance is agreed upon in the literature. Section 3 discusses factors on
which consensus is lacking. Section 4 covers the rank order analysis. Section 5
covers conclusions. The large number of studies covered and the overlap between
them forced us to economize on references. In the following, we confine references
to those authors that are typical for (or typically deviant from) a certain argument.

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4 G. van der Panne, C. van Beers & A. Kleinknecht

Firm related factors: Product related


Firm culture factors:
• Experience • Relative price
• R&D team • Relative Quality
• Strategy towards • Innovativeness
innovation • Technologically
• Organisational advanced
structure
• R&D-intensity

Technological Success Commercial


viability viability
Project related Market related
factors: factors:
• Complementarity • Concentration of
• Management style target market
• Top management • Timing market
support introduction
• Competitive
pressure
• Marketing

Fig. 1. Critical factors for innovative success.

Factors of Consensus
Following the categories of Fig. 1, this section discusses acknowledged success
factors. Although it is sometimes hard to distinguish between factors of commercial
and of technological viability, it is useful to maintain this distinction. First, we
discuss factors that affect the projects technological viability, distinguishing factors
related to the firm (Sec. 2.1.1) from project related factors (Sec. 2.1.2). Second,
we discuss factors that affect a project’s commercial viability, covering both
product related and market related factors (Sec. 2.2).

Technological viability

Firm related factors

With respect to the technological viability of an innovation project, four factors


concerning the firm are generally considered relevant for success. These are:

• Firm culture;
• Experience with innovation;
• Characteristics of the R&D team; and
• The firm’s strategy towards innovation.

Firm culture

A culture susceptible to innovation fosters firm-wide recognition of the necessity


to innovate. Therefore, the firm’s culture is undisputedly considered crucial to the

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Success and Failure of Innovation: A Literature Review 5

firm’s technological capabilities in the long term (e.g. Ekvall & Ryhammar, 1998;
Lester, 1998).1 Cultural resistance to innovation may arise from entrenched
routines and interpretative barriers. Routines, whether deliberately organized or
spontaneously evolved, structure activities, processes and information. This tempts
employees to focus solely on their own tasks and responsibilities. As a result,
barriers arise when looking for solutions that surpass individual responsibilities.
This is in conflict with the inherent collective nature of innovation projects that
demands all participants to work towards a common objective (Dougherty, 1992).
Likewise, the extent to which various departments of the firm co-operate is
believed to affect technological viability. However, two out of three innovative
firms mention that interdepartmental cooperation is hampered, mainly due to a
lack of mutual trust (Rochford & Rudelius, 1997). For example, interdepartmental
competition for budgets and competencies may result in disharmony, and this tends
to be negatively related to technological viability (Souder, 1988). As a remedy,
all departments should be involved as the project starts. Along with well-defined
arrangements concerning all departments’ tasks and responsibilities, this leads to
cultural susceptibility to innovation (Calantone et al., 1993). In addition, a mission
statement that explicitly emphasizes the value of product development and
internal entrepreneurship can affect the firm’s culture (Johne & Snelson, 1988).
Finally, adequate interdepartmental communication may serve the same purpose
(Calantone et al., 1993). In this case, “adequate” should be read as flexible since
communication along formally institutionalized lines is likely to be an impediment
to success (Hopkins, 1981).

Experience with innovation

Previous engagements in innovative projects are conducive to the firm’s


technological capabilities as these enhance skills decisive for the course of
innovation projects. Therefore, firms ought to go for adventures that resemble
the firm specific experiences with the technology, production and marketing
skills involved2 (Stuart & Abetti, 1987; Bessant, 1993). In addition, engagement
in projects that resemble previous experiences allows for substantial reduction of
the time-to-market (Wind & Mahajan, 1988). Other important advantages stemming

1Openness of a firms culture to R&D-results is directly associated with commercial viability as well.
Mansfield and Wagner (1975) argue that a culture susceptible to R&D-results boosts the rate of
successfully commercialised innovation projects by 15%.
2Experience is associated with commercial capabilities as well. This adds to s firm’s ability to

understand customer needs thus enhancing marketing skills (Maidique & Zirger, 1985).

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6 G. van der Panne, C. van Beers & A. Kleinknecht

from experience are learning-by-doing and learning-by-failing effects. Whereas the


first enhances the firm’s R&D-efficiency, the latter exposes the firm’s weaknesses.
Both phenomena are addressed as crucial in the product learning cycle (Maidique &
Zirger, 1985; Zirger, 1997).

Characteristics of the R&D-team

Several characteristics of the R&D-team affect the firm’s technological capabilities.


One distinctive feature is the team’s configuration; interdisciplinarity adds to the
projects viability (Roure & Keeley, 1990). Although technological capabilities are
prerequisites, a balance between both technological and marketing skills is
indispensable; emphasis is often too much on the former (Cooper, 1983).
A second distinctive feature is the attendance of a product champion.
Confronting internal resistance to innovation, R&D-teams supported by an
individual that appears as an innovation-dedicated internal entrepreneur are
evidently more successful than teams lacking this support (Link, 1987;
Kleinschmidt & Cooper, 1995). In processing the firm’s internal and external
scientific information, the product champion also acts as an efficient technological
gatekeeper (Stuart & Abetti, 1987; Rothwell, 1992).
Many projects lack the product champion’s devotion, mainly due to lack of
top management support; only 40% of all innovating firms deliberately encourage
product champions to arise (Page, 1993). This low share is attributed to a lack of
familiarity with concepts that single out potential candidate champions (Wind &
Mahajan, 1988). Two such concepts are psychological tests (Howell & Higgins,
1990) and adequate merit payments (Page, 1993), but caution is required. In many
cases, individuals become product champions by their own initiative, which is
preferable. Rothwell (1992) even argues that an official nomination as a product
champion may disrupt the champion’s intrinsic motivation and dedication.

Firm strategy towards innovation

For several reasons, an explicit innovation strategy is generally addressed as a


success factor. First, it provides a guideline for dealing with strategic issues, such
as selecting the markets to enter and the skills to develop (Lester, 1998). Second,
strategically planned projects enable the firm to take advantage of synergy between
parallel innovation projects. Third, learning-by-doing can materialize, enabling the
firm to reap benefits of previously successful innovations along with firm-specific
skills that emanate from them (Rothwell, 1992). The relevance of an innovation
strategy has been supported in empirical studies; in order to maximize the benefits

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Success and Failure of Innovation: A Literature Review 7

of previous innovations, innovative activities must be given a strategic direction


(Cottam et al., 2001).
There are numerous innovation strategies defined in the literature. The most
common typology distinguishes pro-active from re-active strategies. Pro-active
strategies pursue product innovations in order to obtain product leadership in the
market, whereas re-active strategies pursue product development as a safeguard
against competing products of others (Johne & Snelson, 1988).
One constitution of the pro-active strategies is the portfolio strategy, in which
the firm proceeds simultaneously with several innovation projects in different phases
of development (Gobeli & Brown, 1987). This strategy is considered appropriate
for several reasons. First, it preserves the firm from a short-term low risk profile.
Second, portfolio planning induces projects targeted at specific, profitable market
segments to be counterbalanced by projects based on fundamental R&D activities.
Therefore, portfolio planning comes down to improvement as well as radical
renewal of the firm’s product line (Wind & Mahajan, 1988). Third, working on
incremental and radical innovations, this strategy allows for financing the latter
with the bread-and-butter profits generated by the former. This preserves the firm
from relying solely on product differentiation (Zirger, 1997). Finally, portfolio
planning adds directly to R&D skills: R&D-teams involved in several projects
simultaneously are observed to be more successful than R&D-teams that are not
(Kleinschmidt & Cooper, 1995). Although an explicit innovation strategy is
conducive to the firm’s technological capabilities, it does not seem to be common
practice; according to Page (1993), only half of all innovating firms have an
explicit innovation strategy.

Project related factors

Two project related factors affect successful completion and hence contribute
to the technological viability of an innovation project. These are the project’s
complementarity with the firm’s resources and the management style.

Complementarity

Stuart and Abetti (1987) find a causal link between technological viability and the
project’s compatibility with the firm’s resources in broad terms (i.e. management
and market research skills, sales, distribution, R&D and production facilities).
Notably the need for a connection between technological development and
marketing activities is often emphasized. Cooper (1983) and Link (1987) claim that
synergy that originates from marketing strengths is even more important than
synergy coming from production strengths. Customers need to assess the innovation

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8 G. van der Panne, C. van Beers & A. Kleinknecht

to fit into the product group they are already familiar with; there must be synergy
at the product level (Hopkins 1981).
Following Cooper (1983), building on in-house strengths, skills and resources
are key factors of success. Synergy emanates from phenomena like learning-by-
doing and economies of scale and scope (Zirger 1997). Madique and Zirger (1984)
report empirical evidence that the product’s market and technological prospects
hinge on the product’s complementarity with the firm’s strengths.

Innovation management style

It comes as no surprise that a firm’s management style is often believed to affect


project viability. According to Cozijnsen et al. (2000) adequate management of
time, costs, information and decision making determines 60% of the projects
viability. In order to make the project better manageable, most innovators split the
project into constituent phases (see e.g. Crawford, 1991: 27). Mostly, six phases
are distinguished. The project is initiated by a phase of planning, followed by
brainstorming, phases of screening and evaluation, development and market
research. It eventuates in the introduction phase.
The more the innovation is kept to this trajectory, the more successful it will
be (Cooper & Kleinschmidt, 1987). The reason is that factors crucial for success
can better be influenced, once the project has been split up (Calantone et al., 1993).
Skipping phases is a main cause of failure (Wind & Wahajan, 1988). Empirical
studies indeed find that technological viability of innovation projects is substantially
enhanced by the degree to which the trajectory is completed (Kleinschmidt &
Cooper, 1995). More important than completing the entire trajectory is how
accurately it is pursued. Notably for radical innovations, this will reduce
uncertainty. It is therefore indispensable that the development scheme is followed
attentively (Rochford & Rudelius, 1997).
In the literature, two phases of the trajectory are distinguished: planning and
evaluation. During the planning phase, a medium-term planning identifying well-
defined milestones has to be formulated. Such a validation-driven planning converts
uncertainties into clear tasks and responsibilities, thereby streamlining the course
of the innovation project (Maidique & Zirger, 1985; Pinto & Slevin, 1989;
Lester, 1998). The evaluation phase is emphasized because adequate evaluation
distinguishes viable projects from those less viable, thereby minimizing the
project’s inherent uncertainty (Mansfield & Wagner, 1975).
There are different views, however, with regard to the relative impact of
planning and evaluation during earlier and later phases of development.
Cooper and Kleinschmidt (1987) argue that the early phases are most important.
An exact project definition in terms of market needs, market preferences and

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Success and Failure of Innovation: A Literature Review 9

product specifications enables the innovator to reach a sound stop/go-decision.


This contrasts with Schmidt’s view that the relevance of pre-development activities
is exaggerated. Mistakes in the early phases are much less harmful than mistakes in
the successive phases. “Upfront activities are important, but the later activities
are critical” (Schmidt, 1995: 31).

Commercial viability

With respect to the product’s commercial viability, two product related factors
(i.e. price and quality) and two market related factors (i.e. market concentration
and market introduction) are acknowledged success factors.

Product related: Relative price

Though recognized by only a few studies, the relevance of a product’s price relative
to competing products or substitutes remains undisputed. Moreover, the extent to
which the innovation reduces the customer’s total-costs-of-use (Cooper &
Kleinschmidt, 1987) as well as the price-to-quality ratio are agreed to be important
(Madique & Zirger, 1984). It is often argued that successful innovations meet
customer needs on a number of features simultaneously. These may concern the
product’s quality, the product’s relative price, the product’s total-costs-of-use,
convenience of use, after-sales services, and backward compatibility (Maidique &
Zirger, 1984). Conversely, less successful innovations excel predominantly in a
reduction of total-costs-of-use only (Roy & Riedel, 1997).

Product related: Quality

The literature unanimously addresses product quality as a prerequisite for success


(e.g. Link, 1987; Calantone et al., 1993; Hultink, 1998). Roure and Keeley (1990)
address it even as the only real determinant of success.

Market related: Concentration of targeted market

One market related factor associated with the product’s commercial viability is
the extent to which the product’s potential purchasers are concentrated in a single
market, which eases communication. However, the relationship does not need to
be linear. Roure and Keeley (1990) report evidence of a U-shaped association
between concentration of buyers and viability: high as well as low degrees of buyer
concentration add to the product’s viability.

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10 G. van der Panne, C. van Beers & A. Kleinknecht

Market-related: Timing of market introduction

A second market related factor is the timing of the new product’s market
introduction. Timing should of course be ahead of competing products, and early
market introduction is considered to yield huge competitive advantages (Hopkins,
1981; Maidique & Zirger, 1984). Johne and Snelson (1988) estimate that a delay
of six to twelve months will reduce financial returns by half. Therefore, it is
recommended to create short-cuts in the innovation process that speed up market
introduction (Wind & Mahajan, 1988).
Although the status of timely market introduction remains undisputed, some
qualifications have been made. First, the benefits of early introduction differ by
type of innovation; while incremental innovations do reap the benefits of
accelerated introduction, original new innovations do not. The latter gain from
relatively extensive development periods in which the development process is
pursued attentively (e.g. Yoon & Lilien, 1985). Second, early market introduction
may be in conflict with the aim of high product quality (e.g. Hultink, 1998). In
spite of such arguments, many innovators still seem to respond to the need for
speed. For example, Page (1993) reports that over 40% of the innovators in his
sample did undertake deliberate efforts in order to abbreviate the time-to-market.

Factors Lacking Consensus


In our discussion of success factors that lack consensus in the literature we follow
again the classification in our above Fig. 1. We distinguish between firm related
factors (Sec. 3.1.1) and project related factors (Sec. 3.1.2), followed by product
and market related factors (Sec. 3.2).

Technological viability

Firm related factors

With respect to the technological viability of an innovation project, there is no


consensus regarding the relevance of two factors, i.e. organizational structure and
R&D-intensity.

Organizational structure

There is some debate about what is the appropriate type of organization


for innovative activities. There is agreement that functional organizations are
considered inadequate. Their pronounced levels of formalization and control are

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Success and Failure of Innovation: A Literature Review 11

in conflict with the trial-and-error character of innovation processes (e.g. Johne &
Snelson, 1988; Calantone et al., 1993). Innovators themselves tend to refute the
functional structure as well; Larson and Gobeli (1988) report that only 20% of
the functionally organized innovating firms report that they are satisfied with this
structure.
As an alternative, an organic (i.e. a more flexible and adaptive) structure is
unanimously preferred.3 Organically organized firms obtain higher success rates
than functionally organized firms do. Moreover, firms that explicitly strive for
discovering and capitalizing on new market opportunities appear to be more often
organically organized. Path analysis shows that organically organized firms develop
superior technical and marketing capabilities; the latter two being recognized
as important success factors autonomously (Calantone et al., 1993). In addition
to these empirical observations, two theoretical arguments in favor of the
organic structure dominate the literature. The first one is a sociological argument.
Other than formal structures, which lead to selection and social confirmation,
organic structures provoke individual diversity and expression. Therefore, organic
structures encourage product champions to arise. Considering the importance of
the product champion’s attendance, the firm’s degree of “organicity” can be
addressed as a success factor (Howell & Higgins, 1990). The second (theoretical)
argument in favor of organic structures stems from the nature of the innovation
process. Equilibrium should be found between the level of formalization (for the
sake of efficiency) and the advantages of a loose, open, creative and adaptive
organic structure. Empirical studies show that successful innovative firms are
loosely structured during the initiation phase of the development process and
evolve to more formal structures as the product becomes better defined (Johne &
Snelson, 1988; Rothwell, 1992; Bart, 1993).
Arguments opposing organic structures have also been made. First, some empirical
studies report a negative impact of “organicity” on a firm’s innovative capabilities.
For example, Rubenstein et al. (1976) argue that one ought to control the process
tightly, especially during the early phases of the innovation process; the argument
that freedom acts as an incentive for innovation is false (see also Stuart &
Abetti, 1987). Indeed, many successful innovators prefer tight control during the
entire innovation process (Larson & Gobeli, 1988). Even more differences remain
regarding two different constitutions of the organic structure: the venture team
structure and the matrix structure (Johne & Snelson, 1988; Larson & Gobeli, 1988;
Rothwell, 1992; Page, 1993; Kleinschmidt & Cooper, 1995; Lester, 1998). In both

3Fora concise comparison between “functional” (or “mechanistic”) structures and the “organic” form
see the classical contribution by Burns and Stalker (1961: 119–122).

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12 G. van der Panne, C. van Beers & A. Kleinknecht

settings, a project manager is put in charge of a team composed of personnel from


several functional areas within the firm. However, whereas the venture team does
not involve the managers of the constituent functional areas, the matrix-structure
does.
The arguments in favor of the venture team relate to its high level of autonomy.
A venture team, behaving as a firm-within-the-firm, yields an indispensable
equilibrium between internal entrepreneurship and risk management. In addition,
it allows for shorter decision making processes and high levels of flexibility
(Lester, 1998). Many successful innovators have deliberately abandoned the matrix
concept (Larson & Gobeli, 1988).
However, the matrix-structure does have several advantages over the venture
team. First, it imposes integration of various functional inputs. If interdisciplinarity
is addressed as a success factor, fostering creativity and initiatives, the matrix
structure surpasses the venture-team (Johne & Snelson, 1988). It also induces
the firm to focus on both customer needs and technical feasibility during
the entire innovation process (Rothwell, 1992). Second, empirical studies show that
innovation projects embedded in a matrix structure obtain relatively high
success rates (Kleinschmidt & Cooper, 1995). Hence the matrix structure became
increasingly popular during the 1980s. During the 1960s, most innovation activities
took place in relatively autonomous development departments. In the early 1990s,
three out of every four innovators have implemented some kind of matrix structure
instead (Page, 1993).
However, most of these arguments are valid for both the venture team and
the matrix structure. Only one argument is claimed to discriminate between both
alternatives: relative to the venture team, the matrix structure allows for superior
planning techniques (Larson & Gobeli, 1988). More generally, however, the impact
of the organizational structure is qualified by the proposition that success depends
on individuals far more than on structures, or, as Rubenstein et al. put it:
“Organizations do not make R&D-projects successful, individuals do” (1976: 18).

R&D-intensity

Obviously, a firm that invests more in R&D will increase its total innovative output.
This is confirmed by empirical studies showing that substantial financial resources
are a prerequisite for success (Page, 1993). Conversely, a lack of financial resources
is addressed as a predominant factor of failure (Rubenstein et al., 1976). However,
regarding R&D intensity (i.e. R&D expenditures as a percentage of sales), this
proposition is subject to debate. R&D intensive firms generally obtain higher
commercial success rates (Gemunden et al., 1992); nonetheless, this relationship
may be less than clear-cut. For example, Acs and Audretsch (1991) argue that

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Success and Failure of Innovation: A Literature Review 13

the causality between R&D input and innovative output may be characterized
by diminishing returns to scale. As far as large and complex organizations are
concerned, this may be due to managerial diseconomies of scale. Moreover,
Brouwer et al. (1999) found that the relationship between R&D intensity and
innovative output is influenced by such factors as regional knowledge spillovers,
demand-pull effects or differences in technological opportunity. Such factors can
explain that R&D input and innovative output are far less correlated than one
would intuitively expect.4
Cooper reports independent empirical evidence on this. He found that low
spenders (i.e. firms spending only 1% of total sales on R&D) generate a quarter
of total sales by innovative products. Conversely, big spenders (firms spending
at least 4% of total sales on R&D) generate only 40% of total sales by innovative
products (Cooper, 1983). In a single case, even claims of R&D intensity being
negatively related to a product’s viability have been made (Stuart & Abetti, 1987).

Project related factors

Under this heading, only one factor lacks consensus regarding its relevance: top
management support.

Top management support

There is agreement that top management support will empower a project and
serves as a driving force for major initiatives and efforts. Rothwell (1992)
emphasizes that top management support may be instrumental to overcome internal
resistance to innovation. Page (1993) concludes from his sample that one quarter
of all innovators qualify top management support as a prerequisite for success.
Another argument relates to the concept of the product life cycle, claiming that
one can judge about the viability of an innovation earliest five years after launch.
Hence innovation projects demand long-term commitment (Brenner, 1994). This
requires a risk tolerant top management that not only prevents viable projects to
be aborted in advance, but also enables the firm to take advantage of learning-
by-failing (Rothwell, 1992). Finally, Gobeli and Brown (1987) observe that radical
innovations tend to achieve higher success rates than incremental innovations do.
They ascribe this to radical innovations receiving relatively more devotion by top
management.

4Seefor similar results several chapters in Kleinknecht (1996) and in Kleinknecht and Mohnen
(2002).

ijim-00083.p65 13 08/26/2003, 12:34 PM


14 G. van der Panne, C. van Beers & A. Kleinknecht

However, management support may endanger the innovation as well. Excessive


top management support may permit individuals to be involved for too long a
period, causing stiffening (Rubenstein et al., 1976). Finally, Kleinschmidt and
Cooper (1995) argue that top management support adds to failure as often as it
does to success.

Commercial viability

In the literature there is no consensus about two product and two market related
factors. The product related factors are the degree to which the product is really
innovative and technologically advanced. The market related factors relate to the
firm’s marketing capabilities and its competitive strength.

Degree of innovation

All arguments, whether favoring or opposing the degree of innovation as a factor


behind success, arise from empirical observations and one can wonder whether
theoretical explanations of the findings are really satisfactory. Some empirical studies
find a U-shaped impact of innovativeness on viability. For example, Kleinschmidt
and Cooper (1991) find that highly innovative products acquire a success rate of
80%, whereas only half of the innovations classified as medium innovative succeed.
Products characterized as low-innovative show success rates of approximately
70%. The relatively high success rate of highly innovative products is accounted
for by the superior product advantages that characterize this type of innovations.
Moreover, this type of innovation benefits from relatively comprehensive
pre-development activities. The relatively low success rate of medium innovative
products is ascribed to the absence of synergy — technologically as well as from
a marketing point of view. Exactly these synergy effects account for the high
performance of low innovative products. Hence one can argue that highly
innovative products are not as risky as they are assumed to be (Kleinschmidt &
Cooper, 1991). However, this proposition is in contradiction with research reported
by Zirger (1997) who suggests linearity between innovativeness and viability
with highly innovative products in the lead, followed by medium and low
innovative products.

Technologically advanced products

The literature remains inconclusive regarding the impact on viability of the degree
to which the product is technologically advanced. Several studies claim that this
variable has a positive impact (Cooper, 1979; Cooper & Kleinschmidt, 1987;

ijim-00083.p65 14 08/26/2003, 12:34 PM


Success and Failure of Innovation: A Literature Review 15

Schmidt, 1995); others find no impact (Maidique & Zirger, 1984). Rackham (1988)
even reports a negative impact, arguing that an innovator’s emphasis on a
high degree of technical novelty may lead to a neglect of customer needs and
therefore diminishes prospects of commercial viability. Examples are observed
during sales conversations when salesmen are tempted to focus on product features
at the expense of customer needs. This may disclose the essence of numerous
failed superior innovations; the feature-based approach tends to dominate the
customer-based approach (Rackham, 1988).

Competition in markets

All arguments about the intensity of competition as a success factor are based
on empirical observations and remain largely inconclusive. For example, Yoon and
Lilien (1985) argue that intensity of competition is negatively correlated with
success rates of innovations: The less competitive is the market, the more viable is
the product. Link (1987) addresses fierce competition as a main factor of failure.
Roure and Keeley (1990) read this as an argument to pursue radical instead of
incremental innovations, since radical innovations face less fierce competition.
Stuart and Abetti (1987) suggest that firms should penetrate less attractive
niche markets. Niche markets are by nature small, growing and hence less
competitive. Roure and Keeley (1990) also argue that market niches with low
degrees of competition offer a fertile environment for innovative products.
However, Kleinschmidt and Cooper (1987; 1995) argue that competitiveness and
rates of growth are neutralizing each other since the advantages of market growth
are offset by increases in competition due to new entry.
In general, these contradictory arguments resemble the long-standing discussion
in industrial economics about the impact of market structure on innovation
(Kamien & Schwartz, 1982). Notably the survey by Scherer (1992) suggests that,
if there is any impact of market structure on innovation, this impact can never
be overwhelmingly strong.

Marketing

Skills in market research are frequently mentioned as a success factor (Cooper,


1983; Yoon & Lilien, 1985; Calantone et al., 1993). Lack of adequate market
research is addressed as the main factor of failure: overestimated forecasts of
demand, problematic translation of engineers’ desires into customer’s needs and
the tempting romance of the innovation-adventures are well-known pitfalls
(Hopkins, 1981).

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16 G. van der Panne, C. van Beers & A. Kleinknecht

Although the literature is unambiguously supportive of adequate market


research as a success factor, one prevailing instrument — involving consumers into
the innovation process — remains controversial. One argument favoring customer
involvement stems from the volatility of customer needs which requires an adequate
study of these needs (Wind & Mahajan, 1988; Calantone et al., 1993; Asplund
& Sandin, 1999). Moreover, the majority of successful ideas originate within the
market, not within the firm (Maidique & Zirger, 1984; Johne & Snelson, 1988).
These arguments are empirically ascertained: three out of four innovators value
customer involvement; half the innovators consider it as a prerequisite for
success. Innovators involving customers obtain significantly higher success rates
(Gemunden et al., 1992).
An argument opposing customer involvement is the pitfall of becoming
prejudiced about customer’s needs as the innovator involves customers more
regularly (Maidique & Zirger, 1984). Customer involvement may bias innovators
towards imitative innovations, as customers express their preferences in terms of
products they are already familiar with. Customers may hardly envision their future
preferences, and may not express them adequately. In fact, customer involvement
may undermine the innovator’s creativity and may lead to a neglect of technology-
driven ideas. Ideas should be allowed to evolve in the firm’s R&D department,
and should subsequently be integrated them with the firm’s marketing strategy.
This can induce equilibrium between technology-push and need-pull factors
(Johne & Snelson, 1988; Rackham, 1988).

A Quantitative Assessment of the Literature


For the sake of a more systematic assessment of causes of success or failure of
innovations we now undertake an attempt at quantification of the evidence from the
qualitative literature review above. When evaluating how potential success factors
are ranked in the literature, we address two questions:
• How consistent are the various contributors in ranking the various factors by
importance?
• As far as they are consistent or inconsistent: to which type of factors can this
mainly be attributed? (Firm and project related factors or product and market
related factors?).
As we aim at a factor ranking, not all forty-three studies discussed above can
be included. The various contributions need to fulfill two criteria:
• The studies must have ranked the alleged success factors; and
• The studies must have investigated a larger variety of factors. If they cover only
a small number of factors, the analysis might become unreliable.

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Success and Failure of Innovation: A Literature Review 17

In the literature reviewed above, nine out of forty-three studies meet these
two criteria. The ranking of success factors by these nine studies is given in
Appendix B. The appendix gives the ranking by importance, from 1 (= most
important) to 21 (= least important). A zero value indicates that the factor was
not considered (or found insignificant) in a study.
In order to obtain an impression of the (dis)-similarities among the nine
studies, we test the null-hypothesis: “the ranking of factors is consistent”
using a non-parametric analysis of variance test (Kruskal-Wallis test). This test
assesses (dis)-similarities in the ranking of factors in the nine studies. In a first
step, we included all success factors exhibited in Appendix B and found a
significant dissimilarity.5 In other words, the ranking by importance of all
success factors differs significantly between these nine studies. This brings us close
to the conclusion by Montoya-Weiss and Calantone who found “a wide variation
in results that are surprisingly non-convergent” (1994: 397). However, a closer look
at the data shows that this result depends strongly on the lower ranking factors.
Inclusion of the factors ranking from 1 to 10 only (i.e. excluding all lower
ranking factors) results in a highly insignificant test statistic.6 In this case, the
null-hypothesis of similarity in factor rankings cannot be rejected. This implies that
consensus exists among the nine studies with regard to their ten most important
success factors.
In order to get more insight into factors that influence the ranking correlations,
we divided the factors into groups, using the categories of our above Fig. 1. First
we divided the factors into two groups:

• Firm and project related factors (indicating technological viability); and


• Product and market related factors (indicating commercial viability).

It turned out that there was significant ranking dissimilarity within both these
two groups, independently of whether we took all 21 ranks or only the ten
highest ranks. We then subdivided the factors of success and failure into all four
basic categories detailed in our above Fig. 1: (1) firm related; (2) project related;
(3) product related; and (4) market related factors. It turned out that firm and
product related factors showed a significantly consistent ranking among the nine
studies, while the rank correlation between the project and market related factors
was only weakly significant (at 90% level of significance).

5The Kruskal-Wallis statistic is 58.8. This value exceeds the critical value (15.5) at n-1 (8) degrees
of freedom, implying that the null-hypothesis has to be rejected.
6The Kruskal-Wallis statistic is 5, which is well below the critical value of 15.5 at n-1 (8) degrees

of freedom, implying that the null-hypothesis has to be accepted.

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18 G. van der Panne, C. van Beers & A. Kleinknecht

In interpreting these outcomes, it is interesting to remind our qualitative


review of the literature. Here we found that, among the project related factors,
the impact on success of the degree to which a product is “innovative” and
“technologically advanced” was quite differently appreciated among the studies
considered. A similar ambiguity holds for the merits of strong top management
support. Moreover, there seemed to be no consensus about the importance of
market structure and competition and about the merits of consumer involvement
within the group of market related factors. Such disagreement has clearly weakened
the rank correlation within these groups. On the other hand, within the group of
firm and product related factors, there is little disagreement on success factors, the
most important disagreement being related to the organic organizational structure
and R&D intensity.
Different terminology makes it hard to directly compare our findings with
those from the meta-analysis by Henard and Szymanski (2001). They argue, “Of
the 24 predictors of new product performance investigated, product advantage,
market potential, meeting customers needs, pre-development task proficiencies, and
dedicated resources, on average, have the most significant impact on new product
performance” (p. 362). In our view, a factor like “market potential” is almost
tautological, since the success of new products (whichever measure of success is
used) will ultimately depend on successful market penetration.
With some caution we can conclude that our findings are not too distant from
the results of Henard and Szymanski. Fortunately, our qualitative discussion allows
us to be more specific on some points. Henard and Szymanski argue that “product
advantage” and “meeting customer needs” are positive factors throughout. We also
concluded that “product quality and price relative to those of established
products” are positive factors. However, on “customer involvement” our results
remain ambiguous. While customer involvement increases the chance of success,
it may also bias innovation efforts towards incremental innovation. Finally, it is
reassuring that Henard and Szymanski’s emphasis on “pre-development task
proficiencies” and “dedicated resources” comes close to four points that in our
survey were positively appreciated as success factors: a culture dedicated to
innovation, prior experience with innovation, multidisciplinary character of R&D
team, and a clearly articulated innovation strategy.

Conclusions
We have compared systematically the ranking of factors among those nine (out
of forty-three) studies that were most comprehensive in considering a substantial
number of potential success factors and provided information about their relative
importance. It turned out that the top-ten highest-ranking factors revealed a

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Success and Failure of Innovation: A Literature Review 19

significant degree of similarity among the nine studies. However, if ranks 11–21
are taken into account, the rank correlation becomes insignificant. From this we
conclude that splitting of the ranking list allows for an important clarification.
A first glance at the literature suggested that outcomes of the various studies
are fairly inconclusive. But this first impression is mainly due to the inconsistent
ranking of those factors that authors consider relatively low ranking. The good
message is that we find a fairly strong consensus about the most important (or
highest ranking) factors. Moreover, there is consistency among the studies on firm
and product related factors and a bit less so on project and market related factors.
Our qualitative review shows that there is agreement that the following factors
will enhance innovative success:

• A firm’s culture that is dedicated to innovation and explicitly recognizes the


collective nature of innovation efforts.
• A firm’s prior experience with innovation projects (learning-by-doing; learning-
by-failing).
• The multidisciplinary character of the R&D team; in particular a balance between
technological and marketing skills, and the presence of a product champion.
• A clearly articulated innovation strategy and a management style suited to that.
• Compatibility of the project with the firm’s core competencies.
• An innovation’s product quality and price relative to those of established
products.
• A good timing of market introduction.

Moreover, strong agreement exists on a functional structure being in conflict


with the trial-and-error character of the innovation process. An organic structure
is unanimously preferred. However, discussion remains on whether a relatively
autonomous venture team is preferable or a matrix structure. In contrast to the
1950s and 1960s, there seems to be increasing preference during the 1980s for
a matrix structure that better responds to the need for integration and control.
Broad consensus exists on the relevance of marketing skills because many
successful ideas originate from the market. Some contributors believe in the value
of consumer involvement in the innovation process and there is evidence that this
indeed increases a project’s viability. Others warn that strong customer involvement
may bias the innovation process towards imitative innovation and may undermine
the innovator’s creativity, as customer preferences are strongly shaped by products
they are already familiar with. Obviously an innovating firm will need to find a
balance between technology-push and need-pull factors.
Finally, there is no clear-cut evidence that strong top management support or
a high R&D intensity are factors that guarantee innovative success. At times, top
management, while being “top”, may still be wrong. Moreover, R&D intensity or

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20 G. van der Panne, C. van Beers & A. Kleinknecht

the degree to which a product is “innovative” and “technologically advanced”


is not unambiguously related to success. This points to the limitations of a one-
sided “technology-push” approach. There is also ambiguity with respect to the
strength of competitive pressure in markets or in specific market niches. These
ambiguities nicely parallel a longstanding and not quite conclusive discussion in
the Industrial Organization literature about the relationship between market
structure and innovation (see the classical review by Kamien & Schwartz, 1982;
or more recently by Scherer, 1992). It is not difficult to predict that this discussion
will continue, and, for the time being, it is not likely to yield practically useful
information for innovation and R&D managers.
Future research may examine success and failure of innovation by using broader
statistical databases that cover, besides cross-sections, also a time dimension.
Moreover, explicit distinction between “easy” (incremental) and “heavy”
innovations (changing strategic directions) might help to avoid confusion. In
particular, it might give better insight into the merits of factors such as consumer
involvement, market structure or innovativeness.

Acknowledgement
We thank participants of the TBM seminar series within the Faculty’s Management
of Innovation Program for valuable comments on an earlier version of this paper.

Appendix A: Typology of Studies Reviewed in this Paper


(in Chronological Order)

Name Freeman et al. (1972) Mansfield & Wagner (1975) Rubinstein et al. (1976) Cooper (1980)
(SAPPHO) (Project NewProd)

Sample 58 projects in scientific 20 firms in chemistry and 103 project in 6 firms 195 projects (Canada)
instruments and chemicals electronics (U.S.) (U.S.)
(U.K.)

Method Empirical Theoretical Empirical Empirical

Subject Identification of factors Impact of some organizational Identification of factors of Identification of factors of
discriminating between aspects on successful technological- and success and failure
success and failure innovation economic success

Main Discriminating factors: • Early evaluation of • Success is determined Three factors determine
results • Understanding user commercial viability by about 50 factors half the viability:
needs significantly improves simultaneously • Unique product features
• R&D-efficiency viability • There is no single and superiority
• External scientific • Quantitative project magical success factor • Market knowledge and
communication selection is effective providence
• Marketing capabilities • Susceptibility for R&D • Technological and
• Managerial capabilities results is decisive production synergy

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Success and Failure of Innovation: A Literature Review 21

Name Hopkins (1981) Cooper (1983) Johne (1984) Maidique & Zirger (1984)
(Stanford Innovation
Project)

Sample 101 firms (U.S.) 103 Canadian firms 16 innovating U.K. firms in 158 innovations in U.S.
(NewProd-sample) instrument industry electronics

Method Theoretical Empirical Empirical Empirical

Subject Identification of factors Importance of technological Experience as a guideline for Identification of factors of
of success and failure skills on viability the organizational aspects of success and failure
innovative activities

Main Important factors: • Success rate is significantly • Firms with little or no Success factors:
results • Timing of market higher than is generally experience with innovation • Market knowledge
introduction assumed (56%) benefit by separating • Customer interaction
• Market research • The relevance of success initiation related tasks from • Early market entry
• Technological skills factors applies for all firms implementation related • Planning of the process
• Difficulties regardless of their unique tasks
concerning the characteristics • A certain loosening of
organizational • Success is independent of control and co-ordination is
structure, financial R&D-inputs called for
responsibilities and • Technological strengths are
planning less important than
marketing capabilities

Name Cooper (1985) Maidique & Zirger (1985) Yoon & Lilien (1985) Link (1987)

Sample 195 innovation projects 158 innovations in U.S. 112 innovations in 135 Austrian marketing
in 102 U.S. firms electronics 53 French firms managers

Method Empirical Empirical Empirical Empirical

Subject Design of a model for Identification of factors of Comparison of incremental Identification of factors of
project selection success and failure and radical innovations success and failure

Main Project selection serves • All decisive factors are • Both types of innovation Success factors:
results as an instrument to internal to the firm and differ in objective, • Marketing and technological
improve viability. Eight are manageable marketing and timing of synergy
properties determine • Innovators learn from market introduction • Quality
viability. These can be failed projects • Customer needs
employed to predict the • Price strategy
projects viability • Distribution
Impact of success factors does
not depend on the firm’s
innovative capabilities but on
the degree to which a firm
depends on innovations

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22 G. van der Panne, C. van Beers & A. Kleinknecht

Name Cooper & Kleinschmidt (1987) Crawford (1987) Gobeli & Brown (1987) Stuart & Abetti (1987)

Sample 200 innovations in 125 No sample 13 U.S. high-tech firms 24 new firms (U.S.)
U.S. firms

Method Empirical Theoretical Empirical Empirical

Subject Measuring success and Evaluation of studies of Comparison of different Evaluation of perceived
identification of success factors success and failure innovation strategies success factors

Main Success eventuates in: Success/failure-studies remain • 4 types of strategies Negative causality between
results • Financial returns inconclusive. Further research are distinguishable success and
• Windows of opportunities is needed on: • Portfolio strategy is • Size/growth of market
• Market dominance • Innovation strategies most appropriate for • R&D-intensity
The status of success factors • Critical phases of the innovation • Flexibility and
depends on the measure of innovation process adaptability of the
success employed • Impact of early market firm’s organizational
introduction structure
• Diffusion of innovations

Name Souder (1988) Wind & Mahajan (1988) Larson & Gobeli (1988) John & Snelson (1988)

Sample 289 innovation projects (U.S.) No clearly defined sample 540 innovation projects No sample
(U.S.)

Method Empirical Theoretical Empirical Theoretical

Subject Effects of hampered R&D/ Evaluation of development Organizational setting Identification of factors
Marketing-interface on project processes of innovation projects of success and failure
outcomes

Main Degree of disharmony between • Viability remains short falling Matrix structure is most The most common
results marketing and R&D • Guidelines for successful appropriate for factors of success and
department is correlated to innovation innovative activities as failure can be classified
viability • Viability may be improved by far as cost, planning and according to McKinsey’s
organizational adjustments, technological 7s-model
higher degrees of opportunities are
innovativeness and concerned
encouraging risk-taking
attitudes

Name Pinto & Slevin (1989)

Sample 159 R&D-projects (U.S.)

Method Empirical

Subject Identification of factors of success


and failure

Main Identification of 10 success factors


results All vary in importance during the
development process

ijim-00083.p65 22 08/26/2003, 12:34 PM


Success and Failure of Innovation: A Literature Review 23

Name Howell & Higgins (1990) Roure & Keeley (1990) Kleinschmidt & Cooper (1991) Gemunden et al. (1992)

Sample 50 firms (U.S.) 36 start-ups in U.S. 195 innovations from 125 U.S. 848 U.S. manufacturing
electronics industrial firms companies

Method Empirical Empirical Empirical Empirical

Subject Impact of product Importance of adequate Causality between degree of Mobilization of external
champion on viability reaction to time pressure innovation and success resources and knowledge as
and uncertainty a success factor

Main • Product champions 11 measurable qualities Relationship between success Three kinds of technology
results add to susceptibility of the firm determine and degree of innovation is oriented external
for innovation responsiveness to time U-shaped relationships are important:
• Formally organized pressure and uncertainty. • Customers
structures discourage These qualities determine • Research institutes
product champions to the new ventures • Other firms
arise performance

Name Dougherty (1992) Rothwell (1992) Bessant (1993) Griffin & Page (1993)

Sample No sample No sample No sample No sample

Method Theoretical Theoretical Theoretical Theoretical

Subject Investigation of differences Evaluation of the Effective management of Examination of methods


among the mental worlds of innovation process technology: Which management employed to measure
employees which keep firms capabilities are required and success
from synthesizing their how to develop these?
expertise

Main For efficient innovation in The development process The prime management task is Scientists measure success
results large firms it is necessary to is evolving from matching the technology strategy at the level of the firm.
deal explicitly with the technology-pushed pursued to the current and Innovators measure at the
interpretative barriers to towards a system developing capabilities within level of the product
innovation integrated network model the firm

Name Hart (1993) Bart (1993) Calantone et al. (1993) Page (1993)

Sample 369 firms Undefined 142 U.S. firms listed in the 189 U.S. firms
Fortune 500

Method Empirical Empirical Empirical Empirical

Subject Examination of Importance of formal control Impact of organizational Evaluation of projects


performance measures procedures during the structure, marketing and
used in different studies innovation process technological skills on
viability

Main Instead of employing • Formal control procedures Organizational structure • Half the innovators do not
results direct measures of ought to be minimized, but determines marketing skills employ a strategy towards
success, one ought to a minimum level of control and hence viability innovation
employ indirect measures remains necessary • Success rates have not
• Optimal level of formal improved since 1980
control varies by project • There remain opportunities
for improvement

ijim-00083.p65 23 08/26/2003, 12:34 PM


24 G. van der Panne, C. van Beers & A. Kleinknecht

Name Schmidt (1995) Kleinschmidt & Cooper (1995) Rochford & Rudelius (1997) Zirger (1997)

Sample Two samples: 177 Canadian 103 innovation projects in 21 79 U.S. firms in medical 147 innovation projects in
manufacturing firms firms in chemicals (U.S., U.K., instruments U.S. electronics
obtained from Project Canada, Germany)
NewProd and 142 Fortune-
500 firms obtained from
Spirit data set

Method Empirical Empirical Empirical Empirical

Subject Effect of proficiency of Relative importance of Relevance of completing Impact of experience with
innovative activities on level perceived success factors development phases innovation on viability
of success

Main • Technological factors are • Perceived impact of factors Attentively completing all Technological and market
results more important than differ from reality 13 phases of the experience adds to
marketing factors • Development trajectory development process adds viability
• Product superiority is the must be completed to viability.
most important success attentively
factor • Marketing skills are more
important than
technological skills

Name Roy & Riedel (1997) Lester (1998) Ekvall & Ryhammar (1998) Rackham (1998)

Sample 220 innovation projects in No sample 150 Swedish university 3 products


small and medium-sized U.K. managers
firms

Method Empirical Theoretical Theoretical Theoretical

Subject Impact of degree of innovation Identification of success Impact of leadership on Identifying factors of
and design on viability factors organizational outcomes failure of viable
innovations

Main • Degree of innovation does Five decisive factors: By affecting the social Viable innovations may
results not determine viability • Top management climate, the style of fail due to the sales
• Successful innovations are commitment leadership affects department, which is
mostly designed with a • Culture susceptible to organizational performance product-oriented rather
multi-dimensional focus on innovation in terms of productivity than customer-oriented
quality, product features • Availability of concepts
and design and ideas
• Organizational structure:
venture teams
• Project management aimed
at reduction of uncertainty

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Success and Failure of Innovation: A Literature Review 25

Name Asplund & Sandin (1999) Brouwer et al. (1999)

Sample Swedish beer market 1989–1995 128 new product announcements published in
trade journals

Method Empirical Empirical

Subject Survival rate of new products Are urban agglomerations better breeding places
for product innovation?

Main • Market uncertainty is a dominant factor Influential factors:


results • Survival rates appear to depend on volatile • Continuity of R&D effort
consumer preferences • R&D intensity
• Demand-pull
• Firm size
• Regional spillovers

Appendix B: Ranking of Success Factors by Importance


Maidique & Zirger

Kleinschmidt 1987

Benedetto 1993

Kleinschmidt &
Stuart & Abetti

Pinto & Slevin

Cooper 19954
Cooper 1980

Calantone &
Voss 1985

Link 1987
Cooper &
1985

1987

1989
Firm’s culture 0 0 2 0 0 0 0 0 0

Strategy towards innovation 0 3 0 0 0 0 0 0 0

Experience
experience (in general) 0 2 0 0 2 0 0 0 0
experience/skills with technology 0 0 0 8 0 0 4 1 12
experience/skills with marketing 0 0 0 7 0 0 0 2 0

R&D-team
R&D-team (in general) 0 2 0 0 0 0 2 0 0
interdisciplinarity 0 0 0 0 0 0 0 0 13
attendance product champion 0 3 1 0 0 8 0 0 6

Organization
organizational structure 0 0 0 0 0 0 0 4 0
“organicity” 0 0 0 0 4 0 0 0 0
autonomy R&D-team 0 0 0 0 0 0 0 0 10
interdepartmental communication 0 0 2 0 0 0 0 0 0
intradepartmental communication 0 0 2 0 0 0 0 0 0
embeddedness R&D team in firm 0 1 0 0 0 0 0 0 0

R&D-expenses
R&D intensity 0 0 0 0 3 0 0 0 0
availability financial resources 0 0 0 0 0 0 0 1 0

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26 G. van der Panne, C. van Beers & A. Kleinknecht

Maidique & Zirger

Kleinschmidt 1987

Benedetto 1993

Kleinschmidt &
Stuart & Abetti

Pinto & Slevin

Cooper 19954
Cooper 1980

Calantone &
Voss 1985

Link 1987
Cooper &
1985

1987

1989
Innovation management
innovation management 10 0 1 2 9 0 0 0 9
(in general)
completing development phases 0 0 0 0 0 0 0 1 0
planning/analysis 0 0 0 0 0 0 6 0 3
project definition 9 1 0 4 0 0 6 0 8
project selection 0 0 0 0 0 0 0 0 7
explicit responsibilities 0 0 0 0 0 0 0 0 10
process evaluation 0 0 0 0 0 0 5 0 0

Complementarity
complementarity 5 0 0 2 0 2 0 0 0
marketing synergy 5 0 0 12 1 0 0 0 14
technological synergy 1 0 0 4 2 0 0 0 15
distribution synergy 0 0 0 0 0 0 0 0 19
production synergy 1 0 0 0 2 0 0 1 17
synergy core capabilities 0 1 0 0 0 0 0 0 10

Top management support 0 1 0 0 0 0 5 0 0

Quality 0 0 0 3 3 0 0 3 1

Price
price 0 1 0 11 5 0 0 0 0
price relative to quality 0 0 0 0 0 0 0 0 2
limited risk of purchase 0 0 0 0 0 0 0 0 20

Innovativeness
innovativeness 0 3 0 0 0 0 0 0 0
unique/newness 3 0 0 6 0 0 0 0 0

Technological
technologically advanced 6 2 0 0 0 0 0 0 0
complexity
product advantages/product 3 0 0 5 4 0 0 0 4
superiority
meeting customer needs 4 1 0 9 0 0 0 0 5
ease of use 0 0 0 0 10 0 0 0 0
lower total-cost-of-use 0 0 0 11 4 0 0 0 0

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Success and Failure of Innovation: A Literature Review 27

Maidique & Zirger

Kleinschmidt 1987

Benedetto 1993

Kleinschmidt &
Stuart & Abetti

Pinto & Slevin

Cooper 19954
Cooper 1980

Calantone &
Link 1987
Voss 1985

Cooper &
1985

1987

1989
Concentration 0 0 0 0 0 0 0 0 0

Timing market introduction 0 2 1 0 0 0 0 0 0

Market competition
market competitiveness 4 0 0 0 0 0 0 0 18
market size 7 0 0 0 11 1 0 0 0
market growth 7 0 0 0 11 1 0 0 21

Marketing
marketing (in general) 2 1 0 0 1 0 3 5 0
advertisement/promotion 8 1 0 0 10 0 0 0 0
adequacy of sales force/ 0 1 0 10 6 0 0 0 16
distribution
forecasting turnover 2 1 0 0 7 0 0 0 0
market research 0 0 0 1 0 0 0 5 11
customer involvement 0 0 0 0 0 0 1 0 0
market definition 0 0 0 5 0 0 0 0 8

References
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