Assessing and Improving

Innovation Capability in
Organisations

D.L. Francis
Ph.D.

2000

Assessing and Improving

Innovation Capability in
Organisations
David Louis Francis

A thesis submitted in partial fulfilment of

the requirements of the University of
Brighton for the degree of Doctor of
Philosophy

June 2000

The University of Brighton

Abstract
The rationale for examining innovation is persuasive. It has been widely
argued that exploiting the potential of ideas will be a cornerstone of
competitive success in the 21st century.
The thesis presents the findings of a research programme into the
components of innovation capability. This, it is argued, is an organisational
property that underpins an ample flow of multiple, value-creating and novel
initiatives. A significant outcome is a comprehensive reference model defining
56 factors that enable an organisation to be innovative. In addition, the results
of a pilot organisation development process, based on the reference model,
are described.
The research sought to answer four questions:
1. Can innovation capability be described?
2. What are the attributes of a firm with high innovation capability?
3. Can a means be found to 'audit' innovation capability?
4. Are there ways in which innovation capability can be developed?
Literature relating to organisational innovation has been reviewed, especially
that from strategic and organisation development perspectives and an
integrated theoretical framework constructed. This orientated the empirical
research undertaken. The role of contingency factors has been considered.
Using grounded and adaptive theory methodology, a reference model of
innovation capability was developed and revised following testing
procedures. An audit instrument was devised and used in 48 firms. Three
longer case studies were undertaken, leading to a tentative taxonomy of
innovation-specific organisation development techniques.
The implications of this research for theory and practice have been considered
and suggestions made for further research.

List of contents
List of tables ................................................................................................................... 7
List of figures................................................................................................................... 7
Preface and acknowledgements......................................................................................... 9
Chapter 1

Introduction and overview..........................................................................13

1.1

Introduction ..................................................................................................13

1.2

Study area ....................................................................................................14

1.3

Research focus...............................................................................................15

1.4

Previous studies in this area..........................................................................16

1.5

Research perspective ....................................................................................18

1.6

Research goals..............................................................................................18

1.7

Research methods.........................................................................................19

1.8

Contribution of the research ..........................................................................22

1.9

Structure of the thesis ...................................................................................22

Chapter 2

Innovation and innovation capabilitya theoretical review......................25

2.1

Introduction ..................................................................................................25
2.1.1
Theoretical orientation.....................................................................25

2.2

The scope of innovation .................................................................................26

2.2.1
Innovation within the firm................................................................29
2.2.2
Innovation as a concept......................................................................30

2.3

Innovation within the firm............................................................................34

2.3.1
Why can innovation be difficult to manage ........................................35

2.4

The nature of innovation................................................................................38

2.4.1
Innovation as a managed process........................................................44
2.4.2
Idea acquisition ................................................................................48
2.4.3
Idea adoption ...................................................................................50
2.4.4
Idea application...............................................................................56
2.4.5
Idea exploitation..............................................................................58
2.4.6
Learning ...........................................................................................59

2.5

Innovation and strategy.................................................................................62

2.5.1
Innovation from the perspective of the strategic planning school ........64
2.5.2
Innovation from the perspective of the resource-based school..............67
2.5.3
Innovation from the perspective of the entrepreneurial school ............75
2.5.4
Innovation from the perspective of the innovative organisation
school...............................................................................................79
2.5.5
Innovation and strategy.....................................................................84

2.6

Targeting innovation .....................................................................................86

2.6.2
4Ps targeting .....................................................................................87
2.6.3
Innovation in product.........................................................................88
2.6.4
Innovation in process .........................................................................92

2.6.5
2.6.6
2.6.7

Innovation in position........................................................................95
Innovation in paradigm .....................................................................98
4Psorganisational implications.................................................... 105

2.7

Innovation capability ................................................................................. 105

2.7.1
What is a capability?..................................................................... 105
2.7.2
Elements of innovation capability ................................................... 108
2.7.3
Norms, Assets, Technologies and Skills (NATS)............................... 110

2.8

Contingency factors ..................................................................................... 111

2.9

Theoretical integration............................................................................... 112

Chapter 3

Data and methodologies .......................................................................... 115

3.1

Overview ................................................................................................... 115

3.2

Methodological context............................................................................... 115

3.2.1
The person of the researcher............................................................ 117

3.3

The research task........................................................................................ 119

3.4

Methodological choices............................................................................... 120

3.4.1
Methodological assumptions ........................................................... 123
3.4.2
Vitality and texture........................................................................ 126
3.4.3
Choice of methodologies ................................................................. 128
3.4.4
Selection of methodologies .............................................................. 133

3.5

Research strategy ....................................................................................... 135

3.6

Data sources................................................................................................ 138

3.7

Research techniques.................................................................................... 141

3.8

Development of a reference model and audit instrument................................ 143

3.8.1
Development of an audit instrument................................................. 144
3.8.2
Development of an audit process...................................................... 146
3.8.3
Improving the diagnostic tools......................................................... 149
3.8.4
Extending the research team............................................................ 150
3.8.5
Statistical analysis ........................................................................ 151

3.9

Interventions............................................................................................... 151
3.9.1
Review of effectiveness ................................................................... 152

3.10

Research process as learning........................................................................ 152

3.11

Limitations of the research method............................................................. 154

Chapter 4

Research findings..................................................................................... 155

4.1

Introduction ................................................................................................ 155

4.2

Research design .......................................................................................... 155

4.3

The second generation reference model (G2).................................................. 159

4.3.1
The G2 reference model: components and elements............................. 163
4.3.2
The G2 reference model: 18 components and 56 elements..................... 166

4.4

Using the reference model in organisation development interventions ........... 218

4.4.1
Findings from interventions ............................................................. 219
4.4.2
Reviewing interventions.................................................................. 223
4.4.3
The NORWESCO review................................................................ 224
4.4.4
Learning from all interventions........................................................ 225

4.4.5
Chapter 5

The current situation ....................................................................... 227

Discussion and conclusions......................................................................... 229

5.1

Introduction ................................................................................................ 229

5.2

Review against objectives............................................................................ 230

5.3

The theoretical context of innovation capability.......................................... 231

5.3.1
Trends and common features............................................................. 235
5.3.2
Innovation and other processes in the firm........................................ 236
5.3.3
Is the notion of innovation capability helpful? ................................ 238

5.4

The use of adaptive theory.......................................................................... 239

5.5

The G2 Model - an assessment ...................................................................... 243

5.5.1
Use of the reference model............................................................... 246

5.6

Interventions intended to enhance organisational innovation capability....... 249

5.6.1
An 'intervention tree' ...................................................................... 252

5.8

Contingency theory and this research .......................................................... 255

5.9

Theoretical discussion................................................................................. 257

5.10

Learning for the researcher ......................................................................... 262

5.11

Suggestions for further research ................................................................... 264

5.12

Thesis structure and research limitations..................................................... 266

5.13

Concluding remarks ..................................................................................... 268

Appendix 1 Interview schedule................................................................................... 270

Briefing statement .................................................................................................. 270
The questions .......................................................................................................... 270
Appendix 2 Auditing innovation effectivenessa review of alternative models........... 275
Ahmed ....................................................................................................... 276
Archibugi ................................................................................................... 278
Burgelman .................................................................................................. 278
Chiesa........................................................................................................ 280
Coombs ....................................................................................................... 280
Cook........................................................................................................... 281
de Ven ........................................................................................................ 281
Deutschman ................................................................................................ 282
Dooley........................................................................................................ 283
Doyle ......................................................................................................... 287
Johne and Snelson ........................................................................................ 288
Kao ........................................................................................................... 289
Koeste ........................................................................................................ 290
McGourty .................................................................................................... 291
Rothwell .................................................................................................... 291
Tang ........................................................................................................... 292
Trott........................................................................................................... 293
Comparative assessment ......................................................................................... 293

Appendix 3 The first generation reference model (G1) .................................................. 296

Appendix 4 NUDIST databasenode statistics ........................................................ 319
Appendix 5 The innovation capability audit............................................................... 326
Appendix 6 List of companies and individuals contributing to the research................... 331
Appendix 7 Letter from Fleming Agri-Products Ltd...................................................... 334
Appendix 8 Innovation capabilitya universal or contingent attribute? ...................... 337
8.1

Innovation in an entrepreneurial organisation (simple structure)................... 339

8.2

Innovation in an machine organisation (machine bureaucracy)...................... 343

8.3

Innovation in an professional organisation (professional bureaucracy)........... 346

8.4

Innovation in an diversified organisation (divisionalised form) ................... 349

8.5

Innovation in an innovative organisation (adhocracy) .................................. 351

8.6

Innovation in an missionary organisation ..................................................... 354

8.7

Common features of the six cases.................................................................. 358

8.8

Consistency check........................................................................................ 359

Abbreviations and technical terms................................................................................. 361

References

................................................................................................................ 363

List of tables
Table 2.1: idea acquisition...............................................................................................49
Table 2.2: idea adoption ..................................................................................................55
Table 2.3: idea application..............................................................................................57
Table 2.4: idea exploitation.............................................................................................59
Table 2.5: learning...........................................................................................................62
Table 2.6: four strategic perspectives................................................................................64
Table 2.7: strategic perspectives and innovation capability..............................................85
Table 2.8: sources of innovation (following Mintzberg) .................................................... 105
Table 2.9: elements of innovation capability .................................................................. 109
Table 2.10: comparing NATS and Amabile's categories................................................... 111
Table 3.1: biographical factors influencing research ....................................................... 118
Table 3.2: appropriateness of methodologies.................................................................. 133
Table 3.3: major activities undertaken............................................................................ 136
Table 3.4: rationale for inclusion of data sources ............................................................. 139
Table 3.5: data set ......................................................................................................... 141
Table 3.6: audit design criteria ...................................................................................... 145
Table 3.7: audit design options....................................................................................... 147
Table 4.1: data set for G1 reference model ....................................................................... 156
Table 4.2: G2 components compared with G1 ................................................................... 162
Table 4.3: G2 components and elements ........................................................................... 164
Table 4.4: participants' evaluation ................................................................................ 223
Table 4.5: review of activities ....................................................................................... 226
Table 5.1: relevance of this research: conclusion one........................................................ 232
Table 5.2: relevance of this research: conclusion two ....................................................... 232
Table 5.3: relevance of this research: conclusion three..................................................... 233
Table 5.4: relevance of this research: conclusion four....................................................... 233
Table 5.5: relevance of this research: conclusion five....................................................... 234
Table 5.6: relevance of this research: conclusion six......................................................... 234
Table 5.7: relevance of this research: conclusion seven..................................................... 235
Table 5.8: this research and adaptive theory ................................................................. 240
Table 5.9: relevance of the 4Ps framework...................................................................... 253
Table 5.10: intervention tree activities (level D)............................................................ 253
Table 5.11: intervention tree breakdown (level E)........................................................... 254
Table 5.12: need for a multidisciplinary approach.......................................................... 261
Table A2.1: comparison of G2 and Ahmed's framework ................................................... 277
Table A2.2: comparison of G2 and Burgleman's framework .............................................. 279
Table A2.3: comparison of G2 and the Siegel scale .......................................................... 281
Table A2.4: comparison of G2 and Deutschman's framework............................................ 282
Table A2.5: comparison of G2 and Dooley et al's framework ........................................... 284
Table A2.6: comparison of G2 and Doyle's framework ..................................................... 287
Table A2.7: comments on Johne and Snelson's framework ................................................. 288
Table A2.8: comparison of G2 and WEI framework.......................................................... 290
Table A2.9: comparison of G2 and Rothwell's framework ................................................ 291
Table A2.10: comparison of G2 and Trott's framework ..................................................... 293

Table A2.11: comparative assessment............................................................................. 294

Table A3.Ia: transformational leadership ..................................................................... 296
Table A3.Ib: stretching strategic intent .......................................................................... 298
Table A3.Ic: dedicated innovation resources ................................................................... 299
Table A3.Id: strong external linkages............................................................................. 300
Table A3.Ie: directed innovation initiatives .................................................................. 301
Table A3.IIa: empowerment practised............................................................................ 302
Table A3.IIb: demanding expectations............................................................................ 303
Table A3.IIc: high enrolment......................................................................................... 304
Table A3.IId: respect for mastery................................................................................... 305
Table A3.IIe: confronting learning.................................................................................. 306
Table A3.IIIa: exceptional individuals.......................................................................... 307
Table A3.IIIb: creative destruction................................................................................. 308
Table A3.IIIc: active internal networking....................................................................... 309
Table A3.IIId: conceptual road map ............................................................................... 310
Table A3.IIIe: full competencies portfolio ...................................................................... 312
Table A3.IVa: relentless continuous improvement........................................................... 313
Table A3.IVb: effective new productprocess development systems ................................. 313
Table A3.IVc: sound decision processes ........................................................................... 315
Table A3.IVd: honoured champions ............................................................................... 316
Table A3.IVe: strong implementation capacity............................................................... 317
Table A4: node statistics (G2) ........................................................................................ 320
Table A8.1: organisational configurations ...................................................................... 337
Table A8.2: common features and the G2 model............................................................... 359

List of figures
Figure 2.1: institutionalisation of innovation....................................................................32
Figure 2.2: a model of the innovation process ....................................................................48
Figure 2.3: strategic perspectives on innovation ................................................................85
Figure 2.4: characteristics of high innovation capability................................................ 108
Figure 2.5: perspectives on innovation capability ........................................................... 113
Figure 3.1: research strategy map................................................................................... 135
Figure 3.2: hindsight map.............................................................................................. 136
Figure 3.3: assessment of data sources ............................................................................. 139
Figure 3.4: possible diagnostic procedures....................................................................... 147
Figure 4.1: G2 reference model ........................................................................................ 160
Figure 4.2: domain, components and elements.................................................................. 163
Figure 4.3: asset intensiveness and innovation requirements............................................. 182
Figure 4.4: cultural factors ............................................................................................. 191
Figure 4.5: areas for learning.......................................................................................... 198
Figure 4.6: types of maps................................................................................................ 212
Figure 4.7: illustrative decision profiles......................................................................... 215
Figure 4.8: structure of intervention ................................................................................ 219
Figure 4.9: intervention process (actual case) .................................................................. 220
Figure 5.1: helix model .................................................................................................. 237
Figure 5.2: paths for development of innovation capability ............................................ 251
Figure 5.3: intervention tree ........................................................................................... 252
Figure 5.4: intervention over time................................................................................... 259
Figure A2.1: audit categories ......................................................................................... 275
Figure A2.2: other researchers ....................................................................................... 276
Figure A8.1: clarifying opportunity space....................................................................... 340
Figure A8.2: exploitation options ................................................................................... 341
Figure A8.3: an example of process innovation ................................................................ 344
Figure A8.4: elements of a process innovation.................................................................. 345
Figure A8.5: participants' perceptions of opportunities ................................................... 347
Figure A8.6: opportunities following discussion .............................................................. 348
Figure A8.7: balancing global and local requirements ...................................................... 349
Figure A8.8: adhocracy.................................................................................................. 354
Figure A8.9: values driven organisation ......................................................................... 355
Figure A8.10: pulls on values.......................................................................................... 357

10

Preface and acknowledgements

Many people contributed to this research and, concurrently, to my own
learning. I am grateful to them all.
Particularly helpful guidance concerned my own values, attitudes and skills.
Having been a consultant in organisation development for many years, with
some experience of writing, I felt, at the outset, that a research degree would
build on my existing expertise. This proved to be a naive assumption. I was
unprepared for the significant unlearning that was needed. Over time I came
to understand and respect the role of scholarship in the development of
robust theoretical frameworks. Also, I came to learn how to build theory
from reliable and comprehensive data sets. In my consulting role my goal
had been client-centred and goal-orientated. I needed to become
knowledge-centred and integrity-orientated.
I learned and unlearned within CENTRIM (the Centre for Research in
Innovation Management) from the mid-1990s and thank my colleagues for
being open-minded and generous with their time and ideas. Often without
realising it, they provided role models and I came to understand the
importance of enquiry, diligence and valid conceptualisation. CENTRIM's two
'fathers', professors Howard Rush and John Bessant, have created something
rare and special that challenged, nourished and informed me. Thank you
both.
John Bessant, as one of my academic supervisors, provided unfailing support,
challenge and inspiration. In many ways this research reflects his
commitment to root theory in practice and use theory to inform practice.
Jon Bareham, my other academic supervisor, skilfully enabled me to re-think
and restructure this thesis so that it is, hopefully, balanced, readable and
useful to others.

11

Whilst I was undertaking this research another student, Milady Parejo PhD,
was completing her studies. We read each others' work and she spent many
hours helping me to access ideas and theory pools of which I was unaware.
Her support was extremely valuable. In addition, my colleague,
Sandie Meredith, read several chapters and made valuable comments,
supporting me with unfailing enthusiasm. During the final two years of this
research Mike Hales PhD led the development of a researchers' community
that proved a source of ideas, feedback and support. Professor
Raphie Kaplinsky provided insight into the disciplines of academic work
through his inspired leadership of a reading group and detailed comment on
my theoretical work.
Outside CENTRIM many people contributed to this research effort. The
original motive to undertake a research degree was inspired by conversations
with professors Henry Mintzberg and Gareth Morgan in the 1980s. Professor
Yves Doz agreed to be a mentor and, brilliantly, helped me to frame the
research agenda. Murray Dalziel, PhD, was a second mentor and, as
managing director of Hay Consulting, offered insights into the organisational
development aspects of this work.
I am grateful to John MacKay and the Innovation Unit of the Department of
Trade and Industry for undertaking more than 110 interviews and focus
groups and giving me permission to use the data set from the Partnerships
with People Research. In addition, I wish to thank Trevor Bradford and
Gren Amstrong, both from the University of Ulster, who conducted many
interventions based on this research.
Many managers generously gave their time and I thank them all. Six people,
in particular, took my thinking forward. They are Jim Wright PhD, Terry
Hutton PhD (both of SmithKline Beecham), Vincent Henry (New York Police
Department), Helen Price (Jardine Pacific), Patrick Maule CIPD (Hong Kong
Mass Transit Railway) and Stephen Walker PhD (Thames Water).

12

During this research I gained much from presenting preliminary ideas to

audiences of academic specialists and managers. Their feedback has been
invaluable. In particular, colleagues in CENTRIM on several occasions,
members of the Jardine Pacific Annual Strategy Conference in 1996, the
special interest group at the Strategic Planning Society in 1997, the audience at
the Institute for Personnel and Development Annual Conference in 1998,
members of the Technology Development Programme in Poland in 1999 and
senior members of the Czech Consultants Forum in 2000.
Finally, I wish to thank Graham Perrin whose skills in solving computer
problems are legendary. His dedication helped this thesis to be delivered on
time.

13

Chapter 1
Introduction and overview
1.1

Introduction

The May 2000 edition of Management Consultancy (2000a) had six articles.
The first (2000b), on new technologies influencing telecommunications, began
with the sentence "five years ago all of the 'issues' raised here would have
been predicted on either laboratory, blue sky or barely emerging
technologies new entrants, using bleeding edge (sic) technologies are
rewriting the rule books and reshaping business models." (9). Other articles in
the magazine included a discussion of e-retailing, manufacturing systems
designed for flexibility, supply chain management using the www, internet
security, business to business commerce via the internet (B2B). In the
appointments section of the magazine there were 54 job advertisements, of
which 41 mentioned technological or organisational change. The wording of
one advertisement includes the following statement "this e-building, venture
capitalist hybrid organisation is shortly to be rolled out globally. It is a unique
offering in that it is a triumvirate partnership between a strategy consultancy,
a well-regarded venture capitalist and an institutional investor. They have
first mover advantage, a host of technological partners and the clout to
shoehorn a place in a growing market" (55).
The April 1996 edition of the same magazine had five articles. The topics
included the speed of air travel, developments in the Australian economy,
coping with disasters (e.g. fire), outsourcing and data warehousing. There
were 31 job advertisements of which 21 mention technological or
organisational changewith business process re-engineering and quality
systems management being the most commonly mentioned managerial
specialisms.
The scale of change in the content of articles and job advertisements in
Management Consultancy over four years is striking. This magazine,
intended for change agents, concentrates on new ideas, business models,
technologies and management methodologies. It, arguably, presents a
snapshot of current business development trends. Within the profession of

14

management consulting, and embedded in the services offered by

consultancies, there is evidence that many products, processes, market
positions and business models are undergoing radical and/or incremental
change.
Such changes require that ideas are developed then exploited for
advantagea brief definition of innovation. This thesis presents research into
those organisational factors that enable multiple, value-creating initiatives to
be generated and implemented for the advantage of the firm'innovation
capability'.

1.2

Study area

Innovation is a broad topic. As will be discussed in Chapter 2, innovation

requires ideas (new to the unit of adoption), making commitment decisions
about novel, perhaps uncertain, proposals, the realisation of ideas and
exploiting benefits. Firms may undertake hundreds or thousands of
innovation initiatives (Christiansen, 2000). Innovation can embrace a whole
organisation as a strategy and/or a cultural attribute (Coyne, 1996).
Innovation is important but, as Christiansen (2000) observes, "under the best
circumstances, innovation is an uncertain endeavour" (1). It is widely
considered that high innovation capability is necessary for survival and
facilitates superior commercial performance. For example, Freeman and
Soete (1997) assert that "not to innovate is to die" (266). However, not all
innovation initiatives provide advantage. For example, one of the largest
investments in an innovative product in the 1990s, $5 billion invested in the
Iridium global phone system, was totally wasted (Doz and Hamel, 1998). It is
possible to innovate and die. Innovation cannot be considered as a
guaranteed path to superior, sustained profit margins.
Despite the risks inherent in some forms of innovation, there is a broad
consensus amongst scholars (Duggan, 1998) that the rate and scale of the
'innovation requirement' has increased, and will continue to increasewith
globalisation, technological development and heightened competition being
key drivers.

15

Forces driving innovation are disparate. They may be internal to the firm,
come from linkages (for example, with suppliers), customers, technological
leaders, strategic choices, rival firms etc. These forces can influence a firm at
all levelsfrom the executive team to entry-level employees. A firm's
innovation activities are influenced by, and may influence, political, economic,
social, market-driven, ideological and/or technological phenomena (Giddens,
1995).
Despite its importance, organisations can be unfriendly hosts for innovation
(Mintzberg, 1983a) through an emphasis on conformity, hierarchy,
predictability and the like. Firms using the principles of scientific management
(Taylor, 1911) have sought to professionalise innovation and thereby
inhibited some potential wellsprings (LeonardBarton, 1995).
The obvious outputs (at least as far as customers are concerned) of innovation
are improvements in products and/or services. However, customers and
potential customers may not be the sole beneficiaries as other stakeholders
can benefit including employees, the environment and local community.
Partly for the reasons mentioned above (importance, risks, multiple drivers,
varied stakeholders and organisational constraints) innovation presents
distinctive management challenges (Duggan, 1998). Some managers are
concerned to develop their own skills and organisations to facilitate
innovation. This research is intended to help them.

1.3

Research focus

Innovation capability will be examined at the level of the firm, rather than
related to individuals, teams, projects, value-streams, clusters, industries,
nations or other possible foci. This research focused on innovation within
strategic business units (SBUs) but not at the corporate level1 . Despite the

Distinctive models, methodologies and tools are used to develop corporate strategies. Issues
such as industry positioning, portfolio evaluation and parenting philosophies are
important. The researcher decided not to consider specific characteristics of innovative
corporations but has little doubt that a different pattern of innovation attributes would be
needed than the one developed for this thesis.

16

commercial orientation of the research, there is reason to believe that the

models developed could be applicable to not-for-profit organisations2 .
The research has a pragmatic bias and belongs to the school of doctoral
studies (EasterbySmith et al., 1991) that considers a useful outcome to be a
worthwhile endeavour. A managerialist perspective has been adopted and
with the aim of helping managers to answer the question: "how can the
management of a firm increase the possibility that there will be sufficient
numbers of apt, creative, timely, efficiently executed and value-creating
initiatives to provide it with 'high' innovation capability?"
This researcher adopted a position that high innovation capability is often
necessary and sometimes essential for 21st century organisations. However,
to adopt an uncritical pro-innovation bias would have been unhelpful. It will
be argued that the targeting of innovation capacity can be as important as its
possession. High 'innovative capability' needs to perform two functions
simultaneouslyto enable a specific unit of innovation (referred to in this
thesis as an 'innovation initiative') to yield benefits and, more broadly, to
enrich the dynamic capability to the firm to enhance future value creation by
sustaining a flow of multiple, timely and appropriate initiatives.
It is not argued that all activities in a firm's value chain require the same
degree of innovation capability. For example, an advertising text for a
Scotch whisky (1999b) says:
"Since time immemorial, the Macallan has been distilled by
craftsmen on the same Estate in particularly small hand-beaten
copper stills and, whilst other distillers no longer insist on using
oaken sherry casks, at Macallan this costly tradition is
maintained." (message on package of bottle)
Such examples provide useful reminders that new does not, invariably, equal
betterat least for some consumers.

1.4

Previous studies in this area

Innovation has been studied for many generations. It became a

preoccupation of industrialists in Britain in the early days of the industrial
2

A police force and a school were included in the case studies and no significant differences
could be identified with commercial examples.

17

revolution in the middle of the 18th century (Weber, 1976). Studies of 'great
innovators' have enlivened the popular imagination for decades as
remarkable individuals (Sobel, 1998), like Brunel, Edison and Arkwright, were
seen as heroes. However, there are many examples of an earlier practice,
going back to the Palaeolithic period (Diamond, 1997).
Many bodies of literature have relevance including economics, economic
history, biology, sociology, social psychology, psychology, management
theory, strategic management, systems theory and organisation
development. This research draws primarily from three fields of scholarship:
innovation studies, organisation development and strategic management.
Current approaches to the study of innovation owe much to the work of
Schumpeter (1961). Innovation management emerged as a distinctive field in
the years following the Second World War, partly as it was seen to underpin
the drive for industrial recovery and economic development in the
Third World (Rostow, 1971). From the late 1950s sociological research (Burns
and Stalker, 1971; Gouldner, 1956) provided distinctive perspectives on
organisational life and contributed to a rich tradition of relevant sociological
research.
From a different world of practice another field of literature emerged in the
1960s. A distinctive set of methodologies, given the generic name of
'organisation development' (OD) developed, primarily in the USA (Blake and
Mouton, 1964) and from the Tavistock Institute in the UK. From the
beginning OD was driven by a belief-set that held that organisations were, in
the main, poor guardians of individual and collective creativity. In order to
develop, it was claimed, they needed to adopt facilitative processes (Schein,
1969), humanistic values and open-systems organisational designs
(McWhinney, 1972). OD provided insights into the organisational and
behavioural characteristics of innovation, combined with improving
understanding of the processes of organisational change and meant that
managers could institute interventions with the goal of enhancing innovation
capability.
The rapidly evolving field of strategic management provided a source of
further insights (Mintzberg et al., 1998a). The long-range planning school was

18

superseded by dynamic frameworks, specifically the positioning approach to

competitive strategy that came from Harvard's faculty (Porter, 1980) and,
later, resource-based views (Hamel and Prahalad, 1994). The relationship
between innovation and strategy emerged as a significant issueone that
continues to interest scholars and managers.

1.5

Research perspective

The approach adopted in this thesis is a child of the dynamic capabilities view
of the firm. However, innovation capability is not seen as an universal
formula like, for example, good accounting practice. Rather, it is seen as a
flexible resource for an organisation comparable to physical fitness for an
individual. Marathon runners, university researchers, school children, yogis
and old-aged pensionersall need a degree of physical fitness but the type
and extent varies significantly. Of particular interest is the impact of a change
of requirementwhen a university researcher whose sport is practising darts
takes up marathon running, for example!

1.6

Research goals

Despite a wealth of interest in the topic, a systematic methodology to help

managers develop the capability of their organisations to be innovative in
ways that are functional to the firm has not been fully developeda new
synthesis is needed. It is to that end that this research is directed. In a seminal
paper Wolfe (1994) wrote:
"The objective of OI (Organisational Innovativeness) research is
to discover the determinates of an organisation's propensity to
innovate" (408).
"innovation researchers have recently began to specify the
characteristics of the organisations they investigate a typology
of organisational innovational approaches, by providing
researchers with a common frame of reference, would facilitate
classification efforts. Though several have been proposedno
broadly acceptable typology or check-list of attributes has
emerged" (418).
The research undertaken for this thesis adopted the suggestion made by
Wolfe and aims to deepen understanding by providing such a 'typology or
check-list of attributes' of innovation capability.

19

The research sought to answer four questions.

1. Can innovation capability be described?
2. What are the attributes of a firm with high innovation capability?
3. Can a means be found to 'audit' innovation capability?
4. Are there ways that innovation capability can be developed?
These questions position this research differently than some major research
programmes, for example that undertaken by the Minnesota Innovation
Research Programme which Angle and de Ven (1989) stated had the objective
"to provide the innovation manager a road map that indicates how and why
the innovation journey unfolds, and what paths are likely to lead to success or
failure" (663). Using Angle and de Ven's metaphor of innovation as a journey,
this research is concerned with the resources that are needed to plan the
journey and cope with vicissitudes on the wayincluding the fitness of
travellers, their training, mental attitude and experience as well as practical
'tools'waterproofs, corn plasters and compass.
An intent statement for this research (written in June 1995) was:
'to provide an intervention process for enhancing innovation
capability that managers would find practical, relevant and
developmental'.

1.7

Research methods

An approach adopted to link theory to empirical research was 'adaptive

theory'. Since this is little known a brief explanation is relevant. The
researcher decided in 1996 to use extant theories of innovation management,
strategy formulation and organisation development as sensitising concepts to
set an agenda for his empirical research. The methodology selected to analyse
and theorise from data was grounded theory (Strauss and Corbin, 1990a).
The 'classic' mode of undertaking grounded theory includes the use of
sensitising concepts. This was reinforced and extended by Layder (1998) who
published a work on a distinctive sociological method that he called adaptive
theory. Layder argued that an ongoing dialogue between theory and data
gathering/interpretation is constructivea stance that had been adopted by
this researcher. Layder's explication of adaptive theory came too late to affect

20

the design of this research but almost all of his "new rules of the sociological
method" (173) had been (unknowingly) adopted.
The research was structured as a looping process in which a 'theory' was
developed, tested, reviewed and redefined. This thesis describes a process of
learning-over-time where ideas and insights have evolved, been changed,
destroyed and deepened through interaction with firms. It is interesting to
note that the research process included phototyping, iterative learning and a
dialogue between theory and practice; cited, for example, by
LeonardBarton (1995) as typical steps in innovation development.
Accordingly, the research itself can be seen as an innovation initiative and
reflection on it provided a source of double-loop learning (Argyris, 1977).
Five primary research methods were used. These were:
1. The researcher codified a set of frameworks that, taken together,
provided a tentative model of innovation capability from a review of
relevant literature. This led to the design of a research questionnaire.
2. Data was collected from change agents, managers and other employees
using the research questionnaire as the basis for semi-structured
interviews. In addition, video and audio tapes of innovation processes
were studied. In total, more than 400 firms and individuals were included
in this element of the research.
3. Data from various sources was placed in a qualitative database (NUDIST)
and grounded theory methods used for the development of two
generations of reference models.
4. The reference model provided the basis for an audit instrument that was
used as an element in an intervention process. Procedures for using audits
as an intervention methodology have been described in the literature
under the generic heading of 'survey feedback' (Bowers and Franklin,
1977; Franklin, 1976).
5. Three cases3 were explored in greater depth to track the development of
innovation capability over time. This provided preliminary data for
understanding possible links between intervention processes,
developmental initiatives and innovation capability.

These were large organisations in the pharmaceutical and water industries and a police
service.

21

The researcher invested significant effort in the development of a reference

model. Despite limitations of such forms of codification, its merits were
considered to be persuasive. It provided a means of generating theoretical
insights. Also, it offered a basis for dialogue with firms that could alert
managers to domains of adequacy and inadequacy.
Findings and tentative models were subjected to peer reviews, presentations
to managers and trials with companies. The reference models went through
numerous minor changes and two major re-formulations. At the same time
the model was developed as a diagnostic aid and located within a structured
practice for developing innovation capability. The methodologies used in the
research will be described in Chapters 3 and 4, but here it is necessary to note
that some of the research studies were the consequence of opportunistic
assignments and were not the result of deliberate sampling.
Initially, the researcher decided to share the view of Tidd et al. (1997) that
"there is some commonality around the things which are managedthe key
enablersin successful innovation how these enablers are actually put
together varies between firms but they represent particular solutions to the
general problem of managing innovation" (26). This research, therefore, took
a non-contingent approach and sought to define the 'commonalities' of
innovation capability. Later, the decision to take a non-contingent view was
questioned as fieldwork enabled a preliminary assessment to be made
innovation practices in six organisational configurations described by
Mintzberg (1998).
The later phases of the research required entering companies and seeking to
facilitate a change process that would enhance innovation capability. A
'product specification' was attempted for the intervention process. This was
amended and developed several times during the enquiry. 41 audits of
companies followed by intervention were carried out4 by the end of August
1999 and 943 people had completed the audit. All companies had fewer than
500 employees and were largely selected from the engineering and
manufacturing sectors. A review of the effectiveness of these interventions

Six audits and interventions were completed directly by this researcher. The remainder
were completed by change agents trained by him.

22

was undertaken including a workshop with participating firms. In addition,

an independent consultant reviewed the process and provided a report.

1.8

Contribution of the research

As will be described in the body of the thesis, many scholars and change
agents have defined and sought to facilitate the development innovation
capability. This research does not claim to make a pioneering contribution but
it did, independently, check and extend the findings of others.
The researcher sought to be cautious about the contribution made by this
work being mindful of Rickards' (1999) observation that "over generalized
inferences from empirical work, and less than clear evidence for the proposed
mechanisms are recognized as limiting the usefulness of theoretical models
and practical prescriptions" (42).
The research makes five distinctive contributions to the field.
1. This research extends understanding of how innovation capability can be
targeted towards products, processes, positions and paradigms.
2. The development of the NATS (norms, assets, technologies and skills)
framework provides a bridge between high-level aspiration and
organisation development initiatives.
3. The use of adaptive theory with a large data-set offered an opportunity to
explore the use of a relatively new theoretical approach.
4. The reference model (second generation) has 18 components and 56
elements. This provides a degree of precision not previously available.
5. Although there are many examples of the use of survey feedback as an
intervention methodology, the specific approach developed and tested in
this research was new.

1.9

Structure of the thesis

The thesis has five chapters and eight appendices. Chapter 2 provides a
literature review, Chapter 3 explores methodological issues, Chapter 4
contains the research's findings and Chapter 5 discusses the research and
draws conclusions.

23

Chapter 2 addresses six questions: 'what is the scope of innovation?' 'Why

can innovation be difficult to manage?' 'Can innovation be managed?' 'what
is the strategic role of innovation?' 'what is innovation capability?' 'is
innovation capability a contingent attribute?' It concludes with a conceptual
model that synthesises the conclusions of the theoretical review and sets an
agenda for the empirical research programmeproviding a set of orienting
and sensitising concepts (see Layder, 1998 pages 101116 for a discussion of
this use of theory).
Chapter 3 provides a discussion of methodological issues. A rationale is
provided for the selection of methodologies used and the researcher's
strategy is discussed. The chapter concludes with a review of interaction
between research and learning.
Chapter 4 contains the findings of the research. It explores the second
generation (G2) reference model in detail and describes the effects of
interventions into firms. In order to prevent this chapter being unwieldy to
the reader, the research findings on the first generation model (G1) have been
included as Appendix 3.
In the final chapter, the research is reviewed against the objectives set.
Innovation capability, within the context of intervention processes, is
considered in the light of the research conducted. In addition, the researcher
reflects on his own learning. Following discussion, suggestions for further
research are made and conclusions drawn.
In the appendices can be found the research interview schedule (1), an
examination of other researchers' audits (2), findings from the first tranche of
research (3), a statistical breakdown from the NUDIST database of node data
(4), the audit instrument (5), a list of companies and change agents included in
the data-set (6), a letter from the first company that experienced an
intervention (7) and preliminary findings related to innovation capability
from a contingency perspective (8).
Despite quantity of data collected, and the support of others in the data
collection and intervention work, the researcher is aware that this work is
limited. The findings, and the intervention process developed for this
research, will be challenged by others, superseded and improved upon.

24

Nevertheless, this has been an exciting endeavour, replete with learning and
the warm support of many managers and colleagues gave encouragement at
times when the task seemed excessively daunting. Few topics on the
managerial agenda can be as significant as developing innovation capability.
This researcher hopes that he will play a small part in 'shining a light in the
black box' and rendering the development of innovation capability
manageable.

25

Chapter 2
Innovation and innovation
capabilitya theoretical review
2.1

Introduction

This chapter considers theoretical frameworks relevant to innovation

capability from the perspective of the firm. It is organised in six sections:

The topic of innovation is introducedexploring the question 'what is the

scope of innovation?'

The context of innovation is examinedexploring the question 'why can

innovation be difficult to manage?'

The nature of innovation is consideredexploring the question 'can

innovation be managed?'

The relationship between innovation and competitive strategy is

reviewedexploring the question 'what is the strategic role of
innovation?'

The notion of innovation capability is discussedexploring the question

'what is innovation capability?'

The question of whether innovation capability can be considered to be an

universal attribute is consideredexploring the question 'is innovation
capability a contingent attribute?'

The chapter concludes with an integrated model that summarises the

theoretical work reviewed in this chapter. The theoretical review was
undertaken to provide a basis for an empirical study of innovation capability.
It provided a set of orienting concepts following the suggestion of
Layder (1998) that "(b)y using orientating concepts one is able to deal with the
problem of how to bring some provisional order to a mass of data or
information" (108).
2.1.1

Theoretical orientation

As mentioned in Chapter 1, much is known about innovation from the work

of scholars, researchers and managers (Trott, 1998). Innovation has been

26

extensively studied in economics (Porter and Stern, 1999) and sociologists5

have explored the organisational values and organisational arrangements
that help or hinder the development of innovation capability. In addition,
psychology, social psychology, management theory, strategic management,
biology, systems theory and organisation development have added
considerable insights (LeonardBarton, 1995).
The primary intellectual orientations explored in this chapter are from
innovation management theory, strategic management and organisation
development rather than economics, psychology or biology. Throughout an
assumption has been made that innovation capability is generally beneficial
but that it is, by itself, not sufficient to assure competitive advantage.
Innovation needs to be supported by effective strategic decision-making and
multiple competencies in many or all the activities in a firm's value chain
(Porter, 1985).
The research focus is the firm, not the wider society, industry, sector or
economy, although it is accepted that firms are influenced by their
environmentsin particular, the prevailing national system of innovation
(Porter and Stern, 1999).

2.2

The scope of innovation

Since the Palaeolithic period (Curwin, 1954) some, but not all, human societies
have devised new or improved products, processes, ways of selling and
models of organising (Diamond, 1997). This process can be termed
'innovation'. It has been defined as "the successful exploitation of new ideas"
(DTI, 1994).

Marx (Mayo, 1960), Weber (1976) and Durkheim (1984) were among the first to discuss
innovation as a driver of societal change in industrialised society. Each considered the
antecedents and consequences of periods of innovative change. Their explanations vary from
class exploitation to religious beliefs and social anomie. Explanations of social change have
relevance at the organisational level since organisations are social institutions (Cuff et al.,
1990). Issues such as the relationship between owners and workers (perhaps drawing from
the Marxist perspective), predominant ideology (Weber) and the identification of the
employee with the firm (Durkheim) have relevance in the study of management of
innovation and innovation capability. The implication is that firms seeking to enhance
their innovative capability need to construct a social entity capable of multiple,
value-creating innovation initiativesto initiate, at least in part, a form of 'social
engineering'.

27

This definition of innovation, while apparently straightforward, raises several

questions. These include, what is meant by 'successful'? Exploitation for
whose benefit? How is 'new' defined? And what is an 'idea'?
Implicit in the definition is the notion that innovation can be a managed
process. If this is true then it is reasonable to assume that some managers are
better able to manage innovation than others. Some organisations are
believed to demonstrate a consistent record of successfully exploiting new
ideas and can be said to possess, at least for a period of time, a superior
'innovation capability'. From a study of these, it may be possible to identify
elements that result in high innovation capability.
Tidd et al. (1997) in their review of the field conclude that:
"Management research suggests that innovative firmsthose
which are able to use innovation to differentiate their products
and services from competitionare on average twice as
profitable as other firms" (ix).
This observation alone would be seem sufficient to put innovation
'centre-stage' for top management decision-making. The promise of doubling
profitability must seem attractive for non-innovative firms and the risk of
reducing profitability by half surely would concern executives in firms that
are already deemed to be 'innovative'.6
The words 'on average' in Tidd et al's assessment are important. The
contribution of innovation to the profitability of a firm is not straightforward.
Some innovation initiatives have proved to be dysfunctional, occasionally
leading to catastrophic losses. Even an 'excessive' rate of innovation can be
disadvantageous as Yoffie and Cusumano (1999) illustrated when considering
the increasing resistance of corporate clients to rapid product developments
by Netscape in the mid-1990s.
Tidd et al. suggest that there is a recognisable entitythe 'innovative
firm'that implements more and/or better ideas than its rivals and thereby
6

A report from the consultants Arthur D Little indicates that innovative firms are, on
balance, more highly valued by stock exchanges in the USA and UK (Jonash and
Sommerlatte, 1999). It is suggested that (1999a) there is a minimum 15% higher valuation
with which the City rewards innovative companies" (5). However, this study was
undertaken with large firms and depended on interpretations of the term 'innovative' by
investment analysts.

28

gains advantage. It is reasonable to assume that an innovative firm must

generally7 possess 'innovation capability'an underlying capacity to gain
advantage by implementing more and better ideas than rivals. However,
innovation capability may not be a unitary set of attributes (Mintzberg,
1989)just as physical fitness can be sustained in different ways so different
kinds of innovation may require distinctive approaches. Indeed, it may be
that some types of innovation, continuous improvement for example, can
impede other innovation, especially radical changes (Christensen, 1997).
Innovation, at least as defined by the DTI above, is a broad, perhaps too
broad, concept. It would include a simple change, for example using
self-adhesive rather than moisture adhesive envelopes in an office or refer to
a complex programme of initiatives like establishing an internet banking
business. Some innovations have created new industries and destroyed
others (Utterback, 1994). The scope of the topic is vast; Diamond (1997), for
example, sees innovation as a primary driving force of human history.
Despite, or perhaps because of, its complexity, the management of innovation
is a 'hot topic'. Virtually every management journal has at least one pertinent
article in each issue. Drucker (1994) argues that innovation is a core process
for a firm; he suggests that:
"ina period of rapid change the bestperhaps the onlyway
a business can hope to prosper, if not survive, is to innovate.
This is the only way to convert change into opportunities. This,
however, requires that innovation itself be organised as a
systematic activity" (Preface 1).
Drucker goes on to suggest that "innovation is a discipline, with its own, fairly
simple, rules" (2).
If Drucker and Tidd et al. are correct then two puzzles become apparent. If
innovation is a profitable strategy from a historical viewpoint, offers the best
way to ensure future survival and has "fairly simple rules" then why is it not
adopted by all but 'basket case' firms? Furthermore, if the majority of firms
succeed in adopting an innovation strategy then (assuming that they are
7

Not all firms that create value through innovation may possess innovation capability
themselves. For example, a film-production company may produce innovative films by
providing financial backing for talented film-makers but the company itself may lack
innovation prowess.

29

successful) innovation would cease to be a source of differentiated

competitive advantage and become 'table stakes'a requirement to compete
rather than a source of competitive advantage. The notion that firms are
either innovative or not may be simplistic as much depends on the rate of
innovation, fit with strategy, value created, costs incurred and other factors.
Many firms have adopted the rhetoric, if not the substance, of innovation, as
Coyne (1996) observed:
"In 1994, 85% of the annual reports of the 50 largest
corporations in the United States used the word innovation to
describe their products and operations. One report employed
the word 11 times" (3).
There is evidence that, in some industries at least, the 'we must innovate'
message has been already widely adopted (Cusumano and Selby, 1996).
Perhaps many firms have acquired innovation capability in recent years and
the key question is 'how and where is this targeted?'
Innovation and innovation capability are complicated constructs. Both will be
explored from several viewpoints in this chapter in order to un-pick
complexities, explore puzzles and identify questions.
2.2.1

Innovation within the firm

Innovation can be seen as one of several interdependent streams of processes

and/or activities that a firm undertakes (Porter, 1985) and is influenced by,
and can influence, a firm's strategy and operations. It is helpful to explore
such interdependencies through the medium of a brief case example, as this
presents a holistic viewpoint or gestalt (Khler, 1947).
Svensk (1973) wrote a relevant case about a firm in the elevator industry
called Daag Europe (actually the company was Otis). The case was set in 1969
and, at that time, the company had failed to show a profit on the sales of
elevators for the fourth consecutive year. However, progress was being
made on a move "towards standard models and rationalised production
facilities" (5). The Managing Director, Dr Pelz, was seeking to adopt a strategy
based on radical innovation and introduce standardised elevators, rather than
manufacture the customised ones that were typically installed at that time.
Pelz faced several difficulties, in particular the lack of needed competencies,

30

technical problems, reluctance from the firm's sales force, consumer

resistance, changing industry cost structures and declining revenues from
elevator sales. Pelz committed the firm to major investment in innovation,
based on a speculative model of industry evolution, but he could have been
wrong. If this had happened then the firm's investment in innovation could
have rendered it weaker. In the event Otis gained a dominating position in
the European elevator industry, sustained it for more than a decade (Aguilar,
1987) and the experience facilitated learning across Otis world-wide.
The case suggests that innovation cannot be understood within a single field
(LeonardBarton, 1995). Strategy, scenario development, innovation
processes, investment decisions, competency development and organisation
behaviour were relevant in this case. Also demonstrated, is the
interdependency of some innovation initiatives. For example, Daag Europe
developed an innovative product concept but needed a new reward scheme
to persuade its sales force to promote it. Innovation in product and
innovation in sales force management needed to progress hand-in-hand in
order for the strategy to be deployed (Howard, 1995).
2.2.2

Innovation as a concept

The value created by innovation in Daag Europe is not repeated in all cases.
As mentioned in Chapter 1, Innovation can be a demanding, uncertain,
time-specific and subtle endeavour. However, there is a persuasive rationale
for examining it. Innovation is high on many agendas (Porter and Stern,
1999). Governments define it as a key element in their drive for economic
success and social development (DTI, 1994). Many scholars of organisational
effectiveness consider that innovation is a core element in maintaining
organisational dynamism (Foster, 1986). Some managers espouse the belief
that value-creating innovation is key to the development of a robust
competitive strategy (Semler, 1993). Some senior academics argue that
organisational creativity is necessary but underdeveloped in today's business
schools (Rickards, 1999). Consultants facilitate the development of innovation
capability in client firms, some claiming to have a formula for success (Perrin,
1999). With many influential actors adopting innovation as a mission, it can be
argued that this is an age of innovation. Garratt (1987), Guinness (1996) and

31

CBI (1992) are some of the many voices that suggest that innovation will be
the cornerstone of competitive success in the 21st century.
Innovation may be elevated towards the top of national developmental
agendas but it is not, of course, new. The industrial revolution in Great Britain
was an era of intense innovation (Heaton, 1936), perhaps more profound in
its social and economic impact (Rostow, 1971) than any period before or since
(Utterback, 1994) (see anon., 1993 for a description of a Victorian Flour Mill
that incorporated many innovative features). Many other historical periods,
such as the Western Han dynasty in China 206 BC8 AD) when printing was
developed (Ting, 1998) and the development of the rail-roads in the USA
(Johnson and Kaplan, 1987) were periods of intense and radical innovation.
Innovation takes place within a set of contexts (Peng and Heath, 1996).
Relevant factors include the quantity and orientation of educational provision,
societal value systems, technological diffusion, availability of capital, tax
regimes, legacy of skills and existence of industry clusters (Schmitz, 1998).
Innovation can be more consequential than an internal organisational
attribute or a stratagem for achieving competitive advantageit may have a
broad social impact. Transformational innovations, like the wheel, television
and the internet, have social consequences; they are social facts. It appears
that the impact of innovation on society is increasing and has become an
extensive social phenomenona form of social hunger. Penrose (1980)
suggests that "a kind of 'competition in creativity' has become a dominant
motif in the pattern of competitive behaviour in many industries, where
consumers and producers alike are caught up in an almost compulsive
obsession for that which is 'new'" (106).
Giddens (1995) described the key change in late 20th century society as the
rapid evolution of 'modernity'. By this he meant a society in which thought is
globalised, permanence becomes a heritage concept, the traditional
relationship between space and time has been lost and people expect a
continuous flow of novelty. If modernity is a dominant social form then firms
need to operate in ways that allow them to thrive in these conditions. Of
particular interest is the impact of the globalisation of thought and
information (Bessant and Francis, 1999). Where this applies it seems that

32

market-facing innovation initiatives must either conform to dominant

(global) valuation criteria or find another way to signal their superiority
(Cook and Lunt, 1996). This provides a dominant logic that shapes
firm-specific innovation strategies.
Viewed from the perspective of the sociology of knowledge (Wolff, 1959)
innovation has become, increasingly, an institutional rather than an individual
property (Foster, 1986), beginning with work of Edison (Tidd et al., 1997) and
the impact of scientific management constructs in the early years of
the century (Taylor, 1911). The institutionalisation of innovation enabled the
development of a separate innovative component of the firm (termed the
'technostructure' by Mintzberg (1989)) and R&D by Freeman and
Soete (1997). More recently, the firm, as an entity, has been seen by some as
an unitary innovative system or generative organism (Wheatley, 1994). These
broad changes are illustrated by Figure 2.1 developed by the researcher

Importance in explanations

below:

1899

Innovation as an
organisational property
Innovation as a
technostructure-driven activity
Innovation as a product of
remarkable individuals
1999

Figure 2.1: institutionalisation of innovation

The diagram suggests that are three major ways of locating innovation in
organisations, The innovation drivers can be individual innovators, coalitions
of 'experts' and/or multiple actors, working interactively. If the figure is
correct then the third form, 'seeing multiple actors, working interactively, as
drivers of innovation' is likely to be especially relevant to organisations
today.8
8

This assertion is supported by the DTI Partnerships with People research undertaken by
this researcher (DTI, 1996).

33

Although there were examples of innovative organisations in the

pastancient universities and early military organisations, for examplethe
economic history of innovation is punctuated with the names of great
individuals like Reith, Brunel, Arkwright, Edison and Bell. This is less likely
today. SmithKline Beecham, NASA, Bell Labs, Sony and Disney are regarded
as innovators (Kelley and Caplan, 1993)they are organisations where
talented people are enabled by facilitative organisational arrangements to
produce ongoing collective innovation (Livesay et al., 1996). It seems that at
least some large organisations have learned how to be innovative rather than
operate as rule-bound machine-bureaucracies that Weber (1976) described.
For example, over the past decade many innovations in retailing have come
from the largest players (Gereffi, 1999) rather than independent stores.
The nature of the innovation process is, itself, subject to innovation (Freeman,
1994). It has changed and, arguably, has become more efficient and diffused
in the past century (LeonardBarton, 1988). There is a greater participation in
the innovation process today than was historically the case (Gill et al., 1993).
Many people contribute to workplace innovation (kaizen) (Caffyn et al.,
1997), their wants and needs are extensively studied through market research
(Tull and Hawkins, 1993) and their response to ideas helps determine whether
they are implemented (Christopher et al., 1987). It could be said that we live
in an era of the democratisation of innovation (Giddens, 1999a).
As innovation became of greater significance to firms, economies and
societies since the second world war innovation management emerged as a
distinctive field of academic study (Burgelman et al., 1996). The literature is
largely concerned with understanding innovation, defining innovation
processes and assessing its impact (Rothwell, 1994). A distinctive 'technology'
for the integrated development of innovation capability has not yet fully
emerged, although many relevant frameworks and techniques,
theories-in-action, case examples, developmental methodologies and tool-kits
have relevance.
Innovation and innovation capability are significant, probably vital, to
organisational effectiveness but there is a risk that researchers adopt a
optimistic stance. Abrahamson (1991) points out that "reviewers of the

34

innovation literature unanimously agree that it contains pro-innovation

biases" (589). In some literature there appears to be a sub-text that says, in
effect, 'if these managers took more risks and invested more in innovation
then their firms would be a lot more profitable'. Such assertions need to be
regarded with caution. As will be discussed below, innovation can prove
disadvantageous or misbegotten. Some forms of innovation incur a high risk
profile, like generational changes of technologies, partnerships and entry into
new markets (Hamel and Prahalad, 1994). Inevitably, some who take risks
will fail.9

2.3

Innovation within the firm

A popular use of the term 'innovation' is 'something new, something better'

(Schumann et al., 1994). This can be applied, for example, to digital television,
internet share-dealing or a holiday combining adventure with comfort in
Antarctica.
The development of new or improved products or services can be described
as a process having four stages. Someone had an idea (perhaps original,
probably not), the idea was adopted, applied and someone benefited. These
stages provide an apparently simple outline of the process of innovation
(Rosenfeld and Servo, 1991) and will be discussed below in more detail. They
offer a preliminary framework for understanding what is required to manage
"the successful exploitation of new ideas" (DTI, 1994).
In addition, organisations adopt new internal processes, position or
re-position themselves in markets and invent or re-invent the business
models that they use to define their identity (Houlder, 1995). Such initiatives
can also be innovations. Again, someone had an idea, it was adopted, applied
and someone benefited.

Giddens (1999b) suggests that risk refers to "hazards that are actively assessed in relation
to future opportunities" (22) and may not be confined to the risk-taker. For example,
asbestos cement, nuclear power and crack cocaine could all be said to be 'innovations' but
introduced new hazards for users and, in some cases, those remote from the product. Giddens
suggests that an accumulation of social and technical innovation has led to "the end of
nature" (27). Hence, innovation has a moral dimension as the current debate (2000) about
genetically modified foods demonstrates.

35

The scope for internal innovation is wide and deep (Bessant et al., 1994). It can
include team decision-making processes (Rickards, 1999), accounting
procedures (Johnson and Kaplan, 1987), production technology
(Goldman et al., 1995), relationships with suppliers (Butler, 1992), new product
development (Bessant and Francis, 1996) and many other activities.
Organisations may have thousands of innovation initiatives, large and small,
underway at any time (MacLennan, 1998).
2.3.1

Why can innovation be difficult to manage

Innovation is distinct from invention in that it requires commitment

(Ghemawat, 1991) and enactment. It can, therefore, be said to be a strategic
act whenever and wherever it takes place. Strategic decision-making results in
the opening of some windows of opportunity and the closing of othersa
process that can be described as 're-configuration of opportunity space'
(Power et al., 1986).
Drucker's observation that "innovation is a discipline, with its own, fairly
simple, rules" was cited above. If this were true then identifying these 'simple
rules' should be relatively straightforward. As will be illustrated below, it
seems that Drucker was underestimating the complexity of the field. In fact,
multiple factors influence innovationsome hard, some soft (see Tranfield
and Starkey, 1997 for a discussion of hard vs. soft categories). Moreover, once
innovation capability has been acquired it can be lostmaintenance and
renewal are required (LeonardBarton, 1995).

36

Seeking to understand innovation capability presents distinct theoretical

challenges as it is more complex organisationally than a single act of
innovation (Rosenfeld and Servo, 1991). Eight factors help to explain why:
1. Not all innovation initiatives add more value than cost. Innovation can be
either functional or dysfunctionalit is rarely neutral. Dysfunctional
innovation undermines a firm if it adds cost faster than value (Porter,
1996), occupies resources on fruitless activities, undermines the existing
core business (becoming a 'distraction') (Tregoe and Zimmerman, 1982) or
locks the firm into sustaining, rather than disruptive technologies
(Christensen, 1997). Important variables are likely to be uncertain or
speculative. Since innovation often, but not always,10 includes an element
of risk it cannot offer a guaranteed formula for gaining or sustaining
advantage.
2. Innovation can have the effect of increasing complexity, strife and
uncertainty in an organisation and 'disturb' existing policies, practices,
mind-sets and competencies (Pinchot, 1996). The known can be replaced
with the unknown: that which is tried-and-tested replaced with promise or
aspiration. Innovation can be a driver of change in which some are
disadvantaged (Machiavelli, 1984).
3. In many organisations there are more ideas generated than can be
implemented.11 Many must be 'killed-off', sometimes without a full
understanding of their potential (Chee and Phuong, 1996). The culling of
ideas and proposals can demoralise their champions and there is a risk
that promising ideas are not given the commitment needed. Decisions
about which innovations to adopt can be demanding and significanta
complex organisational process without certain benefit.
4. Assuring the needed quality and quantity of ideas is a demanding
organisational task. It is possible that ideas available to one organisation
are inferior to those developed by rival firms in terms of their capacity to
exploit assets, create value to the firm and/or its customers. Not every
firm has access to the 'best' ideas (McGourty et al., 1996). The quantity of
supply of ideas is also variable.

10

11

For example, if a firm with a requirement for making international calls begins to use a free
internet connection, rather than using BT phone lines, the (process) innovation is risk free.
Sometimes firms in a 'disadvantaged' section of an industry may be unable to develop ideas.
For example, in the early 1990s the British government reduced expenditure on road
building by nearly 80%. Some firms in the civil engineering sector found it impossible to find
a way of remaining profitable in these adverse circumstances and industry restructuring
followed.

37

5. Innovation capability it is not a single processrather a multiplicity of

processes that occur in a multiplicity of places within a firm. This presents
a management challenge as the diffusion of multiple speculative
innovation initiatives cannot be effectively managed using conventional
management-by-objectives (MbO) disciplines (Ashkenas et al., 1995).
Management in distributed power systems is more complex than in
unitary power systems (Mintzberg, 1983b).
6. Innovation initiatives often require co-operation across internal
organisational boundaries, perhaps requiring the re-organisation of
responsibilitieswith the possibility that internal 'politics', interplay of
personalities or lack of managed horizontal processes will retard effective
implementation (Hastings, 1993). Lateral management processes are more
complex (Galbraith, 1973) than classic functional structures (Hammer and
Champy, 1993).
7. Not all organisational forms encourage innovation (Mintzberg, 1983a).
For example, an emphasis on conformance and reliabilityimportant
performance indicators for many firmscan diminish the motivation to
be innovative and the skills to do so. An organisational form that
facilitates innovation can be 'untidy', perhaps conflicting with other
organisational values and policies.
8. A final factor renders innovation more complex than routine activities.
This is the requirement for learning and unlearning (Argyris, 1977). Some
innovations can be straightforwardthe replacement of a slow computer
printer for a faster one, for example. But they can require the destruction
of mind-sets, routines, assets, authority structures and cultural imperatives
(Hurst, 1995). New learning may be required, at the organisational, team
and individual level. Unlearning and learning can be drivers of innovation
as well as servants of it. The learning and unlearning process can be
exploratory, anticipatory and speculative, thereby challenging
organisational routines that provide stability, effectiveness and
conformity. The significance of learning in innovation is difficult to
underestimate, especially as much can depend on tacit knowledge.
Moreover, codified learning can change from being an asset to a rigidity
with rapidity (LeonardBarton, 1995).
These eight factors are illustrative rather than exhaustive. However, the
discussion demonstrates that, when considering innovation capability, many
dimensions of organisational design and management practice are relevant,
including decision-making, risk-taking, conflict-resolution, power
relationships, organisational change, motivation, creativity, management

38

philosophy, horizontal management, learning and cultural factors. The

development of innovation capability presents a challenge to managers
(Senge, 1992) and change agents (Beckhard, 1997).

2.4

The nature of innovation

Above, the DTI's straightforward definition of innovation was mentioned:

"the successful exploitation of new ideas". It was also described as a process
with four stages (ideaadoptionapplicationbenefit). Many academic
authorities, and some managers, have sought to define the term 'innovation'
from different perspectives, thereby enabling its epistemology to be
explored.
There are debates about what constitutes an innovation (Trott, 1998). The
successful development and marketing of a totally new producta pair of
electronically stabilised binoculars, for exampleis, for all observers, 'an
innovation'. Few would argue that the replacement of hand-machines with a
robotic production line would be 'an innovation'. However, it is less clear
whether other changes, such as adopting known technologies or structural
re-organisations, should properly be called 'innovations'. Also significant is
the question of profitability: for example, if a firm invests in a new product
concept that yields a low or negative return on investment can that be said to
be a 'successful innovation'?
Definitions of 'innovation' differ in scope. They can be narrowly or broadly
defined. The term 'technological innovation' considers innovation to be an
application of science-based technologies that facilitate major changes of
process and/or product (Tidd et al., 1997). Innovation can also be defined it
terms of originality with firms that produce the original idea being described
as 'innovative' and the others as copyists. For example, Mintzberg et al.
(1998b) define innovation as "the first reduction to practice of an idea in a
culture" (706) (authors' italics).
From the perspective of a manager or change agent, advantage can be gained
by defining the term 'innovation' narrowly. Targets for intervention can be
tightly defined (Burgelman et al., 1996). To use an analogy, it is easier to see
how to improve treatment of a single illness than improve the health of the

39

nation. Specific fields of study can be identified that help the application of
science-based technologies to facilitate major changes of process and/or
product. Relevant topics include technology auditing, R&D management,
product development, process management, multi-disciplinary working,
technology transfer and protection of intellectual capital. Importantly, there
are specific developmental methodologies (procedures, training etc.) relevant
to each of these areas.
However, the disadvantages of narrow definitions are significant. Scienceand engineering-based definitions of innovation, or those that define
innovation as something original to the world, are, by definition, inherently
limiting. Adopting a narrow definition would mean that many firms would
be excluded from participating in innovation since they are neither
science-based nor capable of original invention. In addition, there are
examples of initiatives that are novel and add value, but are neither
technology-driven nor totally original. An example makes the point. In the
early 1990s, SmithKline Beecham took a strategic decision to re-launch
Lucozade as a health and life-style drink rather than a sickness aid. The
re-launch re-defined the product in the customers' eyes, even though the
beverage was not significantly changed in formula.12 The Lucozade re-launch
used marketing methodologies rather than 'the application of science-based
technologies'. However, it is difficult to claim that this was not an innovation,
since it was "the successful exploitation of a new idea" and four innovation
stages (ideaadoptionapplicationbenefit) were present.
A perspective from economic history might define 'innovation' differently, as
a pattern of adaptive organisational changesthe responsiveness of a firm to
the interaction of technology push and market pullthe metaphorical 'blades
of a pair of scissors' (Tidd et al., 1997)and facilitated by enabling managerial
philosophies, by codified bodies of applicable knowledge within a conducive
organisational climate.
The trend is to define the scope of innovation broadly. For example,
Guest et al. (1997) elaborate on the UK Department of Trade and Industry's
definition of the term ("the successful exploitation of new ideas") by focusing
12

In fact, advertising related to the product in 1999 describes the formula as 'original'.

40

on the use of innovation for advantage (note the use of the word
'exploitation' in both):
"innovation is defined as 'the creation, successful exploitation
and impact of new ideas at all levelsthe economy, sector,
enterprise, workplace and individual'" (1).
Rosenfeld and Servo (1991) adopt a similar definition but emphasise the
creative nature of the process, that they define as 'transformational'. They
assert that:
"The challenge (in innovation) is to transform creative ideas into
tangible products or processes that will improve customer
services, cut costs and/or generate new earnings" (29).
This definition would seem unnecessarily limiting but it links creativity,
developmental processes and value creation. However, there is no obvious
reason why an idea has to be 'creative' for it to contribute to an innovation
initiative. For example, if a firm re-configures its production process to be a
pull rather than a push system there is novelty in the approach but not
significant creativity, since the firm is applying a tried-and-tested operations
management model.
Vrakking (1989) adopts a similar viewpoint and sees innovation as a means of
strengthening a firm's competitive position. He considers that:
"Innovation is any renewal, designed and realised, which
strengthens the organisation's position against its competitors
and allows a long-term competitive advantage to be
maintained The term 'innovation' is usually linked to the
creation of new products innovative energies should be
directed to all aspects of organisation: products, markets and
technology" (95).
Vrakking's test of the benefit of an innovation initiative is whether it
strengthens "long-term competitive advantage". He suggests the notion of
'innovative energies', inferring that these are different in kind from other
forms of organisational energies. The scope of Vrakking's definition is broad,
probably excessivefor example, it would include the purchase of a
competitor or the acquisition of capital equipment, neither of which could be
reasonably said to be innovative acts. However, Vrakking widens the scope
of innovation beyond new product development and suggests that
innovation "should be directed to all aspects of organisation". In short,

41

Vrakking argues with Porter (1985) that every activity within a firm's value
chain, both direct and indirect, can be a target for innovation.
Some scholars mention the frequency of innovation initiatives. For example,
Pearson (1990) commented: "competitive success is built on a steady stream of
improvements in production, finance, distribution, and every other function,
not just a big hit in sales, or marketing or R&D" (277). Pearson supports the
view that innovation can occur in many activities but his use of the term
'steady stream' can be questioned. There are times when an unsteady stream
of innovations are required, for example when technological changes are
providing new opportunities to create value (Christensen, 1997).
Broad definitions of innovation are commonplace, indeed dominant. Dewar
and Dutton (1986) write "we define an innovation as an idea, practice or
material artefact perceived to be new by the relevant unit of adoption" (1422)
(authors' italics).
The broadest definitions of innovation include new (to the unit of adoption)
forms of business models as 'innovations'. For example, Jonash and
Sommerlatte (1999) define innovation as:
"the process of harnessing creativity to create new value
through new products, new products and new businesses. The
value-creation activity is not limited to the products and services
themselves, but also applies to business strategy and processes.
In fact, strategic innovation, aiming at creating top-line growth
and capturing innovation premiums, is one of the most critical
challenges facing businesses today" (6-7).
Broad definitions can embrace all firms, indeed all organisations. But they
pose a conceptual dilemma. If the views of the DTI, Guest, Pearson, Dewar,
Jonash and others who define innovation broadly are adopted, it is
reasonable to ask, 'if every change, large and small, is to be regarded as 'an
innovation' what is the difference between innovation management and
management per se?' Indeed, is it helpful to make a distinction? It may be
more accurate to consider that strategic/operational management and
innovation management are totally intertwined and that the firm, as an
entity, needs to be a dynamic system or organism capable of building bridges
between competing domains for acquiring, developing and implementing
ideas. Perhaps there was a time when the usual role of a manager could be

42

properly described as 'administrative'. However, the depth and breadth of

internally and externally driven change has rendered such passive role
definitions obsolete in most cases (Francis and Woodcock, 1996). It can,
therefore, be argued that, today, the key job of the manager is to innovate
and innovation is inseparable from management.
Broad and inclusive definitions of 'innovation' have an additional
disadvantagealmost anything can be included, even micro-changes. In a
caf, for example, the following could be regarded as 'innovations'13 a new
menu item, larger napkins, customer comment cards, an improved fly-killing
machine and environmentally-friendly operating procedures for washing
dishes. These five initiatives may be described as trivial but each, hopefully,
added value to the customerincluding the improvement of customer
choice, superior customer experience, higher quality assurance, faster
management decisions and greater social responsibility. A caf owner may
undertake dozens or hundreds of such initiatives in a year, many of which
appear to have a minor benefit but with, potentially, a cumulative effect
(Imai, 1986). However, from a theoretical perspective it can be difficult to see
how the introduction of a fly-killing machine in a caf and the development of
global satellite telecommunications can be correctly named as the same
construct.
Although there are very significant differences in the scale of innovation
initiatives, such changes share common characteristics. Innovation is,
generally, about realising possibilities rather than solving puzzles and is likely
to have uncertain or unknowable elements, as demonstrated by an
observation made during the Davos World Economic Forum in 1999
(Jackson, 1999). Michael Bloomberg, observed that:
"(u)npredictability is the nemesis of any established
organisation You only run the business by planning. Most
companies project revenues. In my business you can't do that.
And if you can't predict, you're not willing to devote
management time to the problem. You're unwilling to set up
the political structure in the company which can deal with new
markets". Innovation, he concluded was a religion rather than a
science. "You've just got to keep the fire in your belly and
plough ahead" (19).
13

This example was developed by ideas suggested in Maule and Lai (1995).

43

Bloomberg's comment that innovation is a "religion rather than a science"

opens an interesting avenue of enquiry. Perhaps, innovation, at least
sometimes, requires decisions that are an act of faith or, more accurately, a
series of acts of faith. Bloomberg was describing, at least in part, an
organisational process that depends on beliefs, intuition, power-brokering,
passion and opinion. He describes innovation, in part, as a political process.
This is apt as politics is the practice of decision-taking in human systems
where an objectively correct answer cannot be demonstratedoften the case
with innovation (Golembiewski, 1978).
Some researchers see innovation as, quintessentially, a creative act and draw
perspectives from the human potential movement. Innovation is considered
as being directly energised by people. Goodfield (1999) points out that it
requires a commitment "to put wheels on a thought"14 and can be
considered as a practice of generative action (Weick, 1995). Stoltz (1997) for
example, emphasises the importance of the person in innovation, writes that:
"innovation is, in essence, an act of hope. It requires the belief
that something that did not previously exist could be possible"
(68).
Others define the term in the context of fundamental processes of change,
adaptation and progress. For example, Wheatley (1994) puts it this way:
"Innovation is fostered by information gathered from new
connections; from insights gained by journeys into other
disciplines or places; from active, collegial networks and fluid
open boundaries. Innovation arises from ongoing circles of
exchange, where information is not just accumulated or stored,
but created. Knowledge is created anew from connections that
weren't there before. When this information self-organizes,
innovations occur, the progeny of information-rich, ambiguous
environments" (113).
Wheatley argues that: "living systems respond to disorder
(non-equilibrium) with renewed life. Disorder can play a critical role in giving
birth to new, higher forms of order" (11). Her viewpoint offers an 'elemental'
perspective, different from models of the innovation process based on
systems theory (Dooley and OSullivan, 1998). She sees innovation as a cosmic

14

A phrase used by Professor Goodfield in a lecture at the Diplomatic Academy, London

on 12 March 1999.

44

property and draws parallels between organisations, the animal kingdom,

galaxies and sub-atomic particles. The models presented by Wheatley might
seem fanciful, even esoteric, were it not for some case studies, such as that on
the highly innovative Japanese company Kao (Butler, 1992), that appear to
adopt a similar set of principles to those advocated by Wheatley. The Kao
company continued to be more successful than most in the bleak economic
environment in Japan during the late 1990s (Abrahams and Harney, 1999)
and will be discussed in more detail below. From these, and other cases, it
may be that innovation should be regarded as more than just another
management process (Peters, 1992) and it is a kind of 'organisational alchemy'
(Harrison, 1995c). If this were true then it would help to explain why the topic
has proved uniquely exciting for some managers and change agents (Semler,
1993).
Since the purpose of this research, as discussed in Chapter 1, was to develop
an intervention methodology it was necessary for the researcher to take a
definitive view on the scope and the nature of innovationat least for the
first stage of the empirical research (Layder, 1998). From the perspective of a
change agent (Egan, 1990), a broad definition of innovation opens doors of
opportunity to help firms (especially smaller ones). Accordingly, for the
purposes of this research, innovation was defined as "the application of any
idea, new to the unit of adoption, undertaken with the intention of
strengthening a firm's competitive position and/or benefiting others".
2.4.1

Innovation as a managed process

There have been many studies of managerial aspects of innovation in firms

(Tidd et al., 1997). Models have been developed of good practice (see, for
example, Hamilton, 1997) and research has been undertaken into the process
of innovation (for example, Schroeder et al., 1989). A broad conclusion from
this body of literature is that innovation is one of the least structured
dimensions of organisational performance. However, it is widely considered
that innovation can, to some extent, be a managed process (Tidd et al., 1997).
It has been argued above that competition, strategies, resources,
technologies, values, culture, communication, uncertainty, politics and
self-organisation can play a role in innovation. Accordingly, the use of the

45

term 'process' to describe the development of an innovation initiative must

be used with caution. For example, MacDonald (1998) writes, "innovation is
not the culmination of a process, and consequently there may be no particular
process involved. Innovation would seem to be inherently incremental with
change itself stimulating and contributing to further change. With doubt cast
on the very existence of process, the linear model of technology change
would seem to lie in ruins" (43).
MacDonald's stance is extreme and, in the view of this researcher, incorrect.
Innovation requires a movement from idea to exploitation over time. But the
sequence of acts is not noted for uniformity or predictability. Extensive
studies by de Ven et al. (1989) into the empirical characteristics of innovation
projects demonstrated that they are characterised by setbacks, uncertainties,
looping backwards, re-direction and external changes that re-shape initial
intentions and plans. The notion of an innovation development process
working, in practice, like neat stages on a flow-chart (Pinchot, 1985) or a
symmetrical funnel appears to be fanciful (Wheelwright and Clark, 1992).
Nevertheless, in all cases, there must be a process of sorts as ideas become
enacted, even if some stages are truncated, repeated, neglected, apparently
magical or contemporaneous.
Clear examples of innovation processes come from studying new product
development (NPD) (Wheelwright and Clark, 1992). This can be a major
endeavour for firms (Ghemawat, 1991). Complex and/or technically
advanced products can take years to move through the product development
process at a cost of millions of pounds (Walton, 1997). Emphasis is placed on
NPD processes that simultaneously provide quality, variety, frequency, speed
of response and customisation (Cooper, 1994). Specific methodologies have
been developed to facilitate this, such as concurrent engineering,
rapid-phototyping, time-compression, cross-functional working, early
involvement, etc. (Jayaram et al., 1999). Attention has focussed on the
decision-making dimension of NPD, with progression frameworks such as
Cooper's 'stage-gate' approach providing a systematic approach (Bessant and
Francis, 1996). It has been argued that NPD capability can become a
high-performing resource for a firm that supports talented individuals with

46

managed processes to provide the firm with a hard-to-replicate advantage

(Millson et al., 1992).
Despite the availability of specific methodologies, the management of NPD
may not be straightforward. Schn (1983) conducted a case study in product
development within a consumer products firm. He pointed out that the
innovation process was characterised by a complex interfusion of assertion,
persuasion, uncertainty, data and hunch. When analysed at a conceptual level
innovation can seem to be a logical and coherent activity. However, at least in
the case Schn discussed, the reality was different. He writes: "It consists in
on-the-spot surfacing, criticizing, restructuring, and testing of intuitive
understanding of experienced phenomena; often it takes the form of a
reflective conversation with the situation" (241-242). Organisational norms
were vital ingredients of successful product development. Schn observes
that "(t)he pattern was one of 'heroism under a tent'. To quote some of the
observations of the participants, "Three people told me not to work on
Product X, but I wouldn't stop," "Don't tell management what you are doing,"
"Fix the problem first, and then tell them about it" (26). Schn concludes,
"managers must commit to a process which they distrust. They respond by
making the commitment of resources hard to win" (260). "Thus heroism
and secrecy (mastery and mystery) are essential elements of the strategy for
winning the product development game" (262).
Schn's analysis is replete with implications for students of innovation.
Perhaps the most important, for a reader personally involved in the
management of innovation initiatives, is an intuitive sense that Schn is
largely correct. It is difficult not to nod with agreement as he describes
undercurrents of emotion and game playing. This 'feels like' a more accurate
description of innovation, as it is experienced, than that presented by
flow-charts and descriptions of formal product development reviews.
Two conclusions relevant to this research emerged from Schn's study.
Firstly, innovation is more demanding on the person than other aspects of
organisational life; people operate in a domain where undue caution is seen as
negative and, yet, advocating and participation in change can be surrounded
by risk. Secondly, Schn points out that groups can take contrary positions:

47

the organisation does not work as one but as a number of 'tribes'. Individual
and group behaviour plays a role in innovation and objectives may be
re-interpreted by the actors concerned, sometimes on multiple occasions.
It is within this context that the exploration of innovation as a process needs
to take place. Perhaps innovation is best described as an untidy nexus of
processes. The four stages mentioned above
(ideaadoptionapplicationbenefit) provide a basic structure for
examining innovation initiatives (Greer and Bessant, 1996). However, these
four stages alone are insufficient as they do not provide a feedback loop
(Pascale et al., 1997). It is important that individuals, groups and the
organisation adopts a reflexive stance. Otherwise the innovation process
becomes mechanistic and repetitive (Senge, 1992). In the discussion below,
each stage will be sub-divided to provide an elaborated description.
Figure 2.2 below provides an overview of the material to follow. The figure
shows the steps described above. With the addition of learning to the
otherwise linear model of innovation, it is possible to conceptualise the
process as an open systems diagram.

48

IDEA ACQUISITION
Intentionality
Originality
Maturity
Radicalness
Utility

IDEA ADOPTION
Risk
Type of
Commitment
Decision Clarity

IDEA
APPLICATION
Means Planning
Project Management
Portfolio of
Competencies
Resource Provision

IDEA
EXPLOITATION
Defendability
Longevity
Magnitude
Marketing Plan

LEARNING
Personal
Group
Process
Targeting

Individuals

Groups

Decision-Makers

Figure 2.2: a model of the innovation process

2.4.2

Idea acquisition

The first stage of the innovation process (if the development of conducive
organisational arrangements, the provision of enabling assets, technologies
and capabilities are taken for granted (Burgoyne, 1995)) is the acquisition of
an 'idea'. Ideas are creative acts, at least for the actors involved.
Rickards (1974) observes that:
"Creativity is a mysterious process which can give rise to heated
arguments amongst psychologists. It is sufficient here to regard
the process as one which gives rise to novel combinations of
concepts which have significance to the solver or his
environment" (13-14).
Rickards' notion of "novel combinations of concepts" emphasises the
importance of human processes. These may take place in the mind of an
individual and/or through interaction between people. Rickards also uses the
term "significance", emphasising that someone needs to see the potential
application of an idea within a particular environment. The acquisition of

49

ideas can, therefore, be seen as requiring insight, combination and attribution

of meaning (see Elias and Hill, 1986 for a discussion of this point).
Ideas come from different sources or wellsprings. LeonardBarton (1995)
comments on the functions of generative sources and suggests that "a
wellspring, the source of a stream, sustains life within and beyond the
riverbanks or, by becoming dammed up, or polluted, denies its existence"
(xiii). An exploration of the wellsprings or sources of innovation reveals a
complex picture. Some sources are direct (a firm can buy a patent from an
inventor) whilst others are indirect (a firm may see a rival undertaking an
initiative, reverse engineer it and develop a new product or process concept)
(Schonberger, 1986). In addition, some sources are generic (acquisition of new
technologic platforms, for example) whilst others are specific. Firms can
demonstrate considerable ingenuity in finding sources of innovation (Sowrey,
1988). For example, Anita Roddick, co-chairperson of Body Shop learnt about
skin care from South American Indian women and deodorants from African
women (Lessom, 1991) and employed the ideas she gained in the
development of new products.
It is helpful to draw this section to a conclusion with a tentative schema
relating to the acquisition of ideas. These can be sub-divided on the basis of
intentionality, originality, maturity, radicalness and utility. These are referred
to as 'variables' in the table below:
Table 2.1: idea acquisition
Variable

Definition

Explanation

Intentionality

The degree to which

an idea is sought
deliberately.

Sometimes a company will search for an innovation initiative

(Shillito, 1994), perhaps in pursuit of a strategic initiative, a novel
solution to a problem or an opportunity (MacLennan, 1998). At other
times ideas emerge, sometimes serendipitously, and intention follows
the idea.

Originality

The degree to which

an idea is new (to
knowledge).

Ideas can possess a high degree of, or total, originality. Others are
new combinations of existing ideas or applications of known principles
(Schumpeter, 1961). The least original ideas are those adopted
without adaptation.

Maturity

The degree to which

an idea is
elaborated.

Some ideas are rudimentary or embryonicespecially if developed

'in-house'. Others are elaborated and, perhaps, proven
(Hesselberth, 1994).

50

Variable

Definition

Explanation

Radicalness

The degree to which

an idea requires
internal change
and/or market
repositioning.

Many, probably most, innovation initiatives are incremental and

promote minor change. Others require significant organisational
change. Some initiatives offer new choices of products and/or services
to customers and require market repositioning (Collinson, 1993).

Utility

The degree to which

an idea appears to
offer advantage.

An initial assessment of the potential utility of an idea

(Hauschildt, 1996) determines whether it is discarded or provided with
'space to grow' (Schwartz, 1991). However, this is notoriously difficult
to predict (Tidd et al., 1997).

2.4.3

Idea adoption

The second stage of the innovation process is the adoption of an idea. This
requires a decisionat least to invest in the development and testing of
possibilities. As mentioned above, ideas can come from multiple sources,
including lower level employees, advisers, technological experts, customers,
lead users, suppliers and so on. Management usually have a over-full agenda
of things to do (Mintzberg, 1973). A proposed innovation initiative must,
therefor, gather a 'critical mass' of support amongst those whose agreement
is needed to move an idea into a commitment (Ghemawat, 1991). In order for
resource-intensive innovations to be adopted it is possible that other
initiatives are deprived or resources, stopped or rejected (Smith et al., 1985).
Some, perhaps most, ideas must be culled and a selected number given the
necessary attention and resources to be developed (Pinchot, 1996). How this
is done is highly significant.
Rickards (1997) suggests that "there are excellent methods of closing down"
(51) but notes that "there will often be a need to experiment with more than
one technique, to develop a greater understanding of their scope and
limitations" (51). A priority for management is to invest in innovation
initiatives that are functional for that firm at that time (Pearson, 1991).
'Functional', in this context, means 'creating value faster than cost and helping
the firm move to an attractive and defendable position'. Decisions must be
taken and, often, these are a matter of judgement.15 Such decisions are
firm-specific in that a commitment to undertake an initiative may be
15

Some decisions regarding innovation may not require significant managerial judgement. For
example, in 1999 BT determined that all its suppliers would henceforth communicate with
the company via the internet (company document). For an individual supplier the decision
as whether to conform requires little thoughtthe question is 'how?'.

51

functional for one firm and dysfunctional for another (Day, 1984). For
example, it could be a prudent decision for Rolls Royce to develop a
top-of-the-market sports car but disastrous for Leyland Trucks to do the
sameeven though both are in the motor vehicle industry.
Realising the need to take decisions that are prudent, functional, progressive
and achievable is one thing but being able to do it in practice is another.
Rosenberg (1995) sees the difficulty as a consequence of noveltyhe notes
that:
"Major innovations often constitute entirely new technological
systems. To conceptualize an unknown system is extremely
difficult" (178) "Since innovations often arise as solutions to
specific problems in particular industries, their flow to
application in different settings is bound to be highly uncertain"
(179).
Rosenberg used the development of the laser as an example. He observed
that potential uses for lasers were not imagined until the technology had been
developed for several years. The difficulty of decision-making in such
situations can be compounded by behavioural factors, as noted by Sharpe
and Keelin (1998) who asked: "how do you make good decisions in a
high-risk, technically complex business when the information you need to
make those decisions comes largely from the project champions who are
competing against one another for resources?" (45).
Chiesa et al. (1999) provide a methodology that results in a quantitative
analysis of risk based on an assessment of three factors: levels achieved in the
technology, target easiness and commercial risk. Such methodologies can be
useful but reflect the assessments of an expert group at a particular time.
Experts can be wrong. Accordingly, decision-making regarding innovation
initiatives often includes irreducible elements of chance in situations where
cause and effect chains are impossible to predict (Gleick, 1987). Doz and
Hamel (1998) call such decisions 'bets', drawing from the language of
gambling. The mismanagement of decision-making processes can result in
damaging fiascos (Janis, 1982). Most observers conclude that, whatever
conceptual tools and processes are used, the task of selecting innovation
innovations will be demanding and uncertain (Olins, 1997).

52

Stances to the management of risk are an element in innovation management

and were discussed by Klein and Meeking (1958) who suggested that projects
that have imponderable, uncertain, unknown or ambiguous elements are
best approached by a decision-making strategy that stimulates experiment,
keeps options open and makes commitment decisions as late as possible. This
has the effect of stimulating learning, thereby enabling decisions to be taken
with a greater likelihood of success. A high order of individual skills can be
required to manage a flow of decisions in this contextkeeping the odds on
taking the 'right' decisions as favourable as possible.
Dysfunctional innovation can be defined as 'not creating value faster than cost
and/or failing to help the firm move to an attractive and defendable position'.
There are two primary forms of dysfunctional innovationeither an
innovative product or product positioning can lack value in the eyes of the
potential customer, or the activity of innovating can be dysfunctional for the
organisation and, possibly, for industry as a whole (Dean, 1987). On the later
point, there is evidence, for example, Salk Jr. and Webber (1993) that the rapid
pace of product innovation in the Japanese consumer electronics industry
depressed profit margins for all firms in the affected industries during the
early 1990s.
Decision-making is rendered more complex because opportunity space and
profit potential are not the same (Buzzell and Gale, 1987). Something new or
different may not prove to be attractive to potential customers and a
'technology-push' strategy can lead to interesting products but bankruptcy.
The market is, of course, the arbiter of success rather than the product
producer. It helps if the voice of the (potential) customer is heard by those
who decide which product innovations to support and which to cull (D'Venti,
1995) but there are cases where listening to an established customer-base has
locked firms out of generational changes (Christensen, 1997). People can
change their purchasing criteria, sometimes with great rapidity (Millson et al.,
1992). Moreover, competitors' initiatives are frequently surprising and occupy
some or all of the available opportunity space (Eisenhardt and Brown, 1999).
Sometimes, guesses and bets have to be made about the likely evolution of a
market to allow time for product development and, as will be illustrated
below, these can prove to be wrong.

53

There are many examples of flawed decisions regarding innovation initiatives

including the Rabbit phone, the C5 motor vehicle, BR's tilting train and the
Apple Newton. Firms can take decisions about individual innovations that
may be functional when looked at individually but dysfunctional when
considered as a whole. Apple, arguably one of the most innovative
companies of the 20th century, over-extended its product range and paid the
price with falling profits (Thomson, 1996) for several years in the mid-1990s.
Large amounts of money can be lost in implementing an innovation
proposal, as Ghemawat (1991) observed, "by its own account, Lockheed
eventually lost about $25 billion on the Tristar programme, an average of $10
million on each plane sold" (55).
In order to be functional, innovation requires effective 'fit'or, to be more
precise, effective fits (Francis, 1992). The most significant fit required (from an
innovation perspective) is matching what an organisation seeks to become
(its 'strategic intent') with its capacity to create value aligned within its
strategy16 and deliver sustainable competitive advantage (Hamel and
Prahalad, 1989). The question of capacity is important. For example, in the
1980s Jaguar Cars had the stated strategic intent of being a world leader in
luxury sports saloons (Edwardes, 1983) but lacked the ability to deliver
thishence the ultimate sale of the company to Ford. In general, it can be
argued that firms' innovation ambitions largely need to fit their capability,
although there are examples of extraordinary deviations from this principle
(Janov, 1994) that suggest stretch goals can sometimes enable breakthroughs
to occur (Semler, 1993).
In addition, other fits may be required. These can include the interests of the
senior managers, organisational cultural characteristics, stakeholders' needs,
existing co-ordination mechanisms, current activities within the firm and so
on. Decisions are given more momentum since not all ideas and/or
opportunities are of the same merit: initiatives can be misguided, arduous,
destructive or offensive to values. An organisation, therefore, needs to have
what Pinchot (1996) called an 'effective immune system'. This has the effect of

16

As will be discussed below, it should be noted that innovation can be a driver of strategy as
well as an implementation mechanism.

54

providing a set of sifting, evaluating and selecting mechanisms that,

themselves, operate at multiple levels. On this topic Schn (1983) observed:
"At each stage in the development of a radically new product,
managers must make decisions in the absence of adequate
information or rules for rational decision. Each such judgement
is a unique case" (244-245).
Achieving fit can be simplified into a single question: "is this the right thing for
us to be doing?" If the answer appears to be 'yes' then managers need to
answer a much broader range of questions like: where shall we innovate?
What shall we create/acquire? What should we not do? How will our
product/service be superior? Is the cost likely to be repaid by revenues?
When? Can we protect our investments? Do we have the resources? How
will the task get done? What will we lose by doing this? The act of
commitment to an innovation initiative releases a welter of 'how to'
questions.
Decision-making (answering 'what' and 'how' questions) in relation to a
specific innovation initiative may have an impact on the firm's development
of a portfolio of technological and other competencies. Not all innovation
initiatives advance or deepen a firm's applied expertise (Morita, 1989) in areas
that it can leverage in the future. Sometimes firms take decisions about which
innovation initiatives to adopt on the basis of whether they strengthen the
technological capabilities by providing learning-through-action stepping
stones.
Technologies can be considered as codified bodies of knowledge and practice
that enable complex things to be done reliably (Cohan, 1997). The term
'technology' is generally applied to the application of science-based
knowledge but this may not always be so. For example, the development of
co-dependent relationships with suppliers, rather than a hands-off adversarial
approach, can be described as 'a technology' even though it emerged through
the application of values and practical experiment, rather than through
scientific enquiry. As new or different technologies become available they
redefine the opportunity space available for decision-making
(Schumann et al., 1994). However, the impact of technologies can be
speculative, the commitment cost can be high, competing technologies may

55

be available, the firm may be locked into existing technologies (leading to

high switching costs) and the utilisation of technologies in new application
areas can be far from simple (Faulkner and Johnson, 1992).
Decision-making regarding the adoption of an innovation proposal
sometimes requires consideration of enabling organisational arrangements.
For example, some innovations in a global marketplace may offer the
promise of massive value-creation but the scope of the commitment could
require the development of strategic alliances, as no single firm can make the
necessary investment of funds or competencies. This last point adds a new
dimension to the decision-making task: strategic alliances are not easy to
form or sustain (Doz and Prahalad, 1987). Key questions include: who to form
an alliance with? How to make it mutually beneficial? And how to make the
alliance effective? Radical or architectural innovations, possibly within an
alliance framework, pose major challenges of decision-making as the
commitment required can, in certain circumstances, bet the company
(Ghemawat, 1991).
It is helpful to draw this section to a conclusion with a tentative schema
relating to the adoption of ideas. These can be sub-divided on the basis of
risk, type of commitment needed and decision clarity.
Table 2.2: idea adoption
Variable

Definition

Explanation

Risk

The degree to
which the
probability and cost
of failure or success
can be assessed.

Making an assessment of the costs and likelihood of failure is a

standard, although imprecise, analytical technique
(Kleindorfer et al., 1993). Some innovations require significant
funding and resources in the start-up and market-development
stages but are undertaken with the expectation that they will lead
to rewards later (Bartlett, 1995).

Type of
commitment
needed

The degree to
which people in an
organisation need
to commit
themselves to an
innovation initiative.

Studies have emphasised the importance of champions, sponsors

and enthusiasts (Coyne, 1996), some of whom may develop a
new product or process in opposition to senior management
(Kidder, 1981). Top management may simply need to acquiesce
whilst more junior people require full commitment. However, there
are cases where the opposite situation may pertain.

Decision clarity

The degree to
which objectives for
innovation need to
be specific.

Some innovation initiatives can be progressed with clarity about

the intermediate but not ultimate outcomes. At times only areas of
intention can be indicated (Hamel and Prahalad, 1989). Those
outside of the decision-making process, but who are affected, may
need to understand their roles in the enactment of the decision
(Francis, 1987).

56

2.4.4

Idea application

The adoption of an idea transforms it from being a possibility into a

commitment (although commitments can, sometimes, be tentative or
reversed). The delivery of a commitment concentrates on the 'means rather
than ends' and introduces a new stage in the innovation process.
According to Hamilton (1997) "(w)ork can generally be classified as either
operations or projects. The two types of work differ primarily in that
operations are ongoing and repetitive while projects have characteristics that
include impermanence, uniqueness and uncertainty" (64) (author's italics). An
innovation initiative would generally be regarded as a project but it does not
have to be so. For example, there has been a considerable emphasis over the
last 20 years in incorporating innovation into the operational routines of a
firm (Caffyn et al., 1997).
The work of transforming an idea into a delivered innovation can involve a
great deal of effort. In some cases, thousands of activities need to be
accomplished, some of which are interdependent on others (Hamilton, 1997).
Conceptual and planning tools have been developed to assist in project
management including tiers of objectives charting, relationships diagrams,
task flow diagrams, Gantt charts, time, cost and performance targets for
deliverables, risk identification, quantification and control, sponsors' and
champions' roles, shared philosophies, using learning to trigger reviews of
project plans, developing 'self-healing' and the use of problem-solving tools.
However, project management is more than a portfolio of techniques. It is a
set of routines that can become elements of the normative structure of a firm
(Frame, 1994). It may well be that the mind-sets and skills required for
effective project management are different from those required for the first
two stages of the innovation process. However, it would be an error to see
implementation as uncreative (Rickards, 1999). In fact, a great deal of
ingenuity and invention can be found at later stages of the innovation
process.
Project management provides a way of managing individual initiatives but
can be insufficient as it focuses on single issues and work packages. Projects
are, at least sometimes, elements of larger programmes and 'programme

57

management', which looks at interrelationships, overall capacity and shared

efficiencies, can be used (Holt, 1991). This can be important in relation to the
management of innovation when multiple initiatives are taken. For example,
Walton (1997) describes the design of the Ford Taurus and observed:
"(e)ver day at noon, Landgaff and Bell (the programme
managers) presided over a meeting called 'change control',
where engineers streamed in with problems. They were not
called 'problems' however, a word thought too negative In
the beginning when their goal was simply to hold down the
sheer number of changes it ('change control') had seemed
appropriate, but now (as the prototype was developed) there
was more to the process than controlling the numbers. Some
changes were critical. Others were desirable, but could be
delayed" (108).
The noon meeting provided a way of co-ordinating projects and making
decisions about interdependencies. The design of the Ford Taurus was
advanced but each element had to fit overall design concepts. It was
necessary to provide organisational mechanisms and resources to achieve
this. The provision of resources can require considerable management
attention. Walton considers that the cost of introducing a new model of a
motor car exceeds $300 million and tight time milestones are set. Moreover,
appropriate resources must be available throughout the development of an
initiativethese change considerably over time.
It is helpful to draw this section to a conclusion with a tentative schema
relating to the application of ideas. These can be sub-divided into means
planning, project management, portfolio of competencies and resource
provision.
Table 2.3: idea application
Variable

Definition

Explanation

Means planning

The degree to
which the means of
accomplishment is
clear.

In some cases the means of implementing an innovation initiative

is clear but this is not always the case, especially where
technological or social change is required (Schwartz, 1991).
Considerable work may be needed to develop a strategy for
implementation (Galbraith and Nathanson, 1978).

Project
management

The degree to
which a managed
temporary
organisation is
required.

Project management refers to the creation of a temporary

organisation (Holt, 1991) to achieve time-limited objectives
(Riccardi et al., 1996). Some innovation initiatives need to be
managed as projects in order to be realised (Galbraith, 1973).

58

Variable

Definition

Explanation

Portfolio of
competencies

The degree to
which new or
different
competencies are
required.

Competency development is needed to support some forms of

innovation initiative (Prahalad and Hamel, 1990). In one case at
least, SmithKline Beecham, (Tanouye, 1995) therapeutic area
teams spent hundreds of days defining the competencies needed
to make use of developments in genetic engineering and related
scientific advances.

Resource
provision

The degree to
which specific
financial and other
resource provisions
need to be made.

Many factors can prevent intention from becoming reality,

including lack of funds, competing requirements, management
disinclination, communication breakdowns, lack of competence
and insufficient resolve (de Gues, 1988).

2.4.5

Idea exploitation

Ideas can be realised within a firm but the exploitation of potential benefits of
innovation can prove difficult. Kay (1993) suggests that "the rewards of
innovation are difficult to appropriate (for the firm that introduces the
innovation). Returns must be defended from competitors, from suppliers and
customers, and may accrue to groups within the firm rather than to the
organisation itself" (102).
The exploitation of innovation is central to the conceptotherwise a firm is
engaging in invention or adoption, not innovation itself. Exploitation of
market-facing innovations (i.e. innovations that directly affect the firm's offer
to customers) can take several forms, the principal methods being selling,
licensing, commercialising and entering into a partnership.
It is important to note that the value created by an innovation initiative is not
fixed (Doyle, 1997). It can be considered as a unrealised asset (sometimes
capable of being patented or protected by intellectual property rights) but,
ultimately, limited in its worth (its potential to create value or help the firm
achieve longer-term goals). The capacity to realise the potential value of a
market-facing innovation is shaped by the dynamics of competition in an
industry, for which Porter's five forces model provides a useful analytical
framework. Also, a variable is the skill a company demonstrates in signalling
the value of its differentiated product or service (Porter, 1980).
In general, scholars of the innovation process pay relatively little attention to
the exploitation of ideas, especially those concerned with new product
development. For example, one recent review of the field by Trott (1998)

59

hardly mentions issues of gaining advantage from ideas. However, literature

on marketing provides detailed guidelines, case examples and research
(Buzzell and Gale, 1987) that enable aspects of the management of innovation
to be better understood (Day, 1984).
It is helpful to draw this section to a conclusion with a tentative schema
relating to the exploitation of ideas. These can be sub-divided into
defendability, longevity, magnitude and marketing plan.
Table 2.4: idea exploitation
Variable

Definition

Explanation

Defendability

The degree to which

an innovation can be
protected from rivals'
offers

Firms can find that ideas are copied or adapted so that a rival reaps
the benefit (Teece, 1998). For example, the standard (1999) in
computer presentation is PowerPoint, a Microsoft product. This has
similar features to Persuasion by Aldus (O'Leary, 1989). However,
Microsoft was able to dominate the market and Persuasion is an
extinct product.

Longevity

The degree to which

sustained value can
be created from an
innovation.

The length of time that an innovation can be exploited helps to

determine its attractiveness (Harrison, 1989). Calculation of likely
returns enable a degree of systematic consideration to be given to
this topic.

Magnitude

The degree to which

benefits achieved
offers a superior
return on investment
of time and funds.

The assessment of the potential benefits of an innovation affects

decisions about resources allocated to its roll-out (Kim and
Mauborgne, 1999b). This includes an assessment of the size of the
potential market and the likely share that the firm can expect to
achieve (Chryssochoidis and Wong, 1995).

Marketing
Plan

The degree to which

a marketing plan
places the
product/service in a
position at a price
where it offers
superior
characteristics

Marketing (Gummesson, 1987) provides information on consumer

attitudes and habits (Wiggins, 1955). Decisions about the pace,
form, scope, intensity, brand-integrity and priority of the 'roll-out' of
an innovation (Day, 1980) may affect the extent to which a firm
reaps benefits from its investment (Chryssochoidis and Wong,
1995).

2.4.6

Learning

Learning can help to improve the targeting of innovation capability, the

efficiency and effectiveness of innovation processes (Wenger, 1991) and the
prowess of individuals, teams and other groupings (Garratt, 1987). In
addition, learning provides an input into an innovation process that renders it
open rather than closedthereby facilitating adjustment to external changes
(Argyris, 1977).
Mintzberg (1994) offers a persuasive example of the relationship between
learning and innovation. He suggests that a "salesperson may have the idea

60

to sell an existing product to some new customers. As the other salespersons

realise what that person is doing, they begin to do so too, and one day,
months later, management discover that the company has entered a new
market. This new pattern certainly was not planned. Rather it was learned"
(26). In this example innovation was adopted through a process of ongoing
socialisation (Broom and Selznick, 1958) that can be seen as organisational
learning.
Learning flows, in part, from considering the effects of doing or not-doing
(Kolb, 1983a). This has been described as 'double loop learning' by
Argyris (1977) who discusses how an individual or group undertake an
activity and use the experience as a source of learning. Work, therefore,
becomes 'work plus learning'. It would be reasonable to expect that firms
with high innovation capability apply the double loop learning principle. A
case study of Microsoft suggests that, at least sometimes, this is the case
(Cusumano and Selby, 1996).
Learning is related to the improvement of routines (Caffyn, 1998) and may
also be concerned with the structure of thought that people apply to make
sense of situations (Weick, 1995). Senge (1992) suggests that:
"One of the most important, and potentially most empowering,
insights to come from the young field of systems thinking is
that certain patterns of structure occur again and again. These
"system archetypes" or "generic structures" embody the key to
learning to see structures in our personal and organizational
lives As we learn to recognise more and more of these
archetypes, it becomes possible to see more places where there
is leverage in facing difficult challenges and to explain these
opportunities to others" (94).
Senge emphasises the scale of the learning challenge. However, it may be that
the implementation of the ideas will prove difficultit is not easy to help
people to review their 'system archetypes' and change them if they are
inadequate (Pedler et al., 1991).

61

Despite the persuasive case for encouraging learning from the experience of
innovation this remains difficult to accomplish (Nourayi, 1996). Relevant
factors (Mayo and Lank, 1994) include:

It can prove difficult to determine factors that led to success or failure in a

specific innovation initiative;

Multiple influences can affect performance interdependently and it is not

easy to unravel them;

Sometimes 'lessons' affect groups who did not have a shared

management structure and so are difficult to apply;

Methodologies of learning from experience may not be valued;

People whose behaviour was significant in an innovation process may be

in a partnership relationship or have moved on;

The communication of tacit knowledge is demanding to accomplish.

Products are more than an offer to prospective customer groupsthey can

provide a source of learning for a firm. Products 'close the loop' between an
idea and its enactment. This topic was considered by Ayas et al. (1994) who
examined learning within the context of new product development. Ayas,
perhaps optimistically, made the point that "all individuals involved in a
project are engaged in a constant process of learning, transmit their learning
to others; the cumulative knowledge acquired can be embodied in the project
organisation and used continually to improve project performance" (31).
As briefly discussed above, sometimes a product can be a stepping stone, a
learning step, towards enhanced organisational capability. Learning therefore
extends beyond the boundaries of a specific innovation process. Morita
(1989), then chairman of Sony, reported that he regretted not making a Sony
digital calculator (it was decided that Sony could not make a profit and so the
proposal was abandoned) because his decision deprived the company of
experience in manufacturing low cost digital products that they needed for
future product families.
It is helpful to draw this section to a conclusion with a tentative schema
relating to learningthis can be subdivided into personal, group, process and
targeting variables.

62

Table 2.5: learning

Variables

Definition

Explanation

Personal

The degree to which

individuals learn to be
more effective in
innovation roles

Innovation can involve many individuals whose attitudes, skills

and knowledge-sets play a significant role (Drucker, 1994;
Senge, 1996).

Group

The degree to which

groups learn to be more
effective

Group objectives, norms and routines can help or hinder the

progress of innovation initiatives (Bennett and O'Brian, 1994;
Rickards and Moger, 1999).

Process

The degree to which the

innovation process
improves through
learning

Feedback can be used to improve the efficiency and effectiveness

of innovation processes (Millson et al., 1992; Prince, 1980).

Targeting

The degree to which

decision-making improves
the exploitation of
innovation capability.

Since innovation capability can be targeted in various ways, the

(strategic) choices about how the capability is used helps
determine whether sufficient value is created (Porter, 1996;
de Gues, 1988).

2.5

Innovation and strategy

Innovation for its own sake might interest enthusiasts but firms look to
innovation to provide advantage (Tidd et al., 1997). Innovation is, therefore, a
means not an end (Schumpeter, 1961).17 In general, 'advantage' is taken to
mean achieving economic returns but innovation can also benefit other
stakeholders (Schumacher, 1973). For example, the environment can be
protected by innovations in emission control (Hansen et al., 1999) and public
safety through the development of fail-safe railway signalling. Obviously,
seeking to enjoy the benefits of innovation provides a significant motivation
to invest resources in it (Smith et al., 1992).

17

Professor John Bessant observed that use of the term 'innovation' can be confusing since it
refers both to artefacts and the process by which ideas are realised for advantage (personal
conversation 13/11/99).

63

Achieving a viable competitive strategy in a capitalist economy generally18

requires innovation (Kay, 1993). Francis (1992) defined competitive strategy
in the following terms:
"A winning competitive strategy is a 'bundle of advantages
provided at sustainable cost that impel sufficient numbers of
customers to choose your firm over its rivals' If a business can
provide greater value than its accumulated costs the business
will prosperif not oblivion beckons" (31).
Francis makes the point that advantages offered need to be provided at an
acceptable cost. Customers make, perhaps subconsciously, assessments of
cost and benefit before they buy. The result of such decisions determines the
effectiveness of a firm's competitive strategy and whether its 'bets'
(Hamel et al., 1989) in innovation have yielded sufficient value.
Taking a strategic perspective helps a firm to answer the question 'why
should we innovate'? However, innovation is not simply a servant of
strategy but can also be a partner or a leader. Strategic choices may be
elaborated, extended, truncated, enabled or redefined by innovation. The
strategy of a firm may include a generalised commitment to innovation
(Goshal et al., 1999) or innovation may be targeted more precisely.
Relating two large and diffuse constructsinnovation and strategycannot
be easily undertaken. But the relationship is important and must be
considered.

18

Some firms may thrive in a competitive environment for a period of time without
innovation. For example, Oxted Taxis have maintained the same business formula for more
than 10 years (interview with owner 13/8/98) and no significant innovation has taken place
since the installation of two-way radios in 1983.

64

The researcher is mindful of the observation of Freeman and Soete (1997) that
"(a)ny classification of strategy by types is necessarily somewhat arbitrary
and does violence to the infinite variety of circumstances in the real world"
(265). Nevertheless, the relationship between innovation and strategy will be
considered from four perspectives or schools of thought (simplified from
Mintzberg et al., 1998b) and summarised in the table below:
Table 2.6: four strategic perspectives
Strategic perspective

Key assumptions

Strategic Planning School

Innovation provides product and process improvements that enable

desirable product-market positions to be gained and retained.
Innovation provides waves of differentiation advantage.

Resource-Based School

Innovation provides distinctive core competencies. These act as

wellsprings of innovation. Core competencies that are sticky and
hard-to-replicate offer sustained advantage. Dynamic capabilities are
generative resources that can provide multiple benefits.

Entrepreneurial School

Innovation is the way that entrepreneurs and intrapreneurs create

and exploit opportunities. Essentially innovativeness is an individual
attribute. Strategy is the flow of commitments from ideas developed by
entrepreneurs and intrapreneurs.

Innovative Organisation School

Innovation flows from facilitative culture, routines, processes and

reward systems. The organisation, itself, becomes dynamic and
creative in multiple ways.

Each school gives a primacy of place to innovation but in none is innovation

considered to be the only building block of an effective strategyit is an
element within an organisational gestalt. This supports the view of Kay (1993)
who writes "(f)irms add value by competitive advantages established through
innovation, reputation and architecture and by the management of strategic
assets" (327).
2.5.1

Innovation from the perspective of the strategic planning school

Porter (1980) can be considered as the high priest of the strategic planning
school. His notions of generic approaches to sustaining strategic advantage
and the five forces framework for the analysis of industries became
foundation blocks for strategic analysis in the early 1980s. Porter's discussion
of differentiation strategies placed innovation in a distinctive strategic context.
From his viewpoint, innovation was a (but not the) pathway to the
implementation of a successful differentiation strategy. Innovation of
processes was a primary means of delivering a cost leadership strategy.

65

Jones (1996) points out that Porter saw that the acquisition of relevant
technologies provided a key resource base and commented that: "Porter's
work is important for those interested in the management of innovation
because he, almost uniquely amongst corporate strategists, views technology
as a central element in the quest for competitive advantage" (26).
Porter (1996) emphasises the value creation potential of a differentiation
strategy and asserts that:
"(a) company can outperform rivals only if it can establish a
difference it can preserve ultimately, all differences between
companies derive from the hundreds of activities required to
create, produce, sell and deliver their products or services" (62).
Of course, being different is not, in itself, an effective competitive strategy.
Porter points out that "competitive strategy is about being different. It means
choosing to deliver a different set of activities to deliver a unique mix of
value" (64). The aim is to create a set of differences that sufficient numbers of
customers value and sways their purchasing decisions towards the products
offered by that particular firm.
Some firms adopt a single competitive strategy, perhaps to ensure brand
integrity. For example, a top hotel will take pains to ensure that all of its
services are consistent (Kumarand and Foy, 1996). However, many firms
operate in a number of markets and determine their competitive strategy,
positioning and innovation agenda separately, to some extent,19 for each.
Ghemawat (1991) suggests that:
"modern positioning theory stipulates that strategic choices
should always be analysed in terms of their implications for
competitive positions in individual product markets" (61-62).
Ghemawat argues that advantage can be gained by targeting innovative
capability on the precise needs of sub-markets (Tull and Hawkins, 1993). This
requires that differentiation strategies are deployed through activities within
a firm (Porter, 1985). Many, if not all, of the activities present targets for
innovation.

19

If a firm owns a brand then consistency is needed across different markets. The Sony
Corporation, for example, sells to a wide range of groups but maintains common standards of
quality, design style, warranties, price/value etc. in all products (Nakamoto, 1996).

66

If Porter is correct, it would be possible at the level of a firm, or a strategic

business unit within a corporation, to ask the question "where should we
direct our innovation capability to affect our chosen competitive strategy?"
and devise a rich picture answer. This would relate innovation initiatives
directly to the firm's competitive strategy. For example, it may be that a
pharmaceutical firm makes a deliberate strategic decision to develop a drug
to alleviate the symptoms of Alzheimer's disease. A billion dollars is
earmarked for the programme, world-leaders in this disease are recruited
and research and development goals are established. Once this critical mass of
research talent is gathered, and resources allocated, there is a probability that
useful drugs will be developed (Sternberg, 1999). Without such an extensive
commitment the likelihood is low that an Alzheimer's disease drug will be
developed by that company (but not non-existent as an individual researcher
may have a breakthrough driven by his or her own interest).
Recent thinking in this area, driven by notions of the agile enterprise
(Harvey, 1996), take micro-marketing to its logical conclusion and focus the
firm on meeting the precise needs of a market size of one (Curtis, 1998). For
some products, for example high-end computers, it has become possible to
provide highly customised or unique solutions for individual customers in a
mass market thereby changing the product innovation requirement to a
product kernel/modular configuration rather than a completed offer
(Magretta, 1998). In addition, there may be an opportunity for ongoing
innovation: when, for example, a person buys a computer s/he is buying a
product that is not complete, and will never be complete, as new hardware
and software can be added over time.
Kim and Mauborgne (1999a) suggest that notions of value have hitherto
underestimated the emotional meanings attached to products. They suggest
that innovation can be in the 'meaning' of the product or service, which, in
itself, is often embedded within the meaning or image of the firm. If this is
correct then it may be possible to be innovative in relation to meanings as
well as the tangible characteristics of the product or service.

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2.5.2

Innovation from the perspective of the resource-based school

As was mentioned in Chapter 1, resource-based models of strategy and

organisation are particularly significant for this research and will be discussed
in detail below. It will be argued that innovation capability can be seen as a
resource that provides a 'dynamic capability', meaning that its possession is
generativea force for change (Barrett and Cooperrider, 1990). It should be
noted that this definition of a dynamic capability is broader than that adopted
by Teece et al. (1997) who state "the term 'dynamic' refers to the capacity to
renew competencies so as to achieve congruence with the changing business
environment" (515).
The principal argument is this: defendability of competitive advantage
requires a firm develops resources in ways that rival firms find it difficult, or
impossible, to replicate these 'ingredients' of superior performance (Hamel
and Prahalad, 1994). Few firms can rely on long-term exploitation of valuable
patents or intellectual property so innovation is required. In order to feed a
firm's innovation requirement there needs to be an enabling and developing
resource-base (Teece, 1998) that maintains dynamic development.
Resource-based theories of the firm (Hamel and Prahalad, 1989) adopt the
view that the most significant strategic assets are internal capabilities,
especially if they are 'sticky' (difficult to replicate). So, Honda's capability in
engine design provided the opportunity to enter markets like motor cycles,
generators, cars, trucks etc. Based on their outstanding generic engine
designs, Honda's products are likely to have advantages in efficiency,
functionality and serviceability (Mintzberg et al., 1998b).
Proponents of resource-based theories of the firm argue that strategies
without capabilities are inconsequentiallike threats without power (Hamel
and Prahalad, 1989). Attention, it is argued, should be paid to acquiring and
harvesting an integrated and relevant portfolio of resources that provide a
raft of attractive strategic and tactical options. Resources include human
assets, technologies, company culture, alliances, partners, joint-ventures,
supply chains, knowledge-assets, downstream channels and so on. A case can
be made that the possession of a resource impels a need to exploit it and so is

68

a change driver in itself.20 As new or different resources are developed, or

become available, over time, a broad resource-base can prepare the firm for a
range of possible futures.21
If the resource-based theory of the firm is adopted then there are two
primary targets for innovation. One is to create, deepen, widen and/or
re-configure a firm's competencies, the second is to exploit efficiently and
creatively existing (evolving) competencies.
Hales (1999) points out that the roots of the resource-based theories of the
firm go back to the 1980s or before. Recent experience brings some earlier
assumptions into questionparticularly those that Stokes et al. (1998), citing a
paper by Teece et al. (1992) make concerning flexibility. The point is made
that "over any strategically relevant time frame, firms are stuck with what
they have and may have to live with what they lack" (2). This observation
may be, at least in part, outdated as recently firms have demonstrated
increased agility (Maciariello, 1997).
Doz and Hamel (1998) argue that, in the late 1990s, some firms became
capable of achieving rapid reconfiguration of their resource endowmentsso
have lessened their path dependence (Teece et al., 1997). For example, during
1998 GEC underwent a structural transformation and 're-invented' itself in
the telecommunications industry within a year (Lorenz, 1999). In early 1999
Microsoft made large investments to position itself in entertainment and cable
television, as Alexander (1999) notes "Microsoft is launching a blizzard of
deals to ensure that it is not left behind in the 'post-PC' era'" (3.7). Neither
GEC or Microsoft were markedly confined by their 1998 firm-specific
resource-base and, since they were organised as SBUs (strategic business
20

21

For example, if a retail firm specialising in selling stationery buys a printing firm the very
act of acquisition opens new possibilitiesoffering printing services to customers of
stationery or stationery to customers of the printer, are obvious examples. Here the act of
acquisition of a new resource becomes a generalised dynamic. Part of the reason for this is
that new combinations of interaction are facilitated by the acquisition: the managers of the
stationery business sit down with the printers and ask the question "how can we exploit the
opportunity?" The use of the word 'we' is important as it can lead to joint action.
There is a close connection with emerging theories of agility (Arnott et al., 1996). The
argument of the proponents of the agile enterprise is that it is impossible to plan for a
predicable future and so an organisation needs multi-level entrepreneurship, rapid
re-configurability, flexible resources and rapid learning processes. These are,
quintessentially, dynamic resources.

69

units), it was possible to for them to buy and sell businesses as going
concerns. However, both GEC and Microsoft had proactive leadership, ample
funds and a commitment to both agility and strategic positioning
(Slywotzky et al., 1999). The scale of the re-alignment of these major firms
suggests that earlier resource-based theories tended to underestimate the
significance of strategic leadership as they are located in a view of the firm
that sees boundaries as relatively inflexible, rather than personally led,
permeable, tradable, re-configurable and negotiable.
The perspective of strategy being shaped by flexible firm-specific
accumulations of expertise can be related to notions of military strategy
(Fraser, 1993). The British army does not know where it will be required to
fight next. It may be countering an urban terrorist threat, fighting a full-scale
battle in the Middle East or helping clear-up after a flood in Norfolk.
However, it is possible for an army to develop scenarios (de Gues, 1988) of
possible types of commitment (Schwartz, 1992) and, subsequently, to develop
flexible capabilities that can be rapidly re-configured to meet a range of
possible requirements. In effect, an army's strategy in peace time
concentrates on targeted resource acquisition that enable both planned and
emergent strategies to be effected in real time during engagement according
to the then existing combination of circumstances. Scenarios and flexible
resource development help determine the innovation agenda for armed
services.
Coombs (1996) suggests that it is demanding, although not impossible, to
develop capabilities22 on a 'just in case' basis. The British army have a
world-class competence in urban warfare honed by decades of combating the
IRA in Northern Ireland. It would have been difficult for them to develop this
if their role had been confined to exercises in the tank country of Germany.

22

The researcher has not sought to draw a fine distinction between 'competencies' and
'capability', partly as there is no generally acceptable definition for these terms (Hales,
1999). However, working definitions have been adopted. In this work the term 'competence'
in this work is taken to mean 'possessing all that is necessary to accomplish complex or
important tasks to world-class standards now'. 'Capability' is considered to be a broader
concept as it includes what could be re-configured or acquired as well is what is possessed
now. For example, as mentioned above, in 1998 Microsoft did not have competence in cable
television but it did have the capability to enter this industry (which it did by acquisition
in May 1999).

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Acquiring a capability requires experience in achieving objectives in a relevant

areatheory is not enough (Revans, 1984).
The resource-based theory of the firm has attractions for managers. The
reasons for this become clearer when a military example is considered. A
general will sleep easier at night if he has ample trained and motivated
manpower, superb equipment, excellent intelligence services and short
supply chains. The availability of resources mean that he has a broader range
of options and a higher likelihood that decisions can be implemented
successfully. However, there is a substantial cost23 incurred in development
and maintenance of some forms of resource,24 especially those that require
major learning or assets to be purchased or maintainedsuch as the
resources needed by a modern army.
Parejo (1998) shed light on the acquisition of resources in her study of
technology transfer within the telecommunications company of Venezuela
(CANTV) between 1991-1996. Her doctoral dissertation examined technology
transfer within the context of international alliances. In the late 1980s the
performance of CANTV was below international best practice. It was
determined, at governmental level in Venezuela, to institute a radical
transformation. Fundamental changes took place in ownership, technology
and, subsequently, performance during the 1990s. During the five years of
Parejo's study several new capabilities were acquired by
CANTVdemonstrating that strategic choices, combined with appropriate
institutional arrangements, can be the driving force behind the development
or acquisition of new or enhanced resources.
Parejo's work draws attention the fact that innovation capability cannot
always be seen as being the singular property of a firm. There may be an
underlying logic at the industry level which defines the required norms,
assets, skills and technologies needed for innovation capability for any firm
23

24

Cost categories can include direct, set-up, DCF, maintenance, renewal and lost
opportunities.
Not all resource development necessarily adds to the cost structure of the firm. For example,
the case can be made that benefits in improved efficiency and higher levels of conformance
more than offset the costs of total quality management (TQM) programmes. Other
initiatives may also be 'free'including continuous improvement, teamworking,
problem-solving and supply chain management.

71

within a defined industry. This is especially significant in industries within

which innovation requires a major investment of capital or substantial R&D
resources (like aircraft manufacture, pharmaceuticals or defence) and/or is
subject to external regulation. Here, the capabilities required for waves of
'required' innovation may be almost impossible for smaller firms to acquire
and this drives industry consolidation and/or partnership arrangements.
However, despite the industry logic, it may be that a small firm, or even an
individual, 'breaks the rules' and produces an innovation against the logic of
an industry's evolution or that a contextual change, a 'strategic inflection
point', occurs which 're-writes' the logic of innovation in an industry
(Christensen, 1997).
Required resource endowments may be generalised in that there are
quasi-mandatory generic capabilities required by most firms in some
industries. For example, running a successful international hotel requires
meeting the expectations of guests in terms of room size, comfort,
service-levels, dining options etc. These are global expectations but not fixed
over time. The 'firm-specific expertise' of a specific hotel builds on providing
required generic capabilities and seeks to add a unique persona, combination
of services, style and the like. However, as one hotelier put it,25 "get the basics
100% right and then think about being different. You can have all the bells
and whistles you like but if people come into their hotel room and the loo is
dirty you've lost it all!" In this context, innovation can be targeted on 'order
qualifiers' and/or 'order winners' with the latter being firm-specific
(Brown et al., 2000).
Some capabilities are broader than industry-specific. Exploitation of the
potential of information technology crosses almost all industries, as does
market research, quality management, customer responsiveness, financial
reporting and cost-structure management. These 'world-business' capabilities
provide a generic platform for competition26 but, again, change over time.
25
26

Personal communication.
An example of this is the European Quality Model that provides a reference model and
scoring system that enables firms to assess whether their processes, control systems and
activities are 'world class'. Firms have found this a helpful discipline thereby suggesting
that there are a range of generic abilities required for running a robust and well-managed
organisation.

72

For example, it is likely that success in the next industrial era will require
enhanced capabilities to exploit accumulated knowledge and develop the
organisation's capability to learn and adapt (Davis, 1988). Firms will need to
target some of their innovation capability on these areas should this occur.
Capabilities can provide the foundation for a multi-functional set of
competitive edgesat least until rivals catch up. They rarely last forever
unless continuously updated. Four examples make the point:

In the 1920s Ford developed the capabilities to mass produce motor cars at
prices ordinary people could afford and gained competitive advantage but
later other firms achieved the same capabilities.

In the 1940s Caterpillar developed the capabilities to supply the world

with reliable earth moving equipment and gained competitive advantage
but later other firms achieved the same capabilities.

In the 1960s Michelin developed the capabilities to construct superior tires

for motor vehicles and gained competitive advantage but later other firms
achieved the same capabilities.

In the 1980s Canon developed the capabilities to supply low cost but
superior photocopiers and gained competitive advantage but later other
firms achieved the same capabilities.

There is a hazard when employing resource-based views of the firm. Today's

core capabilities can become tomorrow's core rigidities (LeonardBarton,
1995). There are well-described cases where a major shift has occurred in the
nature of successful business models in specific industries. Existing firms are
disposed to cling to old formulae of competition and, unwittingly, orchestrate
their destruction. A particularly powerful example of this phenomenon was
the 19th century ice-cutting industry in North America that proved unable to
cope with technological advances in refrigeration (Utterback, 1994). At times
when industry logics are changing incremental innovation may be
insufficient; radical innovation is needed.
One systematic approach to relate innovation to resources within the context
of business models was developed by (Tregoe and Zimmerman, 1982). They
argue that resources need to be developed in an aligned way so that a firm
becomes a good example of type (Slywotzky et al., 1999). To use a simple

73

analogy, it would be rational for Glyndebourne Opera to develop capabilities

in staging operas but not in recording, transportation of performers or
teaching opera singerssince these are forms of business and can be better
provided by others. In fact, the attempt to develop such 'wider' capabilities
could become a distraction and reduce the opera's focus on 'core' capabilities
and thereby undermine its capacity to create and sustain value. The notion of
aligning resource development to selective business models is important and
will be discussed below in the section related to targeting.
It seems that capabilities must be developed as an integrated portfolio, that
changes over time. Doz and Hamel (1998) make a direct link between
innovation and competency development. Firms, they argue, must stay in the
race to be contenders or risk being sidelined. They write:
"Competencies are complex bundles of constituent technologies.
They are not built through sudden leaps of inventiveness but
through patient and relentless innovation. Once these efforts are
abandoned, it is extraordinarily difficult to jump back into the
race with the fast leaders" (205).
Doz and Hamel describe innovation as a means to acquire 'complex bundles
of constituent technologies'. This provides a different perspective than that
described by Porter above who argues that innovation needs to be focused
on activities within a firm's value chain. Rosenberg (1995) supports Doz and
Hamel's view and points out that the "impact of an innovation depends on
improvements not only in the invention itself, but also in complementary
inventions" (176). Technologies can affect multiple activities. Doz and Hamel's
perspectives on innovation are located within the 'dynamic capabilities'
approach.
It is helpful to consider dynamic capability as a generative rather than existant
resource (Barrett and Cooperrider, 1990). An example makes the point. In the
US pharmaceutical industry Bierly and Chakrabarti (1996) observe that:
"(f)irms that predominately generate new knowledge internally have
significantly faster cycle times than firms that predominately generate new
knowledge from external sources" (124). The capacity to 'generate new
knowledge internally' can be seen as a dynamic capability in that
organisational improvements can flow from its presence.

74

A strategy to develop dynamic capabilities could incur lower costs and

present a lower risk profile than the development of other firm-specific
resources. This is because dynamic capabilities can be used in multiple ways.
An example makes the point. If a firm adopts the principles of agility as a
policy this can become a dynamic capability. Agile management
principlesshort cycle decision-making, pro-activity, cycle-time reduction,
micro-marketing and asset reconfigurabilitycan be employed throughout a
firm (Gunasekaran, 1999) and provide multiple advantages (Perry et al.,
1999). Here, the adoption of agile processes that do not require irreversible
commitments (Knies, 1997) or sunk costs that have been committed to 'hard'
capabilities (for example, building a power station).
Dynamic capabilities can become wellsprings of organisational learning
(Nonaka, 1991). Viewing strategy as a learning process brings the
metaphorical rivers of innovation and strategy together so that they flow as
one. Since innovation and, its close companion, experimentation are major
drivers of learning, innovation can become an element of strategy (Senge,
1992).
The limits of the resource theory of the firm, and the extent to which it should
drive a firm's innovation agenda, have yet to be fully explored. One way to
challenge the theory is to assess how it explains relevant cases. The case of
Iridium, mentioned in Chapter 1 and one of the largest investments in a
single innovative venture in the 1990s, demonstrates some principles of the
resource theory of the firm being applied in practice. The Iridium consortium
determined to develop the resources needed to provide global mobile
satellite telephony and exploit their firm-specific resources in evolving
markets. This required significant innovation, especially with technologies. A
full set of resources were created and the requisite numbers of satellites were
launched. However, the venture was not successful. In the event, the
consortium was unable to pay the interest on its loans. The project was
abandoned in 2000 with estimated losses exceeding $5 billion. It is logical to
conclude that the acquisition of firm-specific resources is not a guaranteed

75

way to superior profitability and that resources are only one element27 in the
process of value creation (Price, 1999).
The resource-based and related dynamic capability theories of the firm
provide a business model that is particularly suitable for turbulent
environments (Magretta, 1998). A firm's innovation capability can be seen as
an element of a firm's resource base and, since it generates change, provides a
dynamic capability.
Even when a firm possesses a portfolio of resources and/or dynamic
capabilities it is still necessary for managers to decide what markets they wish
to serve, what business model(s) to adopt and what products to offer. As
Teece et al. (1997) observe "these approaches are in many ways
complementary" (511). From this point of view, the positioning school28 and
the resource-based/dynamic capability schools offer complementary
perspectives. Positional strategies and capabilities can be viewed as a
conceptual see-saw. Capabilities are needed to implement strategies and the
possession of capabilities opens, shapes and curtails a firm's opportunity
space.
2.5.3

Innovation from the perspective of the entrepreneurial school

The entrepreneurial school sees the driving force of innovation as a special

kind of person who sees opportunities and combines ideas in new ways. S/he
has the character to overcome hindrances, 'creatively' destroy and make
things happen. Schumpeter (1961), as the primary advocate of this school,
stands out from those who take an institutional perspective of innovation by
concentrating on the mind and being of the entrepreneurthe motive force
driving innovation. Schumpeter suggests that a person is an entrepreneur
when he "carries out new combinations and loses that character as soon as he
has built up his business, when he settles down to running it as other people
run their businesses" (506).
27

28

Other elements include the firms' strategy, access to markets, customers' perception of
value, reputational assets, cost-base, conformance, financial disciplines and capability to
innovate.
This is an approach to competitive strategy that suggests that three interdependent
decisions are the cornerstones of competitive strategy. The questions are: 'where shall we
compete? 'how shall we compete?' and 'what position do we want to achieve?' This
approach to strategy will be elaborated later in this chapter.

76

Numerous case studies have shown the significance of entrepreneurial

leadership (see Davis, 1991 for example). These demonstrate the significance
of willpower, personal motives and boldness. Eddy (1999) provided a
relevant example in his study of the 1998 anti-trust hearing between
Microsoft and Netscape over rival internet browsers. Strategy emerged as
driven by egos and ambition of a few key people rather than a technocratic
endeavour. The language used in internal records was significant, including
discussion of collecting a 'vig' from customers ("In the language of organised
crime, the 'vig' is the unavoidable and extortionate interest demanded of a
loan Microsoft e-mail also speaks of 'wars' and 'jihads" (43). Gates wrote
in an e-mail in May 1995 that "(a) new competitor 'born' on the internet is
Netscape they are pursuing a multi-platform strategy to commoditize the
underlying operating system." (44).
Microsoft's counter to this threat was driven by Bill Gates personally and
included four principal elements, one was an attempt to convince, using
apparently strong-arm tactics, Netscape executives that they should avoid
"sabotaging our platform evolution"29 (44). Secondly, the influencing and
deal-making strategy was supported by accelerated development of the
Microsoft Explorer product (requiring targeted innovation within Microsoft).
Thirdly, Microsoft did a deal with AOL to supply them with a free customised
browser. Lastly, Microsoft integrated its Explorer product into its Windows
interface. Eddy points out that the use of power was an underlying motif.
Such strategies are not new. Sun Tzu, a Chinese General writing around
320 B.C. spelt out the importance of clarity, focus, decisiveness, alignment,
coherence, intelligence and responsiveness in achievement of action goals
(Hou et al., 1991).
In an analysis of this case Yoffie and Cusumano (1999) saw the competitive
dynamics of these two companies as following the rules of judo, specifically
"rapid movement, flexibility and leverage" (71). Product innovation was
needed by Microsoft, but in a tightly defined time-frame. The motives and
skills of a few key people, engaged in a power struggle, were key factors.
Perhaps Porter's comment that the aim is "to deliver a unique mix of value"
29

After the meeting (described as the 'Mountain View Showdown') one of the Netscape
participants described Microsoft's stance as if "Don Corleone had come to see me".

77

needs to be extended to "deliver a unique mix of value, try to prevent others

from doing the same and be in a position on the 'high ground' of the next
wave of value-adding innovation".
The personality of Bill Gates has been dominant in Microsoft (Cusumano and
Selby, 1996). His value system, actions and attention shaped the company
profoundly. It is not always necessary that entrepreneurship is confined to
the top of the organisation. Pinchot (1985) suggests that it is possible for firms
to institutionalise entrepreneurshiphe describes such people as
intrapreneurs. His research (Pinchot, 1996) suggests that the roles of
champion and sponsors are key. They galvanise an organisation behind an
idea and overcome internal disinterest, reluctance or resistance.
Processes of entrepreneurship and intrapreneurship were outlined by Hamel
and Prahalad (1994) who assert:
"what does it take to get to the future first? At the broad level, it
requires four things: (1) an understanding of how competition
for the future is different; (2) a process for finding and gaining
insight into tomorrow's opportunities; (3) an ability to energise
the company top-to-bottom; and (4) the capacity to outrun
competitors and get to the future first, without taking undue
risks. Implicit here is a view of strategy quite different from
what prevails in most companies. It is a view of strategy that
recognises that a firm must unlearn much of its past before it
can find the future" (22-23) (authors' emphasis).
People who undertake these four roles create the firm's future and, Hamel
and Prahalad (1994) suggest, possess a distinctive skill-set. However, their
contribution is essentially personala different individual might take a
different set of decisions.
Mill (1982) made a contribution to the understanding of the behaviourial
aspects of strategy formulation in his study of tobacco companies as they
responded in the wake of the finding that cancer was linked to cigarette
smoking. Mill placed emphasis on the role of top decision makers who served
as the primary link between the organisation and its environment and
pointed out that "this view emphasises the role of learning and choice in the
process of organizational adaptation" (11). It is reasonable to conclude that
individuals in powerful positions, the organisation's elite, have a significant
impact on the direction on policy and practice (Pareto, 1961).

78

The question of 'who is the organisation's elite?' is, therefore, important.

Chandler Jr. (1962) demonstrated that strategy and structure were
interdependent. He observed that centralised organisations, in general,
hindered entrepreneurship and innovation. Divisionalised business forms
permit a degree of decentralised entrepreneurship as divisions are
quasi-independent (Mintzberg, 1983b). Such decentralisation can permit
strategies to be flexible, responsive and emergent rather than fixed and
deliberate as Mintzberg (1994) put it:
"Implicit in deliberate strategy is the belief that the head
thinksthe body acts in the case of emergent strategy
because big strategies can grow from little ideas (initiatives), and
in strange places, not to mention at unexpected times, almost
anyone in the organisation can prove to be a strategist" (26).
It seems probable that turbulent and uncertain environments require
strategies to be opportunistic, frequently revised and pursued with vigour
despite contextual ambiguitiesa working definition of entrepreneurship.
Mintzberg et al. (1998b) used the term 'emergent strategy' to describe such
managerial stances in contrast with formal, planned 'deliberate strategy'. In
essence, an emergent strategy is one in which a firm's strategy-makers accept
that there are too many unknown or unknowable variables for prudent plans
to be prepared in well in advance and it is necessary for strategies to be
developed in real time according to factors that prevail at that time. Emergent
strategies depend assessments and commitments by the power elite of an
organisation are particularly responsive to serendipitous innovation
opportunities. Indeed, it is reasonable to argue that a capacity to adopt an
emergent strategy is, in itself, an element in innovation capability.

79

2.5.4

Innovation from the perspective of the innovative organisation

school

The innovative organisational school sees innovation as coming from many,

perhaps most, individuals within the firm or associated with it. An example
described by Butler (1992) demonstrates the distinctive features of the
approach in the Japanese company Kao:
"Kao dominated most of its markets in Japan. It was the market
leader in detergents and shampoo, and was vying for first place
in disposable diapers and cosmetics the ability to produce a
continuous stream of innovative, high quality products clearly
rested on Kao's repertoire of core competencies, the wellspring
behind these was less obvious: Kao's integrated learning
capability Kao believes that the development of original
products with true value depends on integrated technologies
and perpetual efforts to innovate in all areas" (2).
Butler suggests that Kao had successfully institutionalised creativity and
innovation. Similar cases have been reported from Hewlett Packard
(Eisenhardt and Brown, 1999), Sony (Nakamoto, 1996) and the Hay
Consulting Group (Heraculeous and Langham, 1996).
The argument of proponents of this school (Cooperrider and Srivastva, 1987)
sees individuals, rather than organisational capabilities, as the primary
wellsprings of innovation. If, it is claimed, organisational members grow in
creativity, efficacy and commitment then the organisation will become
innovative as each individual plays a quasi-autonomous and proactive role.
This has been termed by Hall (1997) the use of kinetic theory within an
organisational context.

80

A body of literature exploring kinetic and endemic innovation is 'organisation

development' (OD). This developed from social-science research in the late
1940s.30 OD can be described as a form of 'social technology' (French and
Bell Jr., 1995). Its purpose was to bring about intentional organisational
change. The value system on which it was founded was humanistic and
inspirational, as Greiner (1980) observed:
"There are two key values that provide the foundation of OD.
One is an overriding emphasis on the human dimension. We are
clearly not in the business to advance the financial or technology
dimensioneconomists and engineers do very well in these
areas. We can even say a bit more about the human side,
because OD proponents have long believed that people can
influence organizations instead of being the victims of them.
This leads to a second valuethat of broadening the
decision-making process to include the affected employees so
that they can influence what happens to them and their
organizations." (328) (author's italics)
The context in which OD developed was complex. From the middle of the
last century there was increasing doubt that bureaucratic forms of
organisation would be capable of handling either the rate or depth of
innovative change needed (Burns and Stalker, 1971) in the future. The 'human
potential movement' emerged and devised a new form of educational
experience, sensitivity training (the T-Group), that facilitated reflection largely
through gaining extensive feedback on the presentation of self (Benne et al.,
1964). More generally, OD brought a shift in social values into organisations
influenced by such social forces as the hippy movement, Rock 'n Roll, and
youth cultureBob Dylan was echoing the voice of a generation when he
sang "the times they are a-changing".

30

Mary Parker Follett (Graham, 1996) had presaged the development of OD in her lectures
given in the mid-1920s.

81

The values orientation of OD can be glimpsed by examining the writings of

Carl Rogers, a persuasive advocate of the human potential movement. In his
comments on creativity Rogers (1961) states:
"recent clinical findings from the field of psychotherapy give us
hope. It has been found that when the individual is fully 'open'
to all of his experience then his behavior will be creative, and
his creativity may be trusted to be essentially constructive as
the individual becomes more open to, more aware of, all aspects
of his experience, he is increasingly likely to act in a manner we
would term socialised (sic). If he can be aware of his hostile
impulses, but also of his desire for friendship and acceptance,
aware of the expectations of his culture, but equally aware of his
own purposes; aware of his selfish desires, but also aware of his
sensitive concern for another; then he behaves in a fashion that
is harmonious, integrated, constructive" (352-353).
Rogers advocated inner exploration and self-knowledge as the primary route
to personal growth and creative, effective functioning. Practitioners in the
field of OD, either explicitly or implicitly, have often adopted a similar
position that asserts that there is intrinsic merit in releasing and channelling
latent or releasing blocked human potential.31 A lesser but related movement,
improving the quality of individual and organisational thinking, was
promoted by de Bono (1999) and Buzan (1974) amongst others.
These values informed ways of thinking about organisations that were
supported by organisational change methodologies. Opinion leaders in the
field of OD found ways to link their beliefs with views about leadership,
organisational culture, authenticity and behaviour. For example, a seminal
article by Harrison (1983b) introduced the concept of alignment and
attunement. "By the first is meant the voluntary 'joining up' of individual
members of the organization". "By attunement is meant the support of
individuals for one another and by the larger whole which comes about
through a sense of mutual responsibility, caring and love" (210).
The 'spiritual' theme continues to be a live issue in organisation development
(Harrison, 1995b). It is relatively common for OD practitioners to write about
31

This core value means that OD shares many of the objectives of innovation management. In
the main, OD people would say that "releasing and channelling human creativity is a good
thing in itself". Those in the innovation management school would say that "releasing
human creativity in the service of the organisation is essential for strategic differentiation
and corporate survival". Although the perspectives differ, the end points are similar.

82

'meaning', 'essence', 'energy', 'balance', 'harmony' and 'love'. This apparently

un-pragmatic focus differs markedly from the output and process orientation
of many observers and yet finds favour at the very top of some, highly
prestigious, organisations who consider it to be 'real'. The spiritual dimension
of innovation in organisations is, largely, a 'black box' as far as researchers
are concerned.
Although not originally within the mainstream of OD another strand of
work, pursued as a lonely furrow for many years by (now) Professor Reg
Revens (1980) was a radical approach that wrought a transformation in the
methodology of manager development and, arguably, enhanced the capacity
of managers to innovate. Action learning (AL), or action reflection learning as
it is known in the USA, takes a manager into new areas of practice and
requires a 'helicopter perspective'. It was based on the belief that action is the
critical element in learning: if a person cannot make positive change happen
in the reality of his/her world then learning cannot be said to have occurred.
Of great importance in the AL approach is the central role played by the
learning groupthe setwho are 'comrades in adversity' (Revens, 1982;
Garratt, 1987; Mumford, 1995).
A contributing influence to OD was work undertaken to identify skills and/or
competencies that facilitate the development of the innovative individual (see
Boyatzis, 1982 for an overview of the methodologies used). An early
contributor was Prince (1980) who provided a framework for deepening
understanding of the normative aspects of innovation and identified five32
stages: wishing, retrieving, imaging, comparing and storing. Prince believed
that these specific skills can be learnt by individuals that mitigate, or eliminate,
potential hindering factors. He notes that:
"My twenty years of research has been in the field of creativity:
discovering the actual process and then helping people get back
in touch with their latent capacities for it. I am convinced that
just about everyone has a large potential for creativity that has
been submerged by the socialisation that we all go through"
(39).

32

In an earlier work (Prince, 1976) six stages are identified. These are wishing, retrieving,
imaging, comparing, transforming and storing.

83

The release of creativity at the individual or team level is seen as an element

in the development of innovation capability. However, in its pure form,
Prince is describing a strategically undirected approach and there are few
mechanisms for alignment or policy deployment built into the process.
The publication of work related to OD, action learning, competency
management and related fields coalesced into a reasonably coherent
approach that offered frameworks, models, intervention processes and
change-agent role descriptions. These provided intervention processes33 that
facilitated the development of innovation capability (Rickards and Moger,
1999). However, OD did not provide a complete answer to developing
innovation capability as it had less well-developed models and techniques for
dealing with 'harder' issuessuch as technology forecasting, use of IT, R&D
management, cost-benefit trade-off decision-making, competitive positioning,
asset deployment etc.
In addition to the body of literature from OD a parallel strand of
development was taking place from the 1970s driven by 'the quality
movement'. Influential figures such as Deming (1986) advocated that
managers should "put everyone in the company to work to accomplish
transformation" (24). This led to perhaps the most ubiquitous application of
the innovative organisation principlethe adoption of kaizen or continuous
improvement (Imai, 1986). Here the responsibility for innovation, at least in
part, was devolved to the people actually doing the work. Their familiarity
with opportunities for improvement, combined with appropriate skill-sets,
enabled multiple initiatives to be undertaken, sometimes with cumulative
benefits (Yasuda, 1991).
The motivation to adopt OD practices was increased by 'success stories'. For
example, Larson (1988) provided a description of OD work in Honeywell and
suggested that there are learnable behaviours (partly norms, partly skills, and
partly project management technologies) that support innovation. Larson's
33

It is relevant to note that other forms of intervention can be used. These include 'carrot'
methods (e.g. government may offer tax advantages), 'stick' methods (e.g. government
penalise the non-innovators), 'leadership-change methods (e.g. change in leadership),
'support' methods (e.g. from technical institutes), 'exemplar' methods (e.g. the example of
others serves as a catalyst) and 'education' methods (e.g. key personnel attend conferences,
courses etc.).

84

work assisted in 'getting to the behaviourial level' and was given additional
moment with the observation that Honeywell reported a 30% to 60%
reduction in average product development times as well as substantial cost
savings as a result of initiatives.
One academic writer to address the issue of how to develop innovation
capability is Morgan (1993b) who points out that "organization always hinges
on the creation of shared meanings and shared understandings, because there
have to be common reference points if people are to shape and align their
behaviour in an organized way" (11) (author's italics). He claims:
"The challenge now is to imaginize: to infuse the process of
organizing with the spirit of imagination. We need to find
creative ways of organising that enable us to 'go with the flow',
using new images and ideas as a means of creating shared
understandings among those seeking to align their activities in
organized ways" (page xxix) (author's italics).
Morgan's work emphasises the significance of liberating parts of the self and
enrolling the whole person in creativity and innovation. His position was
informed by research on the capabilities of the brain, first described by
Ornstein (1972). Such viewpoints are becoming more widely advocated, for
example by Kao (1996).
The innovative organisational school is distinctive. It advocates that the
managers of an organisation should not seek to control innovation; rather
they seek to develop, facilitate and, perhaps, align it.
2.5.5

Innovation and strategy

It is unlikely that any company adopts one strategic mode to the exclusion of
all others (Mintzberg et al., 1998a) but it may be that firms favour a certain
strategic perspective (Miles and Snow, 1978). This may influence the firm's
broad targets for innovation as outlined in the table below.

85

Table 2.7: strategic perspectives and innovation capability

Strategic perspective

Broad targets for innovation capability

Strategic modes

Strategic Planning School

Innovation to achieve and sustain superior positions

in selected product-markets.

Deliberate

Resource-Based School

Innovation to build a portfolio of capabilities,

including dynamic capabilities and exploiting these
for value creation.

Deliberate then
emergent

Entrepreneurial School

Innovation to realise the benefits of those with

entrepreneurial talents.

Emergent then
deliberate

Innovative Organisation
School

Innovation to realise the benefits of those with

creative talents.

Emergent

Consideration of strategic perspectives illuminates the interrelationship

between competitive strategy and innovation. This are shown on a diagram
developed by this researcher (Figure 2.3). For the purposes of illustration, the
positions of selected theorists have been approximately positioned on the
diagram. It can be seen that each school has several respected advocates.
STRATEGIC
PLANNING
SCHOOL
Innovation for
Positional
Advantage
INNOVATIVE
ORGANISATION
SCHOOL

"We win because

we well
positioned in
profitable
markets"

Porter

RESOURCEBASED
SCHOOL

Levitt
Yoffie
"We win because
everyone is
innovative"

Innovation as 'a
way of life'

Ghemawat
Slywotzky
Tregeo & Zimmerman

Hamel
Senge Kim
Heraculeous
Innovation for Sticky and
Nonaka
Generative Core Competencies
Wheatley Mintzberg Coombs
Teece
Argyris
Eisenhardt
Parejo
Leonard-Barton
Doz

Mill
Knies
Pinchot
Schumpeter
Innovation for
Realisation of
Opportunities

"We win because

we have people
who create and
exploit profitable
opportunities"

ENTREPRENEURAL
SCHOOL

Figure 2.3: strategic perspectives on innovation

"We win because

we leverage
hard-to-replicate
competencies"

86

2.6

Targeting innovation

It has been argued above that possessing a high degree of innovative

capability provides a dynamic resource for a firm. However, in order to be
useful, a resource must be applied. This must be done prudently. There are
examples where high innovation capability has engendered anarchic,
disruptive, expensive and foolish initiatives or consequences. The targeting of
the use of the capability is as important as its possession (Ghemawat, 1991).
Bartlett and Rangan (1985) illustrate the process of targeting innovative
capability in their case on Komatsu Ltd. In the 1960s Komatsu made dumper
trucks for the local market. The chairman, Ryoichi Kawai, decided that
Komatsu would topple Caterpillar from being the undisputed number one in
the EME (Earth Moving Equipment) sector. This statement of strategic intent
was called 'Maru-C' which means, approximately, 'encircle Caterpillar'. The
executives at Komatsu did not know how they would achieve their strategic
intent, but it provided an overriding direction that guided initiatives in quality
management, product design, marketing and so on. Komatsu grew stronger
and, in the 1980s, Caterpillar was plunged into severe loss (more than $1
billion over 11 quarters) caused mainly by competition from Komatsu (see
Chapter 6 of Eckley (1991) for a detailed description of this case from
Caterpillar's perspective). Komatsu went through four distinct stages on its
path from obscurity to beating Caterpillar in many core markets in the EME
industry during the 1980s. Firstly, they used innovative capability to improve
quality, secondly, to reduce costs, thirdly to develop innovative products and,
lastly, to devise new methods of sales and financing. These waves of focused
innovation were undertaken sequentially. The argument used by their
management was that too many initiatives at the same time would have
fragmented effort and permitted non-achievement. The Komatsu case34
demonstrates that it is possible to target innovation capability on firm-specific
strategic goals.

34

The case also demonstrates that competitive advantage, gained through innovation or
other means, does not guarantee permanent success. Komatsu reported a trading loss in 1999
whereas Caterpillar had returned to profitability.

87

2.6.2

4Ps targeting

It is possible to identify four35 generic targets for the exploitation of

innovative capability.36 Fortuitously, these all begin with a 'P'.

P1 innovation to introduce or improve products;

P2 innovation to introduce or improve processes;

P3 innovation to define or re-define the positioning of the firm or products;

P4 innovation to define or re-define the dominant paradigm of the firm.

These 4Ps are not tight categories: they have fuzzy boundaries. Nor are they
alternatives: firms can pursue all four at the same time. There are linkages
between them; a firm using innovation capability for positioning, for
example, will be highly likely to introduce or improve products. It is possible
to define P3 and P4 as variations of re-framingeither concerned with what
the offerings the organisation provides or what identity it pursues (Tidd et al.,
1997). However, the 4Ps provide an approach to examining the opportunity
space for innovation.

35

36

It has been suggested to the researcher by Helen Poole of the University of Brighton that
there needs to be a 5th Pfor person. The argument being that innovation needs to take
place within individuals as well as in a system. The point is important but it was decided
that this emphasis has already been subsumed in the 4 P model (see the section related to
innovation in internal paradigms).
This analysis is similar to that of Higgins (1995) who identifies "four primary types (of
innovation): product, process, marketing and management" (112). Others suggest more, for
example, Rickards (1999) notes that Schumpeter identified six categories including "the
'conquest' of a new source of supply" (57).

88

2.6.3

Innovation in product

Product development is an obvious target for innovation capability and can

be considered on several dimensions. For example, Wheelwright and
Clark (1992) identify criteria that differentiate products including number,
timing and rate of change of product platforms, whether they are variations
or derivatives, the frequency of introduction/refresh rate, relationship with
strategy and degree of modularity. They point out that product innovation is
influenced by the state of industry maturity:
"In relatively young industries, such as medical instruments,
every development effort appears to be a platform effort (to
broaden the firm's market coverage), with incremental changes
targeted primarily at correcting deficiencies in the platform
products" (42).
The resource requirements for product development can vary over
timewith the development of product platforms requiring more effort over
a sustained period. A firm may be able to plan for several generations of
products over a life cycle with derivatives in between. Here, innovation can
be seen as strategy-driven and deliberate rather than emergent or
serendipitous (Randale and Rainnie, 1996).
Product innovation is also applicable to service firms37 whose 'products' are,
to some extent, created in real time. For example, Singh (1991) notes that in
Singapore Airlines, "the innovative spirit gave the travelling public the first
slumberettes on Boeing 747 upper decks, jackpot machines to relieve
boredom and round-the-world fares" (164).
At one level the notion of innovation in products offered is simple. All a firm
has to do is to find ways of providing superior functionality and/or price and
signal this to the market. It can be argued that any initiative in which the
added value exceeds the added cost by an acceptable margin should be
37

The distinctive features of a service have been defined as (Irons, 1993):

" 1 They are transientleave only memories or promises
2 Cannot be separated from the person of the provider
3 They cannot be stored
4 Standardisation is only partly possible
5 Constant supervision is almost impossible
6 The consumer is a participant
7 Culture is two waythe organisations and the customer"

89

undertaken. Such a stance has a beguiling logic but is simplistic a case

example will demonstrate that product development requires making
decisions with unknown consequences, making 'bets' and channelling limited
resources.
ABC Lighting38 in 1990 had more than 8000 products in their catalogue, some
of which were slow-moving, lacked competitive advantage or were priced
more highly than competitors' offers. An obvious remedy would be to go
through the catalogue and determine to innovate with some products and cut
out others. Why wasn't this done? The view of top management was that a
pruning of the product list could prove counter-productive as ABC Lighting's
strategy was to offer a 'total solution for the contractor' rather than a partial
offer of superior products. Some managers argued that the firm had to offer
certain categories of products at low levels of profitability in order to be able
to fulfil all the requirements of large contracts that were generally offered to a
sole supplier. In addition, each product put through the factory bore a share
or burden of the factory's cost overhead. It could be that, if a marginally
profitable but large volume product was cancelled, the added burden on
other highly profitable lines, perhaps smaller in volume, might be sufficient to
propel them into loss.
Managers realised that decisions about innovation in products offered could
have multiple effects on market perceptions and was linked in somewhat
obscure ways to profitability. Criteria used to make decisions could not be
readily quantified. For example, no one could say how many contracts would
be lost if ABC stopped supplying Emergency Lighting, for example. Product
development was given significant resource in ABC Lighting but was limited
and some initiatives required more or different forms of effort than others.
The added value of intensive product development could frequently only be
assessed by surmise; competitors' intentions in the area were rarely clear39
and, lastly as mentioned above, the link with the firm's overarching product
policy was complex.
38

39

Case material drawn from a presentation at INSEAD in March 1994. Certain details have
been disguised.
There were cases where competitors deliberately set out to confuse the company and try to
cause it to abandon certain product development processes or 'waste' resources developing
others.

90

Historically, several of the fundamental technological innovations in lighting

had been invented by ABC Lighting scientists, including halogen lighting and
the use of light as a source of heat for cooking. The invention of halogen
lighting was a major technological breakthrough and provides an illustrative
example. ABC Lighting had developed the concept, proven it, taken out
patents, devised complex production machines and assessed the potential
market as 'huge'. The question was 'should we develop a halogen light
product range?' and, since the ingredients of competitive advantage appeared
to be present, the answer was 'yes'.
ABC Lighting's range of halogen lighting products were launched and rapidly
became world-leaders. The product found a ready market amongst
commercial designers and profit margins were well above average.
However, other major players, notably Philips, saw the rapid growth of the
halogen lighting market and invested considerable research resources in
devising alternative technologies. It was not long before ABC Lighting saw its
margins dropping and competitors' products being made in volumes beyond
the capacity of ABC Lighting's factories.
The initial reaction of an observer is to say 'well it's a story of a firm that
couldn't capitalise on their advantage, but at least they had the benefits of
excellent margins at the beginning'. This was true but developing the halogen
lighting range absorbed a huge amount of resource from the managing
director, the R&D lab, production engineers and marketing staff. It was the
focus of a great deal of strategy formulation and problem-solving effort. In
effect, the decision to develop the halogen product deprived other products
of development resources. 40 Whether this was counter-productive in the
ABC Lighting case is not known by this researcher.
ABC Lighting provides a useful case to assist in the understanding of the
interplay between management decision-making, industry logics and new
product development. Here was a company with a long history, a full range
of firm-specific capabilities, a uniquely talented R&D facility, global scope and
a strong market presence being unable to survive as a light sources

40

During the later stage of this case study ABC Lighting reported a loss on its light source
business and sold it.

91

manufacturer. They were too small a player in an industry where economic

logic favoured huge producers. This did not apply in the fittings business,
which was retained and operated successfully in markets ruled by a different
strategic logic.
The issue of timing can be significant. House and Price (1991) cite a McKinsey
report that suggests that "on average, companies lose 33% of after-tax profit
when they ship products six month's late, as compared with loses of 3.5%
when they overspend by 50% on product development" (92). The
management of the product development provides a complex decision-taking
task for the firm. Uncertainty and risk can rarely be avoided and rules of
game theory can seem more applicable than direct cause and effect
relationships (McDonald, 1963).
The process of new product development can, itself, be the target of
innovation. Arguably the greatest resource in the future for product
innovation will be in the use of the internet for accessing customers and,
using mass-customisation and agile techniques, it may be possible for firms to
devise a distinctive product for each customer (Goldman et al., 1995). Here,
the product is presented as an 'envelop of possibilities' rather than a
pre-determined entity. This notion presents intriguing challenges; it may
become possible for a customer to participate actively in the development of
a unique product.
It can be seen that managing innovation in product can be a complex task in
which branding policies, market development trajectories, industry logics,
resource availability, technological opportunism, intrapreneurship and other
factors influence decisions. Accordingly, it would be incorrect to define
product innovation 'merely' as an internal middle-level managed
processrather it can be a major element of strategy. Targeting innovation
capability on developing new and/or improved products, as the ABC lighting
case shows, can involve multiple actors engaged in complex and inter-linked
processes with a single end in viewcreating value at an acceptable cost for
the customer.

92

2.6.4

Innovation in process

Processes are widely, if not universally (Clarysse et al., 1998), accepted as a

target for innovation initiatives. Processes are sequences of activities, often
proceeding horizontally across the organisation, that are transformations.41
Transformation processes can often be improved (Gallagher et al., 1997). For
example, new technology can add precision, improved training can increase
conformance or process mapping can identify time wasted in unnecessary
activities (Stalk Jr., 1993).
Process innovations can be direct (e.g. implementing single minute exchange
of dies (SMED) in an manufacturing facility) or indirect (e.g. adopting TQM).
Indirect process innovations are thematic and can apply to multiple processes.
They can be remarkably beneficial, as illustrated by Hanson and Voss (1999)
who describes Total Productive Maintenance (TPM) programmes in Japan
and observes that "cases of 40% cost reduction, in factories already highly
accomplished in lean production, are not unusual" (12).
Not all improvements in processes are innovations as, for example, repetition
and training have been shown to result in efficiencies. For example, during
the Second World War it was noted by Bogue III and Buffa (1986) that "for
each doubling of cumulative total output of an aircraft model, the deflated
unit costs were reduced by 20 per cent" (23). From such cases the
'experience effect' was identified. Because a useful distinction can be made
between innovative and non-innovative process improvements it is helpful to
define a process innovation as one where a novel (to the unit of adoption)
idea or methodology is applied deliberately to a sequence of activities
(Bessant and Francis, 1996).
Processes interact, sometimes in complex ways (Heygate, 1996). In a simple
organisation, for example a dentist's reception area,42 there may be processes
41

42

The term 'transformations' is derived from systems theory. Each process in an organisation
is conceptualised as a system with defined inputs, transformation processes and outputs.
Systems models have been influential since socio-technical systems (Trist, 1978) began to be
articulated in the 1950s and open systems planning was conceptualised in the 1960s
(McWhinney, 1972). At the strategic level Porter (1985) used the underlying philosophy in
his concept of the value chain. A more recent iteration of organisational analysis using the
systems metaphor is re-engineering (Hammer and Champy, 1993).
This example was suggested by comments in Roper (1996b).

93

in place for registering patients, keeping records, stock management, making

bookings, arranging rotas, logging staff time, arranging maintenance work,
cleaning the waiting room, reminding patients of forthcoming visits and so
on. At least some of these processes will be interdependent and core
processes like maintaining hygiene will be particularly important. Innovation
in processes in this relatively simple environment is unlikely to be coherently
manageddifferent agents will play distinctive roles and ideas for
improvement arise from a variety of sources. For example, there is a
likelihood that reception staff will notice weaknesses in some processes or see
opportunities and take initiatives to bring about improvements themselves
without reference to senior personnel (Hummel-Kohler and Kristof, 1997).
From time to time, problems or opportunities may occur that require a
formal review and changes will be made on a planned basis. The dentists,
who have the highest status in the system, will make suggestions or issue
instructionsas may patients and suppliers. Moreover, trade journals will
contain occasional articles on improving reception services that give
inspiration. The dental practice may decide to submit itself to an overarching
set of disciplines like ISO 9002.
It can be seen that ownership of innovation in processes in the dentist's
reception area is likely to be diffuse, even though there may be a practice
manager in a co-ordinating role (Sirkin and Jr., 1990). There are a variety of
sources of critical observations and improvement ideas and several ways in
which decisions are taken to initiate change. Such complexity in the
ownership of process innovation is typical although major processes, like the
layout of a new automated production line, will generally be managed using
a systematic approach. This is more difficult to achieve where sub-processes
evolve in a number of ad hoc ways (McHugh et al., 1995). Those directly
involved may be the best people to identify improvement possibilities and
effect change (Bessant, 1992). There can be multiple actors dealing with
multiple processes in multiple ways.
The diversity of agents playing roles in process innovation means that they
tend to develop without an overall coherence. Accordingly, they can be
inefficient, patchy and/or inherently contradictory. Approaches such as
business process re-engineering (Hammer and Champy, 1993) seek to

94

overcome such weaknesses, identify core processes and subject them to

intensive development.
Process innovation can be facilitated by systematic analysis and comparative
benchmarking. Specific techniques include: process mapping, activity analysis,
constraints analysis, kaizen, problem analysis, video recording, modelling,
time compression, statistical analysis, pilot experimentation, process
management, problem-solving fora and cost structure analysis. These
techniques have the effect of raising consciousness about problems and
opportunities, thereby increasing the probability that innovative initiatives
can be undertaken (Burgess, 1994).
Innovation in process can be divided into two categories: radical and
incremental (Preiss, 1997). Some process innovations can be revolutionary in
their impactthe use of the internet for product distribution by a publishing
company for example. Here technological change is often a major driver as it
opens windows of opportunity. A key issue for firms is whether to, when to,
and how to undertake radical process change since there are costs in making
changes and exiting from commitments already undertaken.
All parts of an organisation use processes. Waterman Jr. (1992) throws light
on a top team process: a form of process innovation rarely discussed in
literature on innovation management. Creativity can be employed, as was
demonstrated by a case example of the annual planning retreat of the top
management group at Raychem. He observed:
"The meeting began in the usual soporific way. Suddenly it was
interrupted by a horrendous racket. A fleet of helicopters,
bearing signs that read IMAGINATION, RISK-TAKING, landed
right outside the conference room. The pilots, dressed as prison
guards, strode into the meeting room and herded the group
members into the waiting helicopters, then flew them 50 miles
south to Big Sur. There they were met, oceanside, by a small
elephant wearing a sign forecasting Raychem's growth goals
throughout the 1980s. The elephant was followed by a string of
camels. More messages: IMAGINATION, TECHNICALPIONEERS. Last in line was a huge elephant announcing the
company's target growth rate for the early 1990s. By the end of
the retreat one big message was clear: Business as usual was out
at Raychem" (54).

95

This dramatic episode was intended to unfreeze the existing mind-set of

senior executives and "galvanise management" (54). Since the group at the
retreat were the primary decision-makers in the company it is reasonable to
assume that their values, beliefs, attitudes and routines play a significant role
in maintaining innovation capability (Ramqvist, 1994; Goleman, 2000).
Processes for determining strategic intent, firm's identity and development
goals are as susceptible as production processes to innovation (Francis and
Young, 1991).
Not all process innovations are within firms. Perry et al. (1999) describe a
form of process innovation at the level of the value stream or supply chain. In
the early 1990s the textile, clothing and footwear industries in Australia were
in danger of being overwhelmed by more efficient foreign suppliers. The
Australian government funded the 'Quick Response Program' to facilitate
increases in speed-to-market. This took the form of a series of workshops
that included participants from all components in a supply chain. The results
showed improvements of between 74% and 100% on key indicators over four
years (129). Interestingly, the development of mechanisms for open
communication were considered just as significant by participants as the
adoption of a standard for electronic data interchange.
Processes present a fertile and extensive set of targets for innovation. Multiple
small improvements can accumulate into large gains. Major processes can be
improved or re-engineered, perhaps incorporating new technologies. All
processes, including those at the strategic apex of the firm and within the
value stream, are potential candidates.
2.6.5

Innovation in position

The brief discussion in Section 2.4 of the re-positioning of the Lucozade brand
offered an example of positional innovation. A positional innovation does not
significantly affect the composition or functionality of the product43 but the
meaning of the product in the eyes of the potential customer (Kim and
Mauborgne, 1999a) and/or the market segments selected as targets.

43

Product attributes may be changed but these are minor compared with the revised
marketing stance.

96

Positional innovation is not mentioned by some commentators on innovation

management who prefer to adopt a narrower product-process definition.
Nevertheless, the realisation that innovation can be positional is supported by
some publications. For example, Guest et al. (1997) point out that, for some
products, "success depends on finding innovative ways of bringing to the
market products that appeal to potential buyers" (1).
It can be argued that the capacity of firms to be innovative in product
positioning has grown over the past 50 years for two main reasons. Firstly,
there has been an improvement in the prowess of marketing and advertising
agencies to construct meanings in potential customers enabled by their
increasing skills, availability of market research data and the proliferation of
means of persuasion (Tull and Hawkins, 1993). Secondly, low cost data
processing means that customer profiling can be elaborated, practical and
instant. Using this capacity presents specific management challenges. In a
mass market billions of pieces of information could be collected about
customers and potential customers but marketing decisions need to be based
on a limited number of salient factors, hopefully interpreted with brilliance
and insight. Kim and Mauborgne (1999b) suggest that managers need to
"(i)magine a market universe that is made up of known and unknown market
space" (16) and they argue that there is a need to "(b)reak free from
competitive convergence" (16).
Most cases of positional innovation relate to firms, brands or products.
However, institutions can go through the same process (Irons, 1993). For
example, the Labour party successfully positioned itself as New Labour
before the 1997 general election in the UK. This required a host of changes in
personalities, power-structures, policies and practices, apparently following a
similar change model to that adopted by commercial firms.
Product positioning can be summarised as 'what the firm would like typical
customers from targeted groups to feel and say about their product (and
company)'. There are many examples of successful positioning and
re-positioning (Gummesson, 1987). For example, the Daily Mail repositioned
itself as the leading newspaper in the UK for women readers in the 1980s, the
BBC repositioned itself as a global media corporation in the 1990s, Henley

97

Management College repositioned itself as Britain's largest internet-based

provider of MBA degrees between 1987 and 1993 and Manchester United FC
positioned itself as a fashion brand in 1994-6.
The central feature of an innovative product positioning strategy is the
management of identities, through advertising, marketing, media, packaging
and the manipulation of various signals. These topics are extensively
discussed in the literature of brand management (Doyle, 1997). Positional
innovation can change the characteristics of a market or create a market that
does not exist. An example is the global brand of ice creamHaagenDaz
(Joachimsthaler and Taugbol, 1995). This brand is owned by Grand
Metropolitan whose marketing specialists44 noted in the 1980s that ice-cream
was associated with children or unsophisticated adults. They decided to create
a hitherto unknown productan ice-cream for sophisticated adults that fell
into the category of an 'affordable luxury'. Many initiatives followed,
including product formulation, packaging, advertising, selection of
distribution channels and global product standardisation codes. Haagen-Daz
has become a global brand of adult ice-cream and tapped a new market. The
case suggests that product identity can be as significant as tangible product
attributes. Some positional innovations are so radical in thinking that they
could be considered to be innovations in paradigm (discussed below)the
development of HaagenDaz ice cream would be an example, as neither the
concept of an adult ice cream, nor the ambition of global branding for ice
cream, had been previously developed it required multiple innovations of
mind-set to launch and develop the product.
Product positioning includes the four elements of innovation
(ideaadoptionapplicationbenefit) and may excel at the first stage
(Beatty, 1997). For example, some would use the word 'brilliant' for the
notion of associating a leading brand of toilet paper with the gentleness of a
puppy or connecting a brand of petrol (perhaps the ultimate commodity
product) with the vitality of a tiger. The final element in the innovation
process, harvesting benefits, is difficult to evaluate but this can be attempted
(Tull and Hawkins, 1993).
44

Additional information regarding this case was gathered from an ex-marketing manager of
Haagen-Daz in confidence by the researcher.

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Firms can seek build a distinctive market position by the management of

identity. It is a frequent occurrence to hear a person choosing to buy a
product as it comes from Sony, Gap or Harrods. In these cases the firm itself
can be seen as 'a brand. Kim and Mauborgne (1999c) discuss the case of
Southwest Airlines and comment that by:
"focussing on the key discriminating factors of both flying and
driving, and by eliminating everything else, Southwest has
inserted itself creatively between airlines and surface transport,
thereby creating a new and highly profitable market" (16).
It is significant that the word 'creatively' is used in the assessment of
Southwest's strategic processes. Kim and Mauborgne assert that the
company's possessed a superior ability to perceive a latent need and devise a
business system to fulfil it. This is an example of positional innovation and
Southwest's new business model was, arguably, an innovation in paradigm
(see below)demonstrating that the two can be interdependent. More
generally, Kim and Mauborgne suggest that it "is in the space between
substitute industries that tremendous opportunities exist for creating new
markets" (16). If this is correct, then positional innovation is particularly
significant.
2.6.6

Innovation in paradigm

This final 'P' is more contentious. Not all scholars support the notion that
'paradigm' is a legitimate target for innovation capability. However, it is not
unknown, for example Rickards (1999) observes:
"Today the term 'paradigm' has found its way into the
vocabulary of organizational management, in such terms as
'paradigm switch' and 'paradigm breakthrough'. The
expressions are broadly taken to imply that a traditional belief
systemthe old paradigmhas been replaced by a new way of
understanding, a new paradigm" (11-12).
Rickards locates paradigms in the (collective) belief system of a firm and notes
that these can change, perhaps fundamentally. This view concurs with that of
Kuhn (1970) who explored the role of paradigm in the context of scientific
enquiry. Kuhn's definition of the term includes a "paradigm is an accepted
model or pattern" (23) and "if I am talking at all about intuitions, they are not
individual. Rather they are the tested and shared possessions of the members

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of a successful group, and the novice acquires them through training as part
of his preparation for group-membership" (191).
Kuhn's discussion of paradigms emphasises their significance as social and
psychological constructs. Paradigms affect how people think, what they
perceive and what they take for granted. In the relatively closed intellectual
world of a scientific discipline there is, typically, a dominant paradigm. In the
more equivocal world of organisational effectiveness there may be multiple
paradigms,45 perhaps ambiguous, indistinct and influenced by wider
contingency factors (religion, national culture, economic situation etc.). Kuhn
points out, "paradigm changes do cause scientists to see the world of their
research-engagement differently" (111). In short, paradigm change is
revolutionary and, therefore, is relevant to the study of innovation.
Ring (1989) supports this point with his discussion of 'sensemaking' which he
describes as "an enactment process in which organizational participants come
to appreciate the nature and purpose of a transaction with others by
reshaping or clarifying the identity of their own organisation" (180).
The collective mind-set of the organisation, referred to by Professor Yves Doz
as the 'organisational orthodoxy',46 has a sensemaking function. But it is not
always functional as it can persist beyond the point of relevance. As
Grove (1998) points out, there are times ('strategic inflection points') when
managers may know that their current approach is failing but may not know
what new paradigm to adopt. Here a 'pre-framing' activity can be
requiredthat can be termed 'exploration', 'learning' or 'entering a void'.
Innovation in paradigm includes a requirement for learning, including
self-reflection (Kolb, 1983b) and/or discourse. In a metaphorical sense it is
necessary for actors in an organisation to 'look into the mirror' and see
themselves as having adopted just one of several options in the way that they
have framed reality and opportunity. Here reflection is a key enabler and the
level needs to be deep and, potentially, transmutational (Cooperrider and
Srivastva, 1987).

45

46

Examples include: scientific management, lean production, project-based organisations,

theory X, TQM and the like.
Personal communication.

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Although there is a significant degree of fuzziness in definition, it is useful to

categorise two types of innovation in paradigm. These are:

Type Ainnovation in inner-directed47 paradigms

Type Binnovation in outer-directed paradigms (business models)

2.6.6.1 Type Ainner-directed paradigms

Type A innovation capabilities targets organisational values and people
management policies. Abrahamson (1991) calls these 'administrative
technologies'. These can be important as, for example, Steele (1975) asserted
"(o)ne of the most important concepts to emerge from behavioral science
consulting is, in my opinion, the notion of social invention. This is simply the
realisation that social settings do not have to be taken only as they occur by
chance" (129).
The significance of changes in inner-directed paradigm is underlined by
Binney and Williams (1997) who suggest:
"Underlying the patterns of behaviour that define organisations
are the mental models that people have, the assumptions and
frameworks that enable them to make sense of the world it is
these mental models or paradigms that ultimately organisations
have sought to change" (12).
There are cases in which such 'mental models' appear to have changed. In the
late 1960s, General Foods (GF) had a low performing dog food plant in
Chicago. In 1969 the company decided to relocate the factory on a greenfield
site in Topeka, Kansas and to use the new plant as a laboratory for innovative
forms of work organisation including autonomous work groups, payment
for skills, commitment to the quality of work life, operator-led problem
solving, participative decision-making and non-authoritarian leadership styles
(Ketchum and Trist, 1992). The initiative was led by the factory director, Ed
Dulworth,48 and supported by Professor Richard Walton as a facilitator
(Walton, 1977).

47
48

The concept of inner-directed and outer-directed is adapted from Riesman et al. (1953)
Two tape recorded interviews between Ed Dulworth and the researcher (1973 and 1975)
were consulted in preparation for this section of the thesis.

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This was one of the first experiments in 'innovative work organisations' to be

the subject of systematic research and was managed according to a distinctive
set of values, many of which were derived from a socio-technical systems
framework (Trist, 1978). The socio-technical experiment at Topeka stimulated
root-and-branch innovation in the social organisation of a factory. According
to Dulworth, in consequence, a wealth of process innovations followed which
resulted in superior performance and gave employees an enriched experience
of work. The adoption of a new organisational paradigm is more than a
process innovation (discussed above) as it requires a shift in values and
associated power structures. In the case of the Topeka GF plant, many
processes were revolutionisedas Dulworth said in an interview with this
researcher, "we challenged all of the givens". The case also highlights another
important aspect of innovation. It can service other stakeholders than the
management, shareholders and customers. Employees can also benefit
(Ketchum, 1974).
The Topeka case, and similar experiments in organisational form, had
innovation as a superordinate goal. This was pointed out by Ketchum and
Trist (1992) who was organisation development manager for GF during the
1970s. Ketchum wrote twenty years later:
"equally important is the replacement of a climate of low risk
taking with one of innovation. This implies high trust and
openness in relations. All of these qualities are mandatory if we
are to transform traditional technocrat bureaucracies into
continuous adaptive learning systems" (42).
Ketchum and Trist described the origins of the 'new' paradigm in the 1970s,
which they termed 'third-order diagnosis of problems of organisational
performance'. Importantly, industrial plants that adopted this new paradigm
were up to 40% more productive than their counterparts (21) at the time
when a financial evaluation was conducted. Ketchum and Trist describe these
as "organizational innovations" (32).
The underlying principle in Ketchum's observation is that bureaucracy is
unfriendly to innovation. Somewhat contentiously he, and others, for
example Nutt and Backoff (1997), argue that innovation capability cannot be
achieved by the installation of systematic management of new product and
process development. Rather, the fundamental social architecture of

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organisation needs to be rebuilt to be 'innovation friendly' (Hurst, 1995).

Equally disadvantageous, in their view, was the alienating and de-humanising
effect of working in a bureaucratic form of organisation where individuality
was perceived as a threat (see Beynon, 1973 for a vivid description of this
form of social setting).
Thus far an inner-directed paradigm shift has been discussed as if it were a
single event. There is evidence that a flow of paradigm changes, a form of
episodic revolution in paradigms, is neededat least in some industries. This
is suggested by comments on Microsoft from one of its senior managers:
"what distinguishes Microsoft is that we're not afraid of making
paradigm shifts, largely because our senior management is very
technical. We understand the technology, which at the end of
the day is really what drives the industry." (Cusumano and
Selby, 1996: 56)
Cusumano implies that paradigms can be managed, and that it can be
important to do so. It is reasonable to assume that explicit paradigm
management would be especially important in industries where the structure
of thinking is advancing in generational ways.
2.6.6.2 Type Binnovation in outer-directed paradigms (business models)
Type B innovations of paradigm relate to business modelsthese are the
system of coherent, comprehensive, explicit and/or implicit constructs used
by managers to understand their firm and shape its development (Senge,
1992).
This form of innovation in paradigm is outer-directed in the sense that it
seeks to provide an organisational formula for thriving in, generally, a
competitive environment. Hence, the test of the efficacy of a business model
is whether it provides the necessary conceptual architecture for a firm to gain
and sustain competitive advantage. As such, it is more extensive than the
market-facing positional innovation discussed above. An early
comprehensive approach to strategic positioning was mentioned in
Section 2.5.2 and described in Tregoe and Zimmerman (1982). They argued
that firms need a Driving Force (a dominant paradigm) and that they can

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only have one at a time. Tregeo and Zimmerman described 849 different
possible driving forces, each of which required a distinctive pattern of assets,
capabilities and strategies. The relationship between the Driving Force
concept and innovation capability was discussed by Tregoe et al. (1989):
"There is a wide range of opportunities for future business
development facing just about every organization: deeper
penetration of existing markets with existing or improved
products; expanding to new markets with current or improved
products; developing or acquiring new products for current
markets; developing new products for new markets. No
organization can pursue all future business development
options simultaneously. If it does, scarce resources become
dissipated, as do the creativity and energy of those involved.
Focus is lost, and with it the discipline to achieve the vision" (39).
Slywotzky et al. (1999) extended this approach and argue that there are
unifying principles around which a firm's activities need to be aligned. It is
possible, Slywotzky et al. argue, to identify 30 or so patterns, several of which
may be unfolding at the same time. They argue that what is frequently
needed is innovation at the level of business designthe structure of thinking
shared by the power elite of the firm that determines policy and practice.
Describing firms that had found their way out of a profitless position (for
example, Swatch) Slywotzky and his co-authors write:
"In each of these cases, business design innovation brought the
business back to sustained profitability. In each of these cases, at
least one player created a paradigm shift, a change in the rules
of the game, in order to create new kinds of value that had not
previously existed in the industry" (63).
There can be multiple innovations to be undertaken in pursuit of a new
business design, each of which is aligned to the new meta-patterns selected.
This raises the interesting issue of how alignment is to be managed of a rapid
flow of innovation initiatives in product, process, (market) position and
(organisational) paradigm.
The choice of business model shapes innovations in product, process and
position. The Slywotzky framework provides an intermediate level of
49

Unfortunately for academic researchers the Driving Force concept is company-confidential

as it is used as the foundation for an extensive strategic consulting business. This researcher
wrote to the parent company requesting access to their research. The company were
forthcoming with published material but would not allow access to their extensive case

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analysis between the generic dynamic resource of innovation capability and

the specific needs of a particular organisation. Rather than saying "all
organisations are the same" or "all organisations are different" the approach
asserts that "you need to understand what your dominant strategic thrust is
and the attributes that firms in your classification need. How effective are you
in each of these?"
A change in business model can have revolutionary implications. Keith Todd,
Chief Executive of ICL, commented on the extent of change in the company
in the following way: "ICL started as a manufacturing company. Now it has
no factorieswe put together service products. For companies like ours,
these are fundamental discontinuities. They're on the scale of the Berlin Wall
coming down" (Jackson, 1998: 15).
Sub-systems within organisations can also be the targets for paradigm
innovation. Indeed, they are a natural location. For example, a training
function may move from promoting a business school-based approach to
executive education to running an in-house action learning programme
(Ulrich, 1997) or a finance function may move from cost analysis to activity
based costing (Srinidhi, 1998). Such paradigm shifts can be the spur for
multiple innovative initiatives (Ulrich, 1995).
Perhaps the most dramatic forms of reconfiguration business model follows
acquisitions, mergers, joint ventures and alliances. These may be undertaken
specifically to provide an appropriate resource base for innovation, as seems,
for example, to have been the rationale for the merger between AOL and
Time Warner, described (Hill and Waters, 2000) as "revolutionising the way
that news, entertainment and the internet are delivered to the home" (1). In
this case the internet distribution capability of AOL was merged with the
content provider, Time Warner, following a 'convergence strategy'.
Innovation in business models has become topical at the time of writing as
many firms seek to transform their operations and use the potential of the
internet for commercial advantage. This requires, in some cases, radical
changes in the ways that businesses are structured, conceptualised and
conducted.
library.

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2.6.7

4Psorganisational implications

Mintzberg (1983a) provided a model that assists in understanding the

organisational context of the 4Ps framework. Elaborating from Mintzberg's
analysis, it is possible to define nine sources of innovation. These are shown in
the table below with illustrations of the functions that they may perform.
Table 2.8: sources of innovation (following Mintzberg)
Sources

Examples related to the 4Ps framework

Strategic Apex

'Big' ideas, paradigm changes and commitment decisions (P4)

Technostructure

Technologically advanced ideas (P14)

Middle Line

Process developments (P3)

Support

Process developments (P3)

Operating Core

Product and process developments (P1,2)

Downstream Suppliers

Technological and value stream ideas (P1, 2, 4)

Upstream Distributors

Customer-driven ideas (P1, 4)

Advisers and Researchers

Paradigm and 'out of the box' ideas (P4)

Ad hoc groups

Paradigm and 'out of the box' ideas. Cross-functional improvement (P14)

Although the model is simplistic, it suggests that the innovation agenda and
innovation processes differ in different parts of a firm. If this framework
incorporated a strategic dimension (as discussed above) then it might be
possible to determine the 'innovation entitlement' from each part of an
organisation. However, as far as this researcher is aware, this has not yet
been done.

2.7

Innovation capability

Above it was suggested that some firms are better than others in generating
ideas, selecting ideas that create or add value to the firm and its customers,
managing ideas into practice and exploiting potential benefits. This statement
provided an initial definition of high innovation capability. However, the
'high-level' statement needs to be elaborated before it can provide an
adequate definition of innovation capability.
2.7.1

What is a capability?

As discussed in Section 2.5.2, resources, dynamic capabilities, competencies

and competitive advantage appear to be overlapping constructs and as

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Hales (1999) points out, "the terms are very variable in usage" (2). As stated
earlier in footnote 22, in this work the term 'capability' is considered to mean
'possessing, or being able to acquire, all that is necessary to accomplish
complex or important tasks to world-class standards'. This definition is similar
to that used by the US Army (Lengy, 1996). Klemp Jr. (1980) cited in
Boyatzis (1982) postulated that there are "an underlying set of
characteristics which results in effective/superior performance" (21). Since a
capability can be considered to be 'a set of underlying characteristics' (rather
as physical fitness underlies the performance of a boxer) there are difficulties
in using the term 'capability' in relation to innovation. Four issues are
particularly relevant:
1. Innovation capability is an enabling set of attributes and is detectable only
when exploitedthis makes it difficult, or impossible, to measure
accurately.
2. Innovation capability possibly requires a combination of factors, both
hard and soft, interacting in a complex gestaltaccordingly attempts to
desegregate elements for analysis may destroy meaning.
3. Innovation capability itself may not be unitary and may vary between
organisational levels, configurations, national or firm-specific cultures,
distinctive strategies, different threat levels, technological complexity or
other factors.
4. Innovation capability can be seen as 'energising or dynamic force' within
an organisation (Schein, 1996) but empirical frameworks for studying or
developing organisations as 'energy systems' are scarce (Morgan, 1986
and 1989).

107

Despite conceptual difficulties it is necessary to attempt to define innovation

capability since it has been shown to be an important, perhaps vital, element
in organisational effectiveness. However, any codification is likely to be
inadequate as it will tend to oversimplify the situation that de Ven and
Angle (1989) describe in the following observation:
"re-invention, proliferation, re-implementation, discarding and
termination many entrepreneurs, distracted, fluidly engaging
and disengaging over time in a variety of organizational roles
(an) expanding and contracting network of partisan
stakeholders diverging and converging on ideas innovation
process constrained by and creates multiple enacted
environments final result may be indeterminate; multiple
in-process assessments and spinoffs; integration of new orders
with old from simple to multiple progressions of divergent,
parallel, and convergent paths, some of which are related and
cumulative, others not" (11).
de Ven et al. go on to say that "(t)his 'fuzzy set' epitomizes the general
environment for innovation, as multiple environments are 'enacted'" (12).
Trott (1998) suggests that, whatever the level of uncertainty:
"(w)ithin organisations there is a fundamental tension between
the need for stability and the need for creativity. On the one
hand, companies require stability and static routines to
accomplish daily tasks efficiently and quickly. On the other
hand, companies also need to develop new ideas and new
products to be competitive in the future" (35).
However, managers have to do their best. Innovation is important and
cannot be placed in the 'too difficult' basket. Many observers suggest that
innovation requires a distinctive stance to management. Hirshberg (1998),
writing as the director of Nissan's Design Facility in San Diego, which is noted
for its prowess in innovation, suggests that high innovation capability is a
rarely found attribute:
"While the creative process is essential to the health and success
of any corporation, it is rare to find a company both willing and
agile enough to its seemingly odd and unpredictable rhythms"
(13).
Hirshberg argues that high innovation capability is an orchidit requires a
special combination of circumstances to thrive. In the light of research on
continuous improvement (Bessant, 1997c) Hirshberg's viewpoint seems
excessively pessimistic. Innovation can become commonplace, at least at the

108

incremental level (Japan Human Relations Association, 1992). From this

viewpoint, high innovation capability is neither an orchid nor a weedit is a
vine that needs careful tendering but can grow, and yield ample fruit, in most
gardens given the right conditions.
2.7.2

Elements of innovation capability

Just as one swallow does not make a summer, neither does one innovation
make an innovative organisation. LeonardBarton (1995) presented a study
of Chaparral Steel (5-16) prior to her discussion of core capabilities. A content
analysis of this case suggests it is possible to define innovation capability as
having ten interconnected attributes (although LeonardBarton limits her
own analysis to "core technological capabilities" (16). The definitions below
have been supplemented with case material from Cusumano and
Selby (1996), Magretta (1998), Sculley (1988) and Semler (1993), and are shown
in Figure 2.4 below:
SOURCES
Ubiquitious

METHODS

Ample
Creative
Directed (partly)

Fast
Efficient
Selectively adopted
Fits organisation

OUTCOMES
Creates value
Builds competencies

Innovation both leads and follows strategy

Figure 2.4: characteristics of high innovation capability

The figure divides innovation capability into sources, methods and outcomes.
The double-headed arrow represents a reciprocal push from innovation
towards a firm's strategy and a push from a firm's strategic commitments to
determine the firm's innovation agenda. The ten elements are briefly
described in the table below:

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Table 2.9: elements of innovation capability

Element

Description

Ubiquitous

Innovation can be initiated and implemented anywhere in a firm. Firms with

high innovation capability enable innovation to take place in multiple
places (Semler, 1993).

Ample

The quantity of innovation initiatives is sufficient to maintain the firm's

renewal process to provide 'world-class' performance. Toyota, for
example, benefited from an estimated 2 million suggestions per year
(Yasuda, 1991).

Creative

The quality of innovation initiatives (both radical and incremental) exploits

individual and group creativity (Rickards and Moger, 1999).

Directed
(partly)

Innovation assists the firm to achieve its strategic development agenda.

However, innovation can also develop new strategies (Porter, 1980).

Fast

Innovation initiatives can be speedily realised (Millson et al., 1992).

Efficient

Every innovative initiative is likely to incur costs and deprive other activities
in the firm of funds and/or other resources. It is important that the value
created exceeds the cost incurred (Srinidhi, 1998).

Selectively
adopted

Firms have at least a notional 'innovation capacity'. Only so much can be

done at once (Bower, 1970). When innovation capacity is exceeded then
the organisation can be overwhelmed by its developmental agenda.

Fits
organisation

Innovation initiatives can be assimilated by the operations of the firm

(Mintzberg, 1987).

Creates value

Innovation enhances the firm's offer to customers and potential customers

(Porter, 1985). Firms could undertake many innovative initiatives, without
addressing key issues which critically affect the future competitive strength
of the firm (Utterback, 1994).

Builds
competencies

Competencies enable a firm to have a broader range of options and be

close to what Porter (1996) describes as a 'productivity frontier' "that
constitutes the sum of all existing best practices at any point in time" (62).

Sources

Methods

Outcomes

These elements provide a preliminary definition of high innovation capability.

It has been assumed, for the purpose of this research, that all elements may
be significant and are probably interdependent. The development of high
innovation capability within the firm is not the only way to achieve the
outcomes mentioned. For example, a staid but wealthy pharmaceutical
company may purchase a dynamic biotechnology firm and achieve a superior
flow of innovation initiatives. In this case the pharmaceutical company has
acquired innovation outcomes without developing high innovation capability
itself (King, 1995).
A body of literature suggests that 'full' innovation capability requires
top-down, side-in and bottom-up processes along with a generalised
capability that combines cultural dimensions, specific assets with individual
and collective skills (Nonaka, 1991; de Bono, 1980; Amabile et al., 1996 and

110

Maslow, 1954). These can be analysed in terms of norms, assets, technologies

and skills.
2.7.3

Norms, Assets, Technologies and Skills (NATS)

Some change agents suggest that innovation capability50 requires specific

norms, assets, skills and technologies. If this is correct then it provides a
helpful framework for defining innovation capability more precisely.
A 'norm' can be considered as something people can be relied on to
dogenerally codified into a routine by the culture of the firm (see Broom
and Selznick, 1958: 5260 for an introduction to the topic). The notion of a
routine is reviewed extensively in Stokes et al. (1996). An 'asset' is any item
which has a financial cost or a value on a firm's balance sheet (Kaplan and
Norton, 1996). A 'technology' is a cluster of integrated codified knowledge that
enables complex and/or important things to be done with predictable
reliability (Brady, 1995). A 'skill' is all that it takes for people to be able and
willing to perform specialised tasks to world-class standards (Rae, 1991).
The NATS categorisation provides a format for answering the question 'what
do we need to take an innovative initiative forward?' For example, if a sales
force is going to move to internet-based sales forecasts (a process innovation)
it is constructive to ask:

What new or different norms are needed?

What new or different assets are needed?

What new or different technologies are needed?

What new or different skills are needed?

Discussion of assets and technologies will not be undertaken here as the focus
of this research is behaviourial and organisational. However, it is important
to note that assets and technologies play an important, sometimes vital, part
in facilitating innovation. The menu of NATS needed will, to some extent, be
issue-, firm- and time-specific. NATS may differ from firm to firm and from
department to department. NATS are affected by situation, types of
50

The author wishes to record his thanks to Dr Jim Wright of SmithKline Beecham for his
assistance in the elaboration of this framework.

111

innovation, technological trajectories, priorities and the availability of

resources. The norms, assets, technologies and skills framework can be
complex; however, it provides an approach to help managers to understand
the organisational and behaviourial requirements of specific and multiple
innovation initiatives (see Mumford, 1991 for a description of a similar
model).
As far as this researcher is aware the categorisation of enabling initiatives into
the NATS framework is novel but the notion is not. For example,
Amabile's (1998) study of the relationship between organisational
characteristics and creativity lists six management practices that affect
creativity (80). These attributes map onto a NATS framework as shown in the
table below:
Table 2.10: comparing NATS and Amabile's categories
NATS

Amabile's categories

Norms

challenge, freedom, work-group features

Assets

resources, organisational support

Technologies
Skills

supervisory encouragement

The NATS framework is speculative but provides a means of integrating

existing strands of research. If further research supports the framework it
could prove beneficial to managers and change agents since it provides a
simple format for identifying behavioural-specific attributes that are
susceptible to training (Jones et al., 1996).

2.8

Contingency factors

Innovation capability may, at least in part, may be affected by the rate and
sophistication of industry evolution, a firm's accumulated experience in
innovation practice (Freeman, 1994), firm's size (Greiner, 1998), the scope of
innovation undertaken (Wheelwright and Clark, 1992), degree of formality
(Pearson, 1997) and/or other factors. If this is correct then innovation
capability may, at least in part, be contingent upon situational factors and not
a universalistic property.

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In Section 2.2 Tidd et al. (1997) were cited suggesting that there was a
recognisable entitythe "innovative firm" but this viewpoint could be
incorrect. It may be that different firms require different forms of innovation
capability. One contingency model that suggests otherwise is that of
Mintzberg (1989) whose explorations of organisational configurations have
been subjected to considerable scrutiny. Mintzberg's model has the merit that
it covers several contingency factors and provides clear differentiation
between organisational forms. A recent version of the model, published in
Mintzberg et al. (1998b) provides an up-to-date articulation of the model.
Mintzberg argues that there are six distinct organisational configurations or
forms (originally only five were identified). These are: the entrepreneurial
form (originally termed 'simple structure'), the machine form (originally
termed 'machine bureaucracy'), the professional form (originally termed
'professional bureaucracy'), the diversified form (originally termed
'divisionalised'), the innovative form (originally termed 'adhocracy') and
missionary form (which was not included in the early formulations of the
model. These organisational configurations vary by co-ordinating
mechanisms, key part of the organisation, dominant ethos, control
methodology, type of decentralisation and other variables (see pages 347357
of Mintzberg et al. (1998b) for an elaboration of these categories).
Mintzberg argues that innovation proceeds differently in each of the
organisational forms. If this is correct then it has considerably relevance for
this research. It may be that the development of a single programme for
enhancing innovation capability is an over-simplistic, perhaps misguided, aim.
A researcher has to remain open to the idea that the phenomenon being
studied may not be unitary and may have contingent dimensions.

2.9

Theoretical integration

From the review of the literature undertaken, it was possible for the
researcher to summarise the key points related to innovation capability, as
shown in Figure 2.5 below.

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Innovation for
Positional
Advantage

"The firm's strategy

process supports
innovation"

Innovation for
Sticky and
Generative Core
Competencies

Innovation as 'a
way of life'

"Innovation
capability is
improving"

Innovation for
Realisation of
Opportunities

"Processes are
well managed"

Acquire

Adopt

Apply

Exploit

Learn

HIGH INNOVATION
CAPABILITY
"Sufficient
innovation is
happening"

Ubiquitious
Ample
Creative
Directed (partly)
Fast
Efficient
Selectively adopted
Fits organisation

"Innovation- specific
resources are in place"

Creates value
Builds
competencies

Double Loop
Learning

Position
"Innovation
capability is
targeted where
value can be
created"

Product

Process

Paradigm

Figure 2.5: perspectives on innovation capability

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This figure integrates the frameworks described in this chapter but presents a
simplified model. An additional dimension mentioned several times during
the explication has been addeda learning loop from targeting to strategy.
Double loop learning (Argyris, 1977) enables a firm assess whether strategic
intents and organisational development goals are both informed from, and
fulfilled by, innovation processes.
As mentioned in Section 1.7, this integrated framework provided a set of
orienting concepts following adaptive theory approach of Layder (1998). The
aim was to adopt the principle that "the best use of individual concepts drawn
from a wider body of theory or knowledge is as a means of cranking up the
process of theorizingeither by elaborating on extant theory or by
generating theory in relation to the research evidence" (23-24). Accordingly,
the elements in the model were worded as questions51 providing a
framework for the empirical research that will be described in Chapter 4. The
methodology adopted for this is described in the next chapter.

51

This model provided the basis for the research questionnaire, see Appendix 1.

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Chapter 3
Data and methodologies
3.1

Overview

This chapter begins with a discussion of methodological issues relevant to this

research. A rationale is provided for the selection of methodologies adopted
and the researcher's strategy is discussed. The chapter concludes with a
review of interaction between the research undertaken and the researcher's
learning. In conclusion, limitations of the research are noted. For clarity, some
detailed methodological considerations are dealt in the next chapter.

3.2

Methodological context

Methodologies are toolsorientations and routines used by researchers to

further the development of substantive knowledge to those who share their
specialisation and, possibly, for other audiences as well (Silverman, 2000). To
some extent methodologies are discipline-specific. They can assist researchers
working in the field of organisation studies for several reasons, including that
they:

provide a discipline for data collection and interpretation that has been
subject to epistemological scrutiny. This increases the probability that
research will be comprehensive, accurate and insightful, thereby
possessing greater value than a lay view in terms of its faithfulness to the
phenomena studied and the validity of the indicator-concept linkages;

assist scholars to have their work assessed or validated by others. This

helps to ensure that research is conducted with rigour, care, sensitivity,
and methodological coherence thereby contributing to an accumulating
body of knowledge in the field;

offer a structured process for a researcher that assists in the management

of work tasks;

offer end-users (in this case managers) disciplined research rather than
anecdotal or speculative material.

The last point raises questions about the role of research in management
practice. This is particularly relevant as one of the objectives (see Chapter 1)
was to produce a work that managers find useful. It has been observed that

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managers are not noted for their eagerness to base their decisions on
research-based theories (EasterbySmith et al., 1991). Mintzberg (1973) points
out that the policies and practices of management are influenced by many
factors other than academic research (however, see McNally et al., 1996 for an
example of where research has been used).
A partial explanation of the relatively low status of research in the eyes of
managers is provided by Mintzberg (1987) who described management as a
'craft'combining science, art, accumulated experience, love of materials
used, disciplines and 'mysteries' learnt from masters. Craftspeople view
research-based knowledge as another input, rather than an overarching
discipline. From this perspective, a researcher can be a contributor to practice,
but one who has less stature than a master of the craft.
The caution with which managers appear to view research is not a matter of
concern if the analogy of management as a craft is adopted. It suggests that
the researcher needs to accept the role that facilitating authoritative discourse
is a worthwhile endeavour, as Egan (1985) puts it "without taking over
responsibility for a task, help others to get it done" (14). A potter (the example
used in Mintzberg's paper) would not turn to a person, no matter how
scientifically or academically qualified, who had never made a pot for overall
direction, although s/he might consider using specific findings to improve
their practice.
This researcher considered that it was a worthwhile aim to help managers to
consider a new body of perspectives and information and relate this to their
organisationin short, to be a catalyst and an adviser. Accordingly, he
adopted a process consultation perspective, based on Schein (1988) who
clarified the role in the following way:
"The process consultant seeks to give the client insight into what
is going on around him, within him, and between him and other
people. Based on such insight, the consultant then helps the
client to figure out what he should do about the situation. But
the core of this model is that the client must be helped to be
'pro-active', in the sense of retaining both the diagnostic and
remedial initiative" (11).

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A commitment to a process consultation perspective meant that the research

methodologies adopted needed to facilitate the processes described by Schein.
Accordingly, the criteria for selecting methodologies included:

is the research process likely to 'give the client (new) insight'?

is the research process likely to help 'the client52 to figure out what s/he
should do about the situation'?

Process consultation could provide an intervention model but not a research

methodology. From the discussion in Chapter 2 regarding the nature of
innovation capability it was considered that it would be necessary to find
ways to relate several bodies of knowledge to a broad organisational
capability (since, as discussed in Chapter 2, innovation affects multiple
activities in multiple ways). It became clear that a single research method was
unlikely to be sufficienta research strategy would be needed that could
combine methods synergistically. However, before an appropriate portfolio
of methods could be selected it was important to question how it might be
possible to study an underlying organisational attribute.
3.2.1

The person of the researcher

As the phenomena being studied could not be easily seen or measured, the
person of the researcher becomes more influential. It is widely considered
that a researcher in the social sciences cannot be an impartial observer and
s/he brings a personal history, preconceptions, stances, values, sensitivities
and theoretical affiliations to the research process (Altheide and Johnson,
1990). This is especially significant when qualitative rather than quantitative
research is undertaken (Silverman, 2000). The person of the researcher can
affect the conduct of research at every stage but this is not, necessarily,
negative, as Denzin and Lincoln (1990) point out:
"The bricoleur (qualitative researcher) understands that research
is an interactive process shaped by his or her personal history,
biography, gender, social class, race and ethnicity, and those of
people in the setting" (3) (authors' italics).
Accordingly, if the personal characteristics of the researcher are made explicit
they can enhance the research process since they provide a distinctive but
52

In this research the term 'client' is taken to mean a manager.

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explicit way of ascribing meaning. For example, a researcher coming from a

feminist perspective examining behaviour in male prisons may detect cultural
stereotypes that researchers from other perspectives would not observe
(Olesen, 1990). However, acceptance of the person as an active influence can
undermine the integrity of the research process since s/he may selectively
screen out data, label prejudicially, build unwarranted linkages or interpret
data selective ways and develop an coherent but invalid case that supports
his/her viewpoints. Incorporating the person into the research process can
add to the value of the research but also imbue it with bias.
This researcher accepts that his personal stance, biography, skills, value
positions and other characteristics have shaped the ontological,
epistemological and methodological positions adopted. Accordingly, at an
early stage, he sought to clarify personal characteristics and value stances that
were likely to affect the conduct of this research. Hopefully, this enhanced the
researcher's 'theoretical sensitivity' (Strauss and Corbin, 1990b). The principal
personal characteristics and stances that were believed could influence the
conduct of this research are outlined in the table below, based an approach
outlined by Layder (1998):
Table 3.1: biographical factors influencing research
Researcher's personal characteristics
and stances

Possible effects

Believes that 'management is a craft'

(Francis, 1989)

The research will be seen as a contribution to practice rather

than 'a thing apart'. May result in excessive respect given to
'masters of the craft'.

Is male

The feminist paradigm will be under-explored.

Has a career spent in organisation

development from a humanistic
perspective

There will be an emphasis on the human side of the enterprise.

The research will be optimistic about possibilities but ignorant of
technological aspects.

Has worked as a strategy consultant

The research will seek to build links between strategy and

innovation but not innovation and operations.

Originally trained as a sociologist in

the Leicester School

The sociological thinking of Professor Elias et al. will provide a

basic interpretative framework. There will be a bias towards
model building.

Considers that hierarchical

organisations can be functional

Radical organisational models will be unlikely to be developed.

Adopts a process consultation

perspective

Concern for the communicability of the research findings may

cause over-simplification.

Is, generally, respectful towards

managers

The research is likely to be supportive towards management and

accept the assumptions and value-positions of the managerial
elite.

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The researcher attempted to be aware of biographic influencing factors

throughout. But there were surely occasions when an interpretation was
made that escaped full scrutiny. Another researcher, with the same data set,
may have developed a different interpretative and/or theoretical framework.
This researcher was not value-freefor example, he believes that people
have a right to be well managed. At the deepest level this research was, in
part, an endeavour to help this to happen.
Schn (1983) observed that a researcher "does not keep means and ends
separate" (68). This can provide another source of subjectivity. Maintaining a
dialogue between means and ends may shape and/or bias the researcher's
perspectives, perhaps unconsciously, and require 'a result' delivered to a
predetermined time scale rather than allowing time for a full exploration of
the data and related conceptualisation. The requirement to come to 'a result'
may also lead to unwarranted claims being made for findings, conceptual
models and predictive statementsin other words, a commitment to the
pragmatic may lead to 'bad science'.
However, there are methodological benefits in focusing on ends and means
together and coming to 'a result'. There is, arguably, a greater possibility that
the output of the research will be of use to the practitioners for whom, in
part, it was intended, since their interests are considered throughout the
process. Seeking to achieve 'a result' delivered to a predetermined time scale
would enable the research to be tested, at least in a preliminary way, thereby
establishing a learning loop between reflection and action. For this research it
was considered that ends and means would be considered together.

3.3

The research task

Silverman (2000) describes three forms of research "theoretical,

methodological and empirical" (233). It is useful to consider into which of
these categories this research can be lodged.

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As mentioned in Section 1.6, the intent statement for this research, written in
June 1995, was:
'to provide an intervention process for enhancing innovation
capability that managers would find practical, relevant and
developmental'.
The statement was concerned with deliverables, specifically to provide an
intervention process of utility to managers in firms. In order to do this two
research tasks needed to be undertaken.

Firstly, to determine what (high) innovation capability was;

Secondly, to identify ways by which it could be enhanced.

These could be either theoretical or empirical research tasks, depending on

whether or not new studies were undertaken. In Section 2.9, Figure 2.5
integrated a number of contributions into a single framework describing
innovation capability. Reviewing this framework it seemed too broad to 'give
the client insight' or help 'the client to figure out what s/he should do about
the situation'.
Within the scope of this research it was decided that the first task ('to
determine what (high) innovation capability was') would be the major
commitment of this research as this provided a conceptual foundation for the
second. If possible, empirical research would be undertaken to examine
organisation development, within a process consultation perspective, for
enhancing innovation capability.

3.4

Methodological choices

Legitimised methodologies for academic research are those accepted as useful

by an influential body of scholars in the field at a point in time. As
Kuhn (1970) pointed out, methodologies are not fixed. They are influenced by
dominant, subject-specific paradigm(s). In medieval times a method used to
test for spiritual possession was the ducking stool. No longer is this the case;
someone with similar symptoms would probably be categorised as mentally
ill and the methodology used to test their 'possession' would be clinical
psychological assessment (this example has been drawn from Cuff et al., 1990:
1424). Methodologies are not immutablelike other forms of tool they are

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susceptible to innovation, both radical and incremental. The possibility of

methodological innovation was important in this research as the researcher
sought to use several methods, possibly in new combinations.
As discussed in Chapter 2, innovation capability is a 'big topic'comparable
in scope to organisational culture or organisational efficiency. The
methodological issues were posed in this way in a researcher's memo dated
1 July 1996:
"How can appropriate research methodologies be selected to
enquire into a topic that is large in scope, may or may not be a
contingent property, is an underlying (therefore not directly
observable) attribute or set of attributes, can be widely
distributed across the organisation, has anarchic properties,
makes an uncertain measurable contribution and blurs into
other areas of a firm's activities (like strategy and operations)?"
This question describes a research task that is broad in scope, complex in
concept and pragmatic in intent. Within the scope of a doctoral programme, a
full research study is probably impossible. When a similar task was
undertaken by Porter (1990) into the nature of national factors affecting
competitive advantage it was found necessary to employ an international
team of scholars and invest more than 50 person-years into the enquiry.53 So
a new question emerged: what does a researcher do when a task is simply
too large?54
This problem is not new. Sociologists have been researching topics of
enormous scope for more than a century (Giddens, 1995) developing grand
or general theory, as undertaken by Mead, Parsons and others (see, for
example, Parsons, 1954). Grand theory provides a way to understand
large-scale phenomena, like the influence of religion on society (Durkheim,
1961), socialisation (Broom and Selznick, 1958) or social class (Marx, 1961). In
addition, grand theory provides a means of exploring underlying forces that
are not readily detectable as specific behaviours. However, grand theory does
not, in general, offer rich pictures, behaviourally-anchored theory or complex
contingent frameworks. Some scholars in management have adopted a grand
53
54

Comment made by Professor Porter at a lecture in the Cafe Royal, 19/8/92.

In general, the advice is to avoid such topics! For example, Silverman (2000) writes "I tell
my students, your aim should be to say 'a lot about a little (problem)'. This means avoiding
the temptation to say 'a little about a lot' (64).

122

theory perspective. For example, Peters and Waterman (1982), Prahalad and
Hamel (1990) and Trist (1978).
To overcome a perceived weakness in grand theory, that is a lack of
connectivity between indicators (that which can be observed) and concepts,
middle-level theories developed. These emphasise, as Layder (1998) points
out, "the importance of formulating theoretical hypotheses in advance of the
research in order to guide the research and give shape to any subsequent
theorizing after the data has been gathered" (15) but "(m)iddle range theories
deal with a limited number of controlled variables" (16).
Some researchers, for example Strauss and Corbin (1990a), have argued that
there is a profound weakness in both grand and middle-range theories. That
is pre-formed theories or hypotheses orientate a researcher towards defined
perspectives and, perhaps subconsciously, act like a pair of blinkers on a
horse. Valid knowledge, from this perspective, can only be obtained from
research that is solidly and solely grounded in observable phenomena.
These differing perspectives on the relationship between theory and practice
posed a dilemma for this researcher. He was dealing with a research topic
that was sufficiently large in scope to require middle-range, or even grand,
theory but was drawn towards grounded theory as this provided a set of
methods that could enable sound but creative concept construction. In
addition, although it could be argued that the research topic required
middle-range theory, the requirement of influential middle-range theorists to
begin with a hypotheses seemed unduly limiting in a topic that had been little
explored from a composite of theoretical positions (see Appendix 2 for a
discussion of other researchers' frameworks and findings).
Tranfield and Starkey (1997) provided a perspective that helped to explore
this dilemma. Drawing from Biglan's and Becher's work on the mapping of
academic disciplines, Tranfield and Starkey provide five dimensions for
drawing distinctions between disciplines: hard vs. soft, pure -vs- applied, life
vs non-life sciences, convergent vs divergent and urban vs rural. Tranfield
and Starkey conclude that management, in general, is a "soft discipline" as
"management operates no single agreed ontological or epistemological
paradigm" (4).

123

Using these frameworks, this research could be defined as 'soft' (there is not a
consensus that a unitary paradigm explains innovation capability), 'applied'
(there is a concern with practical problems), 'life-science' orientated, 'more
convergent than divergent' (there is a growing "sense of togetherness and
shared purpose" (3) amongst researchers and increasingly 'urban'as
innovation in organisation55 is, increasingly, a relatively well-populated
research and discussion topic.56
Tranfield and Starkey suggest that management "may be situated at the cusp
between engineering and a craft" (4) and that "management research should
always address the question 'what are implications for management?'" (4).
The point is developed when Tranfield and Starkey suggest that management
research "might be characterised as becoming the social sciences' equivalent
of engineering (to the physical sciences) or medicine (to the biological
sciences). Specifically, such a role would require that scholars and researchers
adopt a trans-disciplinary approach to problem definition and investigation,
and subsequent dissemination Finally, such a discipline might be expected
to put in place a rhetoric and discourse which is meaningful to users" (4-5).
This researcher adopted Tranfield and Starkey's advice and tried "to put in
place a rhetoric and discourse which is meaningful to users". However, he
decided to reject the advice to say a 'lot about a little' and seek to construct a
comprehensive framework of innovation capability.
3.4.1

Methodological assumptions

In order to devise a methodological framework that fulfilled as many of the

requirements discussed above as possible, consideration was given to
fundamental issues, specifically the nature of the reality being studied
(ontology) and the stance taken to determining the questions to be examined
by research (epistemology).
From an ontological perspective it can be useful to position a research effort
on a continuum with positivism on one end and phenomenology on the
55

The researcher considers that it is reasonable to subsume work on organisational creativity,

entrepreneurship, improvement, adaptation and new product development under the
heading of 'organisational innovation'.

124

other. Positivism is a philosophical paradigm that sees the world as being able
to be described in terms that are true, real and definite. Phenomenology sees
the world as a construct of observers with reality existing 'just' as a structure
of meanings (see EasterbySmith et al., 1991: 2232 for further explanation
and examples).
In this research the choice of philosophical stance was complicated, as both
paradigms had heuristic merit. Positivism offered an opportunity to study
high innovation capability as a real phenomenon and be able to say to
managers, "I've looked at x companies and have found that these are the
characteristics of firms with high innovation capability. Shall we consider your
firm against these criteria?" Phenomenology offered an opportunity to say
"let's have a look at how you think about your organisation at the moment
and see whether the ways that you are thinking help or hinder your capacity
to be innovative'. Both stances could be useful. Perhaps unusually, this
researcher considered that it would not be constructive to take a position on
the philosophical continuum. From the perspective of a craftsperson the
material that s/he deals with is real but the way that s/he ascribes meaning is
also highly significant since it shapes action. Accordingly, it was considered
that toggling between positivism and phenomenology offered a fruitful
philosophical stance as it opened a wider range of perspectives that could be
considered in the data interpretation process.
As mentioned in Section 1.7, in 1998, after a theoretical review had been
undertaken and bulk of the data for this research had been gathered
Layder (1998) published a book introducing 'adaptive theory' that provided
theoretical justification for the stance taken by this researcher. Layder wrote:
"Adaptive theory is accretive, it is an organic entity that
constantly reformulates itself both in relation to the dictates of
theoretical reasoning and the 'factual' character of the empirical
world. Prior theoretical concepts and models suggest patterns
and 'order' in emerging data while being continuously
responsive to the 'order' suggested or unearthed by the data
themselves" (27).

56

This is in contrast to many other areas of management research that are defined by
Tranfield and Starkey as 'rural'.

125

"there has to be some dialogue with all of the kinds of

resources available: general and substantive theory,
theory-testing types, sensitizing concepts, and empirically
emergent theory" (43)
Layder's work provides a way of maintaining a creative dialogue between
theory and data in relation to four levels of research: self, situated activity,
setting and context. This research map, as Layder (1993) calls it, "is to help in
the planning and ongoing formulation of field research which has theory
generation as a primary aim" (73). Some years earlier Schn (1983) discussed a
related aspectthe relationship between theory and action, a topic not
extensively discussed by Layder. Schn observed that:
"there is a high, hard ground where practitioners can make
effective use of research-based theory and technique, and there
is a swampy lowland where situations are confusing 'messes'
incapable of technical solution. The difficulty is that the
problems of the high ground, however great their technical
interest, are often relatively unimportant" (42).
Applying Schn's metaphor, an important question is 'does innovation
capability belong on the high ground or the swampy lowland?' Some aspects
of innovation, for example the patterns of patent registration, seem to be
located on the high ground but the blend of organisational attributes
described in Chapter 4 are more likely to be characteristic of the swampy
lowland. This view is supported by the examples cited by Schn, particular a
case study of the behaviour of a leading architect. Schn describes the process
in the following way:
"When someone reflects-in-action, he becomes a researcher in
the practice context. He is not dependent on the categories of
established theory and technique, but constructs a new theory
of the unique case. His enquiry is not limited to a deliberation
about means which depends on a prior agreement about ends.
He does not keep means and ends separate, but defines them
interactively as he frames a problematic situation. He does not
separate thinking from doing, ratiocinating his way to a decision
which he must later convert into action. Because his
experimenting is a kind of action, implementation is built into
his inquiry" (68).
Schn was describing the stance taken by an able professional, rather than an
academic researcher. However, the approach described had implications for
this research as there was an intention to move from description and

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model-building into application. It became an aspiration to adopt at least

some of the principles of a reflective practitioner that required a commitment
to learn through action and reflexive insight and incorporate learning
deliberately into the research process.
3.4.2

Vitality and texture

A factor affecting selection of methodologies for this research was a sense of

unease with some existing literature on innovation management (for
example, Brundenenius, 1994). It was not that the literature lacked
imagination or thoroughness, more that it seemed to miss the vitality and
texture of the innovation process, just as a written description of a holiday
often fails to capture the essence of the experience. Maslow (1965) made the
point as he was concerned about the need for verisimilitude in management
writing. Maslow observed:
"the data that I've been reading in the books on management
can either be organised in an atomistic, cause-effect,
beads-on-the-string manner, and treated like a pile of bits of
facts, or they can be perceived in organismic terms, that is as if
they were all related to one another. Now, this latter way is
actually more true, more real, more pragmatically successful"
(108).
This 'lack of vitality and texture' was manifested in various ways in the
relevant literature. Four points were considered to be important. Firstly,
much theoretical literature emphasised understanding but not doing.
Secondly, the use of structured methodologies was frequently advocated as
ways to improve the management of situations but these were not always
found in practice.57 Thirdly, participating in innovation processes can be an
emotional experience but this aspect is infrequently discusseddilemmas are
keen, choices taxing and people lie awake in the night to worry about them.
Lastly, innovation appears to be more informal than is reflected in much of
the literature. There might be a business team from a aircraft simulation
company marooned by a delayed flight and sipping coffee at Heathrow when
one says "I've half an idea that we can use our CX 134 display technology for
57

For example, this researcher undertook more than 100 strategy workshops with top teams in
eleven countries and in no case did he find that Porter's five forces model was being used,
even though has been cited as one of the most influential strategic frameworks available
(Pfeiffer et al., 1986).

127

a computer game based on people delayed at airports".58 That apparently

random comment could be a defining moment in an innovation initiative.
An element missing from literature that adopts a systems perspective (see
Dooley et al., 1998 for example) is the significance of the individual in
innovation and the role of 'cognition' or paying high-quality attention to
challenging issues (however, for example, Senge, 1992 and Bennis and Nanus,
1985 see this as a major issue). In the view of this researcher participating in
an innovating group is an experience that 'gets one in the gut'. There is a level
of demand that can be daunting as variables, uncertainties and implications
are considered and weighed. Yet despite the level of challenge, some people
participating in innovation appear to be capable of assessing a large number
of factors and coming to positions, testing, reacting and 'developing thinking'
with rapidity and sureness. In this research it was hoped that it would be
possible to explore the relationship of the person to innovation, at least to
some extent.
Conversely, an element missing from person-centred literature (see de Bono,
1999 for example) is a commitment to understanding the role of the social
system in defining the context within which innovation occurs. Seeing
innovation as, at least in part, a social fact facilitates an understanding of the
interplay between lifeworld and systemsthe micro and macro features.
Excessive concentration on the experience of innovating could belittle the role
played by organisational structures, status systems, power relationships,
ideological stances, mythologies, socialisation processes and the like.
It was concluded that the methodologies selected would need be sensitive to
both lifeworld and system domains. Sensemaking activities were deemed
particularly relevant, especially amongst groups of actors (Weick, 1997)
involved in acquiring, adopting, applying, exploiting and learning from
innovation initiatives. Innovation capability requires the interaction of people,
systems and practices within evolving strategies. How innovation proceeded,
in practice, needed to be better understood. This research focus was not new.
58

The idea that sparked the development of instant photography came to Edwin Land in 1943
when his three year old daughter, Jennifer, asked him why she could not see the
photograph he had just taken of her. Land comments "within the hour the camera, the film
and the physical chemistry became so clear". From an article in Time Magazine in 1972 and

128

Others have undertaken similar studies. For example, the sound and video
analysis methods outlined by Prince (1980) provided inspiration, although not
a detailed methodology as they were only briefly described in published
literature.
3.4.3

Choice of methodologies

As noted above, a significant challenge was to adopt or adapt

methodologies59 that fitted the phenomena under investigation and other
goals of the research. In addition, other 'fits' were neededwith the
pragmatic intent of the research, the time-scale/resources allowed and the
biases and skill set of the researcher (since, as described above, the
sensitivities of the person of the researcher are seen as an irreducible factor in
the research process).
It was accepted that, if a strong case could be put, it would be acceptable to
adapt an existing methodologies in creative ways. This would not be
undertaken lightly, however, as Strauss and Corbin (1990b) point out,
creativity "is a vital component [to] force the researcher to break through
old assumptions and create a new order out of the old" (27).
Once a methodology is chosen it becomes a strategic commitment as far as
the researcher is concerned and has profound effects on the manner of study
and the kinds of output that can be produced. Various methodological
frameworks were reviewed to select those that were fit for purpose in this
research, in particular Experiment, Survey, Case Study, Grounded Theory,
Action Research and Participant Observation. They are briefly considered
below.
Experiment is the quintessential method adopted for scientific enquiry in the
'hard' sciences (Crano and Brewer, 1973). By controlling the number of
variables in an experiment, adopting impartial disciplines, being transparent
about research process and testing measurable hypotheses it becomes
possible to study phenomena with objectivity, precision and reproducibility
of findings. Experiments produce results that predict what will happen in

59

cited in Mintzberg et al. (1998a) (163).

In this chapter the term 'methodology' is used to describe a coherent approach to gathering
and using data. The term 'method' is used to describe a specific technique.

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defined circumstances. The efficacy of prediction provides a test of the validity

of findings and, therefor, the experimental methods used.
Experiments can be difficult or impossible to conduct in the social sciences,
especially when dealing with large systems. Difficulties include ethical
constraints, the inherent complexity of human systems and the unwillingness
of people to submit themselves to experiments. Despite such difficulties,
experiments can be sometimes conducted or may occur by chance. For
example, one organisation may undertake a programme of customer-service
training. Another, in the same industry may not. Comparing the two firms
can indicate the effects of the customer-service training on the former.
However, findings need to be treated with caution as other factors may have
intervened so that apparent cause-effect relationships become suspect or
misleading.
Surveys collect data by gathering the answers to questions from defined
populations (Bowers and Franklin, 1977). Surveys are structured in advance.
Data can be collected by questionnaire, interview, etc. Data analysis allows a
researcher to explore associations and detect patterns of relationship and/or
interdependency between variables. The survey has a long history of
application within the social sciences. Its relative objectivity, reproducibility
and precision provide a defendable foundation to findings and theoretical
frameworks that flow from analysis of survey data.
When survey data is collected by interview, it becomes possible to adopt
flexible and context-sensitive approaches. As Burgess (quoted in
EasterbySmith et al., 1991) points out, the interview is "the opportunity for
the researcher to probe deeply, to uncover new clues, open new dimensions
of a problem and to secure vivid, accurate, inclusive accounts that are based
on personal experience" (73). Rosemary Stewart (quoted in
EasterbySmith et al., 1991) says that the purpose of the interview is to
discover "how individuals construct the meaning and the significance of their
situations from the complex personal framework of beliefs and values
that they have developed over their lives in order to help explain and predict
events in their world" (73). In order to be able to do this, as
EasterbySmith et al. (1991) advise, "the researcher will need to be sensitive

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enough, and skilled enough, to ensure that s/he not only understands the
other person's views but also, at times, assists individuals to explore their
own beliefs" (73-74).
A related research tool is 'the focus group'. This was developed as a market
research tool but has become more widely used in the last 20 years (Morgan,
1993a). For example, the Labour Party used focus groups as a technique for
gauging the mood of the nation in the run-up to the 1997 election in the U.K.
If the membership of the focus group is representative of a category
(e.g. senior executives, telecommunications managers, mature university
students etc.) the approach can provide relevant and valuable information
about the 'population'sometimes the data is more insightful than can be
achieved either through questionnaire or individual interview. The method is
straightforward but not easy. A group of about 4-7 people are brought
together, encouraged to relax and invited to discuss topics chosen by the
facilitator. The interaction between people in the group provokes the detailed
exploration of thoughts and viewpoints. The facilitator guides the group,
manages participation and ensures that pre-determined topics are covered.
Case studies collect multi-dimensional data on a human system, sometimes
over time (Erskine et al., 1981). A benefit of the case study approach is that it
allows interdependencies between variables to be examined in a 'real' setting.
From this point of view, the researcher is able to examine the totalitythe
gestaltrather than see the parts independent of the wholethereby
avoiding the limitations of a reductionist approach (see, for example, Bessant,
1999).
The case approach has proven useful in organisational research (and
teaching). Since a firm possesses some of the properties of a system it is useful
to adopt a holistic viewpoint. Without examination of the systemic
characteristics of the organisation an analysis can be simplistic, insufficiently
meaningful or naive. However, case studies present a significant
methodological conundrum. Their value as generalisations is limited as they
examine the interaction of a particular set of variables in a particular set of
circumstances. It may be that general principles, predictive statements or

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theories cannot be developed from cases thereby rendering them of

questionable value to managers.
Grounded Theory is a relatively new form of qualitative research
methodology (Strauss and Corbin, 1990a) and provides a framework for
undertaking case studies, action research and other fine-grained studies.
Grounded theory insists on open-mindedness and a clear 'audit trail' between
data and theory. Theory is developed interactively with data and includes
examination of interdependencies, explicit acceptance of the researcher's
personal interpretative framework, and a deliberate search to hear many
voices (of the actors involved). Particular emphasis is placed on the
maintenance of a careful, intelligent, ongoing interplay between data
collection and conceptualisation.
Influential uses of grounded theory have been in fairly limited social
settingsa study of people dying in hospital or youth behaviour in a street
gang, for example (Altheide and Johnson, 1990). The methodology begins to
'strain at the edges' when it is applied to large phenomena, like organisational
culture or innovation capability. One reason for this is that there may be a
large number of actors involved whose behaviour is affected by a variety of
factors that occur in fleeting or complex combinations. Nevertheless, used
appropriately, grounded theory provides close-textured and accessible
conceptual frameworks that have a direct, assured relationship with 'the
real-world'.
Action Research refers to a set of approaches in which the researcher
becomes a part of the reality that s/he is studying. The researcher participates
in action and 'feels' what it is like to be involved. Since the researcher
becomes an actor within the system under investigation s/he can experience
issues and dilemmas inherent in the situation. The action researcher, by
effecting the situation, can become valued by the actors and gain privileged
access, deep insight and continuity of observation.
For example, West (1999) undertook an action research programme into
teams undertaking process change in information systems. She comments
that "through involvement as a participant the action researcher learns about
the organisation (within which s/he is working). Action research can gain rich

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insights into different interpretations and perspectives of the changes that are
occurring" (84). However, she observes that "even the strongest supporters of
action research note that it has several disadvantages" (89). These including
questionable validity, ethical dilemmas, lack of reproducibility and goal
confusion.
The conceptual base of action research can be related to Kolb's cycles of
experience, reflection, re-conceptualisation and experiment (Kolb, 1980). The
action researcher may experience all elements of Kolb's cycle. Despite a
commitment to involvement, the researcher must seek to acquire and capture
learning that meets academic criteria for acceptabilitynamely, reliability,
comprehensiveness, integrity and maintaining a public dialogue between
theory and practice. As Steele (1975) remarked "(i)t is true that science is a
cumulative process, but a lot of the accumulation comes through the process
of performing scientific work rather than simply piling knowledge on top of
knowledge" (31).
Participant Observation provides an opportunity for a researcher to be
engaged as an actor in a situation but not with a mission to change it. An
inspiring example is provided by methods adopted by Latour (1986) in his
study of the Salk science laboratory in the early 1970s. Latour's research aim
was to use:
"a research procedure analogous with that of an intrepid
explorer of the Ivory Coast, who, having studied the belief
system or material production of 'savage minds' by living with
tribesmen, sharing their hardships and almost becoming one of
them, eventually returns with a body of observations which he
can present as a preliminary research report" (28).
Latour worked in the science laboratory for two years. The benefits of his
fine-grained research are apparent in his report as this took forward
understanding of the sense-making processes in science. Moreover, the
importance of participant observation as a learning methodology is made
clear. For example, when acting as an observer Latour had been struck by a
'mania' for writing notes but, on one occasion, while he worked as a
laboratory technician he found he could not recall whether he had added a
particular chemical to a particular beaker. He made an error and a day's work

133

was lost. It was through this experience (rather than the observation) that he
realised the merits of scrupulous note taking (245).
Participant observation provides an opportunity to be engaged but not be
intensely committed. A degree of detachment can be maintained so that the
researcher's field notes are observational and intimate (see Walton, 1997 for
an example).
3.4.4

Selection of methodologies

The following criteria were adopted for the selection of methodologies. The
methodology(ies) selected should fit the:

requirement to contribute to the development of knowledge;

aims of the researchi.e. "to give the client insight" and be likely to help
"the client to figure out what he should do about the situation";

nature of the phenomena under investigation;

time-scale/resources allowed;

skill set of the researcher.

Methodologies were used to assess suitability using a decision matrix

approach, summarised below:
Table 3.2: appropriateness of methodologies
Methodology

Suitability

Experiment

Lowit was unlikely that any valid experiments could be undertaken.

Survey

Mediuma survey could be constructed but its validity could be questionable

since the phenomenon being studied (innovation capability) is subject to unknown
contingency factors. The topic required a methodology that was capable of
providing rich textured data and interpretation. However, interviews and other
data collection methods were likely to be needed.

Case Study

Mediumcases provide depth of understanding but have limited generalisability.

Possibly of value in gathering data about organisation development interventions.

Grounded Theory

Highthe use of this methodology should be able to provide a rich-textured

practice-orientated theoretical framework (important for the first phase of the
research programme).

Participant Observation

MediumHighbeing close to innovation-in-action could provide valuable

insights.

Action Research

MediumHighaction research could provide insight into the application of a

theoretical model into practice.

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Based on this assessment, grounded theory was the primary methodology

selected for the initial phase of the research but using the stance of adapted
theory (Layder, 1998) as deliberate study was undertaken to sensitise and
orientate the researcher through a review of extant literature (see Chapter 2).
Strauss and Corbin (1990a) describe grounded theory as "a general methodology
for developing theory that is grounded in data systematically gathered and
organized" (273) (authors' italics). They emphasise that grounded theory
explicitly recognises the role of the person of the researcher and the
importance of including "the perspectives and the voices of the people whom
we study" (274). Importantly, it requires "adaptation to the circumstances of
their (researchers') own thought processes" (275). They assert that "(t)his
methodology is designed to further the development of effective theory"
(278).
As noted above, it was important that the adaptation of grounded theory
methodology by the researcher was permitted. According to Strauss and
Corbin (1990b):
"We like to think of grounded theory as a transactional system, a
method of analysis that allows one to examine the interactive
nature of events (159) Central to the transactional system, and
located with the range of conditions is action/interaction" (160)
(authors' italics).
Strauss and Corbin see grounded theory as understanding "action pertaining
to a phenomenon" (163). In this research action was not the phenomenon
being studied, it was capability (i.e. that which enables action). Action was to
be studied, and interpreted, as one way of exploring and defining innovation
capability but system elements also needed to be considered. Accordingly,
actions, inactions and other factors were subject to the question 'what does
this piece of information tell us about innovation capability?'
A methodology employed later in the research was a unsystematic form of
action research. Unfortunately, it was episodic and a consequence of process
consulting interventions. However, it did serve an important role. For
example, it clarified that the diagnostic tool that was constructed from the
reference model was inadequate and led to the development of a new and
unexpected frameworkthe intervention tree (see Section 5.4.2 for a
discussion of this point).

135

3.5

Research strategy

Prior to embarking on the research programme a 'research strategy map'

was prepared as shown in Figure 3.1. In the event, as discussed below, the
actual conduct of the research was significantly different.
Collect
data

Determine
methodology

Select
voices
to be
heard

Produce
Audit

Develop
Intervention
Process

Produce
Reference
Model

Develop
theory

Review,
learn and
conclude

Test
Audit

Test
Intervention
Process

Figure 3.1: research strategy map

The figure shows seven principal stages of the research (numbers 3,5 and 6
are iterative). Although research methods had been determined at an early
stage, the entire research process was not fully planned from the outseta
great deal of planning was conducted on the way. It is this researcher's
contention that this was an effective way to proceed. An emergent and
deliberate research strategy was adopted to allow for the learning effect of
interaction between the material and the field (Mintzberg and Waters, 1983).
With the benefit of hindsight it is possible to review the research process as it
developed and this is presented as Figure 3.2.

136

Academic

Change
Agent

Literature
Data
review 3 Gathering identify
defining
theoretical
2
'innovation
framework
capability'
and key Determine
questions research
methodologies
1
Develop a
reference
model
4

Input

6 Instrument
development
- innovation
capability
audit (G2)

Peer
reviews
5

8
Literature
review developing
an
intevention
process
Training
change
agents

12

10
Testing the
reference
model - the
Pharma case

Exploring
the
contingency
dimension

Developing
an
'intervention
tree'
11

9
Company

Input

1994

1995

1996

Enhancing the
intervention
process through
interaction with
the field

1997

1998

1999

Figure 3.2: hindsight map

The diagram covers the time-line of the research and locates 12 major
activities undertaken as to whether they were primarily 'academic'
(university based), 'change agent' (with internal/external interventionists) or
'company' (with managers and other company staff).
On the map of the research process above the activities are shown. The table
below outlines major activities, their value-added (to the research) and the
methodologies and methods used.
Table 3.3: major activities undertaken
Major activities

Value-added

Methods used

Literature Review

Provided a provisional list of areas to be

explored to define innovation capability

Conceptual analysis and

synthesis to provide
orienting and sensitising
concepts

Determine research
methodologies

Enable selection of appropriate

research methodologies

Comparative assessment

Data Gathering

Provided data for analysis

Interviews, observation
and action research

Developing a reference
model

Provided an ideal-type model of

innovation capability (G1) then (G2)

Adapted grounded theory

Peer Reviews

Clarified concepts and questioned

conclusions

Presentations, workshops
and peer discussion

137

Major activities

Value-added

Methods used

Instrument
DevelopmentDesigning the
Innovation Capability Audit
(G2)

Provided a means of 'measuring' the

components of innovation capability

Survey design

Training Change Agents

Provided the context-specific help to

enhance the development of innovation
capability in firms

Action research and data

analysis (of audits on firms)

Literature
ReviewDeveloping an
intervention process

Provided the nine-step intervention

model

Conceptual analysis and

synthesis

Enhancing the intervention

process with interaction with
the field

Provided learning for the development

of the intervention tree (see
Section 5.4.2)

Data analysis and action

research

10

Testing the modelThe

Pharma case

Provided learning for an improved

intervention methodology

Interview and case

analysis

11

Developing an intervention
tree

Helped organisation move from

diagnosis to organisation development

Comparative case analysis

12

Exploring the contingency

dimension

Clarified the common features of

innovation capability across
organisational configurations

Truncated case studies

(see Appendix 8)

It is interesting to note that the hindsight map (Figure 3.2) above presents
several activities that were neither considered nor planned. For example, a
significant opportunity to test the intervention process in more than 40 firms
arose by chance. The actuality of the research process was untidy:
Mintzberg et al. (1998a) address the question of the unexpected twists and
turns of programmes in their discussion of emergent strategies, opportunity
and action in his description of how Honda broke into the US motor cycle
market. They report that "events took a surprising turn" (203) when the 50 cc
Supercubs that were used solely for personal transportation by the sales team
attracted so much attention that a Sears buyer asked to purchase some. This
confounded the sales team who were only attempting to sell large bikes to a
totally different market. The Supercubs were supplied and Mintzberg
comments "the rest is history" (204). On reflection, this researcher followed an
emergent strategy in partalthough all planned stages were, in fact, fulfilled.
What actually happened was that opportunities occurred that it was believed,
at the time, could enhance the research process. Also, weaknesses in the
original design became apparentspecifically the lack of a coherent
intervention methodology and continuing questions about the possible
contingent nature of innovation capability.

138

This researcher decided not to fight opportunities but to embrace them when
it appeared that the learning objectives of the research could be furthered
(Buchanan et al., 1998). However, he was aware that there are methodological
pitfalls in this stance. Opportunities are semi-randomised and are more likely
to be found where they are sought, and not, perhaps, where they are needed.
Rigour can be diminished, or lost, through opportunism. Imperfect data can
be misleading and biased. However, unexpected opportunities such as those
outlined above extended the scope of the research, and in the opinion of the
researcher, enhanced its contribution to the knowledge in the field.
Accordingly, they were, on balance, welcomed.

3.6

Data sources

The decision to adopt grounded theory as the primary research methodology

provided inspiration, discipline and clarity about how this research was to be
conducted. However, grounded theory requires hearing a wide variety
(preferably all) of the voices of actors involved in the phenomena being
studied "so that theoretical saturation is reached" (Strauss and Corbin,
1990b: 188). This could not be achieved. With a topic as broad as innovation
capability it would not be possible to meet the 'saturation' requirement.
Either the research needed to be narrowed or the techniques of grounded
theory adapted.
This researcher considered that it would be of interest to adapt grounded
theory and strive to use it with a big topic. This would be done in three ways.
Firstly, an illustrative, rather than a definitive, theoretical framework would
be developed from available data. Secondly, interdependencies, cause-effect
links and significance of factors would not be addressed (although they would
be noted in researcher's memos) since these could be misleading. Thirdly, an
attempt would be made to select data sources that were likely to provide
accelerated learning for the researcher. This was done using a data sources
matrix. Some available sources of learning are shown in Figure 3.3 below. The
axes indicate the quality and quantity of learning that it was considered would
flow to the researcher. Where there was a choice available a more potent
learning source would be selected.

139

High Learning
INNOVATION CAPABILITY

Top
Manager
Interviews

Manager
Interviews

Action
Research
Projects

Participant
Observer
Study

Case
Studies

Academic
Interviews

Documentation Video
Analysis
Analysis
Consultant
Interviews

Low Learning

High Learning

INTERVENTION METHODOLOGIES
Figure 3.3: assessment of data sources

Nine potential sources were placed on the matrix. The principal reasons why
these were included are summarised in the table below.
Table 3.4: rationale for inclusion of data sources
Source

Purposes

1 To understand how top managers conceptualise innovation capability

Top manager
interviews

2 To assess the role of innovation within the firm's strategy

3 To see what sort of help a top manager might welcome

Manager interviews/
focus groups

1 To understand how managers conceptualise innovation capability

Documentation
analysis

1 To explore the relationship between innovation and the formal processes of

a firm

2 To assess the blockages to innovation from managers' perspectives

2 To examine specific innovation cases

3 To consider the formal rhetoric surrounding innovation
4

Participant observer
study

Video analysis

To learn about the difficulties of bringing ideas into being by participating in

innovative ventures
1 To examine the behaviours exhibited in groups during the process of
innovating
2 To explore the utility of structured approaches and tools for facilitating
innovation

Academic interviews

To gain from the experience of academics on topics related to the research

140

Source

Purposes

1 To learn about the difficulties of bringing an idea into being by a facilitator

or change agent in an innovative venture

Action research
projects

2 To work with managers on the task of enhancing innovation capacity

8

Case studies

To review innovation capability holistically in real situations

Consultant
interviews

To learn about approaches and methods of intervention intended to

enhance innovative capability

The researcher made use of all available data sources. Interviews were
conducted with managers and change agents using the interview schedule in
Appendix 1. The researcher sought to get beneath the surface of innovation
capability, working on the assumption that innovative processes were as
likely to be organic as mechanistic (Wheatley, 1994).
The selection of cases was a key issue. It would have been misleading to
develop an ideal type model from firms that were not innovative. A key
source of data was provided by the DTI-funded Partnerships with People
(PwP) research programme (DTI, 1996). As lead researcher on this initiative,
full access was available to case studies of 62 UK companies that were on the
DTI's list of innovative companies (there were a total of 131 on-line
documents on a database60 ). The DTI's criteria for inclusion on the list were a
superior new production and/or process introduction rate and peer review.
As the PwP interview schedule had been designed by the researcher this data
(primarily top management interviews and multi-level focus groups) was
added to the research database and supplements the other data described
above. In total, the researcher had access to 7092 data text units. The list of
companies included in the research data set can be found in Appendix 6.
Perhaps unusually, through contacts made in his professional work as a
strategy consultant, it was possible to collect 'live' data (sometimes recorded
using audio and video tapes) on decision-making elements in the innovation
process through his direct observation in management and project meetings.
Critical analysis of this 'real-time' research data from transcripts and/or field
notes provided a valuable source of data. In addition, the researcher had kept
notes, tape recordings, video tapes etc. from earlier consulting experiences
60

The DTI gave permission for the data from their study to be used for this thesis but
requested that company data should be treated as confidential.

141

and these proved to be a mine of useful insights. In these cases there was no
assessment available of the firm's innovation performance, although cases
were reviewed on a case-by-case basis. A brief rationale for inclusion of these
cases is provided in Appendix 6.
In particular, it was considered that top team assignments provided valuable
research opportunities.61 Typically a team would meet for several days and
undertake a series of sessions to develop the competitive strategy of the firm.
Invariably this required weaving innovation into business planning. As the
facilitator of the event, the researcher had the opportunity to observe ideas
being born, evaluated, growing or being culled. There was an opportunity to
observe, first hand, the dynamics of commitment (Ghemawat, 1991). Several
groups gave permission for the researcher to capture the key learning points,
under conditions of strict anonymity.
The sources of the data set are summarised in the table below. This includes
data sources available in December 1998. Work is in hand to add to this
database.
Table 3.5: data set
Sources of data

Data set

Top and senior manager interviews

71 Interviews

Manager interviews/focus groups

57 Interviews/groups

Documentation analysis

7 Analyses of in-company documents

Video analysis

45 hours of video tapes and 34 hours of sound tapes reviewed

Academic interviews

3 Interviews

Action research projects

6 Projects

Consultant interviews

11 Interviews

Total database documents 196 (some data on several documents)

3.7

Research techniques

The primary research tools used were two computer programsSPSS and
NUDIST. SPSS is a statistical package. It was used for straightforward

61

Especially as EasterbySmith et al. (1991) notes "(g)aining access to the corporate board
room is exceedingly difficult for researchers " (45).

142

analysis, cross tabulation and building a comparative database. As it is a well

known research tool its characteristics will not be discussed here.
NUDIST is a program for qualitative analysis and it was mentioned by
Strauss and Corbin (1990a) as a useful tool for facilitating research using the
grounded theory methodology. The tool is derived from sociological
methodologies developed for the content analysis of media, conversations
and the like (Silverman, 2000). It enables text units to be coded and re-coded
into categories (they are assigned to nodes). As the coding process proceeds
new text units are added to existing nodes or new categories are developed.
The researcher is required to consider at each text unit as a separate item of
data and conceptualise from it. This process results in the development of a
theoretical framework that, literally, grows out of the analysis data and is
expressed in NUDIST as a tree-root diagram. The programme also permits
the movement of clusters of nodes and exploring linkages. If used with
attention, NUDIST provides a tool for meeting the indicator-concept
generation requirements of grounded theory.
Data were examined, categorised, coded and entered into NUDIST using a
line-by-line analysis technique. The researcher, following suggestions by
Strauss and Corbin (1990a), attempted to give balanced attention to six areas:1. the phenomena
2. the context
3. intervening conditions
4. action/interaction strategies
5. evidence of underlying capability
6. consequences
The researcher was aware that greater methodological soundness could be
achieved if the coding process was undertaken by two or more researchers
independently reviewing the same data. This procedure was not adopted for
practical reasons. The coding process for this research required five months'
work and it proved impossible to find a qualified researcher willing to donate
this quantity of time to helping with the task. However, early coding

143

examples were discussed with the researcher's supervisor to provide greater

objectivity.
As briefly noted above, the researcher's intention was to get beneath
descriptive and conceptual analyses and to strive to develop a
behaviourial-based model of innovation capabilityin effect, to explore the
competencies, stances, attitudes, behaviours, routines, processes and
socialisation processes that provide and support innovation capability.

3.8

Development of a reference model and audit

instrument

A key moment in the research was the decision to develop a reference model
as a core intervention tool. The researcher considered that it would be useful
for managers to assess systematically their firm's innovation capability. In
order to do this a template can be helpful. Other models of innovation
capability had been published and examples are considered in Appendix 2.
A reference model is a derivative of an ideal type. Weber (1976) introduced
this conceptual device as a means of describing a quintessentially perfect
example of a characteristic of social institutions. Once the characteristics of an
ideal type are correctly specified, for example of a bureaucracy, it becomes
possible to match a case against the ideal type model and, hopefully, direct
attention towards organisational practices that either help or hinder the
organisation from being a perfect example of type (see Klein and Meeking,
1958 for an example of how this approach can illuminate a managerial issue).
As Burke et al. (1996) point out:
"a model that is comprehensive and based on sound theory and
research enhances the efficacy of an organizational diagnosis
and serves as a guide to actions to take as a consequence of the
diagnosis" (42).
Developing the reference model proved to be challenging. A decision was
taken to limit the numbers of dimensions so that it would be acceptable to a
non-academic audience (Francis, 1998a). Bessant et al. (1994) had
demonstrated that such an approach was possible and described how he and
others had adopted a reference model approach in helping companies assess
the extent to which they were using continuous improvement principles and

144

practices. This proved to be effective as a element in a diagnostic process. A

similar approach was adopted for this research.
Reference models can give an impression of certainty but the reality they
describe may be fluid, contingent and temporary (Silverman, 2000). Also,
such models tend to simplify, and can readily over-simplify, so that they
become misleading caricatures. A reference model tends to stand alone and
be reductionist in orientation, thereby portraying a picture of the world that
underemphasises connections, subtleties and wholes. Lastly, the words
'correctly specified' were used above but a reference model may be partially
correct or correct in some circumstances but not others. An incorrect, or
partially correct, reference model directs attention into areas that are
inappropriate and away from those that are significant. Accordingly, a
reference model can become a tool for misguiding rather than guiding.
Despite limitations on the use of a reference model its merits were persuasive.
For a researcher the development of a reference model provides a goal, a
process and a means of transmuting theory into practice. It also provides a
template that can be used as the basis of reflexive dialogue with client firms,
especially if managers are aware that the model is an approximation to be
challenged rather than an ideal to be striven towards blindly. If it has validity,
a reference model can alert managers to domains of adequacy and
inadequacy thereby providing them with conceptual stepping stones for
determining improvement goals. In addition, as experience builds,
comparative data becomes available that may illuminate trends and add to
the value of feedback provided for firms and the agencies seeking to help
them.
3.8.1

Development of an audit instrument

A reference model does not, in itself, provide an organisation development

tool that can be used for systematic diagnosis. However, it can provide the
foundation for an audit instrumenta widely used device for structuring data
gathering and data feedback. Procedures for using audits as an intervention
methodology have been described in the literature under the generic heading
of 'survey feedback' (Bowers and Franklin, 1977; Franklin, 1976). This
researcher had previous experience of developing and publishing audit

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instruments (Francis and Woodcock, 1994 and 1996; Francis and Young, 1991;
Francis, 1998a and 1998b) and was aware of design criteria and steps needed
to position diagnostic procedures within a wider intervention process.
There are two significant differences between an audit instrument and
research questionnaires. Firstly, it is a change agent, not a fully-trained
researcher, who is undertaking the diagnosissometimes in collaboration
with the client. Secondly, the primary objective of the data-gathering exercise
is to assist a company with an organisation development initiativethe
gathering of research data is an auxiliary aim.
The six design criteria adopted by the researcher for designing an audit
instrument are summarised in the following table.
Table 3.6: audit design criteria
Design criteria

Rationale

Provide focus

The audit must focus attention on problems, issues and/or development needs
specifically related to innovation capability.

Address significant
areas

The audit must address issues that are important for the company to
improveeither for achieving strategic goals, facilitating renewal and/or
developing needed capabilities.

Possess sufficient
validity

The audit results must have sufficient validity to provide a reasonable basis for
managerial decision taking (i.e. data and interpretations must be at least as
good as the company's 'normal' intelligence data).

Have re-framing
potential

The audit process needs to have the potential to facilitate a re-definition of

developing innovation capability in the minds of mangersa 're-framing'
process.

Be linked to action
programmes

The results of the audit need to be able to progress into action programmes.
These may be initiatives to develop or realise potential, an extension of current
initiatives or remedial initiatives to address problems.

Be easy to administer

The work involved in the process needs to be acceptable to all parties and be
achievable with available resources.

The examination of nodes in the NUDIST database provided a list of

elements that were used as the basis for writing the items in an audit
instrument. As will be described later in Chapter 4, 18 'components' were
identified in the second generation reference model (G2). Each item in the
questionnaire was intended to explore a different dimension of a component
and so the normal split-half reliability test was not deemed to be usefulsince
each item, not each group, examined a distinct organisational feature.

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3.8.2

Development of an audit process

An audit instrument and an audit process are not one and the same. Indeed
sometimes an audit instrument may not be used at all. For example,
Bessant et al. (1993) describe the use of a mapping visit approach where a
trained investigator looks for artefacts and behaviours that indicate the
prevailing capability of the firm (in this case in relation to continuous
improvement).
Auditing approaches can be plotted on two dimensions. One is the degree of
specificity of the study. For example, a survey of the degree to which
environmentally friendly procedures are practised would be classified as
'issue specific'. A survey of organisational excellence would be classified as
'generic'. A second dimension describes the degree to which assessment
categories are predetermined. In a firm-specific approach the interpretative
framework emerges as company data is understood. A reference model
approach uses predetermined assessment categories and the organisation is
compared with this model.
It was possible to adopt several different diagnostic procedures for this
research that have been simplified to four in Figure 3.4 below.

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OPTION 1
Standardised
Assessment of
Innovation Capability

Reference
Model Based

OPTION 2
Assessment of
Innovation
Capability as
driven by the
firm's strategy

OPTION 3
Customised
Assessment of
Innovation
Capability

OPTION 4
Non-standardised
Assessment of
Innovation
Capability

Firm-Specific
Issue Specific

Generic

Figure 3.4: possible diagnostic procedures

Each option offered advantages and disadvantages and these are shown in
the table below:
Table 3.7: audit design options
Option

Description

Advantages

Disadvantages

Organisations use a
standardised audit that
compares their firm with a
best practice model

1 Standardised

1 Not context-sensitive

2 Low consultant skill

level required

2 Done to the organisation rather

than done with them

3 Comparisons possible
between firms

3 Assumes that there is one best

practice model

4 Lowest cost
2

Organisations articulate
their competitive strategy
and assess the extent to
which they have
appropriate innovation
capability

1 Strategy led

3 Relates innovation
capability to
firm-specific aims

3 Results not standardised

Organisations use a
standardised audit
supplemented with other
data collection. The report
is firm-specific and draws
from a best practice model

1 Semi-standardised

1 Requires trained facilitators

2 Deals with top

managers' concerns

2 Moderately
context-sensitive
3 Comparisons possible
between firms
4 Medium cost

1 Not innovation capability oriented

per se
2 Requires high level facilitation
4 High cost

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Option

Description

Advantages

Disadvantages

Facilitators use an
approach that they
determine is appropriate for
a specified company at a
specified time

1 Highly
context-sensitive

1 High cost
2 Very high level of expertise
needed
3 Comparisons between firms not
possible

The least attractive option to this researcher was number 4the overall aim
of this research was to develop a reproducible methodology. The researcher
was aware that he could formulate an interview schedule and supply a
recommended methodology for data collection/analysis but the quality of
the outcome would remain highly dependent on the skills of the facilitator in
the field. The second least attractive option was number 1the approach that
used a standardised reference model as the sole device for diagnosis. The
principal reason this was rejected was that it had the propensity to
over-standardise.
The second most attractive option was number 2the approach that started
with competitive strategy. The researcher envisaged a process that began
with the management of the firm articulating their competitive
strategyboth for the firm as a whole and product-market categories. Then
the question would be asked 'where do we need to be more innovative to
achieve our strategy?' This approach, as shown in the table above, has
significant advantages. The most significant benefit of a strategy-led approach
is that it does not treat innovative capability as 'a good thing' but a vital
component for the fulfilment of an organisational commitment. Despite the
potential benefits, eventually, this option was rejected. The primary reason
for rejection was conceptual. Since the researcher was arguing that high
innovation capability opened strategic doors then it would be wrong to limit
the exploitation of innovation capability to an existing strategic direction.
Despite the decision to abandon this option it proved possible to incorporate
some of the benefits in the approach used with the pilot sample of companies,
as discussed in Chapter 5.
Option 3 was selected. This proposed to use a standardised audit
supplemented with other data collection procedures to assess innovation
capability within a firm. The merits of this approach were that it was

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reproducible, focused on innovation capability as a valued resource but had a

(controllable) degree of customisation and/or context sensitivity.
A second key decision was taken at this stageonly one reference model
would be devised. There were arguments from contingency theory (see
Appendix 8) for developing multiple models that would cover, for example,
differences in the size of the organisation, core technologies, competitive
strategy, cultural tradition and the like. It may be that it is impossible to
devise a single intervention process that is valid in all cases.
After considerable thought, the researcher decided to share the view of
Tidd et al. (1997) that "there is some commonality around the things which
are managedthe key enablersin successful innovation how these
enablers are actually put together varies between firms but they represent
particular solutions to the general problem of managing innovation" (26). This
research, therefore, took a non-contingent approach and sought to define the
'commonalities' of innovation capability. However, the point has not been
lost because, as reported later in Chapter 5, the intervention process includes
a step when firms define their particular needs.
3.8.3

Improving the diagnostic tools

Once a pilot version of the audit tool was available, it was decided to review
progress. After this had been done an informed decision could be taken as to
whether to continue with the work thus far completed or 'go back to the
drawing board'. The three forms of review undertaken were:
1. Examining other reference models and audits of innovation capability to
see whether they contained elements that supported or contradicted this
researcher's work (Appendix 2);
2. Sharing the draft reference model with managers. The researcher held
discussions on early drafts with 17 managers who gave valuable
comments;

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3. Sharing the draft reference model with colleagues and peers who were
specialists in innovation management, strategy development and/or OD.
The researcher presented a seminar for colleagues at CENTRIM (8
attended), presented two seminars for the Institute for Personnel and
Development (11 Senior Personnel Officers and 46 Personnel Officers) and
presented a seminar at the Strategic Planning Society (17 strategy planners
attended). Again valuable comments were received.
The second generation audit (G2) incorporated the comments and feedback
received from peer reviewers. The G2 audit was revised five times over 18
months. A version was published in the USA (Francis, 1998a). The researcher
hoped that publication would open dialogue with a wider set of interested
specialists in the field (this did not, in fact, happen).
3.8.4

Extending the research team

One unusual feature of this research is that some activities were undertaken
by people other than the researcher himself. These were change-agents
working under the aegis of a cross-border initiative in Ireland (NORWESCO).
An opportunity occurred for the researcher to offer the data collection and
intervention methodologies developed for this research programme to a
group of enthusiastic change-agents. In the event the development of joint
projects with able collaborators proved to be a potent learning experience.
Their questions, comments and perspectives added to this research. From a
methodological viewpoint the formation of a task force has much to
commend it, as the interplay of diverse contributions provided a real-time
and detailed positive critique of evolving concepts and methodologies.
However, this strategy of using 'co-researchers' raises significant
methodological concerns. There is a risk that relatively untrained people62
make an unwarranted impact on the research process and that academic
disciplines are prejudiced. For this reason this researcher required all audit
data to be analysed by himself alone and he made interpretations personally.
Change agents were, therefore, not able to make any direct input into data
interpretation and theory building processes.

62

Change agents received four days of basic training and met for approximately four days a
year to deepen their understanding and develop their skills further.

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3.8.5

Statistical analysis

A decision was taken to view the statistical analysis of the audit as being of
less importance than its potential educational impact to client
companiescertainly during the early stages whilst relatively few cases were
available for analysis. The researcher was concerned that statistics and norms
present a specious but false impression of the objectivity of the approach. It
was also decided not to supply companies with statistics by the 6 domains or
the 18 componentsbut by the 56 elements (see Chapter 4). This had the
advantage that a distinctive company profile could be developed for each
company but the disadvantage that comparisons with the reference model
were difficult to make. On balance, it was felt that companies would receive a
more objective and useful feedback by going into detail in relation to the
56 elements but research data would be accumulated on an SPSS database and
could be re-structured once sufficient cases had been accumulated. Later, a
statistically-based approach could be developed if this were to be considered
to be helpful.

3.9

Interventions

The later phases of the research required entering companies (either directly
of through agents trained by the researcher) and seeking to facilitate a change
process that would enhance innovation capability. It was decided to adopt a
strategic business practice (Kotter, 1996) and develop a vision statement of
the final 'product' that would be offered to companies. The importance of
visioning is covered by Nutt and Backoff (1997) who identify that (quoting
Peter Block) "a vision provides a way for stakeholders to enter a 'possibility
space' that describes new ideas for an enterprise. So people can find a way to
become involved, the best visions are inspirational, value adding, significant
for key people, challenging but reachable, and energy releasing" (492).
The notion of helping "stakeholders to enter a 'possibility space'" proved
powerful and considered to be likely to help to "give the client insight (and)
figure out what he should do about the situation" (Schein, 1988: 11).
It seemed logical to apply the principles of successful product development to
this endeavour (Millson et al., 1992; Cooper, 1994; Wilemon, 1998). A 'product

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specification' was attempted for the intervention process. This was amended
and developed several times during the enquiry and served as a tool for
focussing the action research phase. The first iteration of the product
specification (February 1996) was as follows:
'The product should have four63 distinct elementsan entry process, a
diagnostic process, a data feedback process and an action planning process'.
41 audits of companies followed by intervention were carried out64 by the
end of August 1999 and 943 people had completed the G2 audit. All
companies had fewer than 500 employees and were largely selected from the
engineering and manufacturing sector. The data from audits was placed on an
SPSS database and basic statistical procedures were undertaken. The intended
role of the audit was limited to providing one form of feedback to firms.
Nevertheless, analysis of patterns of responses did provide indications on
development priorities to enhance innovation capability.
3.9.1

Review of effectiveness

The review of the effectiveness of the interventions was undertaken in two

ways. Firstly, a workshop meeting was held with the majority of the
participating firms in Ireland in 1998. Detailed notes were kept from this
event that were considered when the researcher spent three days in Belfast
with colleagues from the University of Ulster reviewing the initiative. In
addition, NORWESCO sponsored an independent consultant to review the
process. This researcher had been invited to help define the questioning and
review procedure. The consultant's report provided a second, and particularly
interesting, evaluative input.

3.10 Research process as learning

Bourner (1995) describes four key elements of the research process;
reviewing the field, theory building, theory testing and reflecting and
integrating. He observes that "(i)t is quite possible that the four parts will not
63

64

By January 1997 the product had six elements: an entry process, a diagnostic process, a data
feedback process, a report generating process, an action planning process and a learning
network process'.
Six audits and interventions were completed directly by this researcher. The remainder
were completed by change agents trained by him.

153

strictly follow the sequence in which they have been presented you may
well find that you engage in some parts of the research process more than
once" (7).
This was true for this research. Ideas and frameworks were changed,
destroyed or extended through ongoing interaction with firms, advisers,
change agents and colleagues. The research process included product
development, prototyping, iterative learning and maintaining a dialogue
between theory and practice; cited by LeonardBarton (1995) as typical steps
in innovation development.
Tranfield and Starkey (1997) cite Gibbons et al's work that suggests that "each
new configuration (of knowledge) becomes itself a potential source of new
knowledge production which is in turn transformed into the site of further
possible configurations" (Gibbons page 35 cited on page 4). They discuss
'mode 2' knowledge production that is "characterised by a constant flow back
and forth between the fundamental and applied, the theoretical and the
practical" (Gibbons page 19 cited on page 6). Adopting this perspective, a
researcher's work can be valid if it is a contribution to a stream of developing
knowledge and its value resides in its catalytic effectrather than attempting
to resolve an issue once and for all.
This research was viewed as a looping process in which 'theory' was
developed, tested, reviewed and significantly redefined several times. The
Kolb learning cycle (Kolb, 1983b) provided a meta-level theory and the
original stimulus for the research design. Kolb argues that learning requires
four phases of mentation and action that follow each other in a beneficial
cycle. It is possible to begin a learning process at any point. An experience
needs to be followed by a period of reflection, re-conceptualisation and
experiment if 'deep' learning is to occur. Kolb's model is one of the most
influential frameworks for understanding a process generally referred to as
'experiential learning' (actually the title of Kolb's book) (Jones, 1981).
Kolb (1980) suggests that four stances are needed for effective learning:
convergence, divergence, assimilation and accommodation. This requires the
researcher to be able and willing to take different stances within the

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selfanother looping process. Later, Kolb elaborated this concept into a

problem-solving cycle (Kolb, 1983a).
The Kolb learning cycle was beneficial to this research at two levels: firstly, it
led the researcher to seek to construct sequences of experimentation and
reflection; secondly, the intervention process was intended to be a learning
process so far as the companies were concerned and it was believed that the
intervention design would be stronger if it conformed to Kolb's model.

3.11 Limitations of the research method

During the discussion of methodologies in this chapter consideration has been
given to limitations of the research methods chosen. Significant limitations
include:
1. The criteria used for the selection of the research sample was not
sufficiently robust. Although efforts were made to select highly innovative
firms by using a DTI list of innovative firms, the criteria for firms to be
included on this list can be questioned.
2. The research was unable to look systematically at intervention for the
development of innovation capability in larger firmsthere is a SME focus
in the empirical work undertaken. In addition, firms that undertook an
innovation audit were almost entirely from the manufacturing sector.
3. This research did not systematically considered non-behaviourial factors.
Assets, financing, technology acquisition, intellectual property and similar
issues have not been systematically considered.
Despite these limitations, and others mentioned in the text above, it is
considered that the research process provided insight into defining and
developing innovation capability, as will be described in the next chapter.

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Chapter 4
Research findings
4.1

Introduction

In this chapter the findings of the empirical research undertaken for this thesis
are described. The chapter is structured in three sections.
1. The data collection process is outlined. This led to the first generation
reference model (G1) and the development of a pilot audit instrument.
2. The components and elements of the second generation reference model
(G2) are described.
3. The development of an intervention process using the G2 reference model
is described and the effects of interventions into companies are reported
upon.
In addition, the researcher used the available case material to explore a
theoretical issue raised in Chapter 2 concerning whether innovation capability
is a contingent or universalistic attribute. Six partial cases relating to each of
Mintzberg's organisational configurations (1998) were explored and analysed.
These cases were not systematically selected and the researcher considered
that they did not have sufficient methodological robustness to be included as
findings in this chapter. However, since the insights from this analysis are
provocative, and may lead to further research, these caselets and analysis are
included as Appendix 8.

4.2

Research design

In the previous chapter the methodology used for this research was
described. For clarity, relevant points will be reviewed below.
The theoretical review described in Chapter 2 provided an integrated model
of innovation capability encapsulated in Figure 2.5. This provided orientating
and sensitising concepts that were used to frame an interview schedule (see
Appendix 1). This provided the initial framework for data collection, with
theoretical insights adding to the data collection framework during the
progress of the research.

156

Interview data was collected and supplemented from various sources. The
sources of data in June 1995 are shown in the table below.
Table 4.1: data set for G1 reference model
NUDIST database contents June 1995

Numbers of cases

Interviews with consultants and facilitators (internal and external)

12

Interviews with managers

16

Analysis of company documents

Case notes

Action research projects

Observation reports/video tape analysis

1 (22 hours)

A semi-structured interview approach was adopted (rather than a totally

structured approach or a non-directive format). This was done for three main
reasons.

Firstly, structure provided an opportunity for the researcher to make

comparisons between cases.

Secondly, and more significantly, the use of structure added to research

quality. It was felt that a fully structured interview would be too confining
and, conversely as EasterbySmith et al. (1991) note, "the 'non-directive'
interview, where the interviewee talks freely is likely to produce no
clear picture (and) poor data which is difficult to interpret" (75).

Lastly, the 28 item interview schedule was too extensive for most
informants. The researcher had to adapt the interview for informants'
interests, experience and time availability.

The researcher categorised (coded) each text unit and placed it in a NUDIST
database. The development of the G1 model took place between June and
September 1995 when it was decided to undertake a design freeze so that an
initial reference model could be explored with colleagues, practitioners and
managers. The database contained, at that time, 35 documents and 998 text
units.
Interacting with the NUDIST database enabled a data structure to emerge.
Factors that 'helped' innovation capability were identified, named and
considered. The aim was to develop a provisional 'ideal type' model (as
described in Section 3.8). 'Hindering' factors provided a check that valid

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helping categories had been identified. 20 principal nodes (categories of data)

were identified, that could be clustered into four broad domains. This became
the first generation reference model of innovation capability (G1).
The researcher was aware that this form of analysis had disadvantages. There
was a risk that, in the desegregation process, important insights could be lost.
Categories were not clearly separated. In addition, the 'neat' division into 20
categories (termed 'components') was an over-simplification but, partly for
ease of explanation to managers, this format was adopted. An assumption
was made that innovation capability could be viewed as a gestalt, with a
variety of interdependent elements, a system of checks and balances and the
capacity to manage creativity, decisions, enactment and risk and the reference
model would contribute to understanding at least some of the elements.
It was realised that 20 components is a large number for an organisational
model. For example, one of the most widely used models, the 7Ss approach,
only has seven dimensions (Peters and Waterman, 1982) and Weisbord has
developed an influential six-box diagnostic model (Weisbord, 1984). This
researcher believed that managers need to pin-point strengths and
weaknesses within their firms of a complex capability and that an assessment
with a few parameters was unlikely to facilitate this.
Each component was named using active terminology (e.g. strong
implementation capability). This was to provide managers with a 'draft'
cognitive map of innovation capability using labels to which they could relate
readily. The titles of the components followed the advice of Higgs and
Ashworth (1996) who suggest that "organizational researchers can learn yet
another lesson from market researchers, who are often quite effective at
communicating study results through colorful use of language. Descriptive
terms such as 'young urban professional' or 'empty nester' convey research
results in an intuitive, understandable way that encourages broad
understanding of the concepts being measured" (33).
A test was devised for the purpose of defining a component. It needed to:
1. Have not less than 10 mentions as a helping characteristic in the NUDIST
database following a string-word search;

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2. Be defendable as a unitary category (e.g. 'Continuous Improvement and

Supportive Leadership' would be unacceptable);
3. Be the most generalised description possible of specific organisational
attribute (e.g. 'Positive Climate' would be too broad and 'Ideas Listened to
by First Line Managers' too narrow).
The first item in the test (achieving 10 or more mentions) helped to define the
component and, also, elaborate it. Illustrative data supporting each of the 20
components is presented in Appendix 3 with brief field notes and researcher's
memos to demonstrate the methodology used. For reasons of confidentiality
minor changes were made in some text units to avoid individuals or firms
being identified.
The G1 reference model provided a framework for a diagnostic questionnaire
(termed an 'audit'). This underwent nine revisions65 (often minor) as it was
tested and reviewed. Experience gained assisted in the development of the
second generation reference model (G2). The researcher had the opportunity
to teach the model to groups of practising managers undertaking an MSc in
Technology Management. Five students used the model for their
dissertations and provided valuable feedback.
As mentioned above, between 1995 and 1999 it proved possible to increase
the quantity of data in the database. The spread of the larger research sample
(it included a school, police service and two advertising agencies, for example)
extended and enriched the data-set (a list of consultants, companies and
organisations contributing can be found in Appendix 6). This provided an
opportunity to undertake a grounded theory research process with
substantially more data.
The revised test for defining a 'component' was that it:
1. had not less than 40 text units coded to the node;
2. corroborative references could be found from relevant literature to
provide an additional source of evidence for the durability of the
construct;

65

Revisions were dated 3 and 5 October 1995, 22 November 1995, 12 December 1995, 20 and 27
January 1996, 20 February 1996, 17 March 1996 and 8 August 1996.

159

3. Be defendable as a unitary category;

4. Be the most generalised description possible of specific organisational
attribute.
The second test was new. Even though the database was relatively large it
was considered to have merely scratched the surface of the topic. The search
for corroborative references provided a useful check-step and discipline.

4.3

The second generation reference model (G2)

The reference model will be presented to provide the reader with a mental
map of the whole before exploring the parts. For ease of explanation a wheel
diagram was developed (Figure 4.1) to show six domains (not developed
empirically) and 18 components (developed empirically).

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Ib Provides
Strategic
Advantage

Ia
Innovating
Leadership

Ic Prudent
Radicalism

VIc Sustained
Commitment

IIa Exceptional
Individuals

VIb Sound
Decision
Processes
VIa Guiding
Mental Maps

Vc High Performing
NP-PD

IIb Full Competences

Portfolio

DIRECTION
DECISIONMAKING

CAPABILITY
VI

STRUCTURE
& PROCESS

Vb Supported
Champions

II
III

IV

CULTURE

IIc Capable
Implementation
IIIa Selective
Empowerment

IIIb Innovation
Demanded

LEARNING

Va Apt
Organisational
Form

IIIc High
Enrolment
IVc Fruitful
Linkages

IVb
Acquiring
Multiple
Perspectives

IVa Continuous
Learning

Figure 4.1: G2 reference model

The wheel approach to displaying the reference model had advantages and
disadvantages. Its format suggests an interdependence of elements and that
innovation capability can be viewed as a unitary capability. Also, it is possible
to develop a spider plot so that a present capability of an actual firm could be
mapped on to the model. However, several disadvantages of the wheel
format have been identified, as detailed below:
1. there is an unwarranted suggestion of tidiness (e.g. 3 components in each
of six areas);

161

2. there is an inference that all components are equally important;66

3. the format presents a closed model that is difficult to adapt to the specific
needs of a particular firm;
4. no interdependencies between components are identified apart from a
general domain heading which could be misleading;
5. there will be contention in the definition of domains and components and
their definition. It is possible to develop and defend alternative
categorisations from the data set available;
6. There is an inference that companies can and/or should uniformly achieve
a standard that can be assessed;67
7. Some factors, possibly important, associated with organisational
innovation were omitted as they were mentioned infrequently.68
8. Behaviours and activities could sometimes be categorised in two or more
categories.

66

67

68

This factor is considered particularly important. For example, one company had introduced
25 new products within 5 months and was a market leader in its industry. However, a shop
floor focus group included the following: "Q: Tell me about the systems you have for working
out ways to constantly improve things." A: "We work things out for ourselves to make life
easier All the ideas come from above, they never ask us They just want production...we
haven't got brains...they just don't careWe do things the best way for us, you've got to look
out for number one round here." "Q: How are the people here managed differently to how
they were two or three years ago?" "It's a lot worse. It's gone down hill in the last 10
years The attitude has become push...push... pushThe supervisors used to talk to you,
have breaks with you. They don't do that now." At least in this case it seems that a firm
can be an innovation leader without high enrolment, continuous improvement and the like.
In some cases three or four informants or informant groups, from different organisational
levels, described the same company. Perspectives sometimes showed considerable
divergence. For example, one managing director of a firm 'dedicated to innovation'
described his firm's management style as to "give people freedom and responsibility be
responsive to people's needs and be supportive but have demanding tough targets".
Informants from a shop floor focus group from the same company observed: "You don't see
any managers on the shop floor. I've never seen the Chief Exec on the shop floor, the people
who know have gone. I wouldn't know our Board if they fell in front of me New Managers
have degrees, but no tact or compassionMy boss has known me for 8 years and doesn't
acknowledge me or probably know my name." Such examples demonstrate the difficulty of
defining organisational characteristics in comprehensive rather than idealised ways. In
addition, they raise the interesting notion that a firm can be innovative without being
'well-managed'. In the case mentioned above, the firm were noted as an industry leader in
new product development but there was evidence that the workforce were disaffected.
However, strong management and performance disciplines enabled a range of new and
improved products to be delivered without the goodwill of the workforce.
13 additional categories were identified but not included in the reference model. These are
listed in the nodes report (Appendix 4).

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Despite the disadvantages of a wheel format, the decision to use it was

influenced by the enthusiasm of managers who received an initial
presentation of the model. There was evidence that the wheel offered an
efficient communication device. Accordingly, it was adopted as the way in
which the reference model would be presented.
Both the first and second generation reference models used the wheel format.
The G2 reference model had fewer components than the G118 as against
20, however, was not radically different. A previously unconsidered factor
(organisational form) was added. Others components were redefined, more
accurately named and/or elaborated. The titles of the components were
'toned down' to avoid hyperbole and care was taken to ensure that they
accurately described the component.
The 18 components of the G2 reference model were compared with the G1
components. The results of this comparison are shown in the table below.
Table 4.2: G2 components compared with G1
G2 components

Related G1 components

Ia

Innovating Leadership

Ia Transformational Leadership

Ib

Provides Strategic Advantage

Ib Stretching strategic intent

Ic

Prudent Radicalism

IIIb Creative destruction

IIa

Exceptional Individuals

IIIa Exceptional individuals

IIb

Full Competencies Portfolio

Ic Dedicated innovation resources

IIIe Complete portfolio of competencies

IIc

Capable Implementation

IIIc Active internal networking

IVe Strong implementation capacity

IIIa

Selective Empowerment

IIa Empowerment practised

IIIb

Innovation Demanded

IIb Demanding expectations

IIIc

High Enrolment

IIc High enrolment

IVa

Continuous Learning

IIe Confronting learning

IVa Relentless continuous improvement

IVb

Acquiring Multiple Perspectives

IId 'Mastery' ethic

IVc

Fruitful Linkages

Id Strong external linkages

Va

Apt Organisational Form

Vb

Supported Champions

IVd Honoured champions

Vc

High Performing NPPD

IVb Effective new product/process development systems

VIa

Guiding Mental Maps

IIId Conceptual 'roadmap'

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G2 components

Related G1 components

VIb

Sound Decision Processes

IVc Sound decision processes

VIc

Sustained Commitment

Ie Directed innovation initiatives

4.3.1

The G2 reference model: components and elements

NUDIST constructs conceptual maps in the form of a pyramid (see Minto,

1987 for an explanation of this methodology). As a enhanced data set was
available, a decision was taken to add an additional layer to the analysis, as
shown in Figure 4.2 below:

Domain

Component
1

Component
2

Component
3

Component
4

x Elements

x Elements

x Elements

x Elements

Figure 4.2: domain, components and elements

In the figure 'x' represents a variable number. The addition of 'elements'

provided a further degree of complexity to the model. The added layer of
categorisation offered a richness of analysis that, in the opinion of the
researcher, provided a more useful tool for change agents and facilitators. In
total, 56 elements were identified for the 18 components. These are
summarised in the table below.

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Table 4.3: G2 components and elements

Ia

Ib

Ic

IIa

IIb

IIc

IIIa

IIIb

IIIc

IVa

Components

Elements

Innovating Leadership

(i)

Authentic/close involvement (from leaders)

(ii)

Bias towards innovation

(iii)

Focused effort towards defined opportunity spaces

(iv)

Enrolling leadership style

(i)

External focus (sensing)

(ii)

Coherentemerging strategy/vision

(iii)

Effective top teamwork

(iv)

Innovation goals in business plans

(v)

Performance measures assess innovation prowess

(vi)

Innovation policies deployed

(i)

Comprehensive analysis of change needs

(ii)

Openness to new mind-sets

(iii)

Effective change management

(iv)

Restructuring of assets

(i)

Analysis of needs for critical skills

(ii)

Proactive HR policies (recruitment & retention)

(iii)

Able people in innovation intensive roles

(i)

Analysis of competencies needed

(ii)

Co-ordinated competency development

(i)

Effective transfer to routine organisation

(ii)

Capable programme and project management

(i)

Management style supports empowerment

(ii)

Personal potential developed

(iii)

'Can-do' ethos (efficacy)

(i)

High expectations from opinion leaders

(ii)

Innovation goals set

(iii)

Innovation recognisedrewarded

(iv)

Kaizen institutionalised

(i)

Open 3 way communication

(ii)

Positive regard (for staff)

(iii)

Commitment to company

(i)

Enabling learning

(ii)

Competencies (general) developed

(iii)

Training in teamworking and problem-solving

(iv)

Knowledge management

(v)

Exploratory dialogue

(vi)

Experimental initiatives

Provides Strategic Advantage

Prudent Radicalism

Exceptional Individuals

Full Competencies Portfolio

Capable Implementation

Selective Empowerment

Innovation Demanded

High Enrolment

Continuous Learning

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IVb

IVc

Va

Vb

Vc

VIa

VIb

VIc

Components

Elements

Acquiring Multiple Perspectives

(i)

Hearing specialists

(ii)

Hearing 'out of field agents'

(iii)

Hearing 'in-business agents'

(i)

Gaining from external relationships

(ii)

Close customer relationships

(i)

Innovation-enabling organisational design

(ii)

Use of OD methodologies

(iii)

Use of teams and adhoc groups

(iv)

Inter-team co-operation

(i)

Legitimacy of the champion role

(ii)

Intrapreneuring attitudes and skills

(iii)

Effective sponsorship

(i)

Managed NPPD

(ii)

Creative approaches in NPPD

(i)

Tracking possible relevant possible maps

(ii)

Map selection and development

(i)

Fast/full information systems

(ii)

Reliable decision-making processes

(i)

Sustained senior management attention

(ii)

'Roadblock' removal

Fruitful Linkages

Apt Organisational Form

Supported Champions

High Performing NPPD

Guiding Mental Maps

Sound Decision Processes

Sustained Commitment

This model was presented to managers, academics and change agents in

199899 to explore the benefits and disadvantages. The notion of elements
(rather than domains or components) was regarded as important by
managers as they felt that it provided a route to move from a conceptual
understanding of innovation capability to formulating an organisation
development programme. However, the definition of elements was broad
and some managers argued that they should be broken down further into
sub-elements. For example, one company had spent considerable effort in
encouraging skills in intrapreneurship and had developed a competency
profile with six categories of this single element. It is likely that hundreds,
perhaps thousands, of sub-elements could be identified.
In addition to this testing process a parallel activity was undertaken. The
categories developed by this research were compared with research
undertaken by others (see, for example, Ahmed, 1998). A series of
comparisons were undertaken which are summarised in Appendix 2. In

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summary, it was found that there were few cases where other researcher's
work could not be mapped on to the G2 reference model.
4.3.2

The G2 reference model: 18 components and 56 elements

Below the findings on each of the 18 components are summarised in the

order shown on the wheel diagram (Figure 4.1). For clarity, statistical data
related to the NUDIST database has been omitted but can be found in
Appendix 4. A standardised format has been used to aid presentation of a
large quantity of analysis. For each component:

Firstly, a descriptor statement encapsulates the research findings in a

sentence or phrase (Descriptor Statement);

Secondly, a extract from a single case is given to introduce the construct.

Comments on this material are included (Case Example);

Thirdly, the principal dimensions of the component are outlined with the
findings drawn from all relevant cases. This includes the elements of the
component (Principal Dimensions of the Component);

Lastly, supportive references are provided from academic and

management literature (Literature Support).

4.3.2.1 Domain Idirection

The three components grouped under this category were 'innovating
leadership'; 'provides strategic advantage' and 'prudent radicalism'.
Innovating leadership (Ia)
Descriptor Statement: 'The leader(s) demonstrates a strong commitment to
innovation'.

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Case example:
This comment was made by the managing director of a rapidly growing UK
company reflecting on his leadership approach. He commented:
"Ideas sort of bubble up somehow but I think it's the general
atmosphere in the organisation, it's seizing opportunities and
dealing with them is a major celebration and we encourage
people to use our IT system. Any contact they have with a client
that results in additional business we say 'put it on the system,
tell everybody about it' everybody in the company knows
and there's a general motivational factor there. But I think a bit
of leadership as well."
This comment illustrates a reoccurring theme in the data set. The leader saw
his role as facilitating (note the use of the term "encourage" in the quotation)
and energising ("a major celebration"). An external consultant, commenting
on the style adopted by this leader, observed that he "held the space so that
people could develop improved cognition" (defined as "the capacity to stand
back and see opportunities"). In addition, the leader encouraged sharing and
providing positive reinforcement through his encouragement of use of the
firm's intranet ("put it on the system, tell everybody about it"). This managing
director stated that he "wanted to share the emotion", suggesting that he saw
his role as inclusive rather than instrumental.
Principal dimensions of the component
The findings indicate that a task of a leader (or the power elite in a larger
enterprise) is to stimulate a superior flow of value-creating innovation
initiatives. This required acting as a role model and facilitator. It was
insufficient for a leader to be the source of innovation personally (except in
the smallest firms) as this stunted innovation capability elsewhere in the
organisation. One factor mentioned by some leaders was that, in uncertain
situations, the best understanding of a situation (and the best ideas of
opportunities or remedies) may not lie with top management. A managing
director captured this when he observed, "somehow an organisation needs to
be created that can find good answers to multiple, perhaps half-understood,
questions".
The analysis of the data-set suggested that 'innovating leaders' behaved in
ways that were authentic and close, biased (towards innovation), focused

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effort towards defined opportunity spaces and enrolled others in innovating

initiatives.
Visibility and accessibility was considered to be the extent to which the leader
was actively involved in distributed (not personally managed) innovation
initiatives. The significance of this was particularly apparent in the analysis of
video material. Frequently the leader was either physically present at key
stages or participants would refer to his/her attitudes and goals whilst
innovation was being undertaken. Accordingly, the leader was a pervasive
presence. Authentic/close involvement appeared to be adopted by the majority
of leaders; formalistic approaches were largely absent. In general, the leaders
appeared to be themselves, sharing dilemmas and feelings and engaging with
staff from a collegial stance. There were occasions when the leader became a
team member or contributor on an innovation initiative led by lower level
staff.
Bias (towards innovation) was extensively observed and commented upon by
informants. Leaders made sense of the world by advocating that innovation
was a key element in business success. Their stance, in general, was to 'want
to say 'yes' to anything sensible'. Interestingly, almost all leaders interviewed
were cautious as well as supportive of innovation: exemplified by the
comment "it's great to have ideas but they are not all good ideas. And even if
an idea is a good one the time has to be right".
Focusing effort towards defined opportunity spaces can be described as 'setting the
firm's innovation agenda'. However, this was generally collaborative as
leaders could not always provide clarity of direction in innovative situations
as they did not know what was "the right thing to do". However, they
described, or legitimised, needs and opportunities and focused effort on
making progress in defined opportunity spaces. For example, the CEO of a
pharmaceutical company said "we need to achieve 1000 by 2000" meaning
that by the year 2000 (the statement was made in 1995) 1000 days would be
the normal time taken to develop a new drug rather than roughly double
that at the time. From the 1000 by 2000 commitment many innovation
initiatives sprung. Leaders placed innovation initiatives within contexts,
including strategic, financial and resource-availability. They spoke of the need

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for balance, working on the whole of the value chain and matching initiatives
with "not overwhelming folk".
A leadership approach that was enrolling was found in most but not all cases
(see earlier footnotes in this chapter for contrary examples). The leader paid
attention to explaining contexts, encouraging staff to 'buy-in' and maintaining
a high degree of commitment. It was commented that this was especially
important in innovation since "by the time you have understood the rules of
the game they will have changed". There were cases where significant effort
was expended to facilitate enrolmentfor example, one managing director
met all members of the workforce in a large company in small groups to
explain and discuss innovation initiatives at least twice a year.
Literature support
The role of the leader in an innovative organisation has been widely discussed
but less frequently researched systematically. References supporting the
conclusions of this research related to the component can be found in AllenMills (1995), Bennis (1983), Bennis and Nanus (1985), Binney and
Williams (1997), Bratton (1995), Carroll (1993), Goss et al. (1993),
Harrison (1983a and 1995c), Heraculeous and Langham (1996), Jelinek and
Schoonhoven (1990), Kawasaki (1991), Mintzberg and Waters (1983),
Pascale (1994), Schumpeter (1961), Semler (1993), Stacey (1996), Taylor (1995),
Teal (1996), Tichy and Sherman (1995), Voss et al. (1994) and Zaleznik (1977).
Provides strategic advantage (Ib)
Descriptor Statement: 'Innovation is a key element in the organisation's
strategyit enhances the firm's competitive strategy and/or its resource
base'.
Case example:
The researcher was able to observe a four day strategy workshop of the Zat
company in 1997 (company name and other details have been disguised at
the request of the firm). Zat is a major player in the retail grocery industry in
a European country (within the EU). It is the second largest firm of its type in
its home country. The firm had achieved rapid growth in its market share.
This is an extract from the researcher's field notes:

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'The workshop was titled 'Inventing the FutureZat in 2002'.

At the opening session of the workshop PB, the chief executive
officer, positioned the event in these terms: "we are entering
another phase in the development of the company. It is unusual
for us to create the opportunity to be together for such a
concentrated period of time. We must be inventive but
realistically inventive. Our goal is to expand the company
without diminishing our essence. We will do this by targeting
specific market sectors and dominating them. At the moment I
see us attacking independents in the following segments:
independent wine stores, independent cheese stores and
independent convenience stores. At the moment they have
approximately 27% of the market. To be frank with you, I want
Zat to put half of them out of business in five years! In order to
do this we will have to changethis workshop is about taking
these guys out. That is what I want us to be inventive about".
The following four days were spent in three workshop groups,
each reviewing a different market sector. Structured analysis
took place on industry changes, market drivers, competitor
strategies, profit drivers, unmet customer needs, the firm's
strengths and weaknesses. At each stage ideas were generated
and recorded on post-it notes. By the time that strategic options
were formulated (late on day two) each group had between 278
and 414 ideas listed and categorised. A strategy was determine
for each product-market and a step-by-step implementation
programme was prepared (with 109 separate activities listed).
This assignment provided an opportunity to observe the initiation69 of a
wave of innovation in major firm, although the extent to which the findings
could be generalised could not be tested. Of particular relevance were the
multiple connections made between the firm's competitive strategy and the
innovation agenda. Subsequently, selected innovation initiatives were
included in the firm's business plan.
Principal dimensions of the component
The research findings indicate that firms seek, with various degrees of
formalisation, to direct innovation capability towards outputs that enhance
their perceived strategic advantage (strategic advantage was perceived to be
a broader concept than competitive advantage as it included developing
existing and new capabilities and moving into new or different opportunities
spaces, technology- product- and/or market-determined). A close link
between innovation and strategic advantage provided a persuasive rationale

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for firms to commit resources to support selected innovation initiatives to

completion. A firm's 'innovation agenda' was, to some extent, confined by
existing policies (paths)for example, in some cases, products were not
developed as single entities but as manifestations of an established brand.
The analysis of the data-set suggested that 'providing strategic advantage'
required an external focus, a coherent/emergent competitive strategy/vision,
effective top teamwork, innovation goals incorporated in business plans and
innovation policy deployment.
External focus refers to the commitment of decision-makers in a firm to
identify, assess and evaluate political, economic, social, technological, market
and competitive changes that may make an impact on the firm's strategies
and commitment decisions. This task was complex as, for example, a variety
of factors could interfuse in ways that were novel and/or rapidly emergent
(e.g. in connection with internet business opportunities). The findings show
that there is a commitment in innovative firms to scanning and trajectory
tracking, although much sensemaking regarding the external environment
was informal.
A coherent/emergent competitive strategy/vision sought to provide answers to
four questions. Where shall we compete? How shall we compete? What
competencies shall we develop (that can be leveraged for advantage in the
future)? What are the firm's collective intents and values? The research data
suggests that the degree of coherence of a firm's competitive strategy is
important. Innovation initiatives may take place in multiple locations in the
firm and there is a risk that they may be mis-aligned. A coherent competitive
strategy serves to align innovation initiatives. Also, any gap between the
selected strategy and the current actuality clarifies the need for new or
re-energised innovation initiatives.
Effective top teamwork can facilitate innovation as explained, for example, by an
informant who said: "(w)e were all very focussed on doing the same thing
and the priority was to get that thing done and not to maintain a position

69

In July 1998 the researcher was informed that two of the three initiatives planned in the
workshop had been rolled-out. One was discarded when market studies revealed that Zat's
current business model and image were disadvantageous in that specific area.

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outside that each of us wanted to do the job and work together".

Innovation appears to require openness of thought amongst those in the
dominant coalition at the top of the organisation and the ability to manage
ambiguous and/or changeable horizontal relationshipsboth attributes are
helped by a consensus of ends and means shared amongst the members of
the firm's power elite.
The research indicates that, especially in medium-sized and large
organisations, it is important to have innovation goals incorporated in business
plans. This was especially true in diversified organisations where there was
pressure from corporate officers for operating divisions to do the things that
they said that they would do in their annual plan (all diversified firms in the
sample did this). Since the plan was always a full agenda it was likely that
innovation initiatives requiring resources would only be done if they were 'in
the plan'. Performance measures codified the ways adopted by a firm to
manage its resources, activities and outputs.
Innovation policy deployment provides a systematic process for enrolling parts
of the organisation in the application of corporate policies. The research
findings suggest that deployed policies can be a source of innovation since
groups in the firm are required to answer the question 'what do we need to
do to achieve the policy objectives?' For example, in one case, a policy
requiring improvements in customer service led to a new process being
developed and installedto set target service levels for each different type of
customer. A very large number of innovation initiatives were undertaken
when they were incorporated in managers' objectives using some form of
Management by Objectives (MbO) approach.
Literature support
The role of the innovation within a firm's strategy has been widely discussed,
especially in the work of scholars of business strategy. References supporting
the conclusions of this research related to the component can be found in
Bart (1996), Barrett and Cooperrider (1990), Benton (1990), Bessant (1997a),
Bowman and Carter (1996), Butler et al. (1996), Byrne (1996), Coyne (1996),
Debackere et al. (1997), Francis (1992), Hamel and Prahalad (1994),
Hout et al. (1982), Johnson and Smith (1994), Kaplan and Norton (1996), Lane

173

and Maxfield (1996), Miles and Snow (1978), Mill (1982), Millar and
Shamsie (1996), Mills (1985), Mintzberg (1994), Oram (1996), Porter (1980, 1985
and 1996), Raymond et al. (1996), Roper (1996a), Stevenson (1996),
Tang et al. (1996), Thomson (1996), Tregoe et al. (1989) and Utterback (1994).
Prudent radicalism (Ic)
Descriptor Statement: 'Radical change will be undertaken if needed'.
Example:
The following material was selected from a presentation given by the chief
executive of a multi-divisional company based in Bombay and active in
several countries in Southeast Asia:
"What we have to get away from is right now we're thinking
like we're part of a regular army, you know, that we have a
camp, we've got tanks, we've got helicopters, we've got all
these tools and if we don't have the tools we can't fight; so that's
why the American army lost in Vietnam. We have to think like
the Viet Kong, we have to think like guerrillas, that all we have
is an AK-47 and five bullets and we have to make each bullet
countbecause your competition is like that. We are not in a
business where it is difficult to come in; anybody can come in.
So if we are not flexible and fast like the guerrillas, they are
going to come and get us, it's as simple as that."
This chief executive was advocating that his company (he had recently been
recruited) needed to adopt change as an ongoing commitment, indeed an
ongoing passion. He believed that this required being agile and aggressive. A
few months later he implemented a wide set of initiatives that was described
as 'our transformation programme'. He asserted that agility, innovation,
aggression and 'continuous revolution' are interlinked and are, jointly,
requirements for success. At the time of the interview in 1997, India was
undergoing a period of rapid business development and there were many
new entrants into the firm's product-market areas.
Principal dimensions of the component
Radical change, in at least one element of the firm's value chain, was a
common characteristic of the companies in the research data-set.
Transformational change required (the most frequently mentioned activities
only) learning, un-learning, acquisition, adaptation and shedding of assets,

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organisational structural revisions, personnel changes, new or revised

policies, supply chain and logistic revision, cultural/normative change,
amended control systems and application of different technologies. Often a
combination of these were implemented. In order for new (sometimes
innovative) initiatives to be adopted there was a need to destroy, replace or
amend current policies, structures, goals and practices. However,
interviewees emphasised that this needed to be done with care (hence the use
of the word 'prudent' in the title of this component)both to avoid wasting
the value of existing assets (including human assets) and to manage change
processes in ways that were efficient and acceptable to staff.
A review of the data-set suggested that 'prudent radicalism' required a
comprehensive analysis of change needs, openness to new mind-sets,
effective change management and restructuring of assets.
The comprehensive analysis of change needs was a frequent preoccupation of
managers. In some cases they did little else for days (for example, in a
workshop environment). Various devices were used to define change needs
including audits, studies and consultancy reports. Many innovations,
especially of process or paradigm, required multiple initiatives and it was
considered important that all aspects (especially indirect consequences and
risks) were considered in advance so that a comprehensive situational
appraisal was to hand.
Openness to adopt new mind-sets was considered to be required for 'stretching'
innovation initiatives. Interviewees spoke of 'mind-opening', 'thinking
outside the box', 'challenging the status-quo' and 're-conceptualising the
situation'. This requirement was accepted by several top management
groups, many of whom opted to attend seminars and workshops. In
addition, efforts were made to encourage more junior staff to 'open their
minds'sometimes through 'off the wall' training initiatives.
Planned and effective change management was a characteristic of larger firms
although there was evidence that smaller firms had, informally, adopted
many of the principles of change management that have been well-publicised
in the business management press. Change management included the
development of a vision, building of consensus, identification of change

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champions, setting of change objectives, identification of milestones,

extensive communication, project management and definition of liaison
devices.
Restructuring of assets took many forms, from change of use of factories or
production lines to replacement of equipment, plant, services etc. and the
development of e-business experiments. In every case, asset restructuring
was seen as an element of a broader change management process.
Literature support
References supporting the conclusions of this research related to the
component can be found in: Abrahamson (1991), Beng (1993), Binney and
Williams (1997), Boyatzis (1982), Bratton (1995), Carroll (1993), D'Venti (1995),
Drucker (1994), Ghemawat (1991), Goss et al. (1993), Grove (1998),
Hou et al. (1991), Hurst (1995), Janis (1982), Kleindorfer et al. (1993),
Kotter (1996), Olins (1997), Rickards (1999), Semler (1993), Trist (1978) and
Wheatley (1994).
4.3.2.2 Domain IIcapability
The three components grouped under this category were 'exceptional
individuals', 'full competencies portfolio' and 'capable implementation'.
Exceptional individuals (IIa)
Descriptor Statement: 'Outstanding people occupy key roles'.
Case example:
The observation below was made by the organisation development manager
of a multi-national chemical company. He said:
"There are certain tasks for which we need to employ the best in
the world. We have a 'rare and critical skills' strategy for
defining, finding and retaining R&D key staff".
This informant then went on to describe, in depth, how the company had
recognised the need to be world leaders in certain science application areas.
This, they believed, could be partly accomplished through employing 'the
best' people. Accordingly, the company's Human Resource Management
department had a established a 'rare and critical skills programme'. This was

176

funded with million of dollars annually and sought outstanding individuals

globally, making them offers that it was difficult for them to refuse. Much
attention was paid to compensation, with considerable weight placed on stock
options. The company had achieved world leadership in several of its
products.
Principal dimensions of the component
This research indicates that the quality and motivation of key people makes
an important, sometimes critical, contribution to innovation capability (both
full-time employees and/or those on a time-limited contract). Interviewees
argued that there are situations where only a limited number of exceptional
individuals can make an exceptional contribution. This flowed from their
credentials, specific expertise and/or personal qualities. Two examples,
provided by informants, make the point. Only a small number of people
(estimated at 50 in the world at the time) could contribute creatively to a
research project employing the findings of the human genome project for the
development of a new pharmaceutical drug for the treatment of CJD disease.
Secondly, it was considered that there are fewer than 400 people in the world
who could produce a innovative and critically acclaimed ballet choreography
for the Royal Ballet. Technical idea generation was widely reported as
requiring specialist expertise (sometimes requiring teams of able individuals).
Not all rare and critical skills are professionally-based. Some individuals are
reported to be unusually effective in finding solutions to challenging
problems. Others act with skill in a managerial capacity, channelling the
resources of others to accomplish novel projects.
The analysis of the data-set suggested that 'exceptional individuals' required
analysis of the need for critical skills, proactive HRM policies for recruitment
and retention and able people in innovation intensive roles.
The analysis of the need for critical skills provides a basis for targeting search
procedures and determining what conditions need to be provided in the firm
in order to attract the 'right' people. In effect, the firm needs to market itself
to high potential recruits. One company defined its goal in this area as
"becoming the employer of choice" for such key staff.

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Proactive HRM policies for recruitment and retention are needed to implement
the activities mentioned above; specifically, competency need identification,
searching, selecting, inducting, motivating, rewarding and retaining
exceptional people in innovation-intensive roles. The roles of departments of
Human Resource Management varied significantly but in larger innovative
organisations (for example, SmithKline Beecham, the New York Police
Department and Thames Water) the task was well-resourced,
professionalised and committed to organisation development using
variations of the strategic partner role model.
Having able people/teams in innovation-intensive roles provided the quantity and
quality of human resource required. Several informants made the point that
innovation may require particular, sometimes rare, talents, knowledge-sets,
skills, motivations and/or accumulated experiences. Innovation patterns
change over time, requiring the re-allocation of talented individuals to new
tasks. In some cases teams, rather than individuals, were the focus of
concernespecially in international or global companies where the
development of centres of excellence was a common strategy for
institutionalising innovation across multiple product lines.
Literature support
A considerable amount of attention has been paid to organisational
resourcing, with relevant literature being produced by human resource
management specialists. References supporting the conclusions of this
research related to the component can be found in Argyris (1994),
Coles (1996), Collins (1996), Delery and Doty (1996), Fox and Webb (1997),
Gill et al. (1993), Goldberg (1983), Hertzberg (1966), Kelley and Caplan (1993),
Lane and Maxfield (1996), London and Higgot (1997), Lumpkin and
Dess (1996), Maslow (1965), McGovern (1994), Pemberton and Herriot (1993),
Quinn et al. (1996), Scarborough (1996), Schein (1978), Scott and Bruce (1994),
Tampoe (1993) and Ulrich (1997).

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Full competencies portfolio (IIb)

Descriptor Statement: 'All necessary competencies70 are available or being
made available (specifically norms, assets, technologies and skills)'.
Case example:
The observation below was made by a senior manager in a multi-national
chemical company. He observed:
"R&D found it was very helpful to define the need for faster
development of new products as 'improving development cycle
time'. In R&D eight distinct proficiencies were identified. These
were strategic technologies, smart scanning, portfolio and asset
management, product development expertise, information
management, risk management, company-wide influence and
external customer influence) and a process-owner identified for
each."
This company had invested several person years of time (facilitated by
leading consultants) in considering how to improve the innovation process
from an R&D perspective. The final list of 'proficiencies' had been condensed
from a much larger number (more than 100) and had been agreed at top
level. The company recognised that merely identifying a proficiency was
insufficient: a managed development process was needed. In order to
co-ordinate this a 'process owner' was appointed who was answerable to top
management and could call upon considerable resources.
Principal dimensions of the component
The deliberate development of 'hard' and 'soft' competencies, either together
or separately, was noted in most cases. 'Hard' refers to competencies that
require changes in systems, equipment, processes, investments, asset
utilisation and the like. For example, one company in the research sample
linked sites around the world with a company-specific CCTV satellite system
to enable teams to engage in transnational interactive work (a process
innovation). This required investment in the hardware and the development
of new behaviourial skills amongst team members ('soft' competencies).
70

The researcher is aware that definitional problems have resulted in a variety of meanings
ascribed to the term 'competencies' resulting in the term being obscure, ambiguous or
contradictory. However, this is the word that managers use and has, accordingly, been
adopted in this work.

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In smaller firms managers the assessment process was less formal, in effect
managers asked themselves 'what do we have to be good at to get this
done?' Some larger firms adopted a systematic audit procedures
(e.g. technology audits). Not all innovation initiatives required significant
competency development, especially if they emerged from a continuous
improvement process. However, some innovations required the
development of new, enhanced or extended 'hard' competencies. For
example, an electronics firm seeking to develop greater expertise in new
product development needed to develop competencies in stage-gate decision
making, fast-track NPD and early-warning of delay that has been reported
upon elsewhere (Bessant and Francis, 1996). Firms saw that it was necessary
to possess, have access to, or develop all of the needed competencies, as
noted by an informant who said "if you lack something critical you've got a
weak link. It can scupper you."
Asset upgrading was, in some cases, as simple as providing a new machine or
upgrading computer software. At a meta-level many firms undertook an
assessment of asset development needs related to the firm's espoused
strategiesin particular related to technologies. Only a few firms used formal
methodologies for technology appraisal, technology portfolio analysis,
technological trajectories assessment, technology bench-marking and
procedures for matching technological capability with product-market
strategies. However, even informal assessments of asset development needs,
flowing from business planning decisions, could have far reaching
consequences; for example, the move to digital transmission in television
broadcasting required considerable asset investment for an advertising
company and acquiring skills in the use of different technologies (digital video
tape editing, for example).
The analysis of the data-set suggests that 'full competency portfolio' requires
analysis of total competency requirements and co-ordinated competency
development.
The analysis of total competency requirements required the development of a
conceptual map of what might be needed, although, typically, this would be
changed over time. The analysis generally had implications for firms' budget

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provisions and resource allocation decisions. In one case, the specification of

needed norms, assets, technologies and skills provided a coherent
developmental plan for the organisation.
Co-ordinated competency development was practised with different degrees of
formalisation. The example mentioned above, related to the company-specific
CCTV satellite system, indicates that a series of commitments and initiatives
were needed to enact a relatively straightforward innovation. This was
commonplace. It was stated, revealingly, by one informant that "the secret is
that you need to get all of your ducks in a row". By this she meant that
developing partial competencies or not correctly timing multiple competency
development would result in the required portfolio of competencies being
unavailable or sub-optimised. This was considered difficult to manage since
firm-, process- or project-level competencies often required initiatives across
the organisation, invariably involving several line managers except in micro
enterprises.
Literature support
The findings of this research broadly support the contentions of theorists who
advocate a resource theory of the firm (see Chapter 2). References supporting
the conclusions of this research related to the component can be found in
Aviel (1996), Bessant and Francis (1996), Boyatzis (1982), Butler (1992),
Butler (1992), Chiesa et al. (1996), Christensen (1997), Coombs (1996),
Dai (1995), Dess et al. (1995), Galbraith (1973), Grupp (1994), Hales (1995),
Hamel and Prahalad (1994), Johnson and Kaplan (1987), King (1995),
Lloyd (1994), Mitrani et al. (1992), Nakamoto (1996), Prahalad and
Hamel (1990), Sculley (1988), Szanto (1994), Tanouye (1995) and
Utterback (1994).
Capable implementation (IIc)
Descriptor Statement: 'Ideas are successfully transformed into action
programmes'.
Case example:
The transcript below is an extract from a discussion between two managers in
a firm that designs and manufactures complex product systems:

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Manager A: "Okay. Let's assume that's a 'go' decision and a 'go now'
decision."
Manager B: "The first thing that's going to happen then, is that the proposal
that will be put back to JC (John Cole, Director), at which point the first
thing that will happen will be the appointment of a programme
manager. Realistically, unless everything turns upside down, that will
be Jeannette to continue. And with that she will get her defined task
and budget."
Manager A: "Right."
Manager B: "From there she has got to turn that in the normal programme
form into work packages and assign various people to the team. Now
at the moment, up to that point it's fairly self-contained because it's
only involving the people that have been working on the initial part.
Then under PM (project management) methodology, that should then
be assigned as work packages to TLs (team leaders) who take on the
design to cost. It's an assigned work package for which you are
responsible for an assigned task and assigned budget."
Manager A: "And the assigned task includes success criteria?"
Manager B: "It should represent a total package with deliverables."
Manager A: "Right, okay. Understood. All the parameters."
The process being discussed here is a project management approach that
integrates the work of up to fifty teams working on the development and
manufacture of a complex electronic and mechanical product. Key points
included the appointment of a programme manager (Jeannette), adoption of
resource planning methodologies and the imposition of an detailed project
management system that standardised planning and delegation of tasks (as
work packages) to team leaders. These were seen as essential procedures for
transforming an idea into a project.
Principal dimensions of the component
Implementation of innovation initiatives was a major preoccupation with
companies. It was pointed out that implementation processes can be highly
issue-specific and demanding. As one informant put it "it's far easier to come
up with an idea than get it done". The quantity and complexity of
implementation requirements varied widely. For example, a health club
decided to install do-it-yourself fat monitoring meters in locker rooms. All
that needed to be done to implement the idea was to raise a purchase order,
instruct suppliers and arrange when the equipment was to be installed. In

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contrast, a pharmaceutical company changed its role in relation to the

diabetes from being a supplier of drugs to offering a full disease management
to governments for an annual fee per 100,000 of population. In this case, the
implementation of the idea required setting up an entirely new business with
specialised assets in a pioneering area. Implementation issues were described
by informants in ways that can be conceptualised as on Figure 4.3.
High Asset Intensiveness

Systemic
Change
Programme
Major
Programme /
Project
Low Asset Intensiveness

Routine
Adaptation

Incremental

Transformational

Figure 4.3: asset intensiveness and innovation requirements

On this figure the vertical axis represents the degree to which the idea
requires an intensity of commitment of assets. The horizontal axis represents
the extent to which the systems and routines of the organisation require
systemic change. Certain tasks of implementation (for example, fat monitors
at a health club) were performed by the routine adaptation systems of the
organisation, generally through a form of management by objectives
approach. More demanding innovation initiatives required programme and
project management. Ideas that are asset intensive and transformational (for
example, the diabetes health management system) required a multi-faceted
change programme.
The analysis of the data-set suggests that 'capable implementation' requires
effective transfer to the routine organisation and capable programme/project
management.

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The effective transfer (of innovation initiatives) to the routine organisation was seen
most clearly with innovations in product, where a new or different product
was developed and passed over to the routine part of the organisation for
production and roll-out. In a manufacturing environment, for example, there
were frequent comments about difficulties due to the lack of handover time,
inadequate design for manufacture, tooling problems and the like. Roll-out of
an innovative product from manufacturing into a distribution chain or for a
customer required a launch strategy that included marketing, sales and
logistics activities. It was pointed out, for example, by one informant that new
or improved products "needed to be sold to our distributors, the stores, the
magazines that influence customers, the customers themselves and the
regulatory authorities". In some cases 'roll-out' procedures could be
demanding, resource intensive and require multiple, choreographed and coordinated initiatives.
Project management was used as a methodology to manage episodic tasks.
Where projects were large software programs were used to drive coherent
project management. Programme management provided, in a few cases, a
meta-level process for achieving broad objectives involving multiple projects.
Work packaging was used to define the content and scope of work to be
performed and to break this down into tasks that could be carried out by
work groups, matrix teams, organisational units and/or ad hoc groups.
Ownership clarification was universally implemented to determine the
allocation of responsibilities and authorities to named individuals or, less
frequently, groups. Monitoring was used to check performance and identify
where remedial or supplemental initiatives are required.
Literature support
Literature related to project management, distribution and marketing is
relevant. References supporting the conclusions of this research related to the
component can be found in Ayas (1996), Brady (1995), Brundenenius (1994),
Cusumano and Selby (1996), Fisher (1995), Frame (1994), Galbraith and
Nathanson (1978), Hamilton (1997), Harwood (1992), Hendry (1989),
Holt (1991), Karlsson and Ahlstrom (1996), Kawai (1992), Neale (1991),
Rickards (1999), Riccardi et al. (1996), Schwartz (1991), Taylor (1911),

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Tidd et al. (1997), Walton (1997), Warren (1994) and Wheelwright and
Clark (1992).
4.3.2.3 Domain IIIculture
The three components grouped under this category71 were 'selective
empowerment', 'innovation demanded' and 'high enrolment'.
Selective empowerment (IIIa)
Descriptor Statement: 'Able people are encouraged to take initiatives
themselves'.
Case example:
The interview extract below is with a senior officer in a US police force that
was noted for adopting an innovative strategy.

71

'Culture' is a term that has been used loosely and uncritically in many contexts. Here the
researcher follows the view of Maanen and Barley (1985) who state "the presence of
culture is displayed by the identification and elaboration of such matters as language,
totems, taboos, signifying codes, work and leisure interests, standards of behavior (and
characteristic deviance), social classification systems, and jural procedures From the
description of these various domains, the analyst infers the pattern(s) said to
simultaneously knit the society into an integrated whole and to differentiate it from
others" (32). Accordingly, the term culture is used from a sociological perspective.

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Researcher:

"Have you adopted any form of empowerment strategy, of

enhancing the role and sense of powerfulness of people lower
down in the organisation?:

Respondent: "In 1984 we were one of the first, probably the first, police
department in the country to embrace the philosophy of
empowerment. We had a programmatic, which eventually
became a city-wide, programme. Beginning about 1989, 1990,
we went the whole hog. In the prevailing community policing
philosophy of the time the idea was to empower the police
officer. The police officer was to become, in effect, the chief of
his or her beat. We tried to give them the maximum resources,
tremendous discretion, they were basically able to make their
own hours, to address problems as they saw them, we put
more focus on the police officer. We inverted the typical power
pyramid throughout the agency. In the long run we found that
was not effective. The basic problems was that you were
asking a 23, 24, 25-year-old officer who was at minimum a
high-school graduate and probably had a little bit of college
education to be a police executive within his or her limited
scope, limited jurisdiction Some of them did it with aplomb.
After Commissioner B came in, we did an analysis of what was
wrong We found that the level of the pyramid where most
of the authority should be invested, and discretion, was at the
precinct commander level. They were older, they were
experienced, they had the education, they had the skills to
properly use that authority and discretion One of the things
that we have done, is to empower the precinct commanders, to
give them the maximum control over the resources available.
They are now the chief of the precinct. And we've said to them
'You know what we are going back to the old days; the cop
works for you again, you don't work for the cop'."
In this interview the senior police officer described difficulties in applying the
principle of empowerment. He made the point that it was beneficial to
empower employees who are able and willing but it can be dysfunctional to
empower those who are not. It was clear, at least in this case, that
empowerment was not a panacea and inappropriate use of the managerial
strategy can result in a decline in the organisation's effectiveness, including its
innovation capability. Later in this interview it was stated that innovation
required that a co-ordinated (i.e. not piecemeal) set of values was adopted.
Ideas could come from below but needed to be assessed in the context of the
overall organisational strategy.
Principal dimensions of the component
Most firms studied were following a strategy of empowerment, generally as
a deliberate policy, although, often, "avoiding the e-word"! The rationales

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offered for adopting empowerment had two principal elements. Firstly,

managers argued that innovation initiatives should not be solely owned by
top management since that would reduce the quantity and, arguably, the
quality of innovation undertaken. Secondly, top management considered that
the best place to take an initiative was, often, close to the opportunity, rather
than remotely, since enthusiasm and knowledge were located there. Policies
of empowerment required a change of style, especially from management as
the following quotation makes clear: "(t)he dictatorial approach has
gonemushroom management has gonenow everyone knows where
problems lie as information is shared Last year's strategic plan was bottom
up." Empowerment was usually supported by training and represented a
major shift in culture for many firms. There were contingent changes in
structure, power relationships, accountabilities, communication,
decision-making and, occasionally, personnel.
The analysis of the data-set suggests that 'selective empowerment' requires
that the prevailing management style supports empowerment, personal
potential was developed and that there was a generalised 'can do' ethos.
A management style that supports empowerment was widely, but not universally,
adopted. This was not easy to achieve since it required changes of attitude
and behaviour, especially from the firm's ruling elite. Some behaviourial
routines needed to be unlearned and others acquired. It was considered that
managers needed to move in largely the same stylistic direction. Of particular
importance was the adoption of a set of values that could be broadly
categorised as 'theory Y'72 (McGregor, 1960). At the team leader level almost
all companies were redefining the roles of supervisors into acting as coaches,
facilitators and patrons.
The development of personal potential was often considered necessary for those
being empowered since, it was argued, they needed to be capable of coping
constructively with a larger opportunity space made available. Sometimes
imaginative methods were used to develop the sense of self, personal power
and inner resourcefulness with forms of outward bound training being the
most common.
72

Only one company actually used the Theory X, Theory Y terminology.

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A generalised 'can do' ethos provided confidence in permitting and

encouraging the development of ideas. A collective sense of 'organisational
empowerment' appears to enhance collective efficacy, thereby supporting
innovation. One informant put this vividly when he said that many things
changed after the management team "grabbed hold of our own destiny".
Literature support
Literature relevant to organisational culture provides insight. References
supporting the conclusions of this research related to the component can be
found in Ashkenas et al. (1995), Bhalla (1995), Binney and Williams (1997),
Block (1987), Burdett (1991), Burgoyne (1995), Coyne (1996), Curteis (1997),
de Bono (1999), DTI (1994), EBC (1997), Gallwey (1974), Grapper (1996),
Herman and Korenich (1977), Ketchum and Trist (1992), Pfeffer (1994),
Senge (1992) Schonberger (1996), Sell (1997), Semler (1993) and Tichy and
Cohen (1998).
Innovation demanded (IIIb)
Descriptor Statement: 'People are required to innovatethere is an expectation
placed upon people that innovation is a core component of their role'.
Case example:
The conversation below is part of a transcript of a meeting of the senior
management team of a company marketing perfumes and related goods.
Managing Director:
"I think that this is a very interesting point. We sell 10% more
perfume today than ten years ago. It is very important to
distinguish between the growth of the retail business and the
share of different channels of distribution. It is also possible that
within different product categories the story is very different.
The range of products is very different. I encourage everyone to
be very clear as to what the issues are (MD goes to the flip
chart).
"Take gifts to spouses and partners. The image was that these
gifts were a very high proportion of sales. The reality is that it is
35-40% (writes on flip chart).

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"Another category is women to women (writes a figure on flip

chart). What seems to me to be important is that the percentage
of women to women giving is the same but the products have
changed.
(Reflectively) "What has changed is the pattern of women to
women giving. Is the reason for the change economic or social?"
Horace:
"It's young women who do this. It's a type of social experience."
Managing Director:
"We need to be very clear about this, and we are not (seriously
spoken). I think that it is a responsibility of all of the senior
managers in this room to have a deep understanding of social
forces and broad market trends. There is a gradual
diversification of the market. The interesting question is what is
happening in the women to women giving area? We need to
understand this if we are going to roll-out the right new
products in ways that catch tomorrow's markets."
In this section of the meeting the managing director led a reflective
conversation on the nature of market trends in the firm's products. He paid
attention to factors affecting purchasing patterns and assertively made the
point that he expected senior managers to have a deep understanding of
market trajectories. It appeared that he was demanding their commitment to
a broad process of defining opportunity space for innovation. This
expectation was repeated several times in the meeting
Principal dimensions of the component
The data available indicated that senior managers 'pushed and pulled' staff
towards being innovative. They attempted to manage the regime of
expectations in the company so that innovation was expected, sometimes (as
in the case extract above) demanded.
Generally, firms had a management by objectives (MbO) system,
supplemented by frequent informal sessions. This was widely used to drive
innovation once a decision was taken to commit the firm to a particular
initiative. The acquisition of an objective focused a manager's efforts,
provided legitimacy for committing resources, provided a monitoring regime

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and acted as a discipline. The appraisal interview was used as a driver of

innovation in some larger firms, but infrequently in smaller concerns.
The principal formal methodology used for heightening expectations that
innovation was expected was the adoption of continuous improvement or
kaizen philosophy (Imai, 1986). This provided an overarching value system, a
source of inspiration and a tool kit. Informally, the expectations of peers
sometimes established expectations of innovation-supportive behaviours,
especially in firms in knowledge-intensive industries
The analysis of the data-set suggested that 'innovation demanded' required
high expectations from opinion leaders, innovation goals were set, innovation
was recognised and rewarded and that continuous improvement (kaizen)
was institutionalised.
High expectations from opinion leaders legitimised, encouraged and cajoled
employees to be innovative. This could be effective at every levelthere are
many specific cases (more than 200 examples) where shop floor workers
were innovative. Expectations could become a dimension of culture, forming
an element of the normative structure of the firm. New employees were
socialised into adopting such behaviours.
When innovation was included in goal setting processes it had the effect of
focusing attention on improvement areas and the identification and
realisation of opportunities. Innovation goals were explicitly included in some
objective setting and appraisal systems, especially where these were based on
the balanced scorecard approach (Kaplan and Norton, 1996). The data set
suggests that objective setting is a common way that innovation initiatives
are managed within firms.
Recognition and reward for innovation provided reinforcement, both for the
person being rewarded and others who aspired to gain similar benefits. Few
of the companies studied provided outstandingly lucrative innovation specific
rewards; rather the emphasis was on recognition and honouring innovation.
When continuous improvement (kaizen) was institutionalised it legitimised the
involvement of everyone in the organisation in innovation. The CI approach
was frequently combined with team-based management. However, it was

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not perceived as simple to install and maintain as multiple changes in values,

attitudes, behaviours and norms were required.
Literature support
Additional material can be found in motivation theory and organisational
sociology. References supporting the conclusions of this research related to
the component can be found in Bratton (1995), Coyne (1996), Delery and
Doty (1996), Drucker (1994), Fiol (1991), Goffee and Jones (1996), Kaplan and
Norton (1996), London and Higgot (1997), Neale (1991), Pearson (1997),
Roethlisberger and Dickson (1939), Tampoe (1993), Tichy and Sherman (1995)
and Tranfield and Starkey (1997).
High enrolment (IIIc)
Descriptor Statement: 'The firm's culture supports novel ideas and getting new
things done'.
Case example:
The following quotation is from notes taken during an interview with the
manager of an international computer company's UK operation:
"A manager's role is to motivate staff and colleagues. By and
large we are a highly motivated and committed team. This
company is particularly good at pulling teams together for a
specific sales project where expectations and tasks are set early
on. This sort of project has to deliver a solution that fits. The
action-oriented, task-focused culture makes this happen.
Leadership comes from within the team, not necessarily based
on status but someone takes the lead 'who will get the bricks
out of the way' and allows the team to get on with it The
system encourages everyone to contribute and it is a challenge
is get more people taking the lead. Formally teams are recruited
on technical skill mix not personality. Behaviour is dealt with as
we go along There is a strong culture of 'what you measure is
what you get' so team goal-setting is very important. There will
be a need to develop the ability for people to cope with
ambiguity. The concept of virtual teams, virtual resources in a
culture of flexible innovation will evolve, it is not something that
can be managed or controlled."
This informant was suggesting that culture was pervasive and could enrol
staff. Culture was shaped by many factors, including leadership style,
empowerment policy, motivation, team building, goals, measures and

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individual skills. She considered the firm's culture provided a foundation for
the multiple initiatives and suggested that "it is not something that can be
managed or controlled". This organisation was frequently developing new
solutions to client's problems and was project organised. The quantity of
innovation initiatives was high and the specific attributes of the culture
described above were seen by this informant as the bedrock of innovation.
Principal dimensions of the component
An analysis was undertaken of 62 cases in order to indicate possible
dimensions of culture in innovative firms. The results of this analysis are
given in Figure 4.4 below:
25
21
20

Open

18

Performance-orientated
15

Communicative

1212
10
5

9 9

Developmental of People
8

7 7

Fair
5 5 5

4 4

Trusting
3 3 3 3 3

Involving everyone
Empowering
Supportive
Honest
Challenging (targets)
Responsive
Listening
Innovative
Delegating
Celebrating
Partners
Leaders
Flexible
Promote enjoyment

Figure 4.4: cultural factors

'Openness' was mentioned most frequently, followed by 'performance

orientated'. The firms appear to be people-orientated and 'hard-nosed' at the
same time. Openness was seen by informants as key to enrolment. In one
case, the top managers of a company offering high-level professional
(consulting) services identified that the competitive strategy of the firm

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"requires change in leader behaviour, myths, stories, symbols,

communication patterns, power bases and structures, rites, habits, routines,
change expectations, status, rewards, aspirations, disciplinethe sociology of
the business".
The analysis of the data-set suggests that 'high enrolment' requires open 3
way communication, positive regard (for staff) and commitment to the
company.
Open 3 way communication was described as being necessary to build a unity of
purposea sense that meanings are shared. This point was made by one
manager who said, "success over recent years has created a culture of
openness to ideas and opinions that are listened to, reviewed and acted
upon". Blame minimisation was said to be an important norm as inevitably
difficulties occurred during innovation initiatives and these needed to be
confronted as problems, not personal criticisms providing employees acted
with diligence and commitment. In firms that reported progress in this area,
raising a problem was seen as a sign of strength. One firm made this a key
element of its culture development: "we decided we had to remove the blame
culture, if someone makes a mistake and admits it, then no blame accrues but
he or she must help work out how it happened so that it can be prevented in
future". Openness in lateral and upwards communication was cited as being
important as it permitted sensitive or critical issues to be dealt with directly by
those with the authority to resolve the matter.
Positive regard was described as enabling people in the firm to feel that their
contribution was valued. There were many examples. One firm thought of a
novel way to do this: "we wanted all staff to feel part of the firmeveryone,
including drivers, has a personal business card." It was stated as important
that such initiatives need to arise from a real (not fabricated) respect from
managers towards employees. The perception of fairness was deemed to be
important by the majority of firms. One managing director put it this way,
"our approach is to treat everyone fairly and with respect. We work hard at
being consistent in this."
Commitment to the company was a generalised characteristic that was observed
in most, but not all, of firms surveyed. Commitment appeared to liberate

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enthusiasm that could be directed towards innovation and provide an

'energising force'. There were suggestions that a high level of commitment to
the company helped to reduce perceived risk levels associated with
innovation and support people though, inevitable, set-backs.
Literature support
Literature related to communication and persuasion is particularly relevant to
this topic. References supporting the conclusions of this research related to
the component can be found in Baker (1980), Barrett and Cooperrider (1990),
Block (1987), Coyne (1996), Curteis (1997), Fiol (1991), Granell et al. (1997),
Hastings (1993), Harrison (1983a), Heraculeous and Langham (1996),
LeonardBarton (1995), Litwin et al. (1978) and Schein (1986, 1996 and 1997).
4.3.2.4 Domain IVlearning
The three components grouped under this category were 'continuous
learning', 'acquiring multiple perspectives' and 'fruitful linkages'.
Continuous learning (IVa)
Descriptor Statement: 'Learning and knowledge management processes
support the firm's innovation agenda'.

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Case example:
The following description was provided by a senior manager in a global
information company:
"Training is key in our Technical Department, changes such as
the move from Windows to NT or changes to their own
products, mean that the department has to quickly re-train
people in the new skills. This is done through formal
externally-sourced courses and through CBT and workbook
self-learning methods. There is a structured approach to
developing people. Sales Department have a development
programme to train in new skills. The sales force have to
address more technical problems than they used to, issues of
integrating our products with existing systems and the product
is itself more technical than it used to be. There is a programme
for passing on skills within the department, learning from each
other. In Client Training there is now a structured programme
that means that people are getting up to speed much faster and
are therefore more productive. The downside is that they are
then looking to move on more quickly than they were, often
into other parts of the business. Account teams were introduced
in 1990-91 as the basic way of working. It had to be driven
through, it took a lot of management time, with workshops,
case studies learning programmes to develop the understanding
behind the reasons for working together. It has not always been
easy, technical and sales staff are very different people but it
now works very well, team incentive schemes have helped pull
the teams together. It has improved customer satisfaction
levels."
In this interview extract, training and the management of learning were used
to facilitate the innovation process, especially the deployment of changes in
processes (such as the move from Windows to the use of the NT platform).
The use of managed learning processes was reported to have assisted
individuals to cope with specific process changes and with broader contextual
challenges, such as the "sales force have to address more technical problems
than they used to".
Principal dimensions of the component
The notion that training can be a multi-purpose driver of innovation
capability was widely accepted. Training was seen as one of the few
systematic tools available for a company to 'feed the minds' of employees. It
can be a mechanism for effecting socialisation and/or persuasion. Frequently,
progressive ideas were introduced through formal training programmes. In

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addition, it was suggested that the experiential formats commonly used

promoted a sense of personal power (efficacy) amongst participants. Since the
company was paying for the event, and generally sanctioned the curriculum,
legitimacy accrued to the content of training programmes. Moreover,
training programmes could provide an opportunity for people in different
parts of the organisation to form informal bonds. Such networks were
influential in the innovation process as they provided an informal distributed
support structure for initiatives. Expertise was thought to have 'a half-life'
although the redundancy rate varies by task or profession. It was considered
that those at the cutting edge of a firm's innovation (i.e. are dealing with
initiatives which require commitment decisions, are key differentiation factors
or have a significant effect on the cost structure of the firm) need to maintain
a high level of expertise, with frequent updates of theory and practice.
The analysis of the data-set suggests that 'continuous learning' requires
enabling learning, competency development, training in team-working and
problem-solving, knowledge management, exploratory dialogue and
experimental initiatives.
Enabling learning assisted directly in the development of innovation initiatives
in several ways. Some firms established an innovation intent (i.e. an area of
opportunity) that required learning to be "sized and scoped", and/or an
innovation initiative was selected that required learning to proceed on an
innovation process, and/or learning acted as a generalised source or stimulus
of innovation initiatives.
Competency development helped provide the necessary motivation, attitudes,
skills and body of knowledge for tasks to be fulfilled in a superior way (see
Klemp Jr., 1980 for further explanation). Almost all firms studied had invested
significantly in training and employee development (2% of emoluments was
typical). One manager summarised the underlying principle by observing
that "people on top of the job are more likely to come up with good ideas".
Training in teamworking and problem-solving was undertaken by the majority of
firms. The skills of working in teams and using a team context for identifying
and solving problems were widely considered to be important. This required
a facilitating and coaching style from team leaders. Such training sometimes

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included aspects of creativity skills, including brainstorming, idea generation,

idea evaluation etc. Generalised 'team effectiveness tool-kits' were used
formally in some teams (e.g. time was set aside for a brainstorming session)
but, more frequently, a team approach became part of the firm's normative
structure.
Knowledge management consisted of activities undertaken by firms, especially
those in 'knowledge-intensive' industries, to develop, codify, store and share
knowledge systematically or develop a context in which this could be done.
Multiple learning and sharing processes were in place in a few firms using
formal and informal methods for dissemination and knowledge enrichment.
Most companies in the database had not adopted highly structured
approaches, although the topic was discussed and means to effect knowledge
management were being sought.
Exploratory dialogue was a widespread activity, often enabled but not
intensively structured. In essence, it consisted of people 'who got together to
talk things through'. The combination of exploiting a spread of experience,
open dialogue, building on others' ideas and exploring issues was cited as
being related to innovation intensity.
Experimental initiatives were found in some cases. Activities were undertaken
to try out ideas or, simply, to become involved in an field of endeavour. The
underlying theory of action was 'there comes a point when you have to get
involved'.
Literature support
There is an enormous body of literature on learning organisations and
training methodologies but much is professional rather than academic.
References supporting the conclusions of this research related to the
component can be found in Argyris (1977), Barrett and Cooperrider (1990),
Bennett and O'Brian (1994), Bentley (1992), Boyatzis (1982), Carnell (1990),
Culbert (1975), Ghoshal et al. (1992), Henderson and Lentz (1996),
Jackson (1998), Mayo and Lank (1994), McNally et al. (1996), Morgan (1993b),
Musson et al. (1997), Nolan (1979 and 1984), Pedler et al. (1991), Senge (1992
and 1996) and Tichy and Cohen (1998).

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Acquiring multiple perspectives (IVb)

Descriptor Statement: 'People with specialised expertise and/or distinctive
perspectives are valued, accessed and influential'.
Case examples:
In a confectionery firm a middle manager made the following statement:
"I believe there is more feeding up of ideas than down. There is
plenty of opportunity to put forward ideas and implement
ideas. Often this happens at the Monday meeting of senior
managers. The manager to team leader meetings are chaired in
rotation and not solely by the manager. This has brought about
much more individual involvement. These meetings are run in
an informal way. Such regular meetings help everyone
understand each others' problems and help foster a more
supportive attitude/approach from everyone. Positions and
status within the firm are not seen to be of importance,
everyone has a role to play within the team. Doors are always
open therefore people feel able to talk freely about issues.
People on the shopfloor see quite a lot of the MD. Supervisors'
meetings have now progressed from the initial moan and groan
session to very constructive meetings in which supervisors are
feeding up new ideas and suggestions for improvements. The
fact there are no unions is a good thing because management
work directly with the staff, there are no intermediary
complications. There is no problem in challenging the MD's
ideas".
This informant suggested that there were no significant impediments to a
flow of ideas up the organisation and that there were several mechanisms
and routines by which this was achieved.
Principal dimensions of the component
The principal function of the activities described in this component was to
inform anyone who could participate in an innovation initiative of different
viewpoints, thereby enabling situations and opportunities to be considered
from multiple perspectives. This was not considered easy to do.
Knowledge-holders could be reluctant, unavailable, uncommunicative or
incomprehensible. Potential knowledge-acquirers could be influenced by
negative stereotypes, or be ignorant, rushed or dismissive. The sharing of
specialised knowledge or complex arguments presented a demanding
communication task. This could be accomplished more readily if 'knowledge
masters' were valued. It was suggested that innovative organisations need to

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recognise opportunities (and threats) quickly and rapidlyand effectively.

Firms were engaged in learning about the four areas shown in Figure 4.5
below.
Opportunity
Space

"What we could do"

Firm's
Strategic
Intent

"What we
want to do"

"What will
benefit us"

Firm's
Advantage
Potential

"What customers want"

Customer
Needs Actual
and
Potential
Figure 4.5: areas for learning

All four areas were explored interactively, generally by the firm's power elite,
and can be considered as more than a scanning process since substantial
learning was involved. Interestingly, there was evidence that such questions
were addressed widely, especially in organisations in which it was felt that top
management were open to influence.
The analysis of the data-set suggests that 'acquiring multiple perspectives'
requires hearing subject specialists, out-of-field agents and in-business agents.
Hearing subject specialists meant learning from those who had expertise in
relevant industries and/or insight into potentially relevant technological or
market trajectories. Subject experts (e.g. scientists) were deemed to have
relevant knowledge but significant decision-making could not be passed to

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them as, it was considered, they could be limited by narrow thinking,

adopting partisan viewpoints and/or making errors of judgement. Industry
specialists aided trajectories to be tracked thereby assisted in the identification
of signals that may affect strategy and/or operations. Mechanisms for
identifying, processing and selecting information from industry specialists
assisted in scenario development and exploration.
Hearing 'out-of-field' agents was relevant for similar reasons to those given
above. An 'out-of-field' agent was someone whose experience came from a
different perspectivefor example, one firm invited a head teacher from a
local school to undertake a diagnostic audit. Several firms deliberately
'hunted' for ideas. This they saw as a deliberate act with a quarry in mind. In
some cases naivete was considered the main contribution but new
perspectives, generally through the use of consultants, advisors or critical
friends, introduced different business models and a wide variety of
perspectives and suggestions. Considered particularly valuable were people
who understood unconsidered technologies that may influence the firm in the
future. In addition, a few firms systematically gathered information and ideas
from suppliers and representatives of downstream channels.
Hearing in-business agents refers to facilitating and hearing the views of those
who actually do the work of the organisation, especially those in the
operating core and/or customer-facing areas. This was a major wellspring of
innovation in most firms. As has been mentioned above, ideas and
intrapreneurship can be widely distributed across in organisations.
Mechanisms for capturing ideas, bringing them to the attention of
decision-makers and the openness to consider them were considered
important.
Literature support
The body of literature on the learning organisation, especially that related to
appreciative enquiry techniques, is relevant. References supporting the
conclusions of this research related to the component can be found in
Argyris (1993), Augsdorfer (1994), Bennett and O'Brian (1994), Bessant and
Francis (1999), Burnett et al. (1995), Bushe (1995), Casey and Pearce (1977),
Cooperrider and Srivastva (1987), EasterbySmith (1997),

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Ghoshal et al. (1992), Janov (1994), Lave and Wengler (1991), Leonard and
Rayport (1997), Mintzberg et al. (1998a), Schroeder et al. (1989),
Simonton (1992), Waterman Jr. (1992) and Weisbord and co-authors (1992).
Fruitful linkages (IVc)
Descriptor Statement: 'People in the firm are inspired and enabled by contacts
with other organisations'.
Case example:
The interview extract has been taken from an interview between the
researcher and a line manager responsible for installing ISO 9000 into Roda,
an international cleaning company based in Hong Kong.
Respondent: "Initially I needed a consultant to come out and really look at
the system that Roda had. I had to have a consultant who had
industry experience plus a good deal of exposure to ISO 9000.
And that was the starting point. We had to identify some major
projects which we would use for trail blazing."
Researcher:

"Did you have a philosophy of how to introduce it?"

Respondent: "There was a lot of work to do by way of analysisthat was

largely myself with the help of the consultant. They told me in
December that it was decided by the Board that it was going to
go ahead and I contacted the consultant who I thought was
right, having met him in Englandthere were no consultants
in Hong Kong who had the necessary industry experience.
That was very important and given the fact that I didn't have a
huge amount myself and from there the consultants sent me
over things to look at before he came over, that was in
October. Which I did. I looked at a lot of information and
reading material about the subject and then it was trying to
draw lots of flow charts of the system that Roda had and
where things fitted in."
Researcher:

"And how did you find other members of the organisation

responded to it?"

Respondent: "At this stage they weren't involved very much at all. For two
reasons: the Directors had said all along that it was going to be
reviewed after each consultant visit to see whether it is
practical. So to begin with I wanted to have all the Roda
systems on paper as I saw it for the consultant then to come
over to look at it and to expand the areas of the quality system
which I didn't have enough knowledge of. And he had a very
good working knowledge of quality and systems."

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Researcher:

"What were your feelings as you were working through this?"

Respondent: "We identified one plant manager that would be very good at
helping to implement this type of system. It felt good when we
got the thing moving. We sent this guy on a five-day Lead
Auditor course to learn more about the system itself and the
pitfalls that it can entail. But also the initial ideas of auditing so
that it made a review of the industry possible."
This interview presented an example of one kind of interaction between an
organisation and external organisations. In this case the consultant was acting
as a holder of specialist knowledge and transferring relevant knowledge into
the firm. It demonstrates the significant role that interdependent relationships
can play in stimulating and progressing innovation initiatives.
Principal dimensions of the component
External linkages were described as an important element in the development
of innovation capability and were generally context-specific. A linkage
provided a flow of ideas, perspectives and information over time.
Accordingly this component is closely linked with the preceding component
(IVb) but here the focus is on the conduit itself rather than receptivity. There
were many illustrations. For example, the Wool and Sheep Institute of
Romania reported on an initiative to form learning linkages with the
International Wool Secretariat in the UK. A firm in Malaysia sought to form
close informal bonds with key representatives of the regulatory authorities to
facilitate the development of the business.
Linkages could be categorised by purpose, including: learning, influencing,
procuring, alliance-building and selling. In each category examples were
given. Learning relates to formal relationships with knowledge providers,
informal learning relationships (sometimes with peers) and learning from
customer input. Influencing is concerned with gaining favour and signalling
the value of the firm and its products. Procuring includes suppliers,
service-providers and knowledge resources (e.g. consultancy reports).
Alliance-building refers to contractual relationships between firms established
for mutual benefit. Selling is the managing a persuasive connection with
current and potential customer groups. Effective linkages backwards (into the
supplier network), forwards (into the distribution network) and sideways

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(into the partner network) were seen as related to innovation capability by

many firms.
The analysis of the data-set suggests that 'fruitful linkages' required gaining
from external relationships and sustaining close customer relationships.
Gaining from external relationships required having effective processes for
finding linkages and maintaining those that, collectively, met the
organisation's needs in terms of learning, influencing, procuring,
alliance-building and selling. This required building multiple generative
relationships. Such linkages were often developed in several places within the
firm.
Sustaining close customer relationships was ubiquitous. Studying present, lost
and potential customers was an important source of learning for almost all
companies. However, simply listening to customers was insufficient for some.
As one informant put it, "if we just talk to our customers we won't hear the
voice of those who we want to be our customers". In larger companies
considerable resources were generally devoted to hearing 'the voice of the
customer', using a range of market research techniques.
Literature support
There is an emerging body of literature on learning networks and alliances.
References supporting the conclusions of this research related to the
component can be found in Bessant (1997b), Bessant and Francis (1999),
Butler (1992), Chaston (1995), Christensen (1997), Doz and Hamel (1998),
Leonard and Rayport (1997), Morris and Westbrook (1996), Nicholson (1992),
Tan et al. (1999), Voss et al. (1994), Webster (1996) and Wiggins (1955).
4.3.2.5 Domain Vstructure and process
The three components grouped under this category were 'apt organisational
form', 'supported champions' and 'high performing new product and/or
process development (NPPD)'.
Apt organisational form (Va)
Descriptor Statement: 'The form of the organisation helps, not hinders,
innovation'.

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Case example:
This is an extract of an interview with the manager of an advertising agency:
"We moved from a very hierarchical style of management to a
linear approach. In past people only felt responsibility for one
little bit but the ad industry is a holistic industry therefore
people must have a holistic approach and feel that overall
responsibility we believed the old way of working was not
the best way for the company or the people within the
company. We needed a holistic approach and functional
structures do not give that. After much consultation with staff, it
took a year from the conception of idea to implementation. We
recognised major change for people, and for the industry, the
ad agency operating in multi-functional teams, therefore needed
to spend time getting it right and in preparing people for the
change. We linked the change in working practice to move of
offices which facilitated teams to sit together. We recognised
people would take time to get used to the new approach and
therefore invested heavily both in time and money to make it
work. Now there is a much more holistic approach to business,
people feel greater responsibility for entire campaign rather
than seeing their input in isolation. There is a greater flow of
ideas as people committed to the campaigns of their team. Also,
there is a greater understanding of the different areas of work
involved therefore more supportive to each other in the teams
and keener to help each other out if there's a problem."
In this example organisational changes are linked with meeting a requirement
to maintain an appropriate conceptual framework for innovation ("we
needed a holistic approach") and to meet a requirement for "a greater flow of
ideas". The organisational changes required multiple re-alignments;
specifically, of roles, affiliations, objectives, power-relationships and
knowledge sets.
Principal dimensions of the component
The majority of companies studied that had undergone organisational change
in the previous five years and were pursuing a common pattern. This had five
characteristics (pursued differently in firms). Companies were developing
team-based organisations, improving lateral relationships (especially related
to processes), using adhocracies, flattening structures and forming
partnerships with other organisations. One aim of initiatives was to enhance
innovation capability but other aims were pursued as well; specifically,
cost-reduction, motivational improvement, faster response-time and the

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development of participative management practices. Some large firms were

seeking different benefits (although the pattern described above could be
implemented as well). These firms sought to overcome the potential
disadvantages of 'balkanisation' into SBUs or fractals. Companies were:
building core competencies across business units, re-configuring business
units flexibly and developing cross-company management processes.
The analysis of the data-set suggests that 'apt organisational form' requires
innovation-enabling organisational design, use of organisation development
methodologies, the use of teams and adhoc groups and the development of
inter-team co-operation.
Innovation-enabling organisational designs were widely implemented. Many
'traditional' aspects of organisation were considered to inhibit innovation.
These included excessive formalisation, over-centralisation, rigid control
systems, slow decision-taking, lack of horizontal management and excessive
'balkanisation' (strategies formulated independently by small units within a
larger organisation to the detriment of the whole). Organisational designs
and enabling mechanisms were adopted that sought to mitigate potential
blockages and facilitate innovation.
The use of organisation development methodologies provided a means of
systematically collecting data about the innovativeness and effectiveness of
organisational units. This facilitated discussion that could lead to the
implementation of policies and practices that encouraged creativity,
opportunism, problem-solving and other generative processes. Here the role
of linkages such as Business Link (see IVc above) were sometimes important
as they acted as catalysts and provided, in some cases, suitable intervention
methodologies.
The use of teams and adhoc groups was widespread, almost ubiquitous. All cases
studied used team-based management approaches and firms established ad
hoc teams to manage innovation tasks, often using a multi-disciplinary
approach. As will be suggested in Appendix 8, the establishment of adhoc
groups is a significant means of accomplishing innovation. This happened
both formally and informally.

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The development of inter-team co-operation was significant as innovation

initiatives frequently required the co-operation of people across an
organisation's dominant structure, perhaps in an agile manner. As has been
discussed earlier, innovation initiatives often involve multiple actors who
need to co-operate in defining tasks as well as fulfilling them. In some firms
studied considerable efforts had been made to build inter-team co-operation
by reducing the effect of negative stereotypes and building enabling
mechanisms such as joint problem-solving meetings.
Literature support
Literature related to organisational design and development is relevant.
References supporting the conclusions of this research related to the
component can be found in Ashkenas et al. (1995), Ayas et al. (1994), Barrett
and Cooperrider (1990), Benton (1990), Blau (1962), Burgelman (1983),
Burgess (1994), Burgoyne (1995), D'Venti (1995), Eisenhardt and
Brown (1999), French and Bell Jr. (1995), Greiner (1972), Harrison (1995c),
Hersey and Blanchard (1977), Kanter (1983), Ketchum and Trist (1992),
Larson (1988), Maslow (1965), Pfeiffer and Jones (1978), Schein (1988),
Waterman Jr. (1992), Weisbord (1984) and Woodward (1970).
Supported champions (Vb)
Descriptor Statement: 'People with good ideas are encouraged to drive them
through'.
Case example:
This example is from an interview with the director of research for a
merchant bank:
Researcher:

"So how do new markets, new ideas, new products get

developed?"

Respondent: "It is generally by a strong entrepreneur who has the strength

of personality and a loud voice. And a bullying manner. He has
to try to prove that he can make money in this area. One of the
problems in not being able to forecast what revenues may be
in a particular area is that an attempt to prove a promising area
can be made with little investment in analysing the
opportunity. However, since the opportunity may not exist,
the whole thing is often based on judgement."

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This short extract from a longer interview indicates the role of the individual
intrapreneur in some forms of innovation. A case for undertaking an
innovation has to be made assertively and persuasively. In some cases, the
advantage may be speculative and so the intrapreneur needs to influence the
policy makers of the firm.
Principal dimensions of the component
The role of champions (those who drive ideas and initiatives through
organisational indecision and hindrances) and sponsors (members of the
firm's power elite who selectively support champions) was seen as an
important element in the innovation process by all except micro-firms (where
the role was generally played by the owner/manager). However, three
significant difficulties were described in implementing the concept. Firstly, it
was considered that just because someone believes passionately in something
does not mean that it is right for an organisation to support the proposal.
Secondly, since the act of gaining support for an idea was seen to be a process
of selling rather than explaining, it was considered likely that any potential
disadvantages would be understated by the advocate. Thirdly, depending on
champions to manage change "can be a hit and miss strategy" and the
question was asked "what happens if our firm needs to focus its innovation in
a particular area but a champion does not emerge?" Despite these concerns,
firms considered that championing ideas can be functional for the
organisation and had organisational legitimacy. In a few cases champions
were institutionalised, for example, by the allocation of a percentage of the
working week to personal projects. Sponsorship from a senior person within
the organisation was deemed necessary where there were policy implications
or significant resource commitments were required. Sponsorship provided
motivation for those involved, assigned resources and supplied a route into
the formal planning processes of the firm.
The analysis of the data-set suggests that 'supported champions' requires
legitimacy of the champion role, intrapreneuring attitudes and skills and
effective sponsorship.
Legitimacy of the champion role was seen as an enabling factor. The implicit
(sometimes explicit) mental model of the change process held by the power

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elite of the firm needed to incorporate the notion of champions, or the term
'intrapreneurs' was occasionally used. Particularly important was the firm's
status system and its mythology. If those who championed ideas were
honoured, or had positive stories told about them, this had the effect of
legitimising the role.
Intrapreneuring attitudes and skills were considered to include skills in
assertion, influencing, bootlegging, project planning, presentation,
alliance-building and project management. In larger companies some, or all,
of these skills were promoted by training programmes. However, there was
little evidence that a coherent approach had been defined or implemented.
The facilitation of intrapreneurial attitudes and skills was piecemeal.
Effective sponsorship was observed at the senior management level and
considered to include opportunity identification, coaching, supporting,
networking, critiquing and promoting. It was suggested that indifference or
lack of attention from senior managers dampened innovation initiatives as
people needed to feel 'appreciated'. The data related to this point suggest that
the sponsorship role is pursued largely informally.
Literature support
There is a relatively small body of research that deals with champions and
sponsorship of ideas. References supporting the conclusions of this research
related to the component can be found in Augsdorfer (1994), Beng (1993),
Burgelman (1983), Collinson (1993), de Ven and Angle (1989), Dean (1987),
Hatch (1995), Hendry (1989), Lumpkin and Dess (1996), Maidique (1980),
Peters and Waterman (1982), Pinchot (1985 and 1996), Reich (1991),
Roper (1996a), Schn (1963) and Sharpe and Keelin (1998).
High performing New ProductProcess Development (NPPD) (Vc)
Descriptor Statement: 'Processes for new product and/or process development
are fast, effective and efficient'.

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Case example:
The extract below is from an interview with the managing director of a sports
equipment manufacturing company:
"New product lines are introduced twice per year Company
activities are split into business units covering five main
products lines and pilot self-managed teams have been
established. There have been significant reductions in non-value
added activity and defects. Following the successful pilot,
further 'P12' teams (Product, Innovation, Process Improvement)
were introduced and are now operating for individual products.
Management confidence has increased in the team approach,
improved performances in new product introduction, quality
and productivity. Initiatives include removal of shop floor
'supervisors', building of (PI2) teams with the support of top
and middle managers to mentor and provide additional skills as
required. There has been a 20% reduction in staff cost for same
turnover; typical product process cycle times reduced from 6/8
days to 2 days. There are regular team briefings on new
products and targets, including 'off-site' meetings."
This extract from a case interview demonstrates that there were multiple
initiatives underway at the same time. Some initiatives were integrated with
others. The processes described, including the PI2 teams mentioned, had
overall targetsin this case relating to costs and cycle times. New product
development was viewed as a process and interrelated with others. Part of
the task of developing processes was maintaining communication and
deployment of policy, hence the 'regular team briefings'.
Principal dimensions of the component
The development of new products and/or processes was seen as the visible
hand of innovation. Most firms said that they were dependent on the speed
and appropriateness of their new/improved product and process
development routines to provide to create value and increase efficiency. The
following seven stages were observed:
1. Identifying was a 'tuning-in' stage to possibilities and constraints. Two
principal forms of needs were identified as driversone set coming from
customers and others (external) and the other from the company's
strategy (internal).

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2. Creating involved the discovery of an idea that may be original, dormant,

used in other contexts or available to be copied. Idea elaboration took the
idea to the point where it could be evaluated by those who took
commitment decisions within the firm.
3. Committing was the strategic decision-making process that combines the
allocation of resources with a 'gathering of political will'. At this stage the
proposed initiative became a legitimate project.
4. Developing was the process of transforming the idea into a saleable
product, with all that was involvedincluding deployment of resources.
At this stage there was a need to maintain a conceptual dialogue with the
possibilities and constraints as these sometimes changed quickly.
5. Evaluating was a ongoing decision-making process that was sometimes
formalised to define decision-moments. It operated at two levels. Level
one answered the question 'shall we proceed with this?' Level two
answered the question 'what, if anything, do we need to do differently?'
6. Positioning was making decisions about how the product was to be
marketed. This affected development, packaging etc.
7. Routinising was the process of handover of the innovation project to the
operating core of the business.
These stages were conceptually identifiable but were generally blurred,
truncated, repeated and/or elaborated in practice. In general, they confirmed
the model described in Section 2.4.1.
The analysis of the data-set suggests that 'high performing NPPD' requires
skills in the areas listed above (managed NPPD processes) and the use of
creative approaches.
Managed NPPD processes was seen in many firms but varied greatly in
elaboration and format. In some cases, e.g. in the pharmaceutical industry, a
great deal of effort had been and continued to be invested in defining the new
product development process. In other firms new product or process
development was not isolated but integral to the organisation's routines
(e.g. in the case of a software company). Smaller firms adopted ad hoc
processes based on a project management approach.

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Creative approaches refers to the use of creativity tools, methods and processes
across all of the stages of the NPPD process. This was often informal but
opportunities were constructed for creative endeavour. The use of
semi-structured creative approaches was observed in multiple cases.
Creativity seemed to be promoted by the use of simple questions on many
occasions, such as "Are there any other ways we could do this?", "What are
the real smart guys doing that we are not?" or "If we started again what
would we do?".
Literature support
There is a discrete area of literature related to new product and process
development and creative approaches. References supporting the conclusions
of this research related to the component can be found in Ayas et al. (1994),
Ayas (1996), Bessant and Francis (1996), Bierly and Chakrabarti (1996),
Buisson et al. (1996), Butler (1992), Chryssochoidis and Wong (1995),
Collinson (1993), Cook and Lunt (1996), Cooper (1994), Corso and
Rangone (1996), Jonash and Sommerlatte (1999), Karlsson and
Ahlstrom (1996), Littler and Leverick (1995), Millson et al. (1992),
Mitchell (1989), Prince (1980), Rickards (1974 and 1997), Schonberger (1996),
Schn (1983), Trott (1998), Ulrich (1997) and Wilemon (1998).
4.3.2.6 Domain VIdecision-making
The three components grouped under this category were 'guiding mental
maps', 'sound decision processes' and 'sustained commitment'.
Guiding Mental Maps (VIa)
Descriptor Statement: 'Theories of development and practice guide innovation
agendas'.
Case example:
The interview extract below is with a senior officer in a US police force.

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Researcher:

"It seemed to me that what you said earlier indicates that some
of the metaphors that you use for managing the department
come more from the business world than from other police
departments. How did you develop your conceptualisation of
what business you were in? Where were your inspirations?"

Respondent: "Let me back up a bit and describe the types of changes that
have taken place because they are multifaceted We have
developed eight crime-reduction, or quality of life strategies.
These are policy documents based on an analysis of
past-practice and describe the dimensions and scope of the
particular crime problem. There is an analysis of our resources
and insight from our years of experience and the best minds
that we can put together. So, for example, the first strategy was
a gun strategygetting guns off the streets. We looked at the
scope of the problem, got as much data as we could on the
scope of the problem, and analysed our past practices: why are
we only making the kind of level of gun arrests that we were?
How could we do better? We needed to look at resources,
personnel, in terms of organisational change. In order to
accomplish those goals that would achieve our ends. The policy
documents are flexiblethey lay out a city-wide planbut
they are flexible. These policy documents are sufficiently
flexible to adapt to the landscape of crime at the local level
That was basically a top management conceptualisation. The
conceptualisation as to where we should be going and what
our goals and objectives really are, to my view, is worked out
between the Commissioner and the Mayor. With a lot of input
from the private sector."
In this extract from the interview it seems that the development of policy
(statements about stances and rules to be adopted by members the
organisation in defined categories of situations) had a major impact on
patterns of innovation. The Commission of Police questioned many
assumptions made by his predecessor and developed a range of different and
radical policies. These provided a shared intellectual architecture for change.
Individual initiatives were positioned within this larger frame. Gaps in the
organisation's ability to deliver the policies became issues on the innovation
agenda.
Principal dimensions of the component
Although the term 'mental maps' was not used by informants, the practice of
using them was ubiquitous. Some mental maps were standardisedfor
example, ISO 9002, Investors in People, Enterprise Planning and the European
Quality Model of organisational excellence. Other mental maps were
organisation specific, like the example given of the American police

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department at the beginning of this section. Mental maps also varied in their
scope, some being group or department specific whilst others encompassed
the organisation as a whole. Maps also vary in the extent of innovation
required to adopt them. A preliminary conceptualisation of the dimensions of
mental map making is shown in Figure 4.6 below.

Low

Statistical
Quality
Control

ISO 9002

Low

of
St
an
da
rd
isa
tio
n

Virtual
Organisation
Product
Development

De
gr
ee

High

Degree of Innovation Required

Team-Based
Management

Use of New
Accounts
Package
High
Scope of Map
Single Group
Organisation Wide

Figure 4.6: types of maps

On this framework illustrative 'mental maps' have been tentatively

positioned. Since maps have the effect of providing a shared intellectual
architecture they play a major role in targeting of innovation capability within
a firm. Maps provide a (hopefully tried and tested) way of accomplishing
complex or generic goals and they align the actions of actors involved. Some
firms spent a long time considering which maps to adopt. This was for three
main reasons. Firstly, a choice had to be made when there were rival
mapping processes. Secondly, a commitment to a map could require
considerable expenditure of time and other resources. Thirdly, the
implications of adopting a map can be broad and there can be unintended
consequences.
Not all maps are standardised. A few were developed entirely by firms
whereas the majority were adapted from 'off-the-shelf' maps. In effect, the

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map provided an outline and the detailed local 'innovation terrain' was
surveyed by the firm.
The analysis of the data-set suggests that 'guiding mental maps' requires
tracking relevant possible maps and map selection and development.
Tracking relevant possible maps was undertaken by managers who "wanted to
keep up to date with the latest thinking". Models, concepts, frameworks,
developmental processes, case examples and standard approaches provided a
portfolio of possible mental maps. Sometimes these were deliberately sought,
for example from business schools. Smaller firms acquired maps less
formally, perhaps from Business Link advisers and the like.
Map selection was a commitment by the company to adopt a particular map.
Consultants were mentioned as advocates. Map development refers to the
customisation or elaboration of maps for the specific organisation. As
mentioned above, larger firms occasionally prepared a novel set of maps.
Literature support
Relatively little has been written on the role of maps in innovation although
the body of literature related to sensemaking is highly relevant. Weick (1997)
describes the nature of maps in the following terms: "(t)he explorer cannot
know what he is facing until he faces it, and then looks back over the episode
to sort out what happened, a sequence that involves retrospective
sensemaking. But the act of exploring itself has an impact on what is being
explored, which means that parts of what the explorer discovers
retrospectively are consequences of his own making. Furthermore, the
exploring itself is guided by preconceptions of some kind" (400).
Brown (1978) suggests extending "the concept of paradigm to stress its
pragmatic institutional aspects, not merely its cogitative ones. Thus we could
speak of paradigms for discourse and conduct, and even for organizational
behavior" (373). He suggests that a way could be found "for the empirical
study of how new paradigms within specific organizations are generated and
what conditions must be present for a paradigm shift" (373). Hanson (1996)
describes the impact of a new mental map: "TPM (total productive
management) is today's umbrella, yet there is more to this than simply fresh
energy. This is TQM with teeth! This is the route to single-minded cost

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reduction. One Japanese management team described its vision of the process
the company was going through as building on a foundation of TQM (likened
to mental fitness) with a new concentration on TPM (described as physical
fitness)" (8).
Sound Decision Processes (VIb)
Descriptor Statement: 'Sound decisions are taken about supporting selected
innovation initiatives'.
Case example:
This interview was with organisation development manager in an
international pharmaceutical company.
Respondent: "I think people get very invested in major projects that they're
involved in and in our business, historically at least, hopefully
not so much in the future, you can be talking about ten-year
investments or more maybe if you go right back into
discovery, and it's very difficult to drop that investment, walk
away from it, just because you don't have novelty and
distinction from the competition"
Researcher:

"And you have, I know, a formalised decision-making process

with stages and gates to go through and so on."

Respondent: "I mentioned I think the MAP processMarket Align Planning

process that we have which is supposed to focus our
development effort and make sure that we're taking into
account very critically the market demands. I think that has
really helped us to filter some of the compounds we have in
developmentor it will do I think when it comes to helping
people to understand how to make an organisation work,
especially a knowledge-based organisation like we have which
is about information creation and sharing, I probably ought to
think more about the organisation is a brain because I think it's
the collectivity, your knowledge, information, expertise which
we need to tap into. It's not a mechanical, structural thing that
makes the organisation work. It's the information flow around
the organisation."
In this interview the respondent highlights the importance of
decision-making. He points out that decision-making is particularly
demanding, partly because of sunk costs and emotional attachments.

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Principal dimensions of the component

The research findings on this topic suggest that decision-taking is one of the
most challenging of all activities in innovation management. This was for four
main reasons. Firstly, the probable outcome and consequences of some
decisions was unknowable or speculative (uncertainty). Secondly,
decision-makers may not be in the best position to assess the relevant factors
(complexity). Thirdly, the window of opportunity for decision-making may
be time-bound (urgency). Lastly, a coalition of support may be needed
(buy-in). It was possible to characterise decisions on the basis of the degree of
their complexity, uncertainty, urgency and the need for buy-in from multiple
stakeholders. This is shown in Figure 4.7 and two illustrative decision profiles
have been drawnone for a pharmaceutical compound and the other for a
fashion garment.
High Complexity

Which drug shall we

develop?

High Buy-In
Needed

High Uncertainty

What dresses will

teenagers be wearing this
Christmas?
High Urgency

Figure 4.7: illustrative decision profiles

Within each of these categories there were subsets of difficulties. Including,

amongst other factors, lack of recognition of a decision requirement, personal
inadequacy, human processes, lack of information and/or the inherent risk
profile of the proposal. To some extent these are inevitable, although
information systems, decision-support methodologies, superior resources,
human processes and risk-management assessments reduced difficulties in
some cases.

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It was pointed out that "taking the right decision was one thing; taking the
right decision at the right time was another". Speed of decision was perceived
as important for both product and process innovation. Speedy
implementation could provide first- or early-mover advantage for product
innovations and yield maximum benefit to the organisation for process
innovations. In addition, innovations in market positioning and/or business
paradigm were described in the same terms, for example for firms facing
decisions about the effects of the internet.
The analysis of the data-set suggests that 'sound decision processes' requires
fast-full information systems and reliable decision-making processes.
Fast-full information systems provided those taking decisions with timely,
evidence-based, comprehensive and comprehensible information so that they
could form a rich-picture of the decision context and requirement.
Reliable decision-making processes enabled informants, stakeholders and
decision-makers to explore options and come to a defendable decision. This
required assessing complex situations, performing analyses, incorporating
hard and soft data, developing scenarios, seeing unexpected combinations
and making clear decisions.
Literature support
Research on organisational decision-making is generally relevant. References
supporting the conclusions of this research related to the component can be
found in Coggan (1998), Dean (1987), Dess et al. (1995), Evans and
Wurster (2000), Ghemawat (1991), Henderson (1994), Houlder (1996),
Janis (1982 and 1989), Magee (1964), Mathews (1995), Roberts (1992),
Schumpeter (1961), Sharpe and Keelin (1998) and Vroom and Yatton (1973).
Sustained Commitment (VIc)
Descriptor Statement: 'Initiatives will be supported by commitment'.

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Case example:
The case example is from a hotel manager of a large hotel in Macau:
"We really felt that we wanted to break away from the
traditional idea of having a restaurant area and a kitchen. We
wanted to start building the idea of the food village concept
What we want to do is take away some of the kitchen area and
leave part of the restaurant where chefs can cook in different
stylesThai, Chinese, Indian or USAwhatever We want to
fit in with market trends But also with our food court concept,
what we don't want to do, what has been pointed out, is to lose
the strong local market in the evening. We want to create what
we call a 'bi-style'. During the daytime, breakfast and lunch, it
concentrates on quick, efficient service. We can look at all the
possible electronic help that we can getpre-printed bills,
swiping through your credit card before you sit down, using
computer technology. We are taking labour costs down and
putting that into food and ensuring that the computerisation
helps serve our guests We have to investigate wider
knowledge of Asian food. We need to go to Singapore to ask
the Singapore chefs 'what are people eating in Singapore?' We
need to go to Bangkok and ask the chefs there the same
questions. We are catering for an Asian market and yet we have
not fully investigated all the possibilities by talking to our
colleagues. In summary, we want to provide a food court
experience that provides an innovative menu, wide choice, and
it's perceived to be value for money. Complemented by good
service. We need to have a coffee shop workshop to develop in
detail. Exactly like thisto go away and go through all the
issues and really focus on them."
The hotel manager was speaking about the resources that needed to be
deployed in order to implement the new model for the hotel's coffee shop.
This was perceived to require sustained commitment from management,
including senior management. A large number of actions were deemed to be
required and the continuing attention and support of top management was
perceived as a critical element.
Principal dimensions of the component
The maintenance of top management commitment to support innovation
initiatives was observed to be significant. Momentum slowed if management
lost interest, reduced their attention level or became distracted with other
priorities. Some initiatives were said to have languished as they "were moved
to the back burner" or "fallen off the radar screen". Managers provided
support and exercised a monitoring role that was, in most cases, routinised. In

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examples of unsuccessful innovations available for study, the absence of

senior management commitment was a common feature.
The analysis of the data-set suggests that 'sustained commitment' requires
sustained senior management attention and roadblock removal.
Sustained senior management attention enabled the continuity of an innovation
initiative to be maintained and retain its status as an important activity despite
set-backs, alternative priorities and varied difficulties. Monitoring by top
management generally provided enhanced motivation and control. It was
stated that periodic re-energising was necessary when initiatives 'got lost' or
when new phases of activity were embarked upon.
Roadblock removal was the removal of initiative-specific hindering factors. The
aim was to 'clear the way' so that resources could be deployed as and when
needed. 'Blockages' could exist in sub-systems that were removed from the
locus of innovationperhaps in personnel policies, finance systems or
priority-setting criteria.
Literature support
The role of senior managers in promoting innovation has been discussed
extensively in literature on strategic leadership. References supporting the
conclusions of this research related to the component can be found in
Becker et al. (1996), Bennis (1983), Binney and Williams (1997), Fisher (1995),
Francis and Woodcock (1996), Goleman (2000), Harrison (1995c), Iansiti and
West (1997), Semler (1993), Schein (1996), Stokes et al. (1998), Tichy and
Sherman (1995), Warnecke (1993), Wheatley (1994) and Woodcock and
Francis (1990).

4.4

Using the reference model in organisation

development interventions

The reference model described above provided a conceptual structure for

interventions into firms. A diagnostic questionnaire (the 'Innovation
Capability Audit G2') was devised and developed through six versions. The
latest can be found in Appendix 5. Interventions were undertaken to provide
experience of how a diagnosis (based on the reference model) could support
an organisational development programme aimed at enhancing innovation.

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The process for structuring interventions was devised. Its principal

methodological steps are summarised in Figure 4.8.
Innovation
Audit
Ongoing
support
Entry

Top Manager
Interview

Focus Group

Report
Generation

Feedback to
company

Action
Planning

Deployment of
development
initiatives

Figure 4.8: structure of intervention

Nine steps are shown in this framework. The reference model provided the
conceptual framework for the diagnostic steps (innovation audit, top
manager interview and focus group). Report generation drew upon the same
data set and provided the content for the feedback meeting. Action planning
was intended to flow logically and be followed through with a series of
initiatives, supported by the continuing involvement of a facilitator and,
whenever possible, learning group activities.
4.4.1

Findings from interventions

As described in Chapter 3, firms were recruited that sought to develop their

innovation capability. Two major reviews of the effects of interventions were
undertaken. A two-day workshop was organised with representatives from
11 participating companies. This was supplemented by a report from an
external agency commissioned by NORWESCO, the sponsoring agency. The
findings of both will be summarised below, after a discussion of a specific case
example that illuminates the actual, rather than the idealised, intervention
process.

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Figure 4.9 shows a simplified 'map' of one intervention (into company P, a

consulting organisation based in Hong Kong).
Initial

Facilitator
attempts to 'sell
the benefits

Approach
to MD

Firm
commits to
process

Possible
support of
peers

Innovation Audit

1st Report
Generation

Top Manager
Interview

Agenda set by Audit

findings

Agenda set by Audit

findings

Focus Group

Revised assessment
of MD and company
development needs
Assessment of
MD's interests
2nd Report
Generation

Facilitator plans
feedback

'Education' about
innovation from
facilitator

Involve peers

Review
against
firm's
strategic
plan

Feedback to
MD and
others

MD reacts
and engages
in dialogue

Development
of a new
vision of
what the firm
could be

Involve
opinion
leaders in
firm

Many iterations

Opinion leaders
undertake
communication

Impact
assessment
on other
business
areas

Learning Process,
sometimes
formalised into
action learning group

Detailed articulation
of business
development needs

Search for
initiatives

Initiatives
defined

Champion appointed
and project planned

Wider
enrolment

Detailed profect
planning

Initiative
undertaken

Figure 4.9: intervention process (actual case)

Change needs
identified
(including
behaviourial)

Training or coaching
if deemed necessary

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It is apparent from the diagram that the intervention process was more
complex than the idealised nine step template (Figure 4.8). From an analysis
of this, and other, interventions the following findings were noted:
1. The theoretical sequence of steps shown in Figure 4.9 above was followed
broadly in practice. Interventions did move from entry, to diagnosis, to
feedback, to action planning and implementation. However, there were
loops and overlaps in the actual process.
2. Companies required a higher degree of 'education' than was expected.
For example, the facilitator spent nearly six hours with company P helping
them understand the drivers, sources, nature, targets and benefits of
innovation. The facilitator sought to open new possibilities and provide
different ways of interpreting situations. This 'educational' process
provided an important element in unfreezing the existing mind-sets of the
firms' power elite (Lewin, 1947).
3. Following the feedback process into company P, the managing director
undertook an extended dialogue with multiple individuals. In other firms
the persons chosen for dialogue, and the time spent on the task, depended
upon the particular managing director or senior manager acting as
champion to the initiative. In the case of company P, the managing
director sought many opportunities to consider issues arising from the
feedback interview. In the presence of the researcher he discussed the
findings with, amongst others, his dentist (met socially), a business
consultant, a stranger met in a bar, the office secretary, a visiting salesman
and the managing director of a similar firm. In these discussions the
managing director posed a series of questions and sought varied views.
When asked about this behaviour he said, "you've put forward an
argument, supported by facts, that the way that I think about my business
is sometimes narrow, sometimes wrong. You might be right. But I can't
take it on your say-so. I need to check it out and, if I agree in the end, I
need to re-adjust my brain".

222

4. An unexpected amount and intensity of internal discourse was provoked

by the data feedback process. In the case of company P, this served three
main purposes. Firstly, the managing director used dialogue as an
opportunity to "develop his thinking". Secondly, a new or different way of
seeing the business development need was considered to be a process
requiring participation of members of the firm's power elite and other
opinion leadersit could not be accomplished by one person. Lastly, the
managing director felt that he needed to extend his knowledge about the
practical implications of thematic points raised in the diagnostic feedback.
For example, he had received feedback that indicated 'innovation
objectives were not set'. He felt that he needed to know what this meant
in practice and whether examples could be found. He also needed to
gauge the significance of the observation and the assess the urgency of
remedial action.
5. The managing director and his immediate team in company P, over a
period of five weeks, developed a view of what their organisation needed
to become over the next year or so (this was a firm with 29 direct
employees). This was not a conventional business strategy development
process since external factors, like products and markets, were not
considered. Rather the focus was on internal resource development. They
elaborated a vision of the future that had new elements, different
elements and different priorities than before. The managing director
serviced this process by asking the question frequently, "what will this
mean we will do differently in the future?" The visioning process was
largely unstructured but pervasive; it was the dominant lunch time topic,
for example. The process observed was 'sensemaking', as described by
Weick (1995). On three occasions, however, the group met for a four hour
session to progress the sensemaking process formally.
6. As a consensus developed on the future of company P, the search for
initiatives became increasingly visible. Managers asked, 'what can we do
about this?' The answers to this question facilitated the elaboration of a
vision and served to provide an organisation development map.
Sensemaking and map-making were, frequently, coincidental.
7. The search for initiatives was unexpectedly extended. In order to be
accepted, an initiative had to be understood, selected, affordable,
perceived to be effective, promoted by one or more champions and
capable of being integrated within the other systems of the firm. It was
not easy to find initiatives that met all these criteria. Different initiatives
were 'visited' by the managing director and senior staff who "talked them
through'. Initiatives were adopted as commitments in the last of the
formal sessions described above.

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8. An unexpected issue was 'how much to do?' Although innovation

capability was perceived as significant for company P, there were many
other issues to be progressed at the same time. The managing director
spent 50 minutes on one occasion reflecting on the merits of undertaking a
programme to develop innovation capability and a programme to
implement ISO 9002. From his perspective these initiatives were rivals, in
that he felt that he only had sufficient resource to undertake one major
organisation development initiative at a time.
The researchers' memos (as above) led to the development of a richer picture
of the intervention process and had implications for the roles played by
facilitators who needed to become more involved as coaches and facilitators
than had been initially considered. These insights were conveyed to
facilitators through briefings and training programmes.
4.4.2

Reviewing interventions

As mentioned in Chapter 3, at an early stage the reference model and

intervention process were adopted by a body in Northern Ireland who used
it as the basis for interventions in to small and medium sized firms, principally
in the manufacturing sector. Eleven facilitators from NORWESCO (the name
of the co-ordinating body) were trained by this researcher and Professor John
Bessant in the specific intervention methodology. This enabled a wider
number of companies to be included in the data set. On the 20th and 21st of
February 1998 the managing directors of eleven companies that had
participated in the innovation initiative met to review their experience in a
workshop designed by the researcher.
During this workshop an assessment was made by each participant of the
benefits that had flowed from participation in the process. Eleven items were
identified, as shown in the table below:
Table 4.4: participants' evaluation
Benefits listed by participants
1

receiving constructive criticism from others

sharing experiences with other managers (people who have a similar experience)

receiving coaching from an experienced mentor: on my own problems

discussing, and becoming clearer about weaknesses and strengths

focusing on real difficulties

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Benefits listed by participants

6

building my self-confidence through getting support from others

receiving input from people not in my industry

getting new thinking on a persistent problem

through discussion, realising what is really important

10

admitting my weaknesses

11

realising that my problems are shared by others

Despite probing, on this occasion, it proved impossible to get firms to list

negative features! From the group discussion that followed the identification
of the benefits it was frequently emphasised that the interactions that
accompanied the process had added the greatest value (points 1, 2, 3, 4, 6, 7, 8,
9, 10). A series of dialogues enabled confidence to be built, new or different
perspectives to be gained and re-framing to take place.
Despite the enthusiasm of the participants, this feedback alerted the
researcher to a significant issuethat none of the benefits listed was specific
to innovation capability (although item 7 in the list might be an exception).
Since innovation was the purpose of the intervention, the impact of the lack
of innovation-specific benefits was confronting in the extreme.
The researcher explored this issue with the managing directors present at the
workshop who took the view that the key issue that concerned them was not
innovation per se, but "what to do to move their business forward". This
could and would include anything, from reducing tax liabilities, to retaining a
key employee or solving a persistent problem with a product. Participation in
the Innovation Audit Process had provided ideas for what to do to move
their business forwardand this was deemed sufficient to justify their
involvement in the process.
4.4.3

The NORWESCO review

In 1998 NORWESCO requested that a consulting organisation, Peter Quinn

Consultancy Services, undertook an impartial review of the interventions
conducted in Northern Ireland and Eire. 12 companies were visited and the
owner/manager interviewed in each case. The researcher had full access to

225

the findings on a confidential basis.73 Accordingly, only general learning

points will be summarised here.
The report said "It was found that the programme's multi-faceted approach
enabled companies to focus on what best met their needs. Some companies
focused on the results of the audit and concentrated all subsequent activities
on them: other companies invested considerable energy in the networking
and derived most benefit from it; whist the expertise of the facilitator(s) was
used as the main source of input in other cases" (21).
It went on to say "in general, the innovation audit was seen as valuable to
seven companies, but less significant for the other (5) companies. The plant
manager of one company was sceptical about the way in which the audit had
been conducted and, as a result, he queried the validity of the results
interviewees in two companies were unable to comment on the audit as there
had been changes in personnel and they had not seen the results of the audit.
On the other hand, two companies (both in the same sector) used the results
of the audit as the basis for all of the initiatives they implemented" (22).
It was clear that a standardised approach was not appropriate for all
companies. The report makes clear that effectiveness of the intervention
process was strongly influenced by the time availability, skills and
acceptability of the nominated facilitator. Following these comments the
training for facilitators74 (given by this researcher and Professor John Bessant)
was extended and, for later cases, facilitators worked, where possible, in pairs.
4.4.4

Learning from all interventions

It proved possible to extend understanding of the effects of interventions

through six forms of review. The sources of information are shown in
Table 4.5 below and learning points summarised.

73

74

A letter from the first company to participate in the programme is shown as Appendix 7. It
summarises the benefits of the intervention.
Facilitator training included: the theory and practice of action learning, role plays,
data-feedback skills, intervention stages and observation of the researcher conducting an
intervention for one firm.

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Table 4.5: review of activities

What was done

'Positive' points

'Negative' points

Review workshop
with Management
Institute at the
University of
Ulster (3 days)

Innovation legitimised and

'now on management's
agenda'

'Harder' aspects of innovation (e.g. specific

technologies) insufficiently addressed

Diagnosis highlighted
specific areas for
improvement
Intervention led to learning
networks being
established

Interviews with
in-company
facilitators (2)

Initiatives not seen as distinctively innovation

enhancing (e.g. team building)
Requires significant change of management
approach
Unclear relationship with other categories of
organisation development, especially quality
improvement

Structured intervention
process

Initiatives too broad (e.g. develop effective adhoc

teams

Specific initiatives
suggested

Needs leadership from the top including

supportive behaviours
Requires cultural change that is difficult to
accomplish

Interviews with
external
facilitators (6)

Structured intervention
process provided role
clarity for facilitators

Education required to understand the

significance of proposed initiatives (this is not
structured at present)

Management interested in
the topic

Lack of exemplars that demonstrate good

practice
Unproven relationship between innovation
capability and business performance

Input from DTI

Innovation Unit
(1)

Strong reference model

Review with the

Department of
Innovation, IESA
Business School,
Caracas,
Venezuela

Strong and comprehensive

reference model

Supervisor's
comments

Reference model based on

grounded theory

Elaborate model is hard to sell

Comprehensive set of
behaviourial indicators

Important business area

Under-structured intervention process

Lack of an end-point
Lack of exemplars that demonstrate good
practice

Dependent on professional skills and flexibility of

facilitators

In general, the review feedback was positive about the reference model and
the audit procedures based upon it. Weaknesses were found in the content
and structure of interventions. Six main development areas have been
identified:

There is a need to clarify the differences, if any, between the

implementation of a programme to develop innovation and other forms
of business improvement activity;

227

At present, the reference model applies to the organisation as a whole but

it may be that some parts of the organisation need to be more innovative
than others;

Innovation can be assisted by the acquisition of enabling technologies and

related assets. Although this is incorporated in the reference model at a
general level it is probable that specific guidance is needed;

Little help is given, at present on the topic of targeting (see Section 2.6).
This requires that innovation and strategy formulation are seen as
interdependent activities. This is not formally included in the intervention
design at present;

The lack of readily available exemplars (e.g. videos) diminishes the

perception of benefit;

A significant amount of 'education' is needed across the organisation. This

could facilitate cultural change. At present interventions are focussed on
the top management group. It is probable that the organisation, rather
than the power elite, should be the unit of intervention.

4.4.5

The current situation

At the time of writing 49 companies have undertaken an innovation audit

with supportive facilitation. In April 2000 the researcher was informed that
funds had been allocated to put 30 new companies through the audit and
intervention process.
Work is underway to address the weaknesses noted above and this will be
commented upon in Chapter 5. A 'report generator' has been developed that
pulls relevant improvement suggestions from the NUDIST database and
provides a semi-customised report to facilitate data feedback. Facilitators
meet regularly to discuss methodologies and have undertaken further
training. The SPSS database is beginning to provide a source of comparative
data, as more firms are added. However, companies undertaking the
innovation capability development programme are not selected as being
highly innovative and so reliable statistical norms or comparisons are not
available.
It can be seen that this research is work in progress so far as the intervention
activity is concerned. However, the fact that 30 additional companies have

228

committed themselves to participate indicates that, despite its inadequacies, it

has been perceived as a worthwhile endeavour. The researcher is committed
to taking this programme forward.

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Chapter 5
Discussion and conclusions
5.1

Introduction

In this chapter, the research is discussed and conclusions are drawn. In

addition, learning points are described and theoretical, methodological and
practical issues considered. The academic relevance and positioning of the
research is clarified and the specific achievements of this research are noted. It
is hoped that this discussion, and the conclusions drawn, will increase the
usefulness of the thesis to its readers. The chapter is presented in eight
sections.

Firstly, the work is reviewed against the overarching objective

(significantly contributing to knowledge in the field) and the four specific
objectives listed in the introductory chapter.

Secondly, the seven constructs described in Chapter 2 as possibly being

helpful in understanding the field of developing innovation capability are
reconsidered in the light of the research conducted. Trends and common
features are identified. The relationship between innovation, strategy and
operations is discussed and a 'triple helix' model suggested. This section
concludes by discussing the question, 'is the notion of innovation
capability helpful?'

Thirdly, adaptive theory is assessed as a potentially useful framework for

this form of research. This research is considered in relation to Layders
(1998) key features of adaptive theory. The use of adaptive theory for
research of this type is reviewed.

Fourthly, the G2 reference model of innovation capability is reviewed to

determine to what extent it reformulates established perspectives on
innovation capability. Aspects of the G2 model that were 'surprising' to
the researcher are noted.

Fifthly, learning about interventions intended to enhance innovation

capability is summarised. A model for developing innovation capability,
the 'intervention tree', is introduced and described.

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Sixthly, the relationship between contingency theory and the findings of

this research are reviewed. This section considers the researcher's decision
to develop a universalistic rather than a contingent model of innovation
capability.

Seventhly, comment is made on broad theoretical issues. In addition, the

researcher reflects on undertaking a study for a PhD on an unusually
broad and applied topic. The researcher reflects on his learning from
undertaking the research.

Lastly, suggestions for further research are made.

5.2

Review against objectives

As noted in Chapter 1, this research has a pragmatic bias. It belongs to the

school of doctoral studies (Easterby-Smith, 1991) that considers a useful
outcome from research to be a worthwhile endeavour. Nevertheless, the
research makes a distinctive contribution to academic knowledge as it fills a
gap identified by Wolfe (1994) who stated:
" Though several (typologies of organisational innovational
(stet) approaches) have been proposed no broadly acceptable
typology or check-list of attributes has emerged" (418).
This research provides such a typology. Whether it will become broadly
accepted has yet to be determined.
In addition to striving to make a distinctive and significant contribution to
knowledge in the field, four specific objectives were set (in Chapter 1). These
were:
1. Can innovation capability be described?
2. What are the attributes of a firm with high innovation capability?
3. Can a means be found to 'audit' innovation capability?
4. Are there ways that innovation capability can be developed?
In relation to objective one, the description of innovation capability contained
in the G2 model, and elaborated in the previous chapter, represents the main
contribution of this research to the emerging body of knowledge on
firm-specific innovation.

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In relation to objective two, this researcher argues that the principal attributes
of high innovation capability are incorporated in the G2 reference model. The
18 components and 56 elements provide the most comprehensive definition
of the dimensions of high innovation capability available.
In relation to objective three, the diagnostic process developed from the G2
model was drawn from organisation development models and survey
feedback methodologies. A questionnaire based on the G2 model was
devised, supplemented by interviews and focus groups and provided a
means to 'audit' innovation capability. At the time of writing this has been
used in almost 50 companies.
In relation to objective four, the researcher has suggested ways in which
innovation capability can be developed within certain categories of firms
(SMEs). It was shown that survey feedback needed to be supplemented with
skilful and flexible facilitation. Following this conclusion the researcher
reflected on the implications for management research and developed a
comprehensive change model (discussed below) that has yet to be tested.
From this brief review, it can be concluded that all objectives set in chapter 1
have been achieved, at least in part.

5.3

The theoretical context of innovation capability

The review of relevant theory and empirical research in Chapter 2

(summarised in figure 2.5) concluded that seven constructs might be helpful
in understanding the field. These were: a strategy diamond (2.5.5), a fivestage process model of innovation (2.4.1), defining innovation capability as
having 10 attributes (2.7.2), the NATS framework (norms, assets, technologies
and skills) (2.7.3), targeting innovation on 4Ps (product, process, position and
paradigm) (2.6.2) , double loop learning (2.9) and considering innovation
capability as a contingent, not a universalistic, set of attributes (2.8). Each
construct is listed in the tables below and the findings of this research are
discussed in each case.

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Table 5.1: relevance of this research: conclusion one

Theoretical
construct one
Strategy Diamond

Explanation

Conclusions from this research

In Chapter 2 it was
suggested that the
stance taken towards
strategy formulation
and enactment partly
determines a firm's
innovation agenda
and, consequently,
innovation
management
processes. Four
schools were
identifiedstrategic
planning,
resource-based,
entrepreneurial and
innovative
organisation.

This research found few differences between firms adopting

alternative strategic models. All firms demonstrated an intent
as to what markets they sought to serve and what
products/services they wished to offer. Such product/market
strategies were open to change but, generally, within
boundaries of chosen competitive strategies and commitments
to brand integrity. Speculative investments in resource
development were found, but were made within the context of
perceptions of probable product-market opportunity spaces.
The role of the entrepreneur was seen in its pure
(Schumpeterian) form in smaller firms but has been replaced
by a facilitative leadership style in most of the larger firms
surveyed. The role of the intrapreneur was significant in many
cases. Most organisations, including firms with
knowledge-intensive products, had sought to become more
innovative organisations, both by encouraging 'bottom-up' or
middle-up-down innovation and removing organisational
impediments. Similarities between firms were more significant
than differencesfirms sought to innovate for product-market
opportunities and acquire an enhanced resource-base; also,
they were, to some extent, responsive to entrepreneurs and
intrapreneurs.

Table 5.2: relevance of this research: conclusion two

Theoretical
construct two
Innovation as a
five-stage process

Explanation

Conclusions from this research

In Chapter 2 it was
suggested that
innovation could be
described as a
quasi-systematic
process moving from
idea to exploitation.

This research confirms that a process model provides a

realistic framework for conceptualising certain forms of
innovation. It is most apt when describing product and
positional innovation. Small-scale innovation in process is
less systematic. Organisations undertaking large-scale
process innovation or a form of process re-engineering adopt
a project management framework driven by provocative
learning and/or functional or specialist intrapreneurs and/or
consultants. A form of kaizen process frequently drove smallscale process innovation. Innovation in paradigm (or
business model) was less systematic and can be defined as a
leadership act, although multiple discussions were typical
before a commitment decision was made.

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Table 5.3: relevance of this research: conclusion three

Theoretical
construct three
High innovation
capability has 10
attributes

Explanation

Conclusions from this research

In Chapter 2 it was
suggested a firm that
demonstrates high
innovation capability
innovation has
multiple initiatives that
can be described as:
ubiquitous, ample,
creative, directed
(partly), fast, efficient,
selectively adopted, fit
into the organisation,
create value and
build competencies.

This research suggests that the list of 10 attributes provide a

helpful definition but they did not apply in every case.
Some firms confined innovation to the top of the organisation
or the technostructure and did not seek ubiquitous
innovation. In a few firms the high number of innovation
initiatives was perceived as negative as organisational
resources were over-stretched, customers reacted negatively
and/or individuals came under excess stress. Creativity was
widely found and widely valued. Increasing creativity, for
example through the personal development of managers,
was seen as a device for enhancing innovation capability.
Innovation initiatives were frequently directed from a firm's
strategic intent and deployed through a form of management
by objectives system. Indeed, the firms that had the most
coherent and stretching strategies appeared to be the most
innovative. Innovation frequently happened because
someone was being paid to do it! Speed of implementation did
not emerge clearly as an issue from this research, except
when innovation was undertaken through a project
management structure. Some firms were wary of rapid change,
preferring a 'slowly but surely approach'. Efficiency of
innovation was not generally measured, except broadly
through budgeting procedures. In general, timetables were
drawn up by management agreement. The selection of
proposals was mostly determined in management meetings.
The key criterion used to determine whether a proposal was
accepted was its perceived ability to create value conditional
on resource availability, fit with existing programmes and
perceived risk. Some initiatives were specifically undertaken
as stepping-stones to developing the firm's portfolio of
capabilities.
The 10 attributes provided a useful preliminary checklist and
a consciousness-raising device. The pace of industry change
appeared to be a key driver, as firms sought to have a high
rate of value-creating innovation in relation to their rivals. The
list was not systematically investigated in this research and
must be considered to be speculative.

Table 5.4: relevance of this research: conclusion four

Theoretical
construct four

Explanation

Conclusions from this research

Developing
innovation
capability requires
attention to norms,
assets,
technologies and
skills (NATS)

In Chapter 2 it was
suggested that the
NATS framework
provides a format to
understand specific
attributes of
innovation capability.

The NATS framework provided the researcher with a template

for coding the characteristics of innovative firms. It was found
that attributes could generally be divided into norms, assets,
technologies or skills. The NATS approach appeared to be
particularly helpful at the level of the work group, cell,
department or process. In addition, the NATS framework
provided a helpful structure for facilitators as they sought to
help firms to develop innovation capability.

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Table 5.5: relevance of this research: conclusion five

Theoretical
construct five
Innovation can be
targeted on the
4Psproduct,
process, position
and paradigm

Explanation

Conclusions from this research

In Chapter 2 it was
suggested that
targeting was
importantanswering
the question 'where
should innovation
capability be
deployed?' and four
areas of potential
application were
identified.

This research found that firms, periodically, targeted

innovation capability on each of the 4P areas. However,
different parts of the organisation were involved, sometimes in
complex ways. Firms that mass-produced products generally
had specialised adhocracies to perform the tasks (e.g. an
R&D department). Firms that created bespoke, complex
and/or knowledge-based products had distributed product
development routines across the organisation. Processes
could be developed in multiple waysdriven from the top, by
an overarching methodology (e.g. TPM), by middle managers,
by contractors and/or from 'the shop floor'. Innovation in
position seemed to require specialised skills and larger firms
generally established symbiotic relationships with advertising
agencies to provide this input. Innovation in business model
or paradigm was seen as a leadership and strategic act
determined by the power elite of the firm, apparently through
a 'political' process. Sometimes internal champions from
outside the power elite proved highly influential. The role of
an entrepreneur (in the Schumpeterian sense of the term)
seemed significant. S/he sometimes acted as a force for
re-conceptualisation of the business model(s) used by the
firm.

Table 5.6: relevance of this research: conclusion six

Theoretical
construct six
Double Loop
Learning

Explanation

Conclusions from this research

In Chapter 2 it was
suggested that
intentional learning
from experience
would enhance a
firm's innovation
capability.

There was evidence that firms deliberately engaged in

learning through reflection but did not describe it as such.
Regular meetings of top teams 'reviewed' initiatives and
reflected on their performance. In addition, reviews were
undertaken as a routine part of project management.
Learning happened but was either informal (often referred to
as 'experience' by informants) and/or codified into
procedures, processes or routines. Whether firms would
benefit from more intensive or structured learning processes
was not determined by this research.

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Table 5.7: relevance of this research: conclusion seven

Theoretical
construct seven
Innovation
capability may be a
contingent, not a
universalistic, set of
attributes

Explanation

Conclusions from this research

In Chapter 2 it was
suggested that
innovation capability
might be a contingent
rather than a
universalistic
property. Various
contingency models
could be relevant
based on size,
industry, nature of
work, maturity of firm
or some other
intervening variable.

This research did not offer an opportunity to explore fully the

application of contingency theory in relation to innovation
capability. However, preliminary work was undertaken to
apply Mintzberg's configurational model to selected cases
(see Appendix 8 and below). A key insight was that most
organisations construct an adhocracy when they seek to
innovate. Facilitative stances and processes included:
enabling learning, open dialogue, management commitment,
a relationship with a wider innovation agenda, prudent but
progressive decision-making, an over-arching conceptual
map, a process for development of ideas into action, the
sustaining of an affirmative consensus amongst opinion
leaders, that proposed innovation initiative were seen as 'do
able', use of the disciplines of project management, that those
concerned took pains to understand issues in depth, that
perspectives and frameworks (sometimes) were changed, that
people involved were capable and it was recognised that
much work was needed to turn an idea into a successful
innovation initiative.
The findings from this preliminary research suggest that
innovation proceeds in largely similar ways in different
organisational configurations, at least for the initial phases of
innovation process.

5.3.1

Trends and common features

The research data and findings have been reviewed to see whether trends
and/or common features can be identified. Seven key points emerged:
1. Innovation is, almost invariably75 , a highly person-centred activity.
Although certain forms of innovation (R&D or CI, for example) can be
routinised they can only be partly mechanised. The person remains
central.
2. Senior management generally consider achieving and sustaining
competitive advantage, not innovation, as an overarching goal. This
requires the capacity to offer valued products and/or services with a
sufficiently low cost-base to provide adequate margins. It is to these ends
that innovation capability is directed. Achieving and sustaining
competitive advantage is seen as a moving target: firms perceive a need to
develop their offers at least as fast as their rivals do. Innovation capability
is deemed to be important if it can enhance strategic flexibility and create
value.

75

In a few cases, for example in pharmaceutical research, aspects of the innovation process had
been automated.

236

3. Innovation can be a disintegrative force. Maximum exploitation of latent

innovation capability requires a degree of decentralisation; without
alignment of innovation initiatives the integrity of policy and strategy can
be undermined. There may be, therefore, an inherent tension between
innovation and deliberate strategies.
4. Innovation can offer dignity to the individual. One perspective of
organisational life suggests that it can become a 'psychic prison' (EasterbySmith et al., 1991). Participating in innovation provides an opportunity for
the individual to use elements of creativityboth in the production of
ideas and their execution. Accordingly, involvement in innovation can be
seen as a form of valuing of the individual.
5. Innovation requires decisiveness in situations characterised by levels of
risk and uncertainty. This is demanding on decision-makers as managerial
tools and methodologies are of limited help: uncertainty cannot be
eradicated.
6. Innovation capability is akin to a river that needs to be deep and
widealthough the quantity of capability needed is affected by the
industries within which the firm operates. Certain styles of management
are more likely to facilitate the development of innovation capability than
others and these, to some extent, can be developed systematically (see the
discussion of the intervention tree below).
7. Some targets of innovation capability are related more to business
development rather than 'traditional' management. The skills of the
entrepreneur and the intrapreneur are important. Entrepreneurship
requires an uncommon blend of personal aptitudes and competencies that
can be difficult to develop and retain, except at the apex of an
organisational unit. Effective entrepreneurship and intrapreneurship is a
significant asset for the development of innovation capability.
5.3.2

Innovation and other processes in the firm

As mentioned above, a useful analogy for innovation capability is to see it as

a river that should be deep, fast flowing but tamed in that its energy is put to
use. Freeman (1994) used a similar metaphor as he observed "the fastest
growing firms are distinguished by their capacity for a flow of incremental
innovation as well as (more rarely) outstanding success with a radical
innovation" (81). The analogy is apt as some approaches to understanding
business policy (Mintzberg, 1994) describe strategy as a flow of commitment
decisions, in effect a river of choices and consequences flowing through time.

237

Firms have to do more than innovate. They determine policy and manage
routine operations. These meta-processes are affected by chains of choices
and consequencesthey are also rivers. The innovation and the strategy
rivers join at many places but their confluence may be turbulent. Operations
flows with the other two and, again, has distinctive characteristics.
It appears that there are distinctive values, processes and outcomes of
strategic, operational and innovation streams of decision and action within
firms (Tang, 1999). Essentially, strategy is concerned with constructing value
and determining identity, innovation with the discovery and exploitation of
possibilities and operations with timely construction and delivery of valued
'products'. It is possible to conceptualise these as strands of a helix, shown in
the 'triple helix' diagram below in Figure 5.1.

Strategy

Operations

Innovation

Figure 5.1: helix model

A firm that possesses high innovation capability needs the capacity to

integrate innovation with the other two rivers of choice and decision. This
may require managing for requisite tension. Innovation is presented by the
helix model as a web of processes of dynamic interaction, interfacing,
sometimes uneasily, with strategic decision-making and operational
effectiveness (Hurst, 1995). Each strand makes its distinctive contribution to
building and sustaining the competitive advantage of the firm, although this

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may change in significance and intensity over time. This model of an

organisation has its roots in Marx's viewpoint of the functionality of conflict in
driving social entities forward (Coser, 1956). The three strands can be seen as
competing for dominance but a firm requires each to be strong and for
conflicts to be creative.76 Enabling mechanisms may be needed between
strands, although this was not investigated in this research. For example,
innovation can be linked with operations through application of the principles
of organisational agility (Bessant et al., 1998).
5.3.3

Is the notion of innovation capability helpful?

As discussed in Chapter 2, defined broadly, innovation capability can be seen

as underpinning many changes undertaken by an organisation. These may
include developing a simple tool to extract the last drop of ink from a tube,
introducing team briefing as a means of improving internal communication
and developing the technology to access the internet from a mobile phone
anywhere in the world. It is right to question the notion of 'innovation' itself
and ask 'is such a broad category useful?'
The largely positive responses of firms to the innovation capability
development programme described in Chapter 4 suggest that the answer is
'yes'at least for the time being. It is not claimed that innovation
management demands a wholly separate set of competenciesmany of the
attributes of effective innovation management are elements of a wider
managerial skill set. However, the competencies are distinctive in emphasis,
objective and effect and, in the opinion of this researcher, justify separate
treatment. It should be noted that, in firms studied, innovation was
interwoven with other activities in ways that were difficult, or impossible, to
separate.
The scope of the topic is wide and the development of innovation capability
can be reduced to being expressed as a set of slogans. At present the topic is
fashionable but fashions change. The notion of innovation capability itself
may be subject to innovation. For example, notions of generic innovation
76

The development of a team provides an interesting analogy emphasising the importance of

difference. Belbin (1981) showed that an effective team requires individuals with different
personal qualities. When the 'right' mix is present the team is stronger than any
individual.

239

capability described in this thesis may need to be elaborated by application

areas over time (e.g. specifying innovation capability for finance specialists or
innovation capability in insurance companies).

5.4

The use of adaptive theory

In Chapter 1 (1.7) the following comment was made, 'the approach adopted
(in this research) to link theory to empirical research was 'adaptive theory'
reinforced and extended by Layder (1998) who argued that an ongoing
dialogue between theory and data gathering/interpretation is constructive'.
Partly because of the novelty of Layder's approach, it is useful to reflect on
the benefits of using adaptive theory as an overarching method for research
of this kind.
Adaptive theory was seen as appropriate for research of this type, although it
should be noted that Layder does not explicitly discuss management research
in his book. Adaptive theory legitimises indeed advocates the use of grand
and middle-range theories as sensitising and orientating concepts. Also it
encourages the use of grounded theory for producing sound
indicator-concept linkages. In the opinion of this researcher, the primary
benefit of adaptive theory is that it committed to (critically) building-on
existing theory and empirical research rather than considering each situation
as context-specific. This means that, with appropriate caveats, it should be
possible for managers and their advisers to take the outcomes of research,
see its relationship with previous studies, and apply the research findings to
their particular situation (Layder describes this as a 'transituational' research
outcome (133)).
Layder (1998) describes 8 key features of adaptive theory (132-133). Assessing
this research against Layder's list of key features in table 5.8 below offers
arguments that support the characterisation of this research as adaptive
theory. It is important to note that Layder himself comments that, at this
stage, the "philosophical and methodological context (is) fairly sketchy in
form" (133).

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Table 5.8: this research and adaptive theory

Layder's comments on the
nature and scale of
Adaptive Theory

Relevance to this research

"Adaptive theory is a synthetic

approach " (132).

The seven 'potentially helpful constructs' that were described in

chapter 2, and reviewed above, were drawn from strategic
management, innovation theory, organisation theory, organisation
development literature and learning organisation models amongst
others. The research methods included quantitative analysis,
qualitative analysis, case studies and action research. Accordingly,
both in the selection of orientating concepts and in the choice of
methods a synthetic approach was adopted for this research.

"Adaptive theory is 'middle

range' in terms of immediate
focus" (133).

This research can be said to have resulted in a 'middle range' theory.

The scale of the theoretical model generated is neither grand (c.f. the
role of innovation as a driver of socio-economic change) nor is it
context-specific (c.f. the history of innovation in the Brighton Cooperative Society 1960-75). Middle range theories offer generalised
explanations that may be applied in defined conditions. That is true
of the G2 reference model.

"Adaptive theory both shapes,

and is shaped, by the
empirical data that emerges
from research. It allows the
dual influence of extant theory
(theoretical models) as well as
those that unfold from (and
are unfolded in) the research"
(133).

This feature of adaptive theory is strongly characteristic of this

research. The seven 'potentially helpful constructs' that were
described in chapter 2, formed the basis for the initial research tool
(Appendix 1). However, the analysis using the NUDIST database
required the researcher to construct a theoretical model, ground up,
from the data itself. In the course of doing this, and captured in
researcher's memos, unexpected theoretical and conceptual models
and frameworks were noted to aid in explaining and exploring
indicator-construct linkages. The "dual influence" referred to by
Layder (133) was strongly practised.

"Adaptive theory uses both

inductive and deductive
procedures for developing
and elaborating theory (133).

Deductive processes were dominant during the early phases of the

research when the questionnaire was being developed (appendix
1). The researcher was seeking to develop a set of sound
assumptions that could be used to formulate a structured empirical
enquiry. Later the centre of gravity of the research shifted so that
inductive processes became dominant, as the reference models
emerged from the coding process on the NUDIST database. A similar
pattern was observed when the interventions were considered. The
researcher began with deduction (drawing from texts in the
organisation development literature) and, following fieldwork,
inductively reflected on the efficacy of these.

"It rests on an epistemological

position which is neither
positivist nor interpretivist"
(133).

In Chapter 3 (3.4.1) this researcher wrote: "it was considered that

toggling between positivism and phenomenology offered a fruitful
philosophical stance as it opened a wider range of perspectives that
could be considered in the data interpretation process". This is
similar to the view expressed by Layder (1998) who wrote: "Adaptive
theory adopts a position on the nature of social science which is
neither positivist or interpretivist. Traditional positivism fails to
recognise that the social world is constituted by the actions of
meaning-conferring human beings although adaptive theory
rejects positivism in general, it does not reject the view that there are
phenomena in the social world that bear some similarities with those
in the natural world. social phenomena must be treated as
relatively 'impersonal' and as possessing an objective or
'transpersonal' and transituational character" (139-140).

"It embraces both objectivism

and subjectivism in terms of its
ontological presuppositions"
(133).

Layder (1998) wrote: "adaptive theory endorses an epistemological

position which incorporates both the 'internal' subjective point of view
of social interaction while simultaneously appreciating that such
activity always takes place in the context of wider social settings and

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Layder's comments on the

nature and scale of
Adaptive Theory

Relevance to this research

contextual resources" (140). The researcher considers that the G2

reference model is an example of work that takes such an
epistemological position. In the G2 model subjective meanings, social
settings and resource context are included and intermingled.
7

"It assumes that the social

world is complex, multi-faceted
(layered) and densely
compacted" (133).

Layder (1998) wrote: adaptive theory attempts "to produce an

enhanced or more accurate rendering of the nature of social reality
secondly, the adequacy of knowledge is reflected in the
formulation and presentation of ever-more powerful explanations of
social phenomena" (142). Although these are lofty ambitions, in a
small way this research aspires towards them. The development of a
reference model with 56 elements (greater in number than any other
model studied) demonstrates a commitment to understanding a
'densely compacted' topic.

"It focuses on the multifarious

interconnections between
human agency, social
activities and social
organization (structures and
systems)" (133).

In this regard this research failed to achieve the potential of adaptive

research. Although some were identified in the definition of
components the researcher was aware that many interconnections
were not investigated systematically.

242

It must be noted that the perspective of the researcher on the applicability of

adaptive theory is limited as he became aware of the approach when it was
first published, more than three years after the research had been started. It
supported the researcher's already chosen stance to strive to maintain an
ongoing dialogue between theory and the interpretation of empirical data
and assisted the researcher to draw flexibly from disparate bodies of
knowledge and practice. Before adaptive theory became available the
researcher was aware of a conceptual tension between a commitment to the
principles of grounded theory and the fact that his mind was, in fact, being
opened, orientated and informed by a range of pre-existing theories and
research findings. Layder (1998) saw this tension as a result of excessive
commitment to a doctrinaire conceptual and methodological framework as
the following quotation illustrates:
" grounded theory has certain built-in limitations. First, as I
have pointed out, it too rejects the contribution of general
theory and, in my view, this simply impoverishes its
explanatory potential (its power and scope) in an unnecessary
and inflexible manner. Such a waste of good theoretical ideas
can be avoided and the overall goal of cumulative knowledge
(rather than disparate and isolated fragments) can be served by
accommodating general theory. Secondly, although grounded
theory is good on depicting the lived experiences and subjective
meanings of people, it does not have an adequate appreciation
of the social-structural or systematic aspects of society" (19).
From the perspective of this researcher, adaptive theory was both liberating
and affirmative. The freedom to use pre-existing theory as orienting concepts
meant that accumulated scholarship in the relevant fields of study could be,
legitimately, put to use, rather than treated with suspicion. Secondly, Layder
emphasised the need for a researcher to be aware, proactive, critical but not
dismissive. This positioning of a researcher as a craftsman, rather than a
technician, was felt to be affirmative. However, the researcher did note that
adaptive theory, being quintessentially synthetic in nature, required
considerable personal discipline since maintaining a balanced internal
discourse between established theory, new theory and the lifeworld was
demanding.

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5.5

The G2 Model - an assessment

The G2 model offers a significant contribution to an emerging body of

scholarship on firm-specific innovation. However, its contribution is
evolutionary, not revolutionary. There have been numerous other studies
that provide frameworks for the assessment or auditing of innovation
capability. In Appendix 2 seventeen frameworks developed by other
researchers are compared with the findings of this research. This researcher
noted that 'all components (in the G2 model) receive support from other
researchers although no other researcher has developed a model that
contains all of the components and/or elements found in this research'.
Accordingly, the most significant advantage of the G2 model is its
comprehensiveness.
Despite the fact that much of this researchers work confirmed that of others,
several specific findings were surprising. The most significant of these are
described below:

The G2 model links innovation and strategy symbiotically (component Ib).

The breadth, depth and significance of the interconnectivity between
innovation and strategy were surprising as much of the existing literature
on innovation focused on operational processes, new product
development and the like (see Chapter 2). This research clarified the key
role of innovation as a servant of strategy and, sometimes, its master.
Interestingly, the strategic significance of innovation is receiving more
attention and has found full expression in a recent book (Hamel, 2000) as
indicated by the following quotation: "(I)n the age of revolution we will
see competition not only between business models, but between
innovation regimes" (26).

In the G2 model project and programme management were identified as

necessary management disciplines and skill sets (component IIc). This was
important, as some approaches to innovation had portrayed it as flowing
from a chaotic, inspired or organic organisation (see Chapter 2). This
research found that creativity and commitment needed to be balanced
with structured planning and competent execution.

244

A component in the G2 model (IIIa) deals with 'empowerment'. This

research shows that there is a complex relationship between the
decentralisation of power and innovation capability. Most, but not all,
firms in the research sample adopted, at least in part, empowerment
philosophies in order to increase the quantity and commitment to
implementation of (generally small-scale) innovation initiatives. However,
even in 'empowered firms' some innovation initiatives flowed
downwards from the firm's power elite because of their scope, scale, risk
level, policy implications, radical intent or for some other reason. In these
cases employees were disempowered in the sense that they were required
to implement predetermined policies. Empowerment emerged from this
research as an episodic state, rather than a once-andfor-all commitment.

Component IVa includes a reference to 'exploratory dialogue.' This

emerged as a significant issue. It appeared that dialogue was needed for
five major purposes. Firstly, it served to elaborate under-developed ideas.
Secondly, it provided an informal filter to reduce the quantity of ideas
considered. Thirdly, dialogue provided a means by which commitment,
and therefor 'political will' could be won. Fourthly, it enabled groups of
people to determine what short-term roles they needed to play to 'move
an idea forward'. Lastly, dialogue that led to affirmation could strengthen
the resolve of the idea champion(s). Interestingly, there were many cases
when exploratory dialogue was structured, generally around a
presentation and/or a paper, thereby providing elements of formality in a
process often characterised by informality.

In Component Va the notion of 'adhocracy' is introduced (discussed in

Appendix 8). The research found that when people became involved in the
early or uncertain stages of an innovation initiative they generally formed
an adhocracy a flexible, creative, project-based and temporary
organisational form. This even happened in the case of a mass-transit rail
system that was dedicated to conformance and predictability. The capacity
of managers and other staff to adopt markedly different mind-sets and
play distinctive roles was related to innovation capability. For example, a
manager may need to spend a morning meticulously checking records of
safety inspections and the afternoon 'blue-skying' ways in which new
technologies could be adapted to give enhanced customer service. His or
her capacity to contribute to both tasks required the recognition of a need
for situational flexibility, willingness to change roles and the possession of
a portfolio of appropriate skills.

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Component VIa deals with the topic of 'mental maps'. This researcher had
not considered the relevance of conceptual maps in relation to innovation
before the data from the empirical research became available (although he
was familiar with some of the literature on sense-making as discussed in
Chapter 2). An example helps to explain the concept. In a water utility
company, driven by a variety of pressures, a top management decided to
commit the organisation towards being 'friendly to the environment'. This
could be said to be a 'vision statement'. Shortly thereafter managers
began to visit organisations that had a record of significant environmental
improvements. Through learning and discussion domains of opportunity
were described - a 'map' was prepared. The 'map' provided 'spaces for
journeys' and led to many innovative initiatives, aided by organisational
legitimacy, clarity of intent, resource availability, appropriate exemplars
and shared understanding of the map itself. It is interesting to note that
most managers were readily able to draw a picture of the organisation's
past, present and future journey towards environmental improvement
using the metaphor of a map.

An examination of the G2 reference model as a whole reveals a complex

picture. Innovation capability is seen to be the result of a complex interplay
between norms, competencies, behaviours, interactions, meanings,
structures, processes, institutions, mythologies, disciplines, technologies, sets
of knowledge, power brokers, challenges, alliances, decision-rules and
resource allocation decisions. Moreover, although innovation capability is an
organisational property it is only partly systemic in nature. Built into an
organisation with high innovation capability is a recognition that some
innovation initiatives come 'from outside the box' and will challenge
orthodoxies, perhaps de-constructing and re-constructing systems and
paradigms.
Managing in such an environment, this researcher argues, requires a
somewhat specialised set of competencies that can be, in part, inferred from
this research. It would be premature to suggest a definitive list but it is likely
that an 'innovation-capable' manager will:

imagine radically alternative futures;

on balance, be a successful gambler (i.e. take judicious risks in uncertain

situations);

focus energy and resources on a distinct innovation agenda;

246

hunt actively for new ideas and frameworks;

encourage and enable others to be creative in the finding and exploiting of

ideas;

adopt organisational forms flexibly according to the stage of development

of an idea.

Although this list is speculative and incomplete, it is sufficient to demonstrate

that the competencies required are more typically found in entrepreneurs
than amongst traditional managers (Spencer and Spencer, 1993). It seems
likely, therefore, that organisations that seek to increase their innovation
capability by reducing or eliminating G2 blockages will need to integrate
entrepreneurial individuals, polices and practices into organisations that have
often been unsympathetic hosts to such values and behaviours in the past.
5.5.1

Use of the reference model

The G2 reference model offered a structured format for exploring innovation

capability and provided the core framework in the diagnostic process. Many
discussions with managers took place during its use in firms. In reflecting on
these exchanges, three significant research issues were identified. These will
be expressed as questions:
1

Why are managers not more interested in the reference model?

One interesting puzzle arising from the research process was that
managers rarely attempted to critique the model but were not keen
to understand more about it. The typical reaction was for the
manager to receive a presentation explaining the components, ask
one or two questions and then ask to move on to data relevant to
their particular firm. When asked about this apparent lack of interest
the researcher was told that 'the model was fine', 'as a broad-brush
thing it feels OK' or a similar observation. Further discussion on this
point suggested that, as one manager put it, "it's too daunting. There
is too much to get right. I want to know about things that I can do".
The researcher concluded that the model presented an emotional
hurdle to some managers. As one manager put it, "it's not a hill to
climb, its Everest". Another manager said, "56 elements! I could deal

247

with 6 or 8 but 56 is about 50 too many". It may be that the model, in

an attempt to be universally applicable, has simply become too large.
If this is the case then it could be rejected based on size alone.
These observations have implications for this research and for the use
of models generally. They pose a dilemma for researchers and
change agents. If models are comprehensive they can become
complex, perhaps impenetrable. If they are simplistic they fail to
capture the rich picture of the management task.
This researcher's primary response to the problem was to provide
firm-specific feedback, highlighting lower performing components
and elementsin effect, providing priorities for the firm.
Unfortunately, this meant that the researcher adopted a filtering role,
although decision rules were implemented to reduce the subjectivity
inherent in this. The number of elements that it is reasonable to
describe may vary with the audience. An organisation development
specialist in a large organisation may value the breadth of the model
(all of those consulted did (4)). However, an owner-director of a small
engineering firm could find a short list of priority areas for attention
more beneficial (this was found in practice). On balance, it was
considered that the full model did need to be shown, but care had to
be taken in its presentation. There is a need for greater
understanding of the role of a third-party interventionist in
facilitating organisational innovation.
2

Are all of the components really equally significant?

In the reference model all components are given equal weight. This
seems unrealistic. It is unlikely that all components will be equally
important. Moreover, the relative significance of components is likely
to change according to factors affecting the firm. For example, when
a company undertakes a major innovation initiative that provides
novel challenges it is likely that having an appropriate portfolio of
competencies is critical. This is less likely to be true when incremental
innovation is proceeding within current organisational arrangements
(Freeman and Soete, 1997). The relative weighting of components

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was a topic of concern for managers as they engaged in sensemaking dialogues. They frequently asked the question 'which of
these (components or elements) is really important to us?' At
present, there is no standardised way of helping managers to weigh
the significance of the reference model feedback to their firm's
specific needs.
3

Are the elements too broad?

For each of the components identified a list of elements were
identified. In total, 56 elements were identified for the 18 components.
A few managers considered that generic skills should be synthesised
from elements, thereby enabling skill clusters or competencies to be
identified. These managers pointed out that, for example 'listening to
specialists' (IVb) and 'tracking possible maps' (VIa) required similar
skills. If skills could be identified then innovation capability could be
developed, at least in part, through systematic training and/or new
or amended routines. This research did not have the necessary data
to develop valid competency profiles. However, the notion offers the
intriguing possibility that it may be possible to use methodologies
from competency-based analysis (Boyatzis, 1982) to develop tested
programmes for the systematic enhancement of innovation
capability.

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5.6

Interventions intended to enhance organisational

innovation capability

No matter how comprehensively and correctly innovation capability is

described it will remain an intellectual framework unless developed in
organisations. Third party intervention can sometimes make a useful
contribution to the development of innovation capability through
consciousness-raising, diagnosis, facilitation, education, action planning and
the provision of specific techniques. The research demonstrated that
development of innovation capability is not straightforward and six
significant learning points emerged.
1. As innovation capability is a generalised attribute firms lack a ready
means of knowing whether they possess it or not. Since there are no
common standards it is easy to come to a conclusion that 'we are fairly
good, probably' and make other, more specific, development
programmes a higher priority.
2. Innovation capability is a relatively complex construct. It takes time to
appreciate it and identify specific application areas. Investment of the time
to raise consciousness about the depth and breadth of the concept can be
difficult to justify.
3. Interventionists developing innovation capability tend to be evangelical.
They can adopt the position 'you may not know it but you need more
innovation'. However, innovation can be fragmenting, divergent and
risk-ladenso business owners and managers are, properly, cautious.
There can be a mis-match of values and expectations between
interventionists and target firms.
4. Once a company accepts that its innovation capability requires
development it can be difficult to know what to do next. Deeply imbedded
cultural factors, power positions, systems, routines, norms, reward
structures, skills or other factors may need to be changedprobably in a
co-ordinated manner. Such root and branch change is difficult to
conceptualise, enact and assess.

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5. Many techniques for developing business and management skills have

been developed but these tend to be stronger on the development of
rational and systematised skills and processes, rather than developing the
personal and organisational flexibilities needed to enhance innovation. For
example, installation of a TQM capability in a firm is a relatively
straightforward, if demanding, endeavour. In contrast, mastery of the
ambiguity, messiness and divergent nature of innovation is less easy to
develop and integrated proven training techniques are scarce.
6. Innovation capability remains a latent resource until it is targeted and
used. Targeting may be different for each firm. In this developing
innovation capability is unlike other programmes, for example total
quality management which has specific outcomes and metrics. The burden
of strategic decision-making is not reduced by heightened innovation
capabilityindeed it may mean that more demanding choices must be
made.
More generally, from the limited case research undertaken, it emerged that
multiple paths can be taken to develop innovation capability. This means that
firms need to select a configuration of paths that are appropriate to them. It is
not easy to determine which paths are appropriate since, as one informant77
put it, "there are many roads to Rome". One, speculative, way of describing
the paths is shown in Figure 5.2 below:

77

Hugh Chapman, Managing Director of Veeder Root Ltd. 16 June 1996.

251

Innovation through
deliberate strategy
Innovation
through
rewards,
culture and
system

STRATEGY
IDENTITY

CI

Innovation through work

group development

Innovation through
organisational re-design

FORM

KINETIC

Innovation through
individual empowerment

Figure 5.2: paths for development of innovation capability

In the figure five paths for the development of innovation capability are
suggested. These are illustrative, not comprehensive. It is possible for firms to
innovate through deliberate strategy ("we will enter the cellular phone
market"), form ("we will establish market-facing divisions with the power to
develop their own strategies"), kinetics ("we will recruit great people and let
be creative"), CI ("we will empower groups to take initiatives after due
process") and identity ("this organisation succeeds because we value
innovation than rivals").
The notion of paths is speculative but offers a provisional format for helping
firms to develop a policy for the development of high innovation capability.
In addition, research could be undertaken into the paths, relevant
preconditions and effects. None of the paths is straightforward; innovation
capability will remain difficult to develop. Moreover, once acquired it can be
lost.

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5.6.1

An 'intervention tree'

From a detailed analysis of two cases78 in which the company had been
striving to develop innovation capability for some years, it proved possible to
produce an 'intervention tree'. This does not have the status of a research
finding and is an extrapolation from existing practice. It provides a
preliminary model for systematically developing innovation capability. As far
as the researcher is aware there are no models available that have a similar
degree of internal complexity. The tree (Figure 5.3) drawn as a NUDIST
diagram is shown below.
Diagnostic Process
Customisation for
Firm's Strategic
Intent

Level A

Data Feedback

4Ps
Targeting
Programme to
Remove
Identified
Blockages

D1
Other
Initiatives
Identified
by Audit

Training in
Innovation
Specific
Skills

E1

Generic Innovation
Capability Development
Programme

D2

D3

D4

Improve
Customer
and Potential
Customer
Feedback

Establish Ad
Hoc Teams
for
Innovation

Reward
Innovation
Initiatives

E5

E7

E2

Customisation for
Organisational
Form(s)

E3

E4

E6

Level C

D6

D5

D7

Develop
Elaborate the
Effective
Firm's Vision
Project
and Intent
Management

E8

E9

Level B

E10

E11

E12

Level D

Put
Innovation
on the Top
Team
Agenda

E13

Level E

ge
nta
va
Ad
s&
on
eam
ati
fT
ov
eo
Inn
nc
for
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irm
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r
eF
ks
Pe
tur
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Lin
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ati
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ies
Str
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log
Inn
era
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ise ls
ech
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Ap ivid ntia
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Gr
Dr
ch
ills
ols
Ea
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Co
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ate
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Str
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Ma
a
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ess
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roc
To
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ild
nta
Bu
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op
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Ma
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it G
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rm
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Re
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Em

lop
ve
De

Figure 5.3: intervention tree

This diagram suggests the structure of a programme to help a firm develop

innovation capability. Diagnostic and data feedback processes (levels A and B)
are standardised entry activities but adapted for a firm's dominant form(s)
78

The cases were SmithKline Beecham R&D and Thames Water. The researcher spent five
days interviewing in the first company and three days in the second.

253

using Mintzberg's organisational configurations (Mintzberg, 1998) as

contingency factors appear to be relevant in later stages of innovation
processes. Senior management consider which of the 4 Ps (product, process,
position or paradigm) are apt targets for the exploitation of innovation
capability as shown in Table 5.9 below.
Table 5.9: relevance of the 4Ps framework
P

When relevant

Product

When timely introduction of products or product enhancements could provide robust competitive
advantage for the firm.

Process

When reduced cost-structures, faster cycle times, improved problem-solving or better

resource-utilisation could provide robust competitive advantage for the firm.

Position

When improved market sentiment or loyalty towards the firm (or its products and services) could
provide robust competitive advantage for the firm.

Paradigm

When technology or top management creativity could enable new business models to be
created or adopted that could provide robust competitive advantage for the firm.

Level C introduces a new element. Initiatives relating to clearing specific

'blockages' are identified. These can be addressed as company-specific
initiatives (indicated by a box on the left of the diagram). Some of these
initiatives may draw from a generic innovation development curricula
(shown on the right of the diagram).
The notion of a generic innovation development curricula (partly customised
for Mintzberg's six organisational configurations) provided a new perspective
for this researcher. At this stage, the model is speculative although follows the
developmental process adopted by the two case companies. Level D
represents those activities that firms would be wise to undertake first and the
activities of level E come later. It offers a step-by-step developmental,
hopefully generative, process for firms and facilitators. A rationale for
selecting the seven entry-level (D) activities is briefly explained table 5.10
below.
Table 5.10: intervention tree activities (level D)

D1

Activity

Rationale

Training in Innovation-Specific Skills

Develops key skills (e.g. opportunism, idea

finding, idea generation, idea evaluation, riskmanagement, accepting challenge, support
building, project management etc.).

254

Activity

Rationale

D2

Improve Customer and Potential Customer Feedback

Increases and deepens customer and potential

customer feedback.

D3

Establish Ad Hoc Teams for Innovation

Develops skills and legitimises ad hoc

teamwork.

D4

Reward Innovation Initiatives

Reinforces recognition, status and other forms

of reward for innovation initiatives.

D5

Develop Effective Project Management

Develops capability for managing innovation

initiatives from firm commitment to delivery.

D6

Elaborate the Firm's Vision and Intent

Shares a firm's vision (in general, what it wants

to become) and intent (how it will gain and
sustain advantage), allows conceptual maps to
be developed, sets an innovation agenda and
aligns initiatives.

D7

Put Innovation on the Top Team Agenda

Enables a consensus about the firm's

innovation agenda to be developed and
shared amongst members of the firm's power
elite. Also, enables education about the
drivers, sources, processes, targets and
enablers of innovation capability.

Level E activities follow once level D activities have been undertaken. Again, a
brief rationale for the 13 level E activities is provided in the table below.
Table 5.11: intervention tree breakdown (level E)
Activity

Rationale

E1

Develop Empowerment Policies

For all firms, except micro-enterprises, empowerment

strategies can increase the flow of innovation initiatives.

E2

Recruit Great People

It is an error to believe that anyone can do everything.

Individuals with excellent skills and personal innovation
capacity are needed in key roles.

E3

Manage Horizontal Processes

Most (except work-group) innovation initiatives require

effective horizontal liaison, project and process
management across boundaries within and without the firm.

E4

Build Top Team Strategic Skills

Top teamwork, at the SBU level, is a key driver of innovation

and aligns initiatives. Teamwork between SBU management
teams in larger firms, and with alliance and/or co-operating
partners, is necessary to avoid parochial thinking and
limited capacity to exploit potential synergies.

E5

Maintain Controls Driving Innovation

The firm's control systems (objectives, measures, financial

appraisal techniques, success criteria and MIS reporting
process) need to support innovation in the firm.

E6

Each Work Group Establishes and

Innovation Plan

Organisation-wide innovation development plans are too

'broad brush' for work groups. Team specific innovation
development programmes are required.

E7

Improve Personal Mastery

The term 'Personal Mastery' refers to individuals capacity to

be innovative as individuals and includes stress
management, creativity development, influencing skills and
tolerance of ambiguity.

255

Activity

Rationale

E8

Audit Innovation Capabilities

This includes auditing to aid the development of the

generic innovation capability and additional audits of
technological, market, competitive and other
industry-relevant change drivers.

E9

Access Comparative Innovation

Performance

Firms can benefit from establishing an assessment process

to determine how innovative they are compared with (the
upper quartile of) rivals.

E10

Develop Seamless Innovation to

Operations Links

This is particularly important for product and process

development in order to manage the transfer of innovation
initiatives to 'routine' parts of the organisation. It should be
noted that routine processes can be the target of multiple
innovation initiatives intended to simplify, improve, increase
speed, reduce cost structures, enhance flexibility, reduce
environmental impacts etc.

E11

Explore Potential Technologies

Firms can benefit from gaining hands-on experience of

potential that could be significant in contributing to
innovation.

E12

Appraise Innovation Performance of

Teams and Individuals

The firm's performance management system needs to

recognise, direct and support innovation. It was interesting
to note that some firms are using the Balanced Scorecard
(see section 4.3.2.3) in order to provide a coherent
structure for doing this.

E13

Structure Firms for Innovation

Advantage

The firm's structure needs to provide appropriate control

and co-ordination devices to manage assessment of
drivers, inspiration sources, idea development, programme
and project management etc. As suggested below, this can
include the capacity of an organisation to change form
according to the requirements of the moment.

It must be emphasised that applying this framework would require flexibility

as it is based on too few cases to provide more than a set of hints about what
could be done to enhance innovation capability. However, it does provide a
tentative step-by-step methodology. In order to apply this approach in
practice, it would be necessary to elaborate each of the activities listed. There
are many training and development methods that could be used, or adapted,
for this purpose.

5.8

Contingency theory and this research

In Chapter 2 (2.8) this researcher noted that 'innovation capability may, at

least in part, may be affected by the rate and sophistication of industry
evolution, a firm's accumulated experience in innovation practice, firm's size,
the scope of innovation undertaken, degree of formality and/or other
factors. If this is correct then innovation capability may, at least in part, be
contingent upon situational factors and not a universalistic property'.

256

The argument that contingency factors shape the requirement for innovation
capability, its nature and its functions is persuasive. The data set generated by
this research provided an opportunity to begin to explore whether
innovation capability was best considered as having a universal set of
attributes, or whether it needed to be viewed from a contingency perspective.
Only a small number of 'lightweight' cases were examined (see Appendix 8)
and the conclusions of this aspect of the research must be regarded as
tentative.
The contingency model adopted was that of Mintzberg et al. (1998). The
researcher had the opportunity to study one example of each of the six
organisational configurations and, contrary to his expectation, found many
(16) points of similarity. This was considered sufficient to justify adopting a
universal model for this research, although, as noted above in the discussion
of the intervention tree, contingency factors have a role in 'customising'
diagnoses and the development of change strategies.
The absence of evidence from this research supporting clear demarcation
between contingency categories could be a result of the choice of Mintzberg's
model rather than another. However, this is unlikely as Mintzberg's model
integrates much of the earlier work in the field. A more likely explanation can
be drawn from an examination of the cases in Appendix 8.
It appears from this research that organisations are capable of adopting more
than one form. This 'morphing ability' has been identified by others and is,
for example, discussed in a recent work (Harryson, 2000) whose framework
(185) describes innovation series of journeys with four possible directions
(north large organisational unit, east organic and heterachic, south small
organisational unit and west mechanistic and hierarchic). According to
Harryson, innovation initiatives tend to start in the Southwest (small and
organic organisational form) and move to the Northeast (large and
mechanistic organisational form). Harryson's process-oriented model helps to
explain why this research suggests that innovation is, to some extent,
independent of contingency factors. The nursery of innovation initiatives is, in
Harryson's terms, the Southwest characterised by "loose creativity
networks for invention and internalisation of knowledge" (185). These can

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appear in any organisation, from the entrepreneurial form to the machine

bureaucracy. The dominant configuration becomes increasingly significant as
the journey Northeast proceeds and an innovation initiative is elaborated,
integrated, enabled, codified, routinised and exploited.
Although Harryson's work was not available to the researcher for use as an
orienting concept (it was published in the year 2000) the G2 model largely
supports his metaphor, especially components IIIc, Va and Vb. In addition,
this research extends the applicability of the constructs embedded in
Harryson's model. His case examples draw from significant product
innovations in large firms. Many innovation initiatives studied by this
researcher were small-scale and targeted elsewhere than at product
innovation. However, a similar pattern is discernible with ideas being found
or born in "loose creativity networks for invention and internalisation of
knowledge".
This research suggests that organisational contingency factors are not
absolute but are conditional, at least in part, on the type of work being
undertaken at the time. However, there is a paradox that merits explication.
This can be expressed as a question: if the innovation capability can be
described as a universal property then why is that firms are primarily
innovative in their area of competence? This research suggests that although
processes maybe similar the skills and knowledge of the people involves
needs to be context-specific. So, a team of pharmaceutical scientists can devise
a new drug and a team of imagineers can develop a new concept for a theme
park but pharmaceutical scientists cannot design an innovative theme park
(although they may a contribution). The importance of context-specific
knowledge is partly reflected in the G2 model (components IIa and IVb) but
could be explored further by other researchers.

5.9

Theoretical discussion

In addition to the points made above, this research illuminated a wider

theoretical issue in relating management studies to the social sciences,
specifically sociology, for which there are no satisfactory answers at present.
The problem was detected in broadly positive reactions of managers to the
G2 model itself and weaknesses in the take-up of innovation capability

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development initiatives. It seemed that the research was stronger in diagnosis

than in helping managers know what was the best thing for them to do next.
The problem can be summarised this way: extant theoretical positions and
related methodologies are strong in allowing a researcher to describe and
understand the present. However, they are relatively weak in facilitating the
development of new and better ways to do things. In short, social science
research has a phenomenological bias that can be internally innovative but is
weak in facilitating novelty.
This phenomenological commitment is not surprising considering that the
roots of the social sciences are conditioned by precepts such as those stated by
Naegele (1961) who wrote about sociology that "(i)t confronts the world
(within and without) in order to make discoveries Discoveries are not
made about the world as a whole Sociology, then, involves a characteristic
image, or alternative set of images, concerning one part of the larger order of
'the world' that can be increasingly known" (5). Naegele sees forming a
'characteristic image' as a goal of sociology. This is more than descriptive but
rooted in phenomena that can be observed (like gender role behaviour) or
inferred (like social cohesion). Indeed, faithfulness to the reality studied is
considered by some to be what puts the science into social science
(Silverman, 2000).
In their discussion of grounded theory Strauss and Corbin (1990a) concur and
elaborate. They state "(a) well-constructed grounded theory will meet four
central criteria for judging the applicability of theory to a phenomenon: fit,
understanding, generality and control it should also be comprehensible
and make sense both to the persons who were studied and to those practising
in the area" (23). This stance firmly roots study in existing phenomena with
the injunction that the findings must "make sense to the persons who were
studied" - giving emphasis to the descriptive nature of research endeavour.
Organisations have been become better understood as a result of such
research. But management requires more than description; it requires action.
Managers take and enact decisions that shape futures. Their preoccupation is
with what might be done to improve, mitigate 'problems', gain advantage,
exploit assets, lever knowledge within a web of constraints, regulations and

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non-negotiable driving forces. In short, management is committed to creation

of value despite difficulties in a messy context. As Revens (1982) put it "(i)n the
widest sense management embraces both the setting of a goal and the
manipulation of resources to achieve it. A person who sets goals but makes
no effort to achieve them is not a manager" (151).
It is relevant to ask the question 'to what extent does description imbued with
phenomenological exactitude aid managers to, in Revens' words, 'set goals
and manipulate resources? From this research, the answer it would seem to
be generally 'partly'. The reasons for this become clearer when an
intervention is considered over time as is shown, simplistically, in Figure 5.4
below.
Review of
options

Organisation
as a working
entity

Implementation
of Action Plans

Managerial
learning
following
feedback

Enrolment of
multiple
stakeholders

Organisation
as a new
working
entity

Action
Planning

Last
Month

Today

3 Months
Time

Next Year

Three
year's in the
future

Figure 5.4: intervention over time

The study of an organisation as an entity can be undertaken relatively

efficiently and effectively using methods rooted in phenomenology.
Managers can be helped to make sense of their current reality using methods
from survey feedback, counselling and sensemaking (see, for example,
Barrett and Cooperrider, 1990). However, at this point, as Goodfield (1999)
puts it "there is a situation of insight without action" (17). Choices need to be
made about whether to do anything, what to do and how to do it; options
need to be reviewed and action plans formulated. Here existing theory and

260

research findings are relatively weak, but not inconsequential. Case studies,
examples of practice, bodies of judicious prescription (e.g. Deming, 1986) can
be generally helpful but also be marginally relevant, superficial, obscure or,
possibly, misleading. However, once choices are made (by a manager) about
what to do the situation improves. There are many studies about how to
enrol others and manage implementation (see, for example, Miller, 1980). In
short, a commitment to phenomenology provides least practical benefit when
futures are being constructed since, by definition, no phenomena exists at that
time.
This point is illuminated by considering a common theme that occurred
during the intervention process of this research. There would come a point in
the feedback interview when managers would say something like "well, I buy
the analysis but what do we do to improve? What will work for us?" Here,
the researcher drew from three sources of guidance. Firstly, other managers
could provide a source of craft-based wisdom on what was likely to be
effective; secondly, accumulated caselets offered possible stratagems
although, generally, in circumstances that were not directly comparable;
lastly, 'progressive' principles (like team working) were espoused with the
intent that they could be considered for adoption.
It is notable that the researcher could not, in this case, provide a taxonomy of
action options with a reasonable estimate of costs, implications and benefits in
which the contingencies (i.e. contexts in which they may be relevant) were
explicitly defined. Although, it should be noted that such taxonomies have
been successfully developed where more specific behavioural-based
organisation development is planned (see Caffyn et al., 1997 for an example).
The relative weakness of current social science theory, and related empirical
research, to provide authoritative help to managers that enables them to
construct progressive futures is a matter of concern. One reason is that
research is frequently considered to be a process of description in pursuit of
understanding within the boundaries of an academic discipline. In the case of
innovation capability, such a commitment to a single academic discipline is
questionable. The components of innovation capability, as reflected in the G2
reference model (see Chapter 4), would require input from several academic

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disciplines to achieve sufficient understanding to supply the kind of

decision-support input outlined above. Table 5.12 illustrates the problem.
Table 5.12: need for a multidisciplinary approach
In order to understand
action planning options in:

The following discipline(s) or

bodies of practice is/are relevant:

selecting individuals with requisite talent and competencies

Psychology

developing innovation in groups

Social Psychology

developing the organisation as an innovative organism

Sociology

constructing a supportive organisational ideology

Anthropology and sociology

devising appropriate measures and management

information systems

Economics and cybernetics

directing innovation capability towards worthwhile ends

Decision theory, politics and strategic studies

managing change and skill development

Education and organisation development

This is a skeletal list but it illustrates that several disciplines and bodies of
practice have relevance. One conclusion is that the topic (innovation
capability) would benefit from researchers adopting a multidisciplinary
perspective to enhance the utility of theory and empirical research to provide
authoritative decision-support for managers. However, that conclusion has
two disadvantages. Firstly, the scope of expertise needed by a single
researcher exceeds that which can be reasonably expected. Secondly, it could
be expected that each of the academic disciplines (but not bodies of practice)
in the table above would remain committed to grounding their research in
phenomena and, thereby, be limited.
This researcher considers that one way to develop scholarship in the field of
innovation studies, and more generally, in management studies, is to adopt a
two-pronged approach.
The first change would require the routine formation of teams that contain
requisite theoretical and research skills. The research output would be
developed through a multi-disciplinary process of synthesis and, therefore, be
a team property. This could involve significant upheaval; not least in the
academic status system that rewards individual scholarship. In addition, many
methods texts would need to be amended since, at present, they deal the role
of the individual researcher. However, such a move would not be

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revolutionary as there are examples of scientific and social science teams that
have followed this pattern, for example the Chicago school (Layder, 1993).
The second change is profound and would need to be extensively debated
before being adopted. In essence, it would require a limited decoupling of
research from being grounded in phenomena when change is required. This
form of research would focus on possibility and probability. The centre of
gravity of insight would move from past and present to the future. A key aim
would be to assist managers to take better decisions. Such a shift in emphasis
could require the development of methodologies similar to those used in
military studies (McNally et al., 1996) so that management is studied, by
researchers, as a practice of action rather than the result of action.
Although speculative, this two pronged approach could help to redress the
relatively low status of management research mentioned in the introduction
to Chapter 3. It carries with it the risk that theoretical objectivity could be
prejudiced by a commitment to be useful to managers in a decision-support
role. But it should be noted that this researcher is advocating a limited
decoupling of research from description only in relation to one element of the
management processdesigning the future.

5.10 Learning for the researcher

As discussed in Chapter 3, the research described in this thesis is broad in
scope and rooted in a commitment to 'make a difference'. It is fruitful, at this
stage, to consider the merits and demerits of this form of research, especially
in relation to the requirements of a PhD programme. A significant advantage
of undertaking research into a topic that was broad in scope was that it
proved possible to address important questions that had multiple aspects. The
research reached out from CENTRIM and researchers, consultants and
managers in several countries made inputs.
There were many rich sources of theory and empirical research findings that
provided orientating concepts. There was no shortage of inspiration! The
profligacy of relevant input proved to be a disadvantage as well, since almost
everything that had been written in fields as disparate as strategy,
organisational behaviour, creativity development, organisation development

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and so on was relevant. As a researcher it was easy to feel overwhelmed and

consider that, no matter what studies were undertaken, there would always
be a huge backlog of unread but important material.
An advantage of seeking to 'make a difference' was that the researcher had
an opportunity to receive a great deal of 'user' comment and feedback on his
emerging work. This provoked profound reflection as comments came from
the lifeworld of practitioners rather scholars whose competencies generally
did not include managing organisations. However, the commitment to 'make
a difference' led to a tendency to limit research and theorising to that deemed
acceptable to 'clients'. In such circumstances, it would be easy for a researcher
to serve practice rather than the development of knowledge; in effect, to
become a consultant rather than a scholar.
The primary aim of this researcher was avoid potential pitfalls and create a
flow of learning, action and reflection, as proposed by Kolb (1983b).
Reviewing the loops of learning that took place during the research process
confirmed that Kolb's proposition is more than a theoretical constructit
happens in practice.
However, in the experience of this researcher, Kolb's cycle is too tidy. He
assumes that learning is the dominant process whereas, in this case,
unlearning was as an important, if not more important, motif.
An example makes the point. During his years as a consultant the researcher
was required to take a view quickly when faced with situation that required a
diagnosis. He would adopt the attitude "I'll do the best I can in the time
available". This stance towards data may be advantageous to a consultant; it is
counter-productive if adopted by a researcher. In order to school himself to
ponder the real significance of data this researcher had to become aware
when his intellectual habit of expediency kicked in and fight the tendency to
stray from a dedication to an emerging understanding of the research ethic
and good practice. The experience of this researcher is supported by
Steele (1975) who comments, "the problem of change is really a two-step
process: unlearning old solutions and then developing more appropriate
ones" (45).

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A more accurate model of this researcher's learning process would be to

imagine five cups standing on a table. The first is labelled 'theory', the second
'sagacity', the third 'action', the forth 'map-making' and the fifth, which is full,
is labelled 'prejudice'. The theory cup needs to kept full through interacting
with ideas, constructs and perspectives. The second, sagacity, is already partly
fullit represents the researcher's accumulated past insights and
'common-sense'. The aim is to use sagacity to avoid flights of fancy or
seduction by partisan ideas and fill the cup to the brim. The third cup, action,
is emptyat the start of the research. The aim is to fill it by trying to make
ideas work in the real world. The forth cup is close to that described by Kolb
as reflectionbut it is reflection that concludes with new perspectives,
insights and connectionsmaps. The learning process seems to follow a
sequence: try to fill the theory cup, sip the sagacity cup to test the theory, take
action, produce a map and avoid being tainted by prejudice.
Rather than follow a neat Kolbian cycle, the actual process of learning
required jumping from one cup to another, sometimes driven by expediency
or opportunity. Progress benefited from a degree of deliberate structure. If,
for example, the researcher needed to fill the map-making cup he would seek
an opportunity to give a presentation on his research and the requirement to
present forced the map-making process. Seen from this perspective, the
learning process can be managed, in part, as a series of tasks each, hopefully,
contributing to an emerging body of significant academic work.
The analogy suggests that all cups need to be kept as full as possible, with the
exception of the last. When this happens there can be a constructive dialogue
between cognition, awareness, action and sensemaking without a structure of
attributed meanings that are, probably subconsciously, negating the learning
process.

5.11 Suggestions for further research

The findings of this research provide a springboard for other initiatives. Some
suggestions for further research have been mentioned above. More extensive
proposals are listed below.

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The single most useful task would be for another researcher to replicate the
research process described in this thesis with a different group of cases and
see whether a similar reference model emerges.
Further research could include:
1. The application of contingency models to the reference and intervention
models. It may be that certain innovation processes are little affected by
contingency factors (e.g. idea discovery) whereas others (e.g. product
design) are more influenced by contingency factors. It would be important
to understand more about the effects of organisational configuration, size
and other variables to all stages of the innovation process (see
Appendix 8).
2. It must be expected that some components of innovation capability are
interrelated. It has not been possible to assess the degree of
interdependency in this research. Further research could be conducted
into statistical and other relationships between components and elements.
3. Although identified weakly in the data, it is probable that there are
extensive processes of 'socialisation' operating in innovative firms.
Innovation capability emerges from the research (at least in part) as a
social phenomenon. From a sociological perspective the process of
socialisation acts to align values, goals, attitudes and practices. This is
probably a multi-level process operating at the team, departmental, task
group and organisational levels. It would be useful to examine the role of
socialisation in relation to the development and sustaining of innovation
capability.
4. The reasons why interventions to develop innovation capability have
achieved patchy acceptance are unclear although this researcher has
speculated above that methods of management research are inadequate
for exploring possible futures. There has been insufficient research
undertaken into the facilitating and hindering factors that assist innovation
development programmes.
5. There is a relatively un-integrated collection of innovation-specific
development technologies and tools available. Without a specialised
innovation capability development 'technology' being available it is
difficult for a change agent to facilitate the process of moving from a
diagnosis to a development plan. Research could be undertaken to
identify, test and disseminate a specific tool-kit, dealing with the
ambiguity, messiness and divergent nature of innovation. The
intervention tree (figure 5.3) offers an initial framework for this purpose.

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6. The helix notion (see Figure 5.1) is capable of elaboration. In some

organisations, for example in centralised integrated bureaucracies like
airlines or supermarkets, there appears to be significant differentiation
between the helixes as operational and innovation processes are largely
separated. In other organisational forms, for example in adhocracies like
software producers or film makers, there seems to be a complex
interfusion between routine and innovation processes and considerable
blurring of function. This speculation could be tested in further research.
7. Distinctive models, methodologies and tools may used to develop
corporate (rather than business unit) strategies. Issues such as industry
positioning, portfolio evaluation and parenting philosophies have been
considered to be important (Kay, 1993). The researcher was unable to
consider specific characteristics of innovative corporations but has little
doubt that a different pattern of innovation attributes would be needed
than the G2 model. What this would be presents an interesting research
question.
8. In this research a position has been taken that there can be an inherent
conflict between deliberate strategy and innovation initiatives. This
remains hypothetical. It could be that strategy should be the dominant
aligning force in an organisation and that innovation should be a servant,
rather than an equal partner. A significant benefit of a strategy-led
approach is that it does not treat innovative capability as 'a good thing'
but a component for the fulfilment of a strategy. In this thesis, the
researcher has argued that since high innovation capability opened
strategic windows of opportunity it would be wrong to align innovation
capability always to an existing strategic direction. The interdependencies
of strategy and innovation could be explored further.

5.12 Thesis structure and research limitations

This thesis describes an extensive research programme that underwent
several stages. The question has been asked, 'if this thesis were to be
considerably reduced in size then what elements should be omitted?'
The researcher considered this by asking: 'what elements of the thesis are
essential?' Essential elements of the thesis are presented below with a brief
rationale in each case. The list can be seen as revised chapter headings.

Introduction and overview

'Seven helpful constructs' existing models and frameworks that help us

understand innovation capability.

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Adaptive theory and grounded theory underpinning the integrity of the

research programme.

The G2 model the full exposition of the researcher's findings.

The relevance of contingency models offers important theoretical

insights.

The intervention tree - a springboard for further research.

The G2 Audit Instrument an opportunity for other researchers to test

this research.

By implication, much of the remaining story of the research could be omitted,

including the background to the 'seven helpful constructs', the discussion of
methodological options, the G1 reference model and the detailed comparison
with other scholars' work (as this did not lead to a redefinition of this
research).
Even in its complete form the research is replete with limitations. Throughout
this thesis these have been made explicit where relevant. Seven classes of
limitations can be identified.
1. The research is behaviourally biased and minimises other factors.
2. The method chosen for coding data results in categories achieving the
same statusthey are all considered as equally important. Such an
assertion of equality of significance cannot be justified.
3. No systematic attention has been paid to the relationship between
innovation capability and commercial performance. It can be argued that
this is the most significant limitation of all. Firms have a right to ask "if I do
all the things that are suggested will I have a more profitable and secure
business?" The answer is "we don't know". Although the data set was
derived largely from the DTI's list of innovative firms there is no way of
knowing whether a similar pattern would have been found in
non-innovative and/or less profitable firms.
4. The cases were predominately UK based. This prevents issues of national
character and national systems of innovation from being considered. Only
unsystematic efforts could made to include firms from Japan, Hong Kong,
Indonesia, Saudi Arabia and the USA.

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5. The effects of interventions have been superficially analysed. Most

research effort in preparing this thesis was invested in developing the
reference model. As discussed above, the effects of interventions has been
patchy, for reasons that are not fully understood. With nearly 50 cases
available it would be possible to conduct a detailed study.
6. The researcher felt there was another limitation that was difficult to codify.
In the fieldwork devoted to this project the researcher frequently felt a
sense of energy, excitement and optimism in innovative teams and
organisations. He recalls commenting after one interview that "there's no
sense of tiredness. Their tails are up and wagging". When conceptualising
from interview data it proved difficult, sometimes impossible, to capture
this spirit. The researcher sometimes wished that he could add verbatim
quotations and video clips to the reference model componentsas these
better conveyed the essence of the phenomena under investigation than
the words used. It may be that the research process was insufficiently
sensitive for the topic being studied.
7. In Chapter 2 it was mentioned that some scholars considered innovation
to be other than a rationally managed process. Rather, they considered it
to be connected with attention, values, will and meaning. This can be
described as a 'spiritual perspective'. Proponents consider that
managerialist solutions ignore or deny the importance of 'heart'. For
example, Harrison (1995) observed, "I have never in all my years as a
consultant seen anyone change an organisation in any fundamental way
through rational planning. Plans have their place, of course, but the
managers I have seen deeply influence their organizations' characters
always operate by intuition, guided by strongly held intentions" (173). The
approach developed in this thesis is based on an assumption that the
mobilisation of talent, processes, alignment and skills enable innovation to
be managed. However, it could be valuable to explore an alternative
perspective: that innovation thrives in a situation in which people are
connected with their inner resources, break out of mechanical thinking
and combine in ways that could be described as 'led by the heart' (see, for
example, Ouspensky, 1957).

5.13 Concluding remarks

In Winston Churchill's memorable phrase this feels like "the end of the
beginning". Writing a thesis about innovation capability was an innovative act
in itself. A fragment of an idea grew into a proposal and then into a
commitment. The highs and lows of the process mirror the emotional
demands of any innovative initiative. The major investment, in this case, was

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time and opportunity. The thesis could not have been achieved without a
significant commitmentopening new doors and closing others. The nature
of innovation is always thus: a combination of hope, aspiration, choice,
tribulation and creation.

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Appendix 1
Interview schedule
The interview schedule was developed from the theoretical review (see
Chapter 2). The researcher adopted, where possible, the critical-event
interview technique described in Boyatzis (1982).

Briefing statement
"I am undertaking research into 'innovation' and I am gathering views of
anyone concerned with an aspect of innovation.
By the term 'innovation' I mean an idea that is put into practice and used to
benefit someone. It does not have to be a brand new ideajust new to the
people using it. It could be to do with the products that the firm produces,
how it does things, how it markets its products and how it is organised. The
important thing is that I am not just asking about finding ideas: I want to ask
about how ideas are applied and benefits gained.
Do you have questions about the way that I am using the word 'innovation'?
Can I give you examples to make it more clear?
As we discuss the topic I would like you to reflect on your direct
experienceeither as a manager, a participant, a facilitator or a recipient. It
will help if, as we talk, you give me actual and real examples and we have the
opportunity to discuss these in depth. I will ask questions but if you feel that
there is an important aspect that I am not asking you about please raise this. I
will be recording this conversation but your comments will be
confidentialalthough I would like your permission to quote anonymously
from the transcript of your interview. Is that OK with you? Do you have any
questions before we get started?"

The questions
1. There is a lot written and discussed about 'innovation' these days. Is it
correct to separate innovation from other things that are done in an
organisation? What, in your own words, would you say were the things
that make innovation different or special?

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2. Every firm has to decide what markets it wants to sell in to. In your direct
experience, has innovation helped a firm to achieve a improved market
position? What happened? Are there any examples that you can think of
where innovation has hindered the firm from doing this? Again, I would
like to know what happened.
3. Some firms try to use innovation to help them to become stronger in the
future by building their resource basethis would make the firm capable
of doing things in the future that it cannot do at the present. Can you
think of examples where this has happened? Are there examples where
innovation has hindered a firm from doing this?
4. Sometimes it seems that innovation happens because a few people,
perhaps only one, has the motivation and skills to drive it forward. Can
you think of examples where this has occurred? What happened?
5. Do you think that it is possible for a firm to encourage innovation
generallyso that it becomes a 'way of life'? Can you give me examples
from your direct experience of this? What did management do that either
helped or hindered the development of innovation as 'a way of life'?
6. Firms need to do more than innovatethey need to set strategies and
develop business plans. Also, of course, they need to perform routine
operations. How do you see innovation fitting with business planning and
operational effectiveness? Is there conflict? Are different kinds of
management needed for innovation and operations? Can you help me to
understand how these different activities fit together?
7. Innovation starts with an ideano matter where it comes from. What is
your experience of where ideas come from and how they are generated,
or acquired? Again, I would like to discuss real examples.
8. Ideas, in themselves, can be just notions unless they are adopted. What is
your experience of how ideas are reviewed, selected and adopted?
9. When a firm adopts an idea it needs to be implementedthat is people
and resources have to be assigned to do the work needed. What can you
tell me about the process of implementation?
10. Firms can implement good ideas but this is not sufficient. Ideas need to be
yield benefitsperhaps in the market or within the firm. What can you
tell me about the process of reaping benefits from ideas? In particular, I
would be interested in examples of ideas that have been successfully
exploited and those that were not.

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11. I'm interested in the learning process that may accompany innovation. In
your experience do firms learn how to innovate better through trial and
error or some other way? Is learning important? Why? How is it best
facilitated? What can impede learning?
12. Can we move on to looking at the factors that help innovation in
organisations? Firstly, I'd like us to think about the organisation's culture.
What attitudes, practices or routines help and hinder innovation? Do these
apply in every situation? If not, why not?
13. I'd like us to think about the organisation's assets. How important to
innovation are facilities, equipment, investment and so on? Why? Are
there certain sorts of ideas that require more asset intensity than
otherswhat are they?
14. Now the organisation's technologies. (By the way, I think that a
technology is a proven methodology for getting complex things
donenot just a science-based approach). How important to the
innovation process are specialised technologies? How are new
technologies acquired?
15. Next, I'd like to ask about skills (by this I mean the capacity of individuals
or teams to perform difficult things to a consistently high standard). How
important to the innovation process are specialised skills? Are generic
skills (like finding ideas) important? What would you say were the most
beneficial skills (for innovation)?
16. Some organisations have tried to enable everyone in the firm to be
innovative. Do you know of any examples where this has happened?
What were the benefits? How was it managed? What, if any, were the
disadvantages? What can prevent this from happening?
17. I'm interested in how organisations can ensure that there is a sufficient
supply of innovative ideas. What, in your experience, are the ways in
which a firm can ensure that a sufficient quantity of innovation takes
place? What can prevent this from happening?
18. Innovation and creativity can be close companions. How have firms tried
to increase or release the creativity of people? What has been their
experience of doing this?
19. Sometimes innovation is required by senior managementusing a
top-down approach. Can you think of examples where this has
happened? What occurred? What were the results?

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20. In today's world it has been argued that firms have to innovate
quicklythat is to exploit the potential of an idea without delay. What are
your views about the importance of time in innovation? Can you think of
examples of where a firm has attempted to accelerate the pace of
innovation? What occurred? What were the results?
21. Innovation can be costly. Is it important to be efficient when innovating?
In your experience, can this be done? How? What were the results of
introducing an efficiency orientation into the innovation process?
22. Firms can innovate in areas that aren't important to their futureso that
they become diverted from what is important. What is your experiences
of attempts to target innovation on the most important issues confronting
a firm? How was it done? What happened?
23. It may be that not all ideas suggested can be adopted. So some ideas have
to be culled. What is your experience of this process? How was it done?
What happened?
24. An innovation may be good for one firm but not another. How, in your
experience, do firms develop an innovation agenda for their particular
needs? What is your experience of this? How was it done? What
happened? Are there disadvantages in only choosing innovations that fit?
What are they?
25. Just six more questions to go! Let's talk about innovation in the products
and services that a firm offers. How, in your experience, is this managed?
What are effective and ineffective processes?
26. Now I'd like to ask about innovation in the processes of a firm (that is the
way that work is organised to get things done). How, in your experience,
is process innovation managed? What are effective and ineffective ways to
do this?
27. Sometimes firms can be innovative in ways that they approach a market
or signal the characteristics of the products and services that they offer. Do
you have any experience of innovation in marketing? What are effective
and ineffective ways to do this?
28. Firms can be innovative in the way that they define their
businesssometimes called 'the business model'. For example, some
firms are redefining themselves at the moment as internet businesses. Do
you have any experience of firms that have tried to do this? How? What
happened?

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29. Thank you very much for answering my questions. Before we close is
there anything about innovation in organisations that I have not asked?
30. And the lastpersonalquestion, what does it feel like to be involved in
innovation? What does it mean to you?

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Appendix 2
Auditing innovation effectivenessa review
of alternative models
In this appendix relevant research and interpretative frameworks presented
by others are reviewed and compared with the findings of this research. The
appendix concludes with a table that shows support available for the
components of the G2 reference model.
There have been many studies that provide frameworks that are applicable to
the assessment or auditing of innovation capability. These include studies at
the national level, at industry level and at the firm-specific level. Since this
research was concerned with firm-level innovation, audits that take a
national, regional, technological or industry perspective have not been
reviewed. A simple framework was developed by the researcher for
categorising innovation audits at the level of the firm and is shown in
Figure A2.1 below.
Total System

AUDITING
ORGANISATIONAL
INNOVATION
CAPABILITY

AUDITING NP-PD
PROCESS
EFFECTIVENESS

AUDITING
ORGANISATIONAL
INNOVATION
PERFORMANCE

AUDITING NP-PD
PERFORMANCE

NP- PD
Innovation Capabilities

Innovation Outputs

Figure A2.1: audit categories

Innovation audits can be categorised as whether they focus on capabilities or

outputs, shown on the horizontal axis in the figure. Also, they can be

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categorised into audits that consider the new products/processes

development (NPPD) or the organisation as a wholeshown on the vertical
axis.
Figure A2.2 below locates an illustrative selection79 of audit approaches in a
four-box matrix with the same vertical and horizontal parameters as the
figure above by the name of the key researcher. For clarity, this research is
also positioned (as 'Francis'). The work of other researchers was reviewed
and compared with the G2 reference model as described in Chapter 4. This is
reviewed in alphabetical order of the lead writer.
Total System

Trott
Burgleman
Ahmed

Dooley

Francis
Tang
Doyle

Siegel
McGourty
Deutschman

Kao

de Ven
Amabile

Rothwell

Johne & Snelson

Chiesa

Archibugi
Coombs

NP- PD
Innovation Capabilities

Innovation Outputs

Figure A2.2: other researchers

Ahmed
Ahmed (1998) describes the results of a survey of innovation in firms
undertaken "in order to identify best practice 21 (companies) ultimately
participated" (49). Based upon the percentage sales from new products and
the success/failure rate participating companies were grouped into three
innovation categorieshigh, medium and low.

79

The selection of frameworks and audits were those suggested by researchers at CENTRIM,
University of Brighton who were asked to provide a full list of examples.

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Ahmed notes that "(i)n the main all these companies were able to pinpoint
four areas of innovation to which they paid detailed attention: (1) product
innovation; (2) process innovation; (3) organisational innovation; (4) service
innovation" (50-51). This confirms three of the four targets of innovation
capability discussed in Section 2.6.
Ahmed briefly describes 25 characteristics of highly innovative firms. The list
is detailed and equivalent to the level of elements rather than components in
this research. Ahmed's 25 characteristics are described below and compared
with the results of this research.
Table A2.1: comparison of G2 and Ahmed's framework
Ahmed's
characteristics

Comments or related components and elements from

G2 reference model

Innovation as a plank of strategy

Component Ib, element (iv) Innovation goals in business plans

Clarity in goals for innovation

Component Ib, element (v) Performance measures assess

innovation prowess

Value of people

Component IIIc, element (ii) Positive regard (for staff)

Culture of innovation

Component IIIb, element (i) High expectations from opinion leaders

Cross-functional interaction

Component Va, element (iv) Inter-team co-operation

Freedom and space to innovate

Component Vb, element (ii) Intrapreneuring attitudes and skills

Reporting structures and idea

channels

Component IVb, element (iii) Hearing 'in-business agents'

Innovative process distinctions

This element was not found by this research. Ahmed suggests that
highly innovative firms make a distinction between "different types
of innovations to produce different trajectory strategies" (53).
This seems reasonable but was not detected by this research.

Customer interaction and

stimulation

Component IVc, element (ii) Close customer relationships

10

Importance of execution

Component IIc, element (i) Effective transfer to routine organisation

and (ii) Capable programme and project management

11

Pressure for action

Component IIIb, element (ii) Innovation goals set

12

Importance of trying

Component IVa, element (vi) Experimental initiatives

13

Importance of sharing, of the big

team

Component Va, element (iv) Inter-team co-operation

14

Importance of celebration

Component IIIb, element (iii) Innovation recognisedrewarded

15

Importance of challenge and

stretch

Component IIIb, element (i) High expectations from opinion leaders

16

Managing the external and

internal image

External image building was not found to be significant in this

research. Internal image building is covered in Component Ia,
element (ii) Bias towards innovation

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Ahmed's
characteristics

Comments or related components and elements from

G2 reference model

17

Importance of managing in the

long term

This element was not found by this research. It is possible this was
because the data collected was from SBU-level informants rather
than corporate-level. Long term commitments may be the result of
corporate policies.

18

Social interaction

Component IVa, element (v) Exploratory dialogue

19

Work environment: design and

layout

Not found as significant

20

Importance of a culture of
'equals'

Component IIIc, element (ii) Positive regard (for staff)

21

Effective processing of ideas

Component IVb, element (iii) Hearing 'in-business agents'

22

Keeping and building

knowledge

Component IVa, element (iv) Knowledge management

23

Accepting failure

Component IIIa, element (i) Management style supports

empowerment

24

Rewarding failure and success

Component IIIb, element (iii) Innovation recognisedrewarded

25

Importance of an internal
structure of entrepreneurship

Component Vb, element (i) Legitimacy of the champion role

Twenty-one of Ahmed's characteristics were similar to those found in this

research. This provides a degree of confirmation for the G2 research model.
Unfortunately, Ahmed does not provide any description of his research
methods and so the value of the confirmation is impossible to assess fully.
Archibugi
Archibugi and Pianta (1996) developed a method of assessing innovation
through the submission and exploitation of patents. This was not seen as
being relevant to this research and has not been reviewed.
Burgelman
Burgelman et al. (1996) take a strategic approach to innovation auditing and
devote five pages to the topic. Burgelman et al. argue that "an audit must
address at least three questions:
1. How has the firm been innovative in the areas of product and service
offerings and/or production and delivery systems?
2. How good is the fit between the firm's current business and its innovative
capabilities?

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3. What are the firm's needs in terms of innovation capabilities to support its
long-term business and corporate competitive strategies?" (8)
They suggest that there are two targets for innovation auditingthe business
unit and corporate level. At the business unit level they define innovativeness
as timing of market entry, technological leadership or followership, scope of
innovativeness and rate of innovativeness (8). In their view, this requires five
attributes shown in Table A2.2 below:
Table A2.2: comparison of G2 and Burgleman's framework
Burgleman's attributes

Comments

Resources available for innovative activity.

Covered in component IIbFull Competencies

Portfolio

Capacity to understand competitors' strengths

and industry evolution with respect to
innovation.

Covered in component IbProvides Strategic

Advantage

Capacity to understand technological

developments relevant to the business unit.

Covered in component IVbAcquiring Multiple

Perspectives and component IbProvides Strategic
Advantage

Structural and cultural context of the business

affecting internal entrepreneurial behaviour.

Covered in component VaApt Organisational Form

and component VbSupported Champions

Strategic management capacity to deal with

internal entrepreneurial initiatives.

Covered in component IaInnovating Leadership,

component VbSupported Champions and
component VIcSustained Commitment

Burgelman et al. note that their list is not exhaustive and they argue that
"strategic management capacity" to channel resources is critically important
(9). Their analysis of corporate innovation capability is similarly narrow,
focusing on the scope and rate of new products, scope and rate of new
business development and timing. In this case, resource availability, strategic
scanning, technology forecasting, corporate culture and the management of
synergies/portfolios are identified as components. The stance towards
innovation auditing taken by Burgelman et al. adopts a checklist approach
with 33 items. It is underdevelopedgeneral managers are asked to rate their
firms on such vague attributes as 'dominant values and definitions of success'
and 'business unit level management capacity to assess relatedness of
entrepreneurial initiatives to unit's core capabilities' (10). However, the
strategic focus of the audit provides clarity and it is likely that it would
provide useful discussion points for a firm's top team in assessing their
investment in innovation capability.

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Chiesa
Chiesa et al. (1996) described the development of a technical innovation audit.
This was seen as being too narrow in focus to be relevant to this research and
has not been reviewed.
Coombs
Coombs et al. (1996) describe the development of a literature-based output
indicator. Coombs et al. looked through trade journals, identified innovations
and categorised them. In total, 941 innovations were coded and placed in a
database. This proved useful for identifying patterns of innovation, by sector,
size of firm, etc. A six category model for classifying innovations was
presented:

new or decisively changed product with a completely new function or

functions;

new or decisively changed product with a different technology but the

same functionality as before;

a modestly improved product;

a new or improved accessory product or service;

a product with a product or service differentiation;

a process innovation.

The approach taken by Coombs et al. examines the outputs of innovation

activities, largely in terms of products offered. It provides an accessible
methodology for examining patterns of innovation so far as potential
customers are concerned. The literature-based output indicator cannot assess
the value-added of an innovation since the criteria for selection was a
published invitation to purchase rather than actual purchases. As the work
deals with outcomes rather than internal qualities, it was not considered to be
directly relevant to this research.

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Cook
Cook et al. (1982) report on the Siegel Scale of Support for Innovation that
suggests that nine variables are significant in developing and sustaining the
capability to be innovative. The nine elements are shown in Table A2.3 below:
Table A2.3: comparison of G2 and the Siegel scale
Siegel scale of support for innovation
components

Comments

innovation climate

Draws attention to cultural elements. Included in

domain III of this research.

job satisfaction

Little evidence from this research that this factor is

directly related although indication that esteem is
heightened by participation in innovation initiatives

nature of work

Too broad for this research.

managerial style

Covered by component IaInnovating Leadership

promotional opportunities

No supportive evidence

organisational satisfaction

Unclear as to meaning; probably related to

component IIIcHigh Enrolment

compensation/remuneration

Covered in component IIaExceptional Individuals

and component IIIbInnovation Demanded

working conditions

No supportive evidence

teamwork relationships

An element of component VaApt Organisational

Form

10

personal characteristics

Unclear as to meaning; but believed to be covered,

in part, in component IIaExceptional Individuals

This list was compiled in the late 1970s and provided a early review of the
underlying components of innovation capability. However, its utility is
largely historic caused by the broad-brush approach, lack of concern for
strategy and exclusive focus on human factors.
de Ven
de Ven et al. (1989) examined, in great depth, the processes by which an
innovation proceeds through a firm. Incorporated in the design was an
extensive questionnaire (de Ven and Chu, 1989) that was "used as one of
several measuring instruments" (55) in the research process. This was called
the Minnesota Innovation Survey and aimed at collecting data from
individuals about their involvement in a specific innovation. Much of the
questionnaire is designed in ways that make quantitative analysis possible,

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although there are several free-form questions that require later coding. Part
one of the Minnesota Innovation Survey has 51 questions that deal with the
scope of the innovation, its demands, the role and influence of the
respondent, problems encountered, leadership, culture, rewards,
communication, conflict resolution, performance management and outcomes.
In addition, there are demographic questions about the respondent and
questions about his/her views on the degree of support for innovation,
resources available and the legal, economic, technological and demographic
environment. Part 2 of the questionnaire has 20 questions related to
inter-group co-operation including sharing of objectives, cooperation/competition, trust, communication, conflict-resolution and
outcomes.
The Minnesota Innovation Survey is a significant instrument and gains in
stature as it has been extensively statistically analysed. However, the
instrument was designed to examine factors which affect the organisation's
performance of a predetermined innovation initiative and factors that relate
to committing the firm to adopting an innovation policy are largely omitted.
Accordingly, it has not been reviewed in detail.
Deutschman
This approach examined the relationship between mission and innovation. 75
senior managers from large Canadian enterprises were interviewed. The
study examined the firms' behaviour on 15 dimensions cited by
Deutschman (1994). These are shown in Table A2.4 below:
Table A2.4: comparison of G2 and Deutschman's framework
Deutschman's items

Related G2 components

Seeking out and delighting difficult

customers

Partly covered in component IVcFruitful

Linkages

Striving constantly to build customer loyalty

Partly covered in component IVcFruitful

Linkages

Promoting the cannibalisation of one's own

products within the firm

Not covered explicitly but relevant to the topics

mentioned in component IbProvides Strategic
Advantage

Using small teams for projects

Covered in component VaApt Organisational

Form

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Deutschman's items

Related G2 components

Willing to make critical technological

decisions ahead of the competition

Covered in component IaInnovating

Leadership and component VIb Sound Decision
Processes

Accepting constant reorganisation as a

way-of-life

Covered in component IcPrudent Radicalism

Undertaking co-operative ventures with

rivals

Covered partly in component IVcFruitful

Linkages

Fostering an 'egalitarian' culture

Partly covered in component IIIcHigh Enrolment

Striving to sell highly differentiated

products/services

Covered in component IbProvides Strategic

Advantage

Promoting the use of electronic

communication across the firm

Not covered

10
11

Placing an extraordinary emphasis on

recruiting the 'right' people

Covered in component IIaExceptional

Individuals

12

Sharing key strategic information with all

employees

Partly covered in component IIIcHigh Enrolment

Glorifying, honouring and celebrating the

people who create new products and
services

Covered in component VbSupported

Champions and component IIIbInnovation
Demanded

Helping employees become world

renowned experts in their fields

Covered in component IVaContinuous

Learning

Granting employees time to learn through

sabbaticals

Possibly covered in component IVaContinuous

Learning

13

14

14

Innovative firms, according to Deutschman, showed high usage of the

behaviours marked with an *. As shown in the table there is a considerable
overlap between this research and that of Deutschman.
Dooley
Dooley et al. (1998) have developed a 'Systems Innovation, Change Levers,
Innovation Audit' that explores "five broad enablers, which act as catch-alls to
incorporate a vast array of positive elements, distilled from the existing
approaches" (3). These are Organisation & Group Leadership; Strategy &
Performance; Empowerment & Groups; Re-engineering and Improvement
and, finally, Learning and Communications.
Dooley et al's audit contains 56 questions, shown in Table A2.5 below. It
demonstrates two differences with this research. Firstly, some questions are
normative (they appear to assume that there pre-defined organisational
attributes that facilitate innovation) and, secondly, some questions relate to
broad organisational topics rather than innovation specific issues. However,

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the intent is directly comparable with this research and so the audit items will
be reviewed in detail.
Table A2.5: comparison of G2 and Dooley et al's framework
Dooley et al's audit questions

Comments

The organisational structure supports group-based

management.

Covered by component VaApt

Organisational Form

The organisational structure adapts well to changes in the

business environment.

Covered by component VaApt

Organisational Form

The organisational structure is flat.

Normative question

Management encourages individual staff/groups to take risks.

Not shown to be accuratesee

component IIIaSelective
Empowerment

Various levels in the organisation have input into the decision

making process.

Covered by component
IVbAcquiring Multiple
Perspectives

The management style supports the goals and strategies

pursued by the organisation.

Not innovation specific

The management adopts a consensus and shared approach to

decision making.

Not innovation specific

Senior management communicates the same vision and goals.

Covered by component
IbProvides Strategic Advantage

Management are receptive towards innovative approaches to

change.

Covered by component
IaInnovating Leadership

10

Management are effective at initiating and driving innovative

change.

Covered by component
IaInnovating Leadership,
IbProvides Strategic Advantage
and IVcSustained Commitment

11

Management are proactive (rather than reactive) about change.

Covered by component
IaInnovating Leadership

12

Senior management are highly visible in driving innovation.

Covered by component
IaInnovating Leadership

13

The organisation chart is utilised as an effective tool for

communication.

Not innovation specific

14

The strategic plan or informal management strategy for change is

effective.

Covered by component
IbProvides Strategic Advantage

15

All employees have access to the strategic plan (if written down or
verbally communicated).

Covered by component
IbProvides Strategic Advantage

16

The process for creating and reviewing organisational strategy is

effective.

Covered by component
IbProvides Strategic Advantage

17

The correlation between organisational goals and current

developments is high.

Covered by component
IbProvides Strategic Advantage

18

All staff in the organisation participate in strategy formulation.

Normative question

19

Benchmarking is carried out as part of the process of deriving

organisational goals and strategies.

Partly covered by component

IVbAcquiring Multiple
Perspectives

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Dooley et al's audit questions

Comments

20

Current measures of performance are effective towards fostering

change.

Covered by component
IbProvides Strategic Advantage

21

The strategies and measures of performance are regularly

communicated to staff.

Covered by component
IbProvides Strategic Advantage

22

There is a good fit between measures of performance and

current developments.

Covered by component
IbProvides Strategic Advantage

23

The strategies and performance measures adapt to reflect

emergent changes in the business environment.

Covered by component
IbProvides Strategic Advantage

24

Shop floor employees and office staff engage in work-group

activity.

Not innovation specific

25

Project groups are cross-functional based.

Covered by component VaApt

Organisational Form

26

Project groups participation represents a diagonal slice of the

organisation.

Covered by component VaApt

Organisational Form (but not
demonstrated in this research as
significant)

27

New ideas and problems are easily harvested from all

employees.

Covered by component
IVbAcquiring Multiple
Perspectives

28

A high level of autonomy and discretion is allowed to individual

employees.

Covered by component
IIIaSelective Empowerment

29

There is delegation between senior and junior staff members.

Covered by component
IIIaSelective Empowerment

30

Employees work offers the optimal variety of tasks.

Not innovation specific

31

Employees have the opportunity to exchange help and respect

among fellow employees.

Covered by component IIIcHigh

Enrolment

32

Employees have a sense of meaningful contribution to the

innovation process.

Covered by component
IIIaSelective Empowerment

33

Employees have the prospect of a meaningful future,

advancement and higher compensation.

Partly covered by component

IIIbInnovation Demanded

34

Employees share in the improved productivity of the organisation.

Partly covered by component

IIIbInnovation Demanded

35

The organisation has an appropriate balance between

transformational and 'Quick-Win' change projects.

Partly covered by component

IbProvides Strategic Advantage

36

The organisation has new projects starting and old ones

finishing on an ongoing basis.

Partly covered by component

IbProvides Strategic Advantage

37

There is an appropriate balance between proactive and reactive

developments.

Partly covered by component

IbProvides Strategic Advantage

38

There is appropriate use of modelling tools for projects.

Covered by component
IIcCapable Implementation

39

There is appropriate use of planning tools for projects and

resources.

Covered by component
IIcCapable Implementation but
defined more broadly

40

The organisation uses external change agents (consultants, etc.)

appropriately.

Covered by component
IVbAcquiring Multiple
Perspectives

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Dooley et al's audit questions

Comments

41

Management encourages 'thinking outside the box'.

Covered by component
IVbAcquiring Multiple
Perspectives

42

A sense of urgency is maintained towards 'on-going' innovation

Covered by component
VIcSustained Commitment

43

Critical information regarding ideas, problems and projects is

readily available to facilitate the decision making process.

Covered by component
VIbSound Decision Processes

44

The incremental improvement process is effective.

Covered by component
IIIbInnovation Demanded

45

The innovation management process is effective.

Covered by component VcHigh

Performing NPPD

46

The organisation effectively ranks the individual developments

contribution to the achievement of its current goals.

Unclear

47

Employees have the opportunity to learn and continue learning

on the job.

Covered by component
IVaContinuous Learning

48

The training process for staff is effective.

Covered by component
VIaContinuous Learning

49

The management development process is effective.

Covered by component
VIaContinuous Learning

50

The staff review and reward process is effective.

Covered by component
IIIbInnovation Demanded

51

The recruitment process is effective.

Covered by component
IIaExceptional Individuals

52

There is low turnover among office staff.

Not innovation specific

53

Difficult change is openly discussed and accepted.

See component IIIcHigh

Enrolment for related factors

54

Information on problems raised, ideas generated and project

status is accessible.

Covered by component
IVbAcquiring Multiple
Perspectives

55

Information on strategies, measures of performance and customer

requirements are accessible.

Partly covered by component

IbProvides Strategic Advantage

56

Information concerning the decisions taken by management

regarding the entire innovation process is accessible.

Unclear

Dooley et al. report on their use of this audit with eight firms in Ireland. They
note
"These (the surveyed firms) organisations have a sense of
commitment and they support all levels of the organisation to
the achievement of this goal. The key mechanism for achieving
this consensus is through the use of cross-functional teams and a
consensus based management team. There is a continuous
desire to develop the organisation and the success of this is
measured through feedback systems and review mechanisms.
The organisation is aware of its key measures which the
customer values and constantly articulates these through the
objectives, strategies and performance measures" (11).

287

The breadth of this study and the multiple ways that Dooley et al. related
organisational attributes to innovation capability provided a useful
comparative framework for this research.
Doyle
Doyle (1997) developed a model with six dimensions. It included strategy,
culture, resources, networking capabilities, processes and systems and market
orientation (6). 16 questions were identified and these are shown in
Table A2.6 below with comments.
Table A2.6: comparison of G2 and Doyle's framework
Doyle's questions

Comments

Does the organisation have a clear strategy for innovation with

defined goals and target markets?

Covered in component IbProvides

Strategic Advantage

What emphasis is given to ensuring innovations have synergy

with current market and technological expertise?

Considered to be covered in
component IbProvides Strategic
Advantage

How are innovation efforts organised in terms of structure?

Covered in component VaApt

Organisational Form

How do you achieve a learning organisationkeeping up to

date with technological, market and environmental changes?

Covered in component
IVaContinuous Learning and
component IVbAcquiring Multiple
Perspectives

How would you describe the culture of the organisation, its

basic beliefs and assumptions?

Question is not innovation specific

How do you achieve an entrepreneurial and creative climate?

Covered in domain III (all

components)

How does the company identify the core competencies that it will
need in the future?

Covered in component IIbFull

Competencies Portfolio.

How does it plan and organise to acquire these key skills?

Covered in component VIaGuiding

Mental Maps and IIcCapable
Implementation

How are budgets for innovation planned and safeguarded?

Covered in component IbProvides

Strategic Advantage and
VIcSustained Commitment

10

How do strategic alliances with other companies contribute to

innovation?

Covered (not extensively) in

component IVcFruitful Linkages

11

How important are partnerships with suppliers, customers, and

employees in innovation?

Considered to be covered in
component IVcFruitful Linkages

12

How is the process of innovation (ideas, development etc.)

planned and co-ordinated?

Covered in component VcHigh

Performing NPPD.

13

How do you achieve fast time-to-market?

Suggested in component
IIIcCapable Implementation.

14

How customer-led is the organisation?

Covered in component IVcFruitful

Linkages

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Doyle's questions

Comments

15

What role does marketing and customer insight play in the

innovation process?

Covered in component IVcFruitful

Linkages

16

How does the marketing department interface with other

functions in the business?

Not directly covered in the G2

reference model

Johne and Snelson

Johne and Snelson (1988) adopted the 7Ss framework for auditing purposes
as they considered it to be "particularly helpful in exploring the intricacies of
product development tasks" (227). They studied 20 UK and 20 US firms in
1986-7 in four manufacturing sectors and describe the characteristics of
'leading product development firms' and 'less successful innovators'.
The approach identifies that 'leading product innovators' use a blend of 'old'
and 'new' product development approaches. Their summary analysis is
quoted in full in Table A2.7 below (230) and comments from this research
added:
Table A2.7: comments on Johne and Snelson's framework
Old product development

New product development

Comments

Strategy

Top management determines

explicit plans and budgets for
development work

Top management sets broad

objectives for organic growth

The new product

development descriptor
statement is largely
confirmed by this research.
Broad objectives were
used to target innovation
capability (domain I)

Shared
Values

Top management fosters

understanding of the need for
product evolution

Top management fosters

understanding of the need
for really new products

The new product

development descriptor
statement is confirmed by
this research. Leaders act
as role models and enrol
others (component Ia)

Style

Top management is supportive

but does not meddle in
development projects.
Progress is checked regularly.

Top management is
intimately involved, often on
a day-to-day basis

The new product

development descriptor
statement is confirmed by
this research. Close
leadership involvement
was used as an innovation
driver (component Ia)

Structure

Top management uses the

existing organisation which
acknowledges the need to
manage updates within a
matrix of responsibilities

Top management uses new

organisational forms such as
business teams to nurture
important developments
outside the mainstream
organisation

The new product

development descriptor
statement is confirmed by
this research. New
organisational forms were
used (component Va)

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Old product development

New product development

Comments

Skills

There is efficient product

planning using sophisticated
market analysis techniques

Techno-commercial idea
generation, screening and
testing in concept.
Development work often
based on new technology

Skills were not identified in

this research down to this
level of specificity

Staff

Existing line managers are

used with some staff advice.
When project leaders are
appointed they may be quite
junior but receive a
commission from top
management

An intrapreneur is allowed to
select his own team with
whom rewards are shared.
Failures are viewed as a
learning experience

The new product

development descriptor
statement is not confirmed
by this research.
Empowerment was
confined (component IIIa)

Systems

Loose-tight using
simultaneous or rugby
approach. More tight than
loose

Loose-tight using
simultaneous or rugby
approach. More loose than
tight

The new product

development descriptor
statement is largely
confirmed by this research.
Flexible organisational
forms were widely found
(component Va)

The approach of Johne and Snelson is distinctive. They argued that successful
innovation requires the management of paradoxes. This did not emerge as
clearly from this research although the paradoxical nature of some elements
could be explored as a research question.
Kao
Kao (1996) published an innovation audit that consists of 40 questions divided
into eight sections. Kao's audit was intended to help managers to reflect on
their firm's innovation (he uses the term 'creativity') capability using the
metaphor of a Jazz Band. Kao's view is that "(w)hat management must do,
above all, is to define, establish, and provision a trustworthy environment"
(55).
Kao's approach is intended to facilitate reflection rather than provide
measurements. 11 of the audit questions explore the progress of recent
innovation initiatives, 7 questions consider a firm's creativity system, 5
questions review a firm's benchmarking prowess, 6 questions address people
issues and 11 questions assess knowledge management, innovation
performance and other general issues. Kao does not quote from research
papers nor does he provide extensive references. However, his work
emphasises a characteristic of an innovative enterprise that is rarely discussed;
he writes of the importance of "clearing the mind", described as "focused

290

reverie" (43). Kao draws from the work of artists and Buddhist scholars and
writes of the need to allow people the space to enter a part of themselves that
is in tune with natural creative forces. This was not confirmed by this research
although related elements were noted in each of the three elements in
component IIIa.
Koester
Koester and Burnside (1992) describe the development and testing of the
Work Environment Inventory (WEI). This instrument has been under
development since 1984, primarily by Teresa Amabile. Survey items were
derived from interviews with 203 R&D scientists who were asked to tell two
storiesone about an event that was high in creativity and the other about
an event that was low in creativity. The stories were subjected to a content
analysis, and those items which concerned 'environmental characteristics' (70)
were abstracted. A principal-axis factor analysis was conducted and eight
factors emerged with an eigenvalue greater than one. The eight factors are
shown in Table A2.8 below:
Table A2.8: comparison of G2 and WEI framework
WEI components

Comments

organisational encouragement

Covered in component IIIcHigh enrolment

supervisory encouragement

Largely covered in component IIIcHigh Enrolment

and component IIIaSelective Empowerment

work group support

Covered in component IIIcHigh Enrolment

challenging work

Not covered in the G2 reference model but noted in

the additional node list

workload pressure (not too much)

Not covered in the G2 reference model

freedom (in deciding how to accomplish a task)

Considered in component IIIaSelective

Empowerment

organisational impediments (freedom from

"destructive criticism, turfism, political problems,
and unfair evaluation". (75))

Largely covered in component IIIcHigh Enrolment

sufficient resources

Covered in component IIbFull Competencies

Portfolio

This work focused on the environmental factors that facilitate creativity

(rather than innovation) and drew its original items from research scientists
(rather than every part of the firm).

291

McGourty
McGourty et al. (1996) studied 14 'best of breed' companies included 3M, Bell
Labs and other large firms with a distinguished record of innovation. Senior
executives were interviewed using the critical incident method. Data was
analysed from focus groups. Four innovative behaviourial clusters were
identified:
1. Inquisitiveness: searching purposefully for useful new ideas, expertise,
technologies and continuously experimenting;
2. Advocating: encouraging, championing, challenging (the status quo);
3. Collaborating: frequent, open, wide-ranging communication;
4. Goal Directedness: work towards specific technological goals, set
objectives and monitor towards them.
The authors assert that "(f)ostering of these behaviours leads to subsequent
modification in organizational cultureto a more innovative culture" (364).
Although it was not straightforward to effect a comparison it appears all of
the G2 components are represented in McGourty's work.
Rothwell
Rothwell (1994) suggested "from the many studies of industrial innovation,
including studies of success, studies of failure and comparisons between
success and failure, the following success factors can be derived" (33).
Rothwell's factors provided a useful check list and are shown in Table A2.9
below.
Table A2.9: comparison of G2 and Rothwell's framework
Rothwell's success factors

Comments

Good internal and external communications

Covered in component IVcFruitful Linkages and

component IIIcHigh Enrolment

Willingness to take on new ideas

Covered in component IcPrudent Radicalism

Treating innovation as a corporate-wide task

Covered in component IbProvides Strategic

Advantage

Careful project management

Covered in component IIcCapable Implementation

and component VcHigh Performing NPPD

Effective implementation

Covered in component IIcCapable implementation

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Rothwell's success factors

Comments

Up-to-date equipment

Covered in component IIbFull Competencies

Portfolio

Strong market orientation

Covered in component IbProvides Strategic

Advantage

Good technical support to customers

Not considered relevant

Presence of key people including product

champions and technology gatekeepers

Covered in component IIaExceptional individuals

and component VbSupported Champions

10

High and developing human capital

Covered in component IVaContinuous Learning

11

Top management support for innovation

Covered in component IaInnovating Leadership

12

Long-term strategy in which innovation plays a

key role

Covered in component IbProvides Strategic

Advantage

13

Commitment to major projects

Covered in component VIcSustained Commitment

14

Organic organisational form

Covered in component VaApt Organisational Form

and see Appendix 8 for a further discussion of this
point

15

Top management acceptance of risk and

termination criteria

Covered in component IcPrudent radicalism and

VIb Sound Decision Processes

16

"Creation of an innovation-accepting,
entrepreneurship-accommodating culture" (36).

Covered in component IIIcHigh Enrolment

The 16 elements in Rothwell's model (with the exception of number 8) fit well
with the results of this research.
Tang
Tang (1999) published an inventory that used a distinctively different
framework from this researcher. He sees innovation as a flowing process of
projects or initiatives that can be enabled or blocked by "six mutually
interacting constructs" (41). These are: project raising and doing, knowledge
and skills, behaviour and integration, information and communication,
guidance and support and the external environment. Tang's perspective on
innovation is that "managing innovation calls for a mindset and a style of
leadership that is different from running routine operations" (43) and his
description of a firm with a high capability for innovation largely confirms the
results of this research, which is especially interesting as Tang undertook his
study in Singapore. However, as he points out, his "data set is not
organisation specific" (49) but it is larger than this researcher's with 871 cases.
There are 48 items in Tang's audit. 44 of these could be fitted into the G2
model. The remaining 4 did not. These items were: "our top managers don't

293

value employees' opinions much", "my work is intellectually stimulating and

challenging", "I frequently encounter non-routine and challenging work in my
organisation", "In my organisation people show great interest in their work"
and "if my new idea is not accepted I can try it elsewhere in the organisation".
It can be concluded that this research has largely confirmed Tang's work.
Trott
Although not presented in the form of an audit, Trott (1998) identifies nine
organisational characteristics that he suggests "facilitate the innovation
process" (35). Trott's nine characteristics are:
Table A2.10: comparison of G2 and Trott's framework
Trott's components

Comments

Growth Orientationa commitment to long-term

growth rather than short-term profit.

Not directly connected with innovation. For

example, an electrical utility has long-term
growth but need not be innovative. However,
Trott considers that the actual policies adopted
by senior managers play a significant rolea
point included in component IbProvides
Strategic Advantage

VigilanceThe ability of the organisation to be aware

of its threats and opportunities.

Covered in component IbProvides Strategic

Advantage

Commitment to Technologythe willingness to invest

in the long-term development of technology.

Covered in component IbProvides Strategic

Advantage

Acceptance of Risksthe willingness to include risky

options in a balanced portfolio.

Covered in component IbProvides Strategic

Advantage

Cross-functional Co-operationmutual respect

among individuals and a willingness to work together
across functions.

Covered in component IIIcHigh Enrolment

and component VaApt Organisational Form

Receptivitythe ability to be aware of, to identify and

to take advantage of externally developed
technology.

Partly covered in component IVbAcquiring

Multiple Perspectives

'Slack'an ability to manage the innovation dilemma

and provide room for creativity.

Not found to be important in this research

Adaptabilitythe readiness to accept change.

Covered in component IcPrudent Radicalism

Diverse Range of Skillsa combination of

specialisation and diversify of knowledge and skills.

Covered, in part, in IIaExceptional

Individuals

Comparative assessment
The models and audits considered above offer a useful but unsystematic
sample and provide support for the G2 reference model. Table A2.11 below

294

shows which components are supported, at least in part, by other researchers

in the field.
Table A2.11: comparative assessment
Components

Support from

Ia

Innovating Leadership
(authentic/close involvement (from leaders); bias towards
innovation; focused effort towards defined opportunity
spaces; enrolling leadership style)

Ahmed, Burgleman, Siegel,

Deutschman, de Ven, Dooley, Johne &
Snelson, Kao, Rothwell, Tang

Ib

Provides Strategic Advantage

(external focus sensing; coherentemerging
strategy/vision; effective top teamwork; innovation goals in
business plans; performance measures assess innovation
prowess; innovation policies deployed)

Ahmed, Burgleman, Deutschman,

Dooley, Doyle, Johne & Snelson, Kao,
McGourty, Rothwell, Tang, Trott

Ic

Prudent Radicalism
(comprehensive analysis of change needs; openness to
new mind-sets; effective change management; restructuring
of assets)

Deutschman, Kao, McGourty, Rothwell,

Trott

IIa

Exceptional Individuals
(analysis of needs for critical skills; proactive hr policies
(recruitment & retention; able people in innovation intensive
roles

Siegel, Deutschman, Dooley, Kao,

Rothwell, Tang, Trott

IIb

Full Competencies Portfolio

(analysis of competencies needed; co-ordinated
competency development)

Ahmed, Burgleman, Doyle, Kao,

Amabile, Rothwell

IIc

Capable Implementation
(effective transfer to routine organisation; capable
programme and project management)

Ahmed, Dooley, Doyle, Rothwell, Tang

IIIa

Selective Empowerment
(management style supports empowerment; personal
potential developed; 'can-do' ethos (efficacy))

Ahmed, Siegel, de Ven, Dooley, Johne

& Snelson, Kao, Amabile, Tang

IIIb

Innovation Demanded
(high expectations from opinion leaders; innovation goals
set; innovation recognisedrewarded; kaizen
institutionalised)

Ahmed, Siegel, Deutschman, de Ven,

Dooley, Doyle, Amabile, Tang

IIIc

High Enrolment
(open 3 way communication; positive regard (for staff);
commitment to company)

Ahmed, Siegel, Deutschman, de Ven,

Dooley, Doyle, Kao, Amabile, McGourty,
Rothwell, Tang, Trott

IVa

Continuous Learning
(enabling learning; competencies (general) developed;
training in teamworking and problem-solving; knowledge
management; exploratory dialogue; experimental
initiatives)

Ahmed, Deutschman, Dooley, Doyle,

Johne & Snelson, Kao, Rothwell, Tang

IVb

Acquiring Multiple Perspectives

(hearing specialists; hearing 'out of field agents'; hearing
'in-business agents')

Ahmed, Burgleman, Dooley, Doyle,

Kao, McGourty, Tang, Trott

IVc

Fruitful Linkages
(gaining from external relationships; close customer
relationships)

Ahmed, Deutschman, Doyle, Kao,

Rothwell, Tang

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Components

Support from

Va

Apt Organisational Form

(innovation-enabling organisational design; use of OD
methodologies; use of teams and adhoc groups; inter-team
co-operation)

Ahmed, Burgleman, Siegel,

Deutschman, de Ven, Dooley, Doyle,
Johne & Snelson, Kao, McGourty,
Rothwell, Tang, Trott

Vb

Supported Champions
(legitimacy of the champion role; intrapreneuring attitudes
and skills; effective sponsorship)

Ahmed, Burgleman, Deutschman, Kao,

McGourty, Rothwell, Tang

Vc

High Performing NPPD

(managed NPPD; creative approaches in NPPD)

Dooley, Doyle, Kao, Rothwell

VIa

Guiding Mental Maps

(tracking possible relevant possible maps; map selection
and development)

Doyle, Kao

VIb

Sound Decision Processes

(fast/full information systems; reliable decision-making
processes)

Deutschman, Dooley, Kao, Tang

VIc

Sustained Commitment
(sustained senior management attention; 'roadblock'
removal)

Burgleman, Dooley, Doyle, Rothwell

It can be seen that all components receive support from other researchers
although no researcher has developed a model that contains all of the
components and/or elements found in this research.

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Appendix 3
The first generation reference model (G1)
In Chapter 4 the findings of the research were presented and the second
generation reference model (G2) described. The first generation reference
model was briefly mentioned. In this appendix the G1 reference model is
described in more detail as it demonstrates some of the techniques used for
coding and developing indicator-concept links (as discussed in Chapter 3).
The 20 components of the G1 reference model are described below with the
researcher's field noted where appropriate.
Ia

transformational leadership

The results of the text search for 'lead' found 73 text units. The word was
mentioned in 44% of the cases. A study of these units was undertaken with
the aim of identifying a small number of learning points (five were arbitrarily
selected). The purpose of the study was limited. It was not intended to
capture everything that could be said about leadership; rather to use the data
to identify distinctive features the specific role of leadership in relation to
innovation capability.
Table A3.Ia: transformational leadership
Code

Evidence

Context

Field notes

RX

"I think the success he has is that he combines

the western management dream of introducing
system, and the rational aspect of running the
business. A very typical Chinese manager
would be sort of more emotional, more lacking
the discipline of systems, procedures and
having clear policy. I think Poon has a mixture of
both the Chinese leadership, the caring, and I
think he's probably right. Sometimes you need
to be more forceful as the leader with manager
who would be sort of come forth and try new
things".

This observation
was made about a
Chinese leader
working in the Far
East noted for
having developed
an innovative and
successful service
business.

Innovation leadership
requires a blend of rational
systems, forcefulness and
emotional alignment with
employees.

AT

"If it was appropriate for somebody else to do it

was needed it. If it was appropriate to listen to
somebody else in the group because they knew
more about it there was no problem in doing
that. It wasn't 'face' problems or anything like
that, it was just everybody working together and
the best person to solve the problem took the
lead at that time".

This senior
manager is
discussing an
incident when he
worked in a highly
innovative team.

Innovation leadership can

be more open and flowing
than the traditional notion of
the resolute and driving
boss. Listening, cooperation and sharing
power are key skills.

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Code

Evidence

Context

Field notes

PC

"Ideas sort of bubble up somehow but I think it's

the general atmosphere in the organisation, it's
seizing opportunities and dealing with them is a
major celebration and we encourage people to
use our IT system. Any contact they have with a
client result in additional business. We say "put
it on the system, tell everybody about it"
everybody in the company knows and there's a
general motivational factor there. But I think a bit
of leadership as well."

This reflection is
from a managing
director of a
rapidly growing
UK company.

Innovative leadership is
concerned with developing
a conducive context and the
systems to support them.
Leading by example is a
telling method as behaviour
communicates more
effectively than words.

VP

"very often they would come up with a better

plan than I had. Now this was a very difficult
change for me, personally, because I always
wanted to lead very quickly, I was very impatient,
and people thought I was a very authoritative
and dictatorial person, which I guess I was,
which I never thought I was; and I thought of
myself as this enlightened, liberal, nice guy(!)"

This reflection is
from a leader who
has taken charge
of a number of
cross-functional
task forces with
extensive
innovation goals.

Innovation leadership
requires differences in
personal style that can be
hard to accept. There is no
guarantee that the most
senior person will have the
best ideas!

CP

There is a "meeting process which takes place

every Wednesday and Friday mornings. These
strategy meetings last from about 7 to 10 in the
morning. Each week, at one of the twice-weekly
meetings, all of teams in a particular division are
gathered together in our strategy centrewe
call it 'the war room'"

This observation
is from a large
divisionalised
organisation
noted for its high
level of radical
innovation.

The management of
attention in a large
organisation requires
appropriate processes
which gather together key
people and create a critical
mass of commitment.

The findings on the role of the leader emphasise that there was a symbolic
aspect to the role. A key task of the leader was to assure a flow of innovation
initiatives rather than attempt to direct and manage every innovation activity.
This was presented in forceful terms by somesee CP's comments in the
next section. It was interesting to note that the word 'control' was not used by
any of the informants.
Ib

stretching strategic intent

The results of the text search for 'competitive/strategy' found 36 text units.
The word was mentioned in 26% of the cases. As before, a study was
undertaken of these units with the aim of identifying illustrative learning
points.

298

Table A3.Ib: stretching strategic intent

Code

Evidence

Context

Field notes

PO

"One of the issues that I get extremely worried

about is that managers, particularly when they
get into large organisations, become more and
more introspective and inward-looking and less
concerned about the competitive element which
is effectively what they're there from. And I think
that in its own way has a big impact on the
amount of introversion which is demonstrated by
an organisation."

This observation was

made by a change
agent who is employed
on a contract basis to
facilitate innovation in
client firms.

The challenges of the

external world,
specifically
competition, need to
be felt if innovation is
to be targeted in ways
that add value to the
firm.

VP

"I think we're talking about using a different way

of looking at our what we thought were
innovative ideas and been prepared to kill them
for commercial reasons. They may still be
technically innovative but they're not actually
yielding a distinctive product we have to have
the grace to walk away from them and put our
resources into something which is truly distinct."

This reflection was made

by a manager in a
pharmaceutical
company.

Investment in
innovation needs to
be targeted at
achieving competitive
advantage. This
presents difficult
decision-making
dilemmas.

DOC

"it's necessary to realise the opportunities of

potential synergies between the different
businesses in the firm. The questions include:
what does it mean? How to do it? What comes
first? How to avoid excessive costs? People will
be called upon to show that they are moving in
the required direction."

Presentation by a
corporate CEO to of the
senior managers of a
newly acquired
subsidiary.

This large company

has several operating
divisions that may
have synergistic
opportunities. The
group CEO is setting a
cross-business
innovation agenda.

JL

"make them do psychology, sociology,

understanding consumers in a way that they
don't understand them. We're dealing with
young people a great deal and the average
age of our marketing people40? You need
some 18-year-old brand managers who'll tell
you what the language is, what the hip
messages are".

An experienced general
manager in a FMCG
company.

A great deal of
specialised study is
needed to
understand potential
markets and define a
competitive strategy.

LS

"we want to expand our range of newspapers

and confectionery etc and put the 109 small
newsagents shops in Dartford out of business!
We need to make their businesses
unprofitable!"

This was said by a

senior manager of a
large supermarket
chain.

Once a strategic goal

like this is set, it is a
spur to innovation.

The findings on strategic intent draw attention to the close and multiple
linkages that exist between the firm's competitive strategy and its innovation
agendaboth in terms of the number of innovations needed, their priority
and choices about what is done and what is not done. Some senior managers
see innovation as an expensive and significant capability that needs to add
value to the firm (Porter, 1985). If the firm had a strategy that drove its
innovation agenda (at least in part) this provided a strong incentive.

299

Ic

dedicated innovation resources

The results of the text search for 'resources' found 31 text units and was
mentioned in 28% of the cases.
Table A3.Ic: dedicated innovation resources
Code

Evidence

Context

Field notes

VP

"there's been a shift towards devoting

resources to leapfrog compounds and leapfrog
therapies and somehow that vision, that mission
must have opened a lot of doors."

This observation was

made by a senior
internal change agent.

Allocating resources
builds a 'head of
steam' for innovation.

MI

"The second hazard is to do with acquiring and

aligning resources."

A senior manager in a
firm making complex
product systems.

If resources are not

available they hazard
an initiative.

UY

"There is nothing that we can do unless we're

pulling together and have put the resources of
the company behind us. And so we've got to try
to create an environment in which innovation
can flourish."

Input from the manager

of a research
department.

Resource allocation
supports shared
commitment.

VP

"the change that's brought is the way we

maintain current capability but needs to operate
through these project teams that have come at
the moment which are multi-disciplinary, tend to
be fairly short-life."

This observation was

made by a senior
internal change agent.

Resource deployment
can be managed
flexibly (through
project teams).

CD

"We must either have the capability to manage

it, or we believe we can hire the people to do it
(which is a questionable thing)."

Presentation by a MD to
all of the senior
managers in her
company.

Resource shortages
can prevent initiatives
from proceeding.

The findings on resources indicate that the presence, or absence, of resources

plays a significant role on the management of innovation, especially the
decision-making process. In order for certain kinds of innovation to be
successful a process was needed that got together a critical mass of people
and enabled them to work together with sufficient intensity. An investment
of time and frequently of other assets as well was required.
Id

strong external linkages

The results of the text search for 'external linkages' found 30 text units and
was mentioned in 20% of the cases.

300

Table A3.Id: strong external linkages

Code

Evidence

Context

Field notes

LX

"We come back to responsiveness to customer

requirements."

Top team member of a

FMCG company.

It is essential to have
a fast reaction to
changes in market
requirements.

BT

"Innovation places a lot of pressure on the

supply chain. Sometimes the suppliers can't
cope."

MD of a products-offered
firm.

The management of
innovation extends
into the supply chain.

CP

"Mr X has been a student of management for

many, many years. He has also sought to
educate himself outside and develop
relationships and to pick the brains of some of
top and most innovative business brains. This
has been learning the lessons that business
has to offer and applying them. I think has
contributed to the success all alongand the
more he did, the more he learnedthe more
willing he was to reach out, the more willing the
outsiders were to reach in."

This observation is from

a senior manager in a
large divisionalised
organisation who is
speaking about the
Chief Executive.

Multiple sources of
learning need to be
used.

KM

We've actually done a lot of jobs in China at a

loss, just to gain experience. A China job we
would have accepted whereas if we were
offered the same job in Hong Kong we would
have said no. Because we want to get some
practical experience and build up out
opportunities for learning."

Observation from the

head of HR for a
multi-national firm.

Experiment in new
environments is a
spur to innovation.

LNB

"We will build strategic alliances with competitor

companies. The boundaries of the organization
become fuzzy and networking and alliance
building skills are needed."

Senior manager in a
chemical company.

The development of
multiple alliances,
joint ventures and
other forms of
partnership has
become important for
the management of
some forms of
innovation. Either the
capabilities do not
exist or the blend of
cultures is seen to be
constructive.

The findings on linkages suggest that, even for the largest firms, there is a
need to form various forms of partnerships. Often these are with groups of
consultants, for example, for process innovation in the information systems
area. It is not clear what the potential benefits and risks are from the research.
However, partnerships have been used at all stages of the innovation process,
from gathering ideas through to exploitation.

301

Ie

directed innovation initiatives

The results of the text search for 'direction/initiative' found 83 text units and
was mentioned in 46% of the cases.
Table A3.Ie: directed innovation initiatives
Code

Evidence

Context

Field notes

AT

"And everybody agrees that that's a way

forward which may not be the right way forward,
but if everybody agrees that that's the way
they're going to go on at least we get a bit of
direction."

Comment from the chief

executive of a service
company based in
Malaysia.

Direction is, maybe,

more important than
doing exactly the right
thing.

PO

"But if your organisation is purely about being

innovative then you're heading in the direction
of being the mad inventor with the shed at the
end of the garden that little loud bangs come
out of on a Sunday morning."

This observation was

made by a change
agent who is employed
on a contract basis to
facilitate innovation in
client firms.

Too much innovation

without alignment can
be dysfunctional.

VP

"in a structured organisation, something which

is appropriately operating as, as you say, a
machine bureaucracy or whatever, I think sort of
a management-led directed approach to
change is probably appropriate. And to try to
effect change in any other way is probably very
disruptive to the organisation."

Comment by a senior
internal change agent.

The types of direction

that are appropriate
vary with
organisational
configurations.

CP

"That was basically a top management

conceptualisation. That gave us the direction
we should be going in"

This observation is from

a senior manager in a
large divisionalised
organisation.

Innovation being
focused from the top.

UY

"Any firm, decisive decision may well knock the

pea off the top of the egg. This would make it
run away in one direction. Therefore, the key is
to do nothing. We get there by communication.
The action of setting a target or identifying a
single direction to move in means that you are
missing the whole point. We are knocking the
pea off the top of the egg."

Input from the manager

of a research
department.

Direction can focus on

the wrong things and
undermine
responsivenessesp
ecially in highly
volatile environments.

The findings on the direction of initiatives suggests that hands-on direction is

sometimes needed but this must be sensitive to the needs of the process and
the task. Despite a participative approach was advocated by many
informants, it did seem important that senior managers took a direct interest
in innovation initiatives. Even if people lower down the organisation felt
empowered, their motivation appeared to wane unless those with high status
in the organisation gave support.

302

IIa

empowerment practised

The results of the text search for 'empowerment' found 65 text units and was
mentioned in 39% of the cases.
Table A3.IIa: empowerment practised
Code

Evidence

Context

Field notes

CP

"In 1984 we were one of the first to embrace the

philosophy of empowerment. Beginning about
1989 we went the whole hog. We tried to give
them the maximum resources, tremendous
discretion, they were basically able to make
their own hours, to address problems as they
saw them. We inverted the typical power
pyramid. In the long run we found that was not
effective."

This observation is from

a senior manager in a
large divisionalised
organisation noted for
its high level of radical
innovation.

Empowerment is not a
foolproof prescription
for facilitating
effectiveness or
innovation.

HL

"I would interpret empowerment to mean 'taking

one step forward towards the control of your
life'. Many people are aware that they have this
power, they have the potential, or maybe they
do but they don't know how to go about taking a
first step. I believe that empowerment is within
the grasp of everyone."

Observation by a
change agent based in
the Far East.

Without empowerment
it is difficult to see how
people could be
contributors to an
innovation process.

DS

"ask people and teams in an organisation

whether they feel, or whether they have the
idea or the opinion that they are able to create,
in their work, what they want to create in their
work; so whether they are able, whether they
feel that they are empowered to do it, or
whether they feel powerless."

Observation by a
change agent based in
Holland.

Personal power and

creativity are closely
related.

WW

"I think that to say I empower my staff is a

complete paradox. The minute you talk about
empowering someone else you've
disempowered them. It is about creating the
conditions in which they can take their power."

Observation by a
change agent in a large
UK public body.

Empowerment cannot
be a strategy. It can,
however, be enabled.

AP

"The centre has responsibility without power.

There is no power to back that. It's based on the
relationship issue and if you actually have to try
and achieve something and they are not
persuaded of what you want them to do and you
fail to persuade them, you actually can't do
anything."

Marketing co-ordinator
in a large FMCG
business.

Empowerment makes
it difficult to deploy
centralised strategies.

The findings suggest that empowerment is desirable from an innovation

perspective when conditional autonomy is taken by those who are willing
and able. This was especially true for those organisations that were embarked
upon continuous improvement as this requires significant initiatives to arise
form the middle and bottom of the organisation. However, as CP pointed
out, empowerment can undermine organisational coherence and undermine
alignment.

303

IIb

demanding expectations

The results of the text search for 'objectives' found 31 text units and was
mentioned in 22% of the cases.
Table A3.IIb: demanding expectations
Code

Evidence

Context

Field notes

AT

"Our process includes formally signing-off

innovation objectives as done. Setting time
frame for objectives to be completed. Discussion
of success criteria which can be applied to each
objective."

Comment from the chief

executive of a service
company based in
Malaysia.

Building innovation
objectives into the
performance
management system
can be effective.

AT

"I think the team was successful because we

were all of a same mind and we all had the same
objectives and we were all on the same
wavelength and we were all Scots. But that's
only part of it. We were all very focussed on
doing the same thing and the priority was to get
that thing done and not to maintain a position
outside that."

As above.

Shared and aligned

objectives are
important.

LM

"For as long as it takes. I think generally you

would find that the brainstorming session would
take about two hours. The process is that we put
ideas down on paper as they come out and then
go back and re-examine them to see how
appropriate they are to specifics and your
objectives."

LM is a senior executive
in an advertising firm
noted for its innovative
solutions to client's
needs. LM is discussing
how ideas are
generated.

Objectives structure
idea generation and
act as a check of
relevance.

KM

"So that immediately seemed like a good idea

and we set some objectives to get some of our
own people to do the training."

Observation from the

head of HR for a
multi-national firm.

Setting objectives
transforms a proposal
into a commitment.

CP

"There has really been a tight bond between

the centre in terms of 'Let's get this job done'.
The conceptualisation as to where we should
be going and what our goals and objectives
really are."

This observation is from

a senior manager in a
large divisionalised
organisation.

Goals and objectives

need to be aligned.

The nature of the expectations that surround employees appeared to affect

behaviour. In part expectations flowed from the organisation's leadership and
in part from peers and co-workers. The type and nature of expectations can
be seen as an element of organisational culture. Innovation was weaker
where people were not expected to innovate, set innovation objectives or
appraised on their innovation prowess.
IIc

high enrolment

The results of the text search for 'involvement' found 37 text units and was
mentioned in 30% of the cases.

304

Table A3.IIc: high enrolment

Code

Evidence

Context

Field notes

AT

"I'm in a team just now where we have people

who are very capable and very co-operative
and very focussed and unselfish about how
they approach the problem."

Comment from the chief

executive of a service
company based in
Malaysia.

Innovation needs a
high level of
co-operation between
people.

KM

"So there is an openness about using

techniques that help with creativity and I think
certainly amongst everybody at the senior
executive, they all have a go at it and I think
that's developed a feeling that there's no
barriers, no one who says 'I'm not creative' in
the department."

Observation from the

head of HR for a
multi-national firm.

Co-operation
encourages informal
idea generation.

JJ

"around sheer creativity and we were talking

about it yesterday, which is how do we get
people to dream and how can we tune them into
a process in our organisation which says you
are 18, you are this, you are this, you are this."

Observation by the head

of organisation
development in a major
international company.

Creativity tools can

assist in the
development of
co-operation.

WW

"I have a preference for pre-oedipal situations,

that is one-to-ones. But of course that won't do
in organisational life and so I really have to
have had to consciously try and overcome that
and get into group situations and not avoid
them, even though my best work is done in
one-to-one situations."

Observation by a
change agent in a large
UK public body.

It may be that deep

psychological issues
affect how people
co-operate.

VP

"I think when it comes to helping people to

understand how to make an organisation work,
especially a knowledge-based organisation like
we have which is about information creation
and sharing, I probably ought to think more
about the organisation is a brain because I
think it's the collectivity, your knowledge,
information, expertise which we need to tap
into."

Comment by a senior
internal change agent.

Co-operation is
especially important in
knowledge intensive
firms.

The findings on enrolment suggest that co-operation, generally, was

facilitative of innovation. There is a possibility that this is especially true in
firms in knowledge-intensive industries or where there is a requirement for a
larger-than-average number of ideas. The key test appeared to be how
co-workers reacted to people who wanted to take initiatives. Active helping
facilitated innovation whereas uninterest, disinterest or ridicule were
hindering factors.
IId

respect for mastery

The results of the text search for 'technical ability' found 49 text units and was
mentioned in 35% of the cases.

305

Table A3.IId: respect for mastery

Code

Evidence

Context

Field notes

CP

"In my opinion, this is the first administration, in

my experience, the top executives not only
have a very high regard for the experience, the
expertise, and the perception of people in the
front line but they reach out to them. These
people contribute as much to these strategies
as the management did."

This observation is from

a senior manager in a
large divisionalised
organisation.

Accessing experience
in the firm is key to
success.

AT

"I then accepted the problem as mine as well

and we worked together. And I just had an idea
because I was looking at it from an entirely lay
point of view: why don't you do it like this? And
suddenly the whole problem was solved and
everybody accepted that, if not the perfect
solution, but that was an easy way to solve the
problem."

Comment from the chief

executive of a service
company based in
Malaysia.

A highly experienced
specialist can use
multiple perspectives
for solving a problem.

JJ

"Some of the techniques, some of the processes

and some of the challenges have got to be
different, I mean technical challenge. You are
talking about technical possibilities. Can we
engineer this in this way? But it still requires
ingenuity. Thinking from a different perspective."

This comment by the

head of an internal
organisation
development group is
talking about the
integration of technical
skills into
problem-solving groups.

Problems that require

technical input need
to be managed in
specific ways.

CD

"It means that if you are trying to solve a

customer's technical requirement, that you have
to be, really, an expert on that industry, and that
you have to read all the same journals and you
have to travel to the conferences, and you have
to know that if Xantix is really the best fibre
board in the world or not."

Comment by the MD of a
divisionalised firm
talking about the need
to be technically
proficient.

There is no substitute
for deep technical
competence.

MI

"a high level of technical expertise is needed so

it is vital to maintain strong functional groups.
Managing the co-ordination and
interdependencies between these groups is
key."

A senior manager in a
firm making complex
product systems.

Technical capabilities
need to be aligned
across functions.

The findings on 'mastery' suggest that there are certain types of tasks for
which a high level of technical skill is essential. With some tasks multiple types
of technical skills must be integrated. Top managers frequently come from a
non-technical backgroundin this research they were predominately
marketing or financial specialists. However, the decisions that they take
involve commitment to technologies and 'expert' solutions. A respect (but not
an unconditional respect) for expertise was deemed facilitative.
IIe

confronting learning

The results of the text search for 'challenge/learning' found 59 text units was
mentioned in 37% of the cases.

306

Table A3.IIe: confronting learning

Code

Evidence

Context

Field notes

JJ

"it's a state of organisation of mind. I think it's

about having a culture that encourages risks,
that learns, that doesn't blame people when
things go wrong, so long as they learn from the
experience."

Observation by the head

of organisation
development in a major
international company.

Learning is affected
by the organisation's
culturewhat is
legitimate.

JL

"I think the thing you've got to understandand

I'm sure you willis that we're learning in this
process."

An experienced general
manager in a FMCG
company.

Processes can
provide (double loop)
learning.

KM

"If you are overworked with what you've got, it

doesn't promote you to be innovative. There is
always a learning curve with new things. But if
you take the business process re-engineering
stuff there are already people interested in it
and as people get more keen, so I'll put
pressure on to make sure that we've got a
respond."

Observation from the

head of HR for a
multi-national firm.

Learning happens
when it is seen as
functional by the
individual.

AP

"We're now learning you get more efficiency if

you put the regional people together. You
know, if we get like people togetherand that's
why it is quite important to put I think smaller
groups together, people who've got similar
disciplines and similar challenges and similar
focus, I think that's the sort of thing we've got to
do."

Marketing co-ordinator
in a large FMCG
business.

Communities of
practice form useful
learning
opportunities.

KM

"If there is somebody who I feel will give me a bit

of intellectual stimulation, then I'll meet them,
even thought there I not a pragmatic reason for
doing it."

Observation from the

head of HR for a
multi-national firm.

Opportunities for
learning need to be
taken, even though
objectives cannot be
set.

The findings on learning indicate that there are multiple sources of learning
and this can be a direct input into the innovation process. Significant forms of
learning were those that shook the existing mindset of key people, confirmed
a tentative view, elaborated a perception, provided inspiration or caused
alarm ("look what x company are doing. They will have us for breakfast if we
don't"). Extensive customer understanding was widely cited as a driver of
innovation. There was evidence that informal communities of practice formed
to share insights and distribute learning. The role of workshops and training
events was substantial, having an unfreezing as well as a educational function.
IIIa

exceptional individuals

The results of the text search for 'individual' found 60 text units and was
mentioned in 39% of the cases.

307

Table A3.IIIa: exceptional individuals

Code

Evidence

Context

Field notes

JJ

"I think as an individual you have to be nearly

an insatiable learner. You have to be insatiably
interested. I think that to me, I'm always finding
something new, something interesting".

Observation by the head

of organisation
development in a major
international company.

Talent in a specific
area is not
sufficientthere
needs to be a
generalised
commitment to
learning.

HL

"they will run into the same problems as we face

in the west; big organisation, and empty life, and
the alienation of individuals. Is there, kind of, a
body of wisdom which exists in the world which
elevates, which once tapped into, elevates the
individual who becomes acquainted with it".

Observation by a
change agent based in
the Far East.

In this observation,
coming from an
oriental frame of
reference, the notion
that some people
have greater life force
(Chi) is seen as a
contribution to
innovation.

DS

"It's mainly about the power of your own

potential if you release the potential of the
individual, or the team or the organisation, you
get powerful; the individual gets more powerful,
or the team gets more powerful, or the
organisation gets more powerful; and with
powerful I mean powerful in order to create
what you really want to create".

Observation by a
change agent based in
Holland.

The correspondence
of group and
individual will,
combined with a
sense of personal
power, provides the
foundation for
innovation.

VP

There are certain tasks for which we need to

employ the best in the world. We have a 'rare
and critical skills' strategy for defining, finding
and retaining R&D key staff".

Comment by a senior
internal change agent.

There are some

innovation-intense
tasks for which very
high levels of
individual skills are
required.

PO

"there are three or four people who are highly

skilled who have been recruited by the
chairman because their thinking happens to be
more or less identical to his who he will trust to
get on with it. The way autocrats often work and
the rest of the organisation is probably run fairly
autocratically".

This observation was

made by a change
agent who is employed
on a contract basis to
facilitate innovation in
client firms.

Organisations may
need a few highly
innovative people
and a larger number
of doers.

The findings on exceptional individuals suggest that there are two, possibly
complementary, ways of integrating the exceptional individual into the
organisation. Firstly, a limited number of outstandingly talented people may
be required. Secondly, the personal creative and proactive power (efficacy) of
people is not fixed: organisations can facilitate its development. Relevant
topics included: valuing of outstanding talent; release of individual potential
and people taking responsibility for their own learning.

308

IIIb

creative destruction

The results of the text search for 'change' found 88 text units, of which 41
were directly relevant to the topic. The word was mentioned in 54% of the
cases.
Table A3.IIIb: creative destruction
Code

Evidence

Context

Field notes

PD

"Our strategy is 'kill and eat'. That helps us in

the short term but we can never develop an
integrated product line. We never have the
timewe're too busy out looking for anything
that moves to kill it! But it becomes a way of
lifevery difficult to change."

Comment by the chief

executive of a
management consulting
company.

Attitudes and cultural

factors can be a
significant barrier to
the development of
innovative practices.

WW

"To tell you the truth I'm really thinking of the

beginning of Kenneth Clark's Civilisation, you
know, his idea that you need some degree of
stability and confidence and yet civilisation does
or has in the past advanced at times of
warwhich I would equate with turbulence. I
mean the thought that creativity is associated
with war is repugnant to me, but some sort of
turbulence anyway."

Senior change agent

speaking about the
facilitation of innovation.

Identifies the positive

benefits of
uncertainty.

VP

"It isn't a matter of sharing the analysis and the

hypotheticor at least that's not the first
stagethe first stage is to do what I was
describing which is to say are they feeling the
need for some change? Are they already
wrestling with that kind of problem? And I think it
really is a matter of is there a felt need by the
client that needs to be there before I can get in
and say, well here I've got not the solution but
here I've got a methodology that will help me to
resolve the issue."

Comment by a senior
internal change agent.

The notion of a 'felt

need' mentioned by
VP is interesting. He is
suggesting that there
needs to be both
consciousness of the
need and willingness
to address it.

CD

"You have to take a small part of the company

and you say, "this company will change this way
in the next twelve months" and then you do it,
and you make mistakes, and you get
discouraged, and you get up and do it again.
Then when that group has then changed and is
proven to be successful you go to the next
group. This will take five years, if we're lucky. If
we're unlucky it will take ten years. I mean,
you're not going to walk out of here tomorrow
and all of a sudden all is sweetness and light
and no, no, this is going to be a very difficult
process".

Presentation by a MD to
all of the senior
managers in her
company.

Radical change
requires
persistenceit is a
way of life. And there
are times when it is
very difficult.

309

Code

Evidence

Context

Field notes

AW

"middle managers are not seen as spare and so

automatically subject to delayering/downsizing.
They have key roles in coaching and mentoring
and acquiring/imparting knowledge. They for
the bridge between the 'airy fairy' ideas at the
top and the rough folk who do things. The
business has some 57 'grades'/levels of
hierarchy. Every person has 20 days training a
year. Looking for return on this investment in the
medium to long term both to change the culture
from pre-privatisation 'guardian' to a commercial
'trader' attitude and to enable people to
successfully take on new business".

Internal change agent in

a public utilities
business.

Training and
providing a valid role
are seen as methods
for facilitating a major
change of collective
mind-set.

The findings on prudent radicalism suggest that the attitudes of people within
a firm can be a major barrier to change. Without a change in cultural factors
innovation capability is stunted. There seemed to be less concern about
redundancy in hard assets like plant, equipment, systems etc.
IIIc

active internal networking

The results of the text search for 'networking/inter-team relations' found 58

text units. The word was mentioned in 33% of cases.
Table A3.IIIc: active internal networking
Code

Evidence

Context

Field notes

BB

"the process of innovation has to be informal.

Research is changingtoday many more
people are involved and there is much more
reaching out. There is an increasing team
orientation3rd Generation R&D."

The interviewee is the

chairman of an
international innovation
network based in
Washington DC.

Inter-team working
seems to be
increasingly important
in science-based
industries.

EX

"An organisation that is vastly innovative can

transfer that innovation internally to itself and
has a capacity for transformation."

The head of an internal

organisation
development unit in a
pharmaceutical
company.

Transformation
requires internal
innovation (i.e. of
people and systems).

DS

"I believe, is that we all have a big wish to

express our full potential, and that's in fact what,
our driving force as individuals, but also as a
team, that will, everybody's longing for. And of
course, that's what you, I mean it will be
formulated in different ways but that's also what
you will find in, the eastern traditions when it's
about spirituality, or Yoga but of course also in
humanistic psychology."

Observation by a
change agent based in
Holland.

Networking meets
some of man's deeper
needs.

310

Code

Evidence

Context

Field notes

CD

"When I was purely a local person, I thought it

was silly to have ex-pats because we local guys
could do what they could do; but when I went to
KL and I went to Berlin, and I then had to run a
global organisation, I realised that expatriates
bring a certain international perspective and
certain skills that locals will never have unless
they work outside their home country for many
years, like I did."

The informant is MD of a
multi-national company.

Diversity strengthens
the organisation's
capacity to be
innovative.

CP

"all of the divisional directors gathered together

in our strategy centre. The command and
control centre, we call it 'the war room', is a
hi-tech facility modelled on the war room at the
Pentagon. We have projection screens,
interactive video capability and all sorts of
gizmos and

This observation is from

a large divisionalised
organisation noted for
its high level of radical
innovation.

Resources and
technologies can aid
networking.

gimmicks."

The findings suggest that internal organisational networking supports

innovationfacilitating what is being called a project- or process-driven
organisation. This appears to be more important than a simple human
resource management tool as it promotes cross-organisation communication,
learning and the development of mutual support.
IIId

conceptual road map

The results of the text search for 'theories/maps' found 32 text units and was
mentioned in 19% of the cases.
Table A3.IIId: conceptual road map
Code

Evidence

Context

Field notes

VP

"The lesson is that a conceptual map is the

platform and then initiatives can be taken in
areas identified. These map on to three strategy
areasimproving Discovery-development
interface; fast cycle-time development and
science based marketing."

This observation was

made by a senior
internal change agent.

A conceptual map
provides a structure
for innovation and
sets priorities for
improvement.

MI

"CODAX methodology has just been launched

into the company. The problem we've currently
got, these people predominantly work for
mechanical design, electrical design. Not too
much of a problem there. But within the product
specialists, they then work, going back to our
structure, matrix, our product specialistshe in
theory and these people are responsible for
this product area. And they work or try to work
through this. It's a pig to be where the main
problem is."

A senior manager in a
firm making complex
product systems.

Unless 'a theory' has

been tested it can
create its own
problems.

311

Code

Evidence

Context

Field notes

DD

"Now I could draw it down for you a million times

on a piece of paper and you say to me: is this
right? and I'll say absolutely, it's right. We've got
bits which are there but they are not linking. It's
like saying, very crudely again, you know, what
do we take to make a house? We've very nearly
got it right and we've got the ingredients but we
haven't got the cake, we haven't baked it."

Marketing director of a
multi-national company.

Conceptual maps can

show where systemic
weaknesses lie.

KM

"There is a story going around that people only

remember 20 per cent of what they hear. I think
that is a flat-earth theory. If those were the
figures given in a marketing presentation, you'd
never buy the product. It's just not good enough
at the moment. We are still navigating by the
stars but in an organisation, how much time can
you actually spend on analysis? Still I feel that
the whole area is inadequate."

Observation from the

head of HR for a
multi-national firm. He is
speaking about current
approaches to training
and development.

Without a theory it
seems easy to feel
lost.

CP

"For the first time we are ahead of the curve on

this. We used to be highly responsive. Now we
are plotted direction and projected into the
future what the future needs will be. What we
expect are issues and our problems to be. That
is five years down the road. And we're working
towards addressing those things now."

This observation is from

a senior manager in a
large divisionalised
organisation.

If a firm has an
operating theory of
how things needs to
change this can align
individual initiatives.

The findings on mental maps suggest that 'theories of action' influence what
managers and other opinion formers pay attention and decide to do. Maps
serve to determine the organisation's reality and appear to play a key role in
aligning innovation practice with innovation capability. The roles of maps are
not straightforward. Three important elements can be identified: firstly, a
map can give confidence that an innovation proposal has been 'well thought
through' (this is especially important with process innovation); secondly,
maps provide a form of low-risk intellectual simulation enabling ideas to be
elaborated and tested prior to commitment; lastly, maps provide a tool for
managing engagement, alignment yet permit local initiative. From this
viewpoint they enable, in part, a fractal organisation to operate (Warnecke,
1993).
IIIe

full competencies portfolio

The results of the text search for 'competencies' found 51 text units and was
mentioned in 26% of the cases.

312

Table A3.IIIe: full competencies portfolio

Code

Evidence

Context

Field notes

JJ

"it's about having available technologies and

processes that are competent."

Observation by the head

of organisation
development in a major
international company.

In order to facilitate an
innovation the
organisation's
infrastructure needs
to be competent.

DS

"strengthening the organisation's position was

personal services, cost structure, the third
dimension is this business of enhancing the
efficiency and effectiveness, capability of people
and systems, and the fourth is to do with
strengthening the organisation's position for
tomorrow."

Observation by a
change agent based in
Holland.

Multiple capabilities
are needed to
facilitate innovation.

CP

"All these systems are integrated,

comprehensive, and they fit together very well.
We have developed eight strategies. These are
policy documents based on an analysis of
past-practice and describe the dimensions and
scope. There is an analysis of our resources
and insight from our years of experience and
the best minds that we can put together."

This observation is from

a large divisionalised
organisation noted for
its high level of radical
innovation.

Policy and resource

availability is very
closely integrated.

VP

"R&D found that it was very helpful to define the

need to develop a faster development of new
compounds as 'improving cycle time'. In
Discovery nine distinct proficiencies were
identified (e.g. strategic technologies, smart
scanning, portfolio and asset management,
drug development expertise, information
management, risk management, company-wide
influence and external customer influence) and
a process owner identified for each."

Comment by a senior
internal change agent.

Very systematic.
Provides the basis for
comprehensive
planning.

JL

"So if you look at the process by which we gain

intelligence, then set it in terms of priority, add
our judgement to it about resources, prioritising,
moving it up the chain of command for action,
that's a combination of people in the line and
our people working as closely together as they
can."

An experienced general
manager in a FMCG
company.

Resource availability
is a factor in
decision-making.

The findings on portfolio of competencies topic suggested that there needs to

be (ready) access to necessary competencies and other resources. If this is not
possible then progress on the innovation initiative is hindered or, perhaps,
rendered impossible.
IVa

relentless continuous improvement

The results of the text search for 'CI and/or continuous

improvement/kaizen' found 55 text units and was mentioned in 41% of the
cases.

313

Table A3.IVa: relentless continuous improvement

Code

Evidence

Context

Field notes

CD

"Professional standards again, if we have

quality staff, we must have the highest
professional standards, and that means
training, that means development."

Presentation by a MD to
all of the senior
managers in her
company.

Development is seen
as an investment in
excellence.

KM

"I am always interested in new theories and new

concepts because I don't feel that what we'll
have got is quite right. Part of it is my own
interest in things that are new."

Observation from the

head of HR for a
multi-national firm.

Learning is a
partnership with the
individual playing a
role.

VP

"I think so and it's not even kind of OD as I've

thought about it five years ago. It's much more
about situational problem-solving, learning. I'm
not even sure that the old-style training
approach that we still have is very valid as we
move forward. I suppose there'll always be a
basic educational need, I don't decry that, but to
attempt all our learning and all our education
through conditional training probably isn't a
way forward. It is more of a part-action learning
process."

Comment by a senior
internal change agent.

Notions about
development are
changing. There is
increasing use of
action research and
making learning an
integral element of
work tasks.

LX

"It has to touch every part of the organisation.

The starting point is to get buy-in from the rest of
the staff. Invariably there is a training
programme to get the process launched. People
are helped to think about their own roles. You
get T shirts, badges and so on."

Member of the top team

of a FMCG business.

Training is a device
that prepares people
for a change.

JL

"I took it upon myself to work with the very best in

the field, get to know them and see how they
work and try to adapt much of that."

An experienced general
manager in a FMCG
company.

Learning from the

best is a tactic for
driving innovation.

The findings indicated that continuous improvement is an element in keeping

individuals in touch with new thinking. From this innovation can spring. CI
requires the individual to be proactiveboth to identify opportunities to
improve and in taking initiatives. The role of training and development is, in
part, to stimulate a commitment to CI processes.
IVb

effective new productprocess development systems

The results of the text search for 'NPD' found 87 text units. The word was
mentioned in 49% of the cases.
Table A3.IVb: effective new productprocess development systems
Code

Evidence

Context

Field notes

RE

"There are three levels of innovation: keeping

brands contemporary, using new technological
platforms and going outside of the existing
product range. We did the first and second well.
The third was tougher."

A general manager in a
FMCG company.

Product development,
technology evaluation
and market
development are
interdependent.

314

Code

Evidence

Context

Field notes

BT

"We have innovation overload at the moment.

The sales force are suffering from indigestion.
We were producing so many new products that
we couldn't absorb them and so we were
cherry-picking and not making the most of the
innovation that we have made. We have had to
change the policy and focus on doing the right
amount of innovation."

MD of a products-offered
firm.

NPD output needs to

meet the capacity of
the firm.

LM

"Our principle is not innovation but maintaining

a revenue base. Our clients are looking for new
and innovative ways of promoting or positioning
their products; so in turn we have to be the
source of new ideas so as to meet those
expectations."

LM is a senior executive
in an advertising firm
noted for its innovative
solutions to client's
needs.

NPD is not an end; but

the means to an end.

VP

"The MAP processMarket Aligned Planning

Process that we have which is supposed to
focus our development effort and make sure that
we're taking into account very critically the
market demands.

This observation was

made by a senior
internal change agent.

Close relationships
with market factors are
essential in NPD.

Presentation by a MD to
all of the senior
managers in her
company.

Many factors,
including the current
portfolio of the firm,
affect decisions about
product development.

I think that has really helped us to filter."

CD

"We must have only quality products; I mean, I

don't want any compromises on this score: we
are building a world-class company and every
stone in that foundation has to be solid. So, you
know, if you find out later on that one of your
products is a health hazard, we should drop it,
even if it means you blow your budget for the
year."

The findings on NPPD suggest the management of new products and

processes occupies significant attention in some organisations. The approach
'more is better' was not generally followed in the case companies. Rather,
there is an effort to target innovation capabilities within defined policies. In
some cases management tools and processes were used to provide added
discipline.
IVc

sound decision processes

The results of the text search for 'decision-making' found 48 text units and
was mentioned in 31% of the cases.

315

Table A3.IVc: sound decision processes

Code

Evidence

Context

Field notes

KM

"And you make a decision about whether to

carry on. There is a cost in undertaking a
review. Even if it is only 60 per cent of what it
was, do you let that carry on and squeeze
another bit out of it or start a new learning
curve? You have got to prioritize. There is a
really cost in refurbishing. You have your own
schedule for refurbishing products and then
something will blow up and you re-prioritize
accordingly."

Observation from the

head of HR for a
multi-national firm.

Decision-making and
innovation (especially
product innovation)
are closely
intertwined.

UY

"And so therefore the traditional management

philosophy of 'extract the root of the problem,
go from the specific to the general, make a
decision about the general issue and then
apply that to the specific' often doesn't work in
running a research department. Because in the
process of abstracting from the detail you have
already over-simplified the problem too much
and therefore your answer is not going to be
particularly useful. Therefore, instead of moving
up and moving back down again, you have to
sort of swim through the porridge from the
specific to the specific without being able to
generalise very much. The other thing is that in
the process of abstraction, since this is a people
business, it's the people that are the problem,
not the structures. It is very difficult. We need to
think of the organisation as a life-form rather
than a machine. Clearly there are times when
systems are appropriate but the methodology is
not easily codified. The essence of our business
is decision-making within short time constraints.
That is the nature of the market."

Input from the manager

of a research
department.

This radical point of

view has interesting
implications. UY is
suggesting that
striving to come to a
planned decision is a
false aim; there are
many related
decisions and each
must be tackled on its
merits so a decision
'emerges'.

PC

"So therefore the key decision is who becomes

the team running each of the divisions."

This reflection is from a

managing director of a
rapidly growing UK
company.

Sometimes the most

important decision is
about who is making
it, rather than what is
decided.

CD

"having decided which products and services

we want to be in, we then design a delivery
system. Very simple to say, a very hard thing to
do. Lining up the logistics, the finances, the
people, the distribution, our customer feedback
and support, the whole thingwe have to
design that properly, and we have to design it in
a flexible way, not in the traditional 'big
company' way."

Presentation by a MD to
all of the senior
managers in her
company.

Decisions require
subordinate decisions
for them to be
enacted.

PA

"The insight is that ideas are ample. It's the

decision making and implementation that's
tough."

Senior manager in a
rapidly expanding
services company.

Decision making is
where the
'heart-ache' really
resides.

The findings on decision making suggest that this presents a high level of
challenge. There was a view from some managers that decision-making was

316

the critical activity. Decisions need to be taken about multiple issues including:
what to do, what not to do, what enabling resources need to be developed,
how things can be done effectively, how initiatives fit with others, how
resources can be used to best effect and so on.
IVd

honoured champions

The results of the text search for 'champions/project leaders' found 77 text
units and was mentioned in 44% of the cases.
Table A3.IVd: honoured champions
Code

Evidence

Context

Field notes

MI

And who's responsible for getting together the

plan, this plan, championing, being the
champion? This is a key issue."

A senior manager in a
firm making complex
product systems.

The role of the

champion can be
institutionalised.
Individuals are
identified and given
the role of champion.

CP

"it is quite common that in a room packed with all

the big-shots, and "I'd like to introduce to you to
Smith. He did some good work last week. Why
don't we give him a big hand?" All the chiefs are
standing up, giving him an ovation. Plus there is
a reward system. What we're doing is
supporting the champions."

This observation is from

a senior manager in a
large divisionalised
organisation.

Honour and status

needs to go to
champions. This can
be institutionalised in
a number of ritual
behaviours.

LX

You have to walk the talk. You will need to have

a policy lead by leaders. They have to
personally put customers first, to encourage a
follow through of ideasespecially from front
line staff. Research shows that up to 80% of
ideas can be implemented."

MD of a FMCG company.

There can be an
expectation on
people that they need
to operate as
champions.

MI

"Well one of the things I've put on the

requirements for all the team leaders is that their
final submission has to include not only the
investment and recurring costs, but also an
implementation timescale that ties up with it and
what we can actually do in that timescaleand
their own (bearing in mind that they're doing it
as a sub-team) their own risk analysis of that
achievement."

A senior manager in a
firm making complex
product systems.

The role of the

champion can be
specified. Tasks,
responsibilities and
expectations can be
defined and codified
techniques (in this
case risk analysis)
applied.

DS

"the model is about how to create a creative

organisation instead of a reactive organisation,
and it's based for what I call dynamics. What I
call the dynamics of actionthat's just being
effective, getting good results, making money
whatever; in order to be successful in action,
you need to be clear on your relationships, you
need to have a clear vision and you have to be
connected with what I call the essence, the
essence of the organisation, you might also call
the true values."

Observation by a
change agent based in
Holland.

Being a champion
needs a close
personal relationship
with the intents of the
business.

317

The findings suggest that the role of the champion can be legitimate and
significant. The champion is expected to be opportunistic and make proposals.
The roles of the champion can be specified and may vary between
organisationsmore devolved power appears to be allocated to champions
in less integrated organisations. When championing happens strategy
formulation is, in part, driven from the middle of the organisation.
IVe

strong implementation capacity

The results of the text search for 'implementation' found 34 text units and was
mentioned in 29% of the cases.
Table A3.IVe: strong implementation capacity
Code

Evidence

Context

Field notes

PA

"The insight is that ideas are ample. It's the

decision making and implementation that's
tough".

Senior manager in a
rapidly expanding
services company.

Implementation is a
key element in
innovation.

JJ

"But it starts with a number of expertsso-called

expertslike top management saying, putting a
hypothesis together and then getting
implementers together and saying: prove it,
disprove it, challenge it, develop it, codify it."

Observation by the head

of organisation
development in a major
international company.

Those who implement

can add greatly to the
innovation process. If
their input is gathered
at the start of the
process it can add to
a conceptual
stimulation.

VP

"There's a dimension there to do with culture

which is encouraging risk-taking, being
demanding and people feeling that things will
have to change. And an area here to do with
application which is to do with taking good
quality decisionswe don't want any more
C5shaving a rapid decision-making, and
being able to implementthose are important."

Comment by a senior
internal change agent.

Implementation
capacity is part of a
system for supporting
innovation. This
informant is
suggesting that there
is a close link
between
decision-making and
implementation.

MI

"There are always far more ideas available than

there is the capacity to effect them. It is in the
application of ideas and implementation that the
real difficulties occur. We seem to be much
better at identifying a need or requirement than
we are at actually mobilising effort to make this
happen."

A senior manager in a
firm making complex
product systems.

Identifying
implementation is a
critical issue.

318

Code

Evidence

Context

Field notes

RE

"We are lacking the 'baptism of fire' selection of

projects process that 3M use. This means that
we take too much on and can't implement
satisfactorily."

A general manager in a
FMCG company.

Over-stretching
resources inhibits
implementation
effectiveness. It is
important to ensure
that (in so far as is
possible) this is done
without over-optimistic
projections of the
ease or prospects for
an innovation
initiative.

The findings on implementation indicate the critical role of these activities

within the innovation process. Implementation takes place after there is a
commitment to an idea. However, only so much can be undertaken at once
and implementation frequently requires multiple actions taken in multiple
parts of the firm.

319

Appendix 4
NUDIST databasenode statistics
Data from 196 documents were placed on to the Q.S.R. NUDIST Power
version, revision 4.0 program. The node codes are shown below, with paths
identified.
(1)
(1 1)
(1 1 1)
(1 1 1 1)
(1 1 1 3)
(1 1 1 5)
(1 1 1 6)
(1 1 2)
(1 1 2 1)
(1 1 2 2)
(1 1 2 3)
(1 1 2 4)
(1 1 2 5)
(1 1 2 6)
(1 1 3)
(1 1 3 1)
(1 1 3 2)
(1 1 3 3)
(1 1 3 4)
(1 2)
(1 2 1)
(1 2 1 1)
(1 2 1 2)
(1 2 1 4)
(1 2 2)
(1 2 2 1)
(1 2 2 3)
(1 2 3)
(1 2 3 1)
(1 2 3 3)
(1 3)
(1 3 1)
(1 3 1 1)
(1 3 1 2)
(1 3 1 6)
(1 3 2)
(1 3 2 1)
(1 3 2 2)
(1 3 2 3)
(1 3 2 4)
(1 3 3)
(1 3 3 1)
(1 3 3 2)
(1 3 3 5)
(1 4)
(1 4 1)
(1 4 1 1)
(1 4 1 2)
(1 4 1 3)
(1 4 1 5)
(1 4 1 6)
(1 4 1 7)
(1 4 2)
(1 4 2 1)
(1 4 2 2)
(1 4 2 3)
(1 4 3)

/G2
/G2/I Direction
/G2/I Direction/Ia Innovating Leadership
/G2/I Direction/Ia Innovating Leadership/Authentic-close leader behaviour
/G2/I Direction/Ia Innovating Leadership/Bias Towards Innovation
/G2/I Direction/Ia Innovating Leadership/Focused Effort Towards Defined Opportunity Spaces
/G2/I Direction/Ia Innovating Leadership/Enrolling Leadership Style
/G2/I Direction/Provides strategic advantage
/G2/I Direction/Provides strategic advantage/External Focus (Sensing)
/G2/I Direction/Provides strategic advantage/Coherent-Emerging Strategy-Vision
/G2/I Direction/Provides strategic advantage/Effective Top Teamwork
/G2/I Direction/Provides strategic advantage/Innovation Goals in Business Plans
/G2/I Direction/Provides strategic advantage/Performance measures assess innovation progress
/G2/I Direction/Provides strategic advantage/Innovation Policies Deployed
/G2/I Direction/Ic Prudent Radicalism
/G2/I Direction/Ic Prudent Radicalism/Comprehensive Analysis of Change Needs
/G2/I Direction/Ic Prudent Radicalism/Openness to 'New' Mind-Sets
/G2/I Direction/Ic Prudent Radicalism/Effective Change Management
/G2/I Direction/Ic Prudent Radicalism/Restructuring of Assets
/G2/II Capacity
/G2/II Capacity/IIa Exceptional Individuals
/G2/II Capacity/IIa Exceptional Individuals/Analysis of Need for Critical Skills
/G2/II Capacity/IIa Exceptional Individuals/Proactive HRM for Recruitment and Retention
/G2/II Capacity/IIa Exceptional Individuals/Able People in Innovation Intensive Roles
/G2/II Capacity/IIb Full Competencies Portfolio
/G2/II Capacity/IIb Full Competencies Portfolio/Analysis of Competencies Needed
/G2/II Capacity/IIb Full Competencies Portfolio/Co-ordinated Competency Development
/G2/II Capacity/IIc Capable Implementation
/G2/II Capacity/IIc Capable Implementation/Effective Transfer to Routine Organisation
/G2/II Capacity/IIc Capable Implementation/Capable Programme and Project Management
/G2/III Culture
/G2/III Culture/IIIa Selective Empowerment
/G2/III Culture/IIIa Selective Empowerment/Management Style Supports Empowerment
/G2/III Culture/IIIa Selective Empowerment/Personal Potential Developed
/G2/III Culture/IIIa Selective Empowerment/'Can-Do' Ethos (Efficacy)
/G2/III Culture/IIIb Innovation Demanded
/G2/III Culture/IIIb Innovation Demanded/High Expectations from Opinion Leaders
/G2/III Culture/IIIb Innovation Demanded/Innovation Goals Set
/G2/III Culture/IIIb Innovation Demanded/Innovation Recognised-Rewarded
/G2/III Culture/IIIb Innovation Demanded/Kaizen institutionalised
/G2/III Culture/IIIc High Enrolment
/G2/III Culture/IIIc High Enrolment/Open 3 way communication
/G2/III Culture/IIIc High Enrolment/Positive Regard (for staff)
/G2/III Culture/IIIc High Enrolment/Committment to Company
/G2/IV Learning
/G2/IV Learning/IVa Continuous learning
/G2/IV Learning/IVa Continuous learning/Enabling Learning
/G2/IV Learning/IVa Continuous learning/Competencies (Generalised) Developed
/G2/IV Learning/IVa Continuous learning/Training in Teamworking and Problem-Solving
/G2/IV Learning/IVa Continuous learning/Knowledge Management
/G2/IV Learning/IVa Continuous learning/Exporatory Dialogue
/G2/IV Learning/IVa Continuous learning/Experimental Initiatives
/G2/IV Learning/Acquiring Multiple Perspectives
/G2/IV Learning/Acquiring Multiple Perspectives/Hearing Specialists
/G2/IV Learning/Acquiring Multiple Perspectives/Hearing 'Out-of-Field' Agents
/G2/IV Learning/Acquiring Multiple Perspectives/Hearing In-Business Agents
/G2/IV Learning/IVc Fruitful linkages

320

(1 4 3 2)
(1 4 3 3)
(1 5)
(1 5 1)
(1 5 1 1)
(1 5 1 2)
(1 5 1 3)
(1 5 1 4)
(1 5 2)
(1 5 2 1)
(1 5 2 2)
(1 5 2 3)
(1 5 3)
(1 5 3 1)
(1 5 3 3)
(1 6)
(1 6 1)
(1 6 1 1)
(1 6 1 3)
(1 6 2)
(1 6 2 1)
(1 6 2 2)
(1 6 3)
(1 6 3 1)
(1 6 3 4)
(1 7)
(1 7 1)
(1 7 2)
(1 7 3)
(1 7 4)
(1 7 5)
(1 7 6)
(1 7 8)
(1 7 9)
(1 7 10)
(1 7 11)
(1 7 12)
(1 7 13)
(1 7 14)
(1 7 15)
(1 7 16)

/G2/IV Learning/IVc Fruitful linkages/Gaining from External Relationships

/G2/IV Learning/IVc Fruitful linkages/Close Customer Relationships
/G2/V Organisation
/G2/V Organisation/Va Apt Organisational Form
/G2/V Organisation/Va Apt Organisational Form/Innovation-Enabling Organisational Design
/G2/V Organisation/Va Apt Organisational Form/Use Of OD Methodologies
/G2/V Organisation/Va Apt Organisational Form/Use of Teams and Ad Hoc Groups
/G2/V Organisation/Va Apt Organisational Form/Inter-Team Co-operation
/G2/V Organisation/Vb Supported champions
/G2/V Organisation/Vb Supported champions/Legitimacy of Champion Role
/G2/V Organisation/Vb Supported champions/Intrapreneuring Attitudes and Skills
/G2/V Organisation/Vb Supported champions/Effective Sponsorship
/G2/V Organisation/Vc High performing NPPD
/G2/V Organisation/Vc High performing NPPD/Managed NPPD Processes
/G2/V Organisation/Vc High performing NPPD/Creative Approaches in NPPD
/G2/VI Decision Making
/G2/VI Decision Making/VIa Guiding Mental Maps
/G2/VI Decision Making/VIa Guiding Mental Maps/Tracking Relevant Possible 'Maps'
/G2/VI Decision Making/VIa Guiding Mental Maps/'Map' Selection and Development
/G2/VI Decision Making/VIb Sound decision processes
/G2/VI Decision Making/VIb Sound decision processes/Fast, Full Information Systems
/G2/VI Decision Making/VIb Sound decision processes/Reliable Decision-Making Processes
/G2/VI Decision Making/VIc Sustained commitment
/G2/VI Decision Making/VIc Sustained commitment/Sustained Senior Management Attention
/G2/VI Decision Making/VIc Sustained commitment/Roadblock Removal
/G2/Non-G2 Factors
/G2/Non-G2 Factors/Systems supportive
/G2/Non-G2 Factors/Outsider challenged
/G2/Non-G2 Factors/Harvesting ideas
/G2/Non-G2 Factors/Clear Values Base
/G2/Non-G2 Factors/Downside of Innovation
/G2/Non-G2 Factors/Creative problem solving
/G2/Non-G2 Factors/Stress
/G2/Non-G2 Factors/Fast-agile
/G2/Non-G2 Factors/Non-compliant
/G2/Non-G2 Factors/Co-operation with Suppliers
/G2/Non-G2 Factors/Creative exploitation of assets
/G2/Non-G2 Factors/Political Sensitivity
/G2/Non-G2 Factors/Special context
/G2/Non-G2 Factors/Resources
/G2/Non-G2 Factors/Higher Consciousness

The table below summarises the content of the qualitative database. Data for
each element in the G2 model are given.
Table A4: node statistics (G2)

Ia

Components

Elements

NUDIST statistics

Innovating
Leadership

(i) Authentic/close
involvement (from
leaders)

Total number of text units retrieved = 66. Retrievals in

46 out of 196 documents, = 23%. The documents with
retrievals have a total of 1634 text units, so text units
retrieved in these documents = 4.0%.

(ii) Bias towards

innovation

Total number of text units retrieved = 64. Retrievals in

43 out of 196 documents, = 22%. The documents with
retrievals have a total of 1715 text units, so text units
retrieved in these documents = 3.7%.

(iii) Focused effort

towards defined
opportunity spaces

Total number of text units retrieved = 68. Retrievals in

37 out of 196 documents, = 19%. The documents with
retrievals have a total of 1367 text units, so text units
retrieved in these documents = 5.0%.

321

Components

Ib

Ic

IIa

Provides
Strategic
Advantage

Prudent
Radicalism

Exceptional
Individuals

Elements

NUDIST statistics

(iv) Enrolling
leadership style

Total number of text units retrieved = 50. Retrievals in

36 out of 196 documents, = 18%. The documents with
retrievals have a total of 1375 text units, so text units
retrieved in these documents = 3.6%.

(i) External focus

(sensing)

Total number of text units retrieved = 94. Retrievals in

27 out of 196 documents, = 14%. The documents with
retrievals have a total of 1409 text units, so text units
retrieved in these documents = 6.7%.

(ii)
Coherentemerging
strategy/vision

Total number of text units retrieved = 324. Retrievals in

55 out of 196 documents, = 28% The documents with
retrievals have a total of 2773 text units, so text units
retrieved in these documents = 12%.

(iii) Effective top

teamwork

Total number of text units retrieved = 77. Retrievals in

43 out of 196 documents, = 22%. The documents with
retrievals have a total of 2190 text units, so text units
retrieved in these documents = 3.5%.

(iv) Innovation goals in

business plans

Total number of text units retrieved = 79. Retrievals in

27 out of 196 documents, = 14%. The documents with
retrievals have a total of 1233 text units, so text units
retrieved in these documents = 6.4%.

(v) Performance
measures assess
innovation prowess

Total number of text units retrieved = 43. Retrievals in

26 out of 196 documents, = 13%. The documents with
retrievals have a total of 1050 text units, so text units
retrieved in these documents = 4.1%.

(vi) Innovation policies

deployed

Total number of text units retrieved = 57. Retrievals in

37 out of 196 documents, = 19%. The documents with
retrievals have a total of 1621 text units, so text units
retrieved in these documents = 3.5%.

(i) Comprehensive
analysis of change
needs

Total number of text units retrieved = 62. Retrievals in

42 out of 196 documents, = 21%. The documents with
retrievals have a total of 1823 text units, so text units
retrieved in these documents = 3.4%.

(ii) Openness to new

mind-sets

Total number of text units retrieved = 61. Retrievals in

30 out of 196 documents, = 15%. The documents with
retrievals have a total of 1558 text units, so text units
retrieved in these documents = 3.9%.

(iii) Effective change

management

Total number of text units retrieved = 46. Retrievals in

30 out of 196 documents, = 15%. The documents with
retrievals have a total of 1142 text units, so text units
retrieved in these documents = 4.0%.

(iv) Restructuring of
assets

Total number of text units retrieved = 41. Retrievals in

26 out of 196 documents, = 13%. The documents with
retrievals have a total of 1457 text units, so text units
retrieved in these documents = 2.8%.

(i) Analysis of needs

for critical skills

Total number of text units retrieved = 43. Retrievals in

27 out of 196 documents, = 14%. The documents with
retrievals have a total of 1271 text units, so text units
retrieved in these documents = 3.4%.

(ii) Proactive HR
policies (recruitment &
retention)

Total number of text units retrieved = 51. Retrievals in

28 out of 196 documents, = 14%. The documents with
retrievals have a total of 1222 text units, so text units
retrieved in these documents = 4.2%.

322

Components

IIb

IIc

IIIa

IIIb

IIIc

Full
Competencies
Portfolio

Capable
Implementation

Selective
Empowerment

Innovation
Demanded

High Enrolment

Elements

NUDIST statistics

(iii) Able people in

innovation intensive
roles

Total number of text units retrieved = 45. Retrievals in

26 out of 196 documents, = 13%. The documents with
retrievals have a total of 1240 text units, so text units
retrieved in these documents = 3.6%.

(i) Analysis of
competencies needed

Total number of text units retrieved = 79. Retrievals in

30 out of 196 documents, = 15%. The documents with
retrievals have a total of 1289 text units, so text units
retrieved in these documents = 6.1%.

(ii) Co-ordinated
competency
development

Total number of text units retrieved = 46. Retrievals in

15 out of 196 documents, = 7.7%. The documents with
retrievals have a total of 606 text units, so text units
retrieved in these documents = 7.6%.

(i) Effective transfer to

routine organisation

Total number of text units retrieved = 60. Retrievals in

24 out of 196 documents, = 12%. The documents with
retrievals have a total of 1235 text units, so text units
retrieved in these documents = 4.9%.

(ii) Capable
programme and
project management

Total number of text units retrieved = 48. Retrievals in

22 out of 196 documents, = 11%. The documents with
retrievals have a total of 1034 text units, so text units
retrieved in these documents = 4.6%.

(i) Management style

supports
empowerment

Total number of text units retrieved = 190. Retrievals in

82 out of 196 documents, = 42%. The documents with
retrievals have a total of 3238 text units, so text units
retrieved in these documents = 5.9%.

(ii) Personal potential

developed

Total number of text units retrieved = 103. Retrievals in

50 out of 196 documents, = 26%. The documents with
retrievals have a total of 2059 text units, so text units
retrieved in these documents = 5.0%.

(iii) 'Can-do' ethos

(efficacy)

Total number of text units retrieved = 59. Retrievals in

39 out of 196 documents, = 20%. The documents with
retrievals have a total of 1383 text units, so text units
retrieved in these documents = 4.3%.

(i) High expectations

from opinion leaders

Total number of text units retrieved = 44. Retrievals in

32 out of 196 documents, = 16%. The documents with
retrievals have a total of 1177 text units, so text units
retrieved in these documents = 3.7%.

(ii) Innovation goals

set

Total number of text units retrieved = 41. Retrievals in

30 out of 196 documents, = 15%. The documents with
retrievals have a total of 1303 text units, so text units
retrieved in these documents = 3.1%.

(iii) Innovation
recognised
rewarded

Total number of text units retrieved = 73. Retrievals in

56 out of 196 documents, = 29%. The documents with
retrievals have a total of 2274 text units, so text units
retrieved in these documents = 3.2%.

(iv) Kaizen
institutionalised

Total number of text units retrieved = 59. Retrievals in

32 out of 196 documents, = 16%. The documents with
retrievals have a total of 1213 text units, so text units
retrieved in these documents = 4.9%.

(i) Open 3 way

communication

Total number of text units retrieved = 71. Retrievals in

46 out of 196 documents, = 23%. The documents with
retrievals have a total of 1538 text units, so text units
retrieved in these documents = 4.6%.

323

Components

IVa

IVb

IVc

Continuous
Learning

Acquiring
Multiple
Perspectives

Fruitful Linkages

Elements

NUDIST statistics

(ii) Positive regard (for

staff)

Total number of text units retrieved = 55. Retrievals in

39 out of 196 documents, = 20%. The documents with
retrievals have a total of 1416 text units, so text units
retrieved in these documents = 3.9%.

(iii) Commitment to
company

Total number of text units retrieved = 44. Retrievals in

33 out of 196 documents, = 17%. The documents with
retrievals have a total of 1238 text units, so text units
retrieved in these documents = 3.6%.

(i) Enabling learning

Total number of text units retrieved = 46. Retrievals in

28 out of 196 documents, = 14%. The documents with
retrievals have a total of 1415 text units, so text units
retrieved in these documents = 3.3%.

(ii) Competencies
(general) developed

Total number of text units retrieved = 76. Retrievals in

50 out of 196 documents, = 26%. The documents with
retrievals have a total of 2061 text units, so text units
retrieved in these documents = 3.7%.

(iii) Training in
teamworking and
problem-solving

Total number of text units retrieved = 58. Retrievals in

31 out of 196 documents, = 16%. The documents with
retrievals have a total of 1277 text units, so text units
retrieved in these documents = 4.5%.

(iv) Knowledge
management

Total number of text units retrieved = 67. Retrievals in

40 out of 196 documents, = 20%. The documents with
retrievals have a total of 2200 text units, so text units
retrieved in these documents = 3.0%.

(v) Exploratory
dialogue

Total number of text units retrieved = 74. Retrievals in

39 out of 196 documents, = 20%. The documents with
retrievals have a total of 1548 text units, so text units
retrieved in these documents = 4.8%.

(vi) Experimental
initiatives

Total number of text units retrieved = 56. Retrievals in

24 out of 196 documents, = 12%. The documents with
retrievals have a total of 1341 text units, so text units
retrieved in these documents = 4.2%.

(i) Hearing specialists

Total number of text units retrieved = 44. Retrievals in

31 out of 196 documents, = 16%. The documents with
retrievals have a total of 1223 text units, so text units
retrieved in these documents = 3.6%.

(ii) Hearing 'out of field

agents'

Total number of text units retrieved = 47. Retrievals in

29 out of 196 documents, = 15%. The documents with
retrievals have a total of 1433 text units, so text units
retrieved in these documents = 3.3%.

(iii) Hearing
'in-business agents'

Total number of text units retrieved = 64. Retrievals in

42 out of 196 documents, = 21%. The documents with
retrievals have a total of 1402 text units, so text units
retrieved in these documents = 4.6%.

(i) Gaining from

external relationships

Total number of text units retrieved = 46. Retrievals in

21 out of 196 documents, = 11%. The documents with
retrievals have a total of 705 text units, so text units
retrieved in these documents = 6.5%.

(ii) Close customer

relationships

Total number of text units retrieved = 130. Retrievals in

65 out of 196 documents, = 33%. The documents with
retrievals have a total of 2403 text units, so text units
retrieved in these documents = 5.4%.

324

Va

Vb

Vc

VIa

VIb

Components

Elements

NUDIST statistics

Apt
Organisational
Form

(i)
Innovation-enabling
organisational design

Total number of text units retrieved = 75. Retrievals in

49 out of 196 documents, = 25%. The documents with
retrievals have a total of 1948 text units, so text units
retrieved in these documents = 3.9%.

(ii) Use of OD
methodologies

Retrievals in 42 out of 196 documents, = 21%. The

documents with retrievals have a total of 1950 text units,
so text units retrieved in these documents = 4.7%.

(iii) Use of teams and

adhoc groups

Total number of text units retrieved = 147. Retrievals in

78 out of 196 documents, = 40%. The documents with
retrievals have a total of 3376 text units, so text units
retrieved in these documents = 4.4%.

(iv) Inter-team
co-operation

Total number of text units retrieved = 52. Retrievals in

33 out of 196 documents, = 17%. The documents with
retrievals have a total of 1210 text units, so text units
retrieved in these documents = 4.3%.

(i) Legitimacy of the

champion role

Total number of text units retrieved = 46. Retrievals in

32 out of 196 documents, = 16%. The documents with
retrievals have a total of 1182 text units, so text units
retrieved in these documents = 3.9%.

(ii) Intrapreneuring
attitudes and skills

Total number of text units retrieved = 40. Retrievals in

22 out of 196 documents, = 11%. The documents with
retrievals have a total of 892 text units, so text units
retrieved in these documents = 4.5%.

(iii) Effective
sponsorship

Total number of text units retrieved = 46. Retrievals in

27 out of 196 documents, = 14%. The documents with
retrievals have a total of 973 text units, so text units
retrieved in these documents = 4.7%.

(i) Managed NPPD

Total number of text units retrieved = 85. Retrievals in

32 out of 196 documents, = 16%. The documents with
retrievals have a total of 1511 text units, so text units
retrieved in these documents = 5.6%.

(ii) Creative
approaches in NPPD

Total number of text units retrieved = 228. Retrievals in

42 out of 196 documents, = 21%. The documents with
retrievals have a total of 1890 text units, so text units
retrieved in these documents = 12%.

(i) Tracking possible

relevant possible
maps

Total number of text units retrieved = 57. Retrievals in

24 out of 196 documents, = 12%. The documents with
retrievals have a total of 1335 text units, so text units
retrieved in these documents = 4.3%.

(ii) Map selection and

development

Total number of text units retrieved = 172. Retrievals in

41 out of 196 documents, = 21%. The documents with
retrievals have a total of 2001 text units, so text units
retrieved in these documents = 8.6%.

(i) Fast/full information

systems

Total number of text units retrieved = 54. Retrievals in

27 out of 196 documents, = 14%. The documents with
retrievals have a total of 1203 text units, so text units
retrieved in these documents = 4.5%.

(ii) Reliable
decision-making
processes

Total number of text units retrieved = 65. Retrievals in

34 out of 196 documents, = 17%. The documents with
retrievals have a total of 1424 text units, so text units
retrieved in these documents = 4.6%.

Supported
Champions

High Performing
NPPD

Guiding Mental
Maps

Sound Decision
Processes

325

VIc

Components

Elements

NUDIST statistics

Sustained
Commitment

(i) Sustained senior

management attention

Total number of text units retrieved = 45. Retrievals in

28 out of 196 documents, = 14%. The documents with
retrievals have a total of 1278 text units, so text units
retrieved in these documents = 3.5%.

(ii) 'Roadblock'
removal

Total number of text units retrieved = 44. Retrievals in

27 out of 196 documents, = 14%. The documents with
retrievals have a total of 1066 text units, so text units
retrieved in these documents = 4.1%.

326

Appendix 5
The innovation capability audit

G2 V2.8

HOW INNOVATIVE IS YOUR ORGANISATION?

In any firm it is important for new ideas to emerge and (if they a good ideas)
they need to be applied quickly and effectively - for the benefit of customers,
employees and owners.
We call this process innovation. This questionnaire will provide information
needed to strengthen innovation in your company.
Please fill out this questionnaire with care and honesty - the intention is to benefit
everyone. Individual results are never identified by name and are strictly
confidential.
Below you will find a definition of the company being reviewed by this survey.
Keep this in mind throughout. (If the box has not been completed please define
the part of the company that you are reviewing in the box before you proceed
further).

INSTRUCTIONS FOR COMPLETION

Below you will find 56 statements. Look at each statement and circle the
appropriate number in each case.
Please answer each statement - even if you give a subjective opinion.
The statements may appear to be repetitive - but there are subtle differences
between them - so consider each item separately.
It helps us to analyse the results if we know what level you are in the firm. Please
tick your job category below
ARE YOU A
Owner / Top Manager
Senior Manager
Manager
Craftsman / Technician
Core Worker - Operator
Other (please state)

Tick here

G2 V2.8

Look at each statement and circle the appropriate response in each case:This statement is true:
1
2
3
4
5
6

to little or no extent
to a slight extent
to a moderate extent
to a great extent
to a very great extent
totally

This company searches for very creative people to fill key jobs

123456

There is excellent communication everyone talks to everyone

123456

People are expected to develop new ideas - its part of the job

123456

A great deal of time is spent planning how this firm needs to change

123456

The new recruits who join the firm bring lots of ideas

123456

I can talk openly to senior managers

123456

Co-operation between teams enables problems to be solved quickly

123456

Managers frequently ask employees for ideas

123456

From time to time managers survey everyone to find out

how the firm could improve

123456

10

You can rely on top managers to support new ideas

123456

11

There are very talented people in all key jobs

123456

12

People have been trained to solve problems in teams

123456

13

Customers are actively involved in the development of new products

123456

14

People frequently get together to discuss ideas

123456

15

Projects are managed very effectively

123456

16

People are evaluated on whether they implement new ideas successfully

123456

17

This company is developing the capabilities needed

to succeed in the future

123456

Managers are always looking for ways to encourage

fresh thinking about how things are done

123456

Top management direct peoples efforts to where new ideas are needed
to help the firm move forward

123456

Lots of people are involved in thinking about what could be done

to develop the firm

123456

We often try experiments to learn from trial and error

123456

18
19
20
21

G2 V2.8

22

The companys leader is tough on anything that blocks change

123456

23

New ideas and techniques are carefully studied

to see whether they should be adopted

123456

Individuals are encouraged to take initiatives themselves

- providing they operate within guidelines

123456

25

Almost everyone welcomes change in this company

123456

26

Ideas are rapidly implemented across the firm

123456

27

The way the company is structured helps - not hinders new ideas to be implemented

123456

28

Top managers inspire all employees to be creative

123456

29

The top management group operate as an effective team

123456

30

Top managers take personal responsibility for major initiatives

123456

31

Those who develop new products and processes

are very creative

123456

People from outside the firm are invited to question the way
we do things to help us to re-think what we do

123456

33

People who drive through changes are given respect

123456

34

People with new or different ideas are greatly valued

123456

35

There is a clear plan to develop the firm

123456

36

Everyone understands what contribution they can

make to help the company move forward

123456

Decisions about launching a new product (or service)

are only taken after careful consideration

123456

People with good ideas can get the resources needed

to implement their proposals

123456

39

Temporary teams are formed to get new things done

123456

40

A great deal of time is invested in developing peoples skills

123456

41

We implement the principle that lots of small ideas, taken together

are a good way to help the firm to develop

123456

If one person has specialist knowledge (anywhere in the firm)

others can quickly access it

123456

43

Effective planning takes place before changes are introduced

123456

44

We all work to a business plan that sets challenging objectives

123456

45

If needed, major changes will be implemented quickly

123456

24

32

37
38

42

G2 V2.8

46

People with up-to-date skills are highly valued

123456

47

We have frequent contacts with industry associations,

universities, consultants etc.

123456

This firm can take an idea and quickly turn it into something
that customers want to buy

123456

People in this firm are committed to a clear path to progress

(e.g. total quality management, e-commerce etc.)

123456

The firms information systems enable fast and effective

decisions to be made

123456

When something new needs to be done people can have all the
training that they need to get them up-to-speed quickly

123456

52

In this company there is genuine respect for each employee

123456

53

There is a can-do spirit in this firm

(people feel able to get things done)

123456

54

People are encouraged to develop their self confidence

123456

55

Recently there has been a review of whether this firm is making

best use of new technologies

123456

Everyone is open to new ways of thinking

123456

48
49
50
51

56

331

Appendix 6
List of companies and individuals
contributing to the research
A list of companies and individuals contributing to the research is given
below. In some cases, by the request of the company, the name has been
disguised. In many cases several interviews and/or focus groups took place
within each company. Permission was given by the DTI for companies in the
Partnerships with People database to be used for this research on a
confidential basis. These are marked with a * below. A brief rationale is given
for the inclusion of other companies in the sample
ABC Construction Plc.............................................. Introduced resource planning
Abingdon Kindergarten*
Airedale Springs Ltd*
Anglian Water Services Ltd*
Anita Lo .................................................................................................Change agent
Appor Ltd*
Aresty Institute.....................................................................................Change agent
Aylesford Newsprint Ltd*
Balfour Beatty Civil Engineering Ltd*
Bartle Bogle and Hegarty Plc*
Baxi Partnership Ltd*
Benihana of Tokyo (London Unit)...............................Harvard case as innovator
Bernard Matthews Plc*
Birds Eye Ltd*
Brick and Tile Ltd*
Britannia Label and Print Ltd*
Britannia Music Co Ltd*
British Chrome and Chemicals Ltd*
British Airways Plc*
Bull Information Systems Ltd*
Case & Sons Ltd*
Cola Inc.........................................................................................................FT feature
Colt International Ltd*
Concord Sylvania Lighting Ltd*
Construction Plc .............................................Construction process improvement

332

Dartington Crystal Ltd*

David Crawford ...................................................................................Change agent
Domnick Hunter Ltd*
Dunlop Cox Ltd*
East-West Insurance Hong Kong .........................Market leader in new segment
Elida Faberg UK Ltd*
Elkay Electric Ltd*
Elmwood Sensors Ltd*
Energy Research Ltd............................................................ World-class laboratory
Express Engineering Ltd*
Facilitate Inc........................................................................Process innovation (MIS)
Fastech Ltd*
FMCG BV ............................................................. INSEAD case study as innovator
Games Inc ..................................................... 2nd to market leader in new segment
GSM Graphic Arts Ltd*
Gt Western Packaging Ltd................................. Recommended by Business Link
Hansonne BV...........................................Market leader in science-based industry
Hay Consulting Ltd*
Herga Electric Ltd*
Heywood Williams Ltd*
Hip-Hop Club....................................................................... Pioneer in new market
Hosiden Besson Ltd .......................................New Product Development process
Howbess Environmental Ltd ............................ Recommended by Business Link
HP Computer Peripherals Ltd*
IDV Ltd*
Industrial Research Institute............................................................. Change agents
Integrated Systems Ltd*
International Hotel........................................Strategic commitment to innovation
Island Records Ltd*
J&J Orthopaedic Ltd*
Jakarta Land.......................................................................... Pioneer in new market
Jardine Engineering Corporation...............Strategic commitment to innovation
Jardine Fleming ........................................Innovation award for financial services
Jasper GuilderChange Agent ........................................................Change agent
Johnson Controls Ltd*
Karimore International Ltd*
Kay O'Neill Ltd*

333

Kwik-Fit Holdings Plc*

La Merdera CafeCaracas..........................Strategic commitment to innovation
Labelgraphics (Glasgow) Ltd*
Leyland Trucks Ltd*
LGG Charlesworth Ltd*
Litton Interconnect Ltd*
Londonderry Farm Equipment Ltd .........................NORWESCO recommended
Lui Hong-Tuang .................................................................................Change Agent
McCormick Consulting Hong Kong................................. Pioneer in new market
MTRC Hong Kong......................................Highly rated underground rail (1996)
New Dimension Painters Ltd*
Nortel Ltd*
NE Enterprises...................................................................... World-class laboratory
New York Police Department............................................ Innovative police force
Oscar David..........................................................................................Change Agent
Ove Arup Plc*
Perfumes International Plc.............................................................Company report
PowerCo (Company Document) ....... Customer service process re-engineered
Print 'n Press Ltd*
Public Relate Co Ltd......................................................Reputation amongst clients
Reliance (Hong Kong)......................................................... Pioneer in new market
Ritchie Bent ...........................................................................................Change agent
Sears Roebuck Inc .........................................Strategic commitment to innovation
SmithKline Beecham R&D ..........................Strategic commitment to innovation
Spa Health Club, Kowloon .....................................................New age health club
Terry Hutton.........................................................................................Change agent
Thames Water Plc................................................................................... FT comment
Tinsley Wire Ltd*
TR Fastenings Ltd*
United Distillers Plc .......................................Strategic commitment to innovation
Wrigley Company Ltd*
Zat Plc.................................................................Market leader through innovation

334

Appendix 7
Letter from Fleming Agri-Products Ltd.

335

336

337

Appendix 8
Innovation capabilitya universal or
contingent attribute?
As discussed in Section 2.8, both the G1 and the G2 reference models were
developed as a unitary framework but, as such, their utility was questionable.
It is known that organisational forms vary (Woodward, 1970) and various
contingency models have been proposed. Suggested contingency factors
include size, age of firm, national culture, market diversity, technology, type
of innovation, masculine/feminine disposition, competitive strategy, rate of
industry change, degree of predictability of routines, industry history, value
systems of the firm's power elite. Innovation capability could vary by these, a
combination of these, or other, contingency dimensions.
The data set provided an opportunity to begin to explore whether innovation
capability was best considered as having an universal set of attributes, or
whether it needed to be viewed from a contingency perspective. Only a small
number of 'lightweight' caselets could be examined and the conclusions of
this aspect of the research must be regarded as indicative and tentative.
The contingency model selected was that of Mintzberg et al. (1998b). The
researcher had the opportunity to study one example of each of these six
organisational configurations. The cases selected for detailed analysis were
(names and details have been disguised at the request of the firms):
Table A8.1: organisational configurations
Configuration

Case selected

Study undertaken

Entrepreneurial form

Quintock Estatesa company run by the

founding entrepreneur that has built a
successful property business.

3 days observation of the entrepreneur

assessing the development
opportunities of a newly purchased
estate (participant observation)

Machine form

Rely Railan underground railway

company.

2 days interviewing directors and staff

concerned with the introduction of a
new safety management system (survey)

Professional form

Alb Consultantsa firm of strategy and

management consultants.

6 days working with the professionals in

the firm to review strategy and formulate
a revised strategic and organisation
development plan (action research)

338

Configuration

Case selected

Study undertaken

Diversified form

Generic Holdingsa corporation with 5

strategic business units.

8 days working with the top team in Sven

Freight to review strategy and formulate
a revised strategic and organisation
development plan (action research)

Innovative form

Cooker Workshopa team established

for one week to design a new range of
cookers.

5.5 days working as the facilitator of the

event (action research)

Missionary form

Holistic Holidaysa company that offers

alternative holidays in Greece and
India.

12 days observation and interviews with

directors and staff members repeated
twice (participant observation)

An analysis was undertaken to assess how innovation capability was

demonstrated in each of the organisational forms.

339

8.1

Innovation in an entrepreneurial organisation

(simple structure)

In July 1997 Quintock Estates purchased the Jolly Estate in North Wales. This
was the fifth estate that Quintock Estates had purchased. The founder of the
company, Harry Quintock allowed this researcher to follow him for three
days whilst he met with farmers, land owners, representatives of the local
enterprise board, quarrying firms and local entrepreneurs. HQ was keen to
develop an innovate strategy to exploit the newly acquired asset. He made
the following comments about his business approach:
"Management and other capabilities are not separate in my
business: they are tied in. I have major opportunities in relation
to finance. If we wanted to we could lay hands on several
million pounds. I run a small business that has become a large
business. There isn't a strategic capability at the topapart from
myselfnor is there a depth of management in the middle. We
don't have enough managementwe have the knowledge and
the capital. Our focus is on tangible assets. Land is the most
stable assetthey are not making any more! No one can
compete with you. But I knew bugger all about agriculture
when I brought my first estate in Wales: but I did know about
tenants. They are, if you are careful, unpaid caretakers and they
improve your property. Also it's tax free. We also know that
tenanted property is not seen as an attractive investment by
mostthe average rate of return for estates is below 4%. It
seemed to me that the model of tenancy was a good
onewhere we do far better than 4%. The old model was to let
a farm for generations for next to nothing. That makes no
sense. My strategy was to find bright ways try to release the
store of value in the asset. The Jolly purchase required a new
strategy. We want to find opportunities to do things that
farmers don't think of. The Jolly required a major strategic
change. The major problem is finding the time to find
opportunitiesbut, more importantly, to make things happen.
It requires energyusually my energyand that is the thing
that is scarce. The Jolly was the first vacant possession estate
that we had brought. It was the first sizeable farm that we had
brought."
A tension between HQ's desire to adopt an innovative strategy and his wish
to limit his personal commitment is clear. This tension underlies much
strategic decision-making in Quintock. HQ defines himself as the agent of
strategy, management and problem-solving in the business. Again this is
recognised; as he said "I've run a small business that has become a large
business. There isn't a strategic capability at the topapart from myselfnor

340

is there a depth of management in the middle. We don't have enough

managementwe have the knowledge and the capital."
HQ's prowess as a decision-taker in asset exploitation opportunities has
received positive comment in the business press. The tacit nature of his
decision-making process was apparent: as HQ said regarding the purchase of
the Jolly (a 1m investment) "It was much of a hunch. It smelt right. I don't do
complex sums."
HQ spent most of the time he was observed defining and testing the shape
and nature of the 'opportunity space' provide by the new estate. This evolved
with learning and considering the impact of external factors, some of which
were unpredictable or speculative. This is shown conceptually in Figure A8.1
below.
Potentially
Disadvantageous

Potentially
Advantageous

Unknown
opportunity
space

Decisions
Today

ize
d se
n
a
rn
d
Lea n and avoi
r
a
e
L
Avoid

Define and expl

W
oit
Wa ait, defi
ne an
it, d
d av
efin
oid
ea
nd
exp
loit

Known
opportunity
space

Possible
opportunity
space

Figure A8.1: clarifying opportunity space

Decisions were taken by HQ, or postponed, as the researcher observed.

These were generally (approximately 11 decisions out of 18) based on

341

hard-to-make assessments where data was difficult to obtain, untrustworthy

or contradictory. It was significant that learning was needed (especially in
relation to 'unknown' opportunity space). The decision-making process was
made more intricate as some decisions/commitments either opened
opportunities or closed them at some points in the future. Even this was
speculative as the impact of decisions could not always be predicted. The
opportunity space presented by the Jolly Estate was defined over a three day
period. Complex trade-offs were made as illustrated by Figure A8.2 below.
On the vertical axis of the chart there is the extent to which HQ and his
organisation are believed to possess the necessary competencies. On the
horizontal axis are positioned (very approximately) the likely economic
returns.
New
Competencies
Required

Zone D

Roadside
Little Chef
(turn-off
from road)

Zone F
Fishing
Holiday
Facilities

Environmental
Power
Generation

Zone B
Exploitation of
Mineral Rights

Fishing
Lake

Zone C
Summer
Lets for
Grass
Parks

Land Fill
Site

Zone A
Sale of
Properties
Existing
Competencies
Sufficient

Road
Tolls

High
Probability
of High
Economic
Returns
Figure A8.2: exploitation options

Craft
Workshop
Development

Forestry

Property
Tenants

Long Term
Farm Lets
Shooting
Rights

Zone E

Low
Probability
of High
Economic
Returns

342

HQ's definition of opportunity space (portfolio of opportunities) was divided

by the researcher into six 'zones' (A to E). Different exploitation strategies
were determined by HQ for each of the zones, although he was not conscious
of this at the time. This diagram was shown to HQ who remarked "I hadn't
realised it but that's the way that I think. It's relating everything to
everything else that is the hard part. Just deciding what to do about one of
the things is easy. Getting the right mix is what it is all about. But the key
thing for me is actually getting the things done as they need to be done
without me being constantly on someone's back and nagging them. I don't
have the time. It's got to be the right thing, the prudent thing, the yielding
thing and the do-able thing". It is, perhaps, significant that HQ spent several
hours redrawing the chart as he said "if I can get it right the whole thing
becomes more manageable".
In total, 14 categories of uses for the Estate and related assets were identified.
These are shown on the chart. Some of these uses were practised at the time
of the research and some were speculative. HQ faced the task of deciding the
best uses for the assets, knowing that some uses for some assets might
preclude others. For example, letting land for farming on a long-term let
might prevent the later use of the land for mineral extraction or developing a
fishing lake.
From an innovation process perspective, it is generally considered that a form
of innovation funnel is the most efficient way to conceptualise the innovation
process (Ciborra and Patriotta, 1998). In this case the notion of an innovation
funnel was simplistic. HQ was attempting to create a total business model and
he avoided seeing innovation initiatives in isolation. Moreover, the
innovation process for Quintock was characterised by an independence of
thought, willingness to learn and periodic intransigence. HQ took a pride in
exploiting an opportunity that others had missed. He juggled a complex set of
personal and business factors including his own interest, judgements about
the suitability of potential partners, legal options and creative choices. HQ
conformed well to Mintzberg's description of the entrepreneur. His
organisation, being highly dependent on him, was, indeed, a simple structure.

343

8.2

Innovation in an machine organisation (machine

bureaucracy)

Rely Rail is a government-owned corporation that operates a city mass transit

railway. In 1996 the researcher had the opportunity to interview directors and
staff who had introduced a new safety management methodologyan
innovation in process for the corporation.
The corporation's documentation contained the following mission and values
statement: "safety is of paramount importance. We do everything we can to
reduce risks to a minimal level. No-one in the Rely Rail can be
complacentrunning a railway is inherently dangerous and incidents occur.
Our mission is to manage risks so that accidents will be infrequent and cause
the least possible damage. Safe operation requires constant vigilance. An
unlikely combination of circumstances can prove to be catastrophic. A task
may be completed 10,000 times correctly and then a momentary lapse of
attention causes a major accident."
Like other railways, until 1990 Rely Rail had adopted a policy towards safety
that was 'compliance driven'meaning that railway management's objective
was to meet the requirements of external regulators. Analysis of major
accidents and experience in other industries (especially in chemical
manufacture) showed that a compliance-driven approach provided only a
basic safety standard. More was needed. Accordingly, an innovative 'risk
management' policy was adopted by Rely Rail in 1995 to assess all hazards in
the existing railway. A total of 541 potential hazards were identified and
individually assessed93 of these were ranked as 'unacceptable' and
remedial action taken in each case.
The new safety management system at Rely Rail was based on five principles:
1. Safety management must be proactiveaiming to prevent accidents that
have not yet happened
2. Management effort must be focused on specific safety objectives11
crucial safety tasks were monitored
3. Everyone running the railway must have personalised and documented
safety responsibilities and receive comprehensive safety training

344

4. There must be a climate of active safety awareness in every part of the

Rely Rail's operationsfrequent communication was essential
5. Safety was too important to be left to an individual's discretionvigorous,
painstaking and impartial monitoring was essential.
The development of the new policy and practices for safety management is
illustrated in Figure A8.3 below:
Ministry
of
Transport

Top Team

Partnership formed with

Government Rail
Inspector
Global
Safety
Seminar

Safety
Working
Group

Recruitment
of New
Safety
Director

Working
Group
given
Terms of
Reference

Management
Forum

Extensive
Study
Trips and
Seminars

Several
Consulting
Groups
Used

Policy Agreed

Top Team
Review
Initial Report
and
Presentation
SOPs Developed
by Function Heads

Briefing
to
Managers

Training and
Communications
Planned

Staff
Roll-out to Staff

Staff Reps join

Working Group

1993

1994

1995

Figure A8.3: an example of process innovation

The implement of new policies and procedure took two years and was
initiated by a seminar on 'trends in global safety' given by an external
specialist consultancy. The new approach was rolled-out in 1995. Key features
of this process innovation are shown in Figure A8.4 below.

345

Active Involvement
of Decision-Makers
and Opinion Leaders

Recruitment of 'Heavy
Weight' Safety
Director

Ownership of
Project by The
CEO and Top
Team
Learning and
Exemplars for all
Actors

Formation and
Empowerment of Ad
Hoc Group

Project Management of the

Change Process
Figure A8.4: elements of a process innovation

There was a high degree of interdependency between these six elements in

this example of a process innovation. One of the respondents commented
that "getting all of the things right is like links in a chain, if one is weak the
whole thing falls down. If you introduce change in an organisation like this it
can be done but you have to do it right. It has to be thought through and in a
form that people expect. There are a lot of people who can make a
contribution. There is a lot of accumulated expertise here. We need to get that
input but in a way that we can cope with. It's all too complex to do
willy-nilly."
Rely Rail was undertaking multiple process innovations at the same time as
this example. The initiative described had high visibility and was driven by
the top management group. However, it was described as "following a typical
route. This is the way that we make changes here. If things are done well they
are implemented without a problem. But the process has to be right".
Rely Rail was a machine type of organisation from the perspective of
Mintzberg's organisational forms. Roles were very clearly defined and

346

individuals were held accountable, sometimes in law, for the fulfilment of

their defined responsibilities and tasks.

8.3

Innovation in an professional organisation

(professional bureaucracy)

Alb Consultants specialise in strategy formation and are based in Boston,

USA. The company had 15 consultants in 1997, most of whom had senior
management experience and were trained at one of the premier Business
Schools in the USA. They were founded by Alan Bloomberg, Lou Stein and
Bernard Rudge in 1979 and the company title contained the initials of their
first names. At the time of the research investigation in 1997 the Chief
Executive Officer was Dr Rudge, the other two founders having retired
recently. The company was established to apply strategic positioning theory
(this was new at the time) and had a successful track record of working with
major clients around the world.
Dr Rudge conducted a strategic appraisal of business in 1996 and noted that
more than 50% of global consulting revenues went to the top 30 consulting
firms in 1996the industry was being increasingly dominated by large
players. He also observed that the products and services offered by Alb were,
to use his expression, "stuck in a bit of a time warp".
Dr Rudge invited this researcher to conduct a strategy development
programme for his company based on Francis (1992). In total, six days were
spent on this process with all 15 consultants present over two long-weekends.
The aim was to develop 'a deep consensus about Alb's ends and means for
the future of the business'.
Ten four-hour mini-workshops were held. They covered industry scenarios
(including technologies), market dynamics, structural profitability,
competitors, external perspectives, values, strategic ideas, strategic options,
competitive strategy and implementation commitment. The workshops
provided a structure for the strategic development process requested by the
company's CEO.
During the first session of the initial workshop this researcher invited each of
the participants to say where s/he believed that Alb should develop in the

347

next five years. The participants (individually) were asked to assess the
degree of change needed and whether Alb should move towards a packaged
or interdependence offer. Figure A8.5 below maps the result of this exercise.

Radical
Change
Needed
14

3/9/11

1
2
4/6

8/15
7/10

Incremental
Change
Needed

5/12

Superior
Packaged
Products

13

High Degree of
Client
Interdependence

Figure A8.5: participants' perceptions of opportunities

The numbers represent the status of the informants. 1 was the CEO, 2-5 were
principal consultants, 6-11 were senior consultants and 12-15 consultants. The
arrows indicate how much each participant believed that s/he had moved in
the preceding 3 months. There was a wide diversity of view that was also
present when the same exercise was conducted with other parameters
including market focus, industry specialisation, functional specialisation,
delivery methodologies, team approaches etc.
Following the strategy development process the same exercise was
conducted at the end. The map that was produced is shown in Figure A8.6
below.

348

Radical
Change
Needed

4/14
10
12

1/2/3/5/6/8/
9/11/15
13

Incremental
Change
Needed
Superior
Packaged
Products

High Degree of
Client
Interdependence

Figure A8.6: opportunities following discussion

The result of this, and similar, exercises suggested that the consultants' views
about the future direction for the consultancy had become more closely
aligned through the workshop process. There was a risk that social pressure
tended to accentuate the degree of consensus that had been achieved but a
year later the CEO invited this researcher back and said that the experience of
working as a team for six days "had been a turning point. We now know
where we need to invest and how we can take on those big suckers like
Andersons and give them a run for their money. Because everybody was
there, and in tune with the thinking, there's an understanding. Beth could be
in Saudi and Tom in Maine but they both do it the Alb way and they help
each other. There a lot of investment going on to develop our skills and niche
specialities. That's coherent now. We even spend a day, a full day, going
through the workshop stuff with all the new hires. And I've had the key flip
sheet framedit's there on my wall".
Alb was a professional type of organisation from the perspective of
Mintzberg's organisational forms. Roles were broadly and comprehensively

349

defined and individuals encouraged to apply their expertise flexibly for each
different (complex) situation.

8.4

Innovation in an diversified organisation

(divisionalised form)

Generic Holdings is a corporation with 5 strategic business units (SBUs), one

of which was Svenis Sea and Air, a global shipping service for freight and
general cargo. The other SBUs are in military communications, facilities
management, mining operations and earth-moving equipment sales. It was
not considered that there are extensive synergies between the SBUs, although
inter-SBU trading was encouraged providing goods and services were
brought at the market rate.
Svenis Sea and Air invited this researcher to undertake a similar development
programme to that undertaken with Alb consulting. This was undertaken
with the Managing Director and members of the top team in the SBU8
people in total. In addition, 11 middle and junior members of staff became
involved in related project work. At the end of the second three day
workshop the following diagram (Figure A8.7) was prepared by the group:
Real Time
Goods-in-Transit
Tracking

Seamless IT
Links with
Customers

LOCAL ADAPTATION

Small Business
Mentality
Proven
Value-Adding
Service

Superior
Global IT
Systems

Frequent
Benchmarking
Opportunist
Culture in
Prospecting
and
Marketing

Exploit
Buying
Power

Superior
Cost
Structures to
Rivals

Superior
Customer
Service
Total
Quality
Philosophy

GLOBAL VISION

Disciplined
Organisation
Benefical
Strategic
Alliances

Figure A8.7: balancing global and local requirements

100%
Quality
Systems

Enforced
Performance
Standards

350

This graphic represents the group's 'new formula for success' as they
described it. They saw their key management challenge to 'handle the tension
between the merits of globalisation and the merits of localisation'. The five
attributes shown in the circles were where they believed that the firm needed
to have proven superiority in the industry. Some of the initiatives required
are also shown on the diagram (the others are confidential).
Following the strategy development workshop the Managing Director and
two senior directors prepared for a half-day session 'with corporate'. They
developed a presentation called 'our formula for success'based on the work
shown above but elaborated extensively. This researcher was able to observe
the encounter. Corporate representatives were the Group CEO, Group
Finance Director and Group Strategic Planning Director.
At the meeting between corporate and the senior managers from Svenis Sea
and Air the following was noted:
0757

Introductory comments by the Group CEO saying that he was looking

forward to the session and thanking the Svenis Sea and Air team for
their "hard work".

0801

Svenis Sea and Air MD gives presentation using a video projector. He

describes industry, market and competitive forces and then gives 'our
formula for success'. The presentation was heard in silence, except for
two questions of clarification.

0932

The Group CEO says "that was interesting but let's kick it to see if it
stands up!"

0933

Group CEO, Group Finance Director and Group Strategic Planning

Director, in turn, ask a series of questions that they noted on their
pads. The Svenis Sea and Air team try to answer, but admit that in
various areas it will be "a question of faith".

1003

Coffee break

1007

Questions and answers continue.

1111

Coffee break

1118

Group CEO says to Group Finance Director and Group Strategic

Planning Director "Well if we don't do what these guys say they want
to do, do we have any better ideas?".

1119

Group Finance Director and Group Strategic Planning Director say that
they "can sign up to the plan" but the Group Strategic Planning
Director says that she wants to "run it past a couple of consulting teams
to do a sanity check".

1124

Group CEO asks "what do you need from us?"

351

1125

Svenis Sea and Air MD goes to a white board and says "Great. This is
our very provisional development plan. We need some help from the
other divisions.". He draws a flow-chart plan and all the directors
gather round the board and work together to develop a revised plan.

1202 Still at the white board the Group CEO says "looks good. Will you get
back to me with the key parameters in a measurable form. We can
only do this if we have a suite of criteria and measures that we can
trust. And I'll hold you to thesebut you know that" (everyone
laughs).
1204

Break for lunch

The analysis of the record of this conversation suggests that the corporate
officers were seeking to pursue three agendas at the same time. They wanted
to encourage the division to be innovative in ways that would create value.
They wanted to stop unwise innovation and other imprudent acts. They also
wanted a structure of control in place so that the division's activities could be
monitored comprehensively.
On the drive back to the Svenis Sea and Air offices the three directors were
elated. They went over the encounter for more than an hour and the MD said
"I'm going to ring every member of the gang tonightthey'll all be tickled
pink". During the following two weeks meetings were held every day in the
MD's office (not observed) and a detailed programme plan was put to the
corporate trio, who accepted the revised plan, made funding available and
facilitated the development of partnerships with other operating divisions.
Svenis Sea and Air was a diversified type of organisation from the perspective
of Mintzberg's organisational forms. The SBU knew its market and developed
innovation proposals that were negotiated with corporate offices. At group
level a complex series of trade-offs were made.

8.5

Innovation in an innovative organisation

(adhocracy)

A 'Cooker Workshop' provided a opportunity to participate in the

construction of a large-group adhocracy. A team was established for one
week to design a new range of cookers and this researcher was invited to
spend 5.5 days working as the facilitator of the event. The company that
sponsored the workshop, DomEase, had identified a generic need to launch a
range of differentiated products that had lower cost to manufacture

352

(primarily through having fewer parts and being easier to manufacture),

could be readily dedicated to different fuels or national markets and would be
go through the NPD cycle 50% faster than rivals.
A group of 24 people were made available for a full week. The selection
criteria were to bring together all of the skills needed to design a new range
of prototype cookers. Included in the group were engineers, cost accountants,
designers, production engineers, home economists, mmarketing specialists
and model makers. One of the industrial designers was a consultant from a
noted specialist design house. In addition to this core team possible
temporary members were put 'on stand-by', including a lighting specialist,
packaging expert, a plumber and electronics expert.
On the Sunday that started the week's work the team met at a motor car
factory and toured the plant. The purpose of this was to demonstrate the
state-of-the-art in automated manufacturing and to have a shared experience
to bond the group. On the Sunday evening the group went to a residential
facility hired for the purpose on a university campus. 15 cookers made by
rival firms had been purchased and the team were divided into
multi-disciplinary teams and asked to strip the cookers down and note their
strengths and weaknesses. This work continued until nearly midnight.
On the Monday morning (at 0830) a team meeting was held and a video
made for the occasion by the MD of DomEase was shown. The MD spoke
about the need for a new range of cookers and set objectives for the group.
This was discussed, elaborated and the team's objectives, and success criteria,
were written on flip charts and posted in work rooms. The remainder of
Monday and Tuesday were spent exploring alternative ways of achieving the
objectives. The lighting specialist, packaging expert, plumber and electronics
expert were called in as consultants to groups. Ideas from the breakdown of
rivals' products were systematically assessed. Groups formed and re-formed
frequently. A 'war-room' was established in which current thinking was
displayed.
On Tuesday evening a whole group meeting agreed final design concepts.
Team members had stated that they were willing to stay in the meeting until
agreement was reached, even if it took all night! An agreement was made

353

and documented and the meeting broke up at 1158. By 0800 the next morning
design teams had been formed and were working, using a Computer Aided
Design system, to develop the design. 'Liaison Officers' were appointed by
each group to ensure co-ordination. Periodic whole group meetings were
held. The researcher recalls that he went to bed at 1157 on Wednesday
evening leaving a design group working. When he rejoined the group at 0755
the next morning they were already at work again! On the Thursday evening
another whole group meeting was held to plan the presentation for the next
day to the firm's Board of Directors and the model makers worked all night
to make a mock-up of the finished product.
By lunch time on the Friday a stage had been erected and, behind a curtain
illuminated by stage lighting hired for the purpose, was the freshly-painted
mock-up of the new cooker concept. The firm's directors arrived and received
the presentations. Each of the key specialists delivered a 10 minute
presentation. Directors afterwards spontaneously applauding the work of the
group. The working drawings were signed and dated for protection of
intellectual rights and the team were thanked and asked to depart.
Interestingly, no-one left for more than 20 minutes. The group members
chatted, but there were periods of silence. One member commented, "we've
done a year's work in a week. No, we couldn't have done it in a year. The
energy wouldn't have been there. It's something great".
In preparing for the event the facilitator used Mintzberg's description of the
attributes of an adhocracy as a basis for design of the adhocracy and the
diagram in Figure A8.8 below was used as a conceptual basis for the
development of this temporary organisation. The key design parameters
included active top management participation, access to resources, dedicated
time of all of the experts needed, facilitative management and the use of
problem-solving and decision-making tools. In the event, the wholehearted
and dedicated enthusiasm of participants became an important factor in
diving the organisation forward.

354

Organising and Re-Organising Frequently

Collective Learning
Top Management Support
Critical Mass of Experts

Facilitative Management Style

Resources Available
Planning and Execution Interwoven

Aligned Objectives
Ad Hoc Organisation Design Concept

An End-Point
Project Management

Explicit Liason Devices

Use of problem-solving and Decision-making Tools

Build On Others' Ideas

Respect for Expertise

Open Hard Working Culture

Figure A8.8: adhocracy

In an interview with the Managing Director following the event he made the
following comment: "Unbelievable. People did things I didn't expect and they
didn't expect either. They loved it. We did too. We got the result!".
The Cooker Workshop was an ad-hoc organisation from the perspective of
Mintzberg's organisational forms. It was established for just one weeks and
the expertise of members drove the group forward.

8.6

Innovation in an missionary organisation

Although this form is less fully described by Mintzberg than the five
mentioned above he does give an explanation of the design characteristics of
the missionary organisation. The dominant co-ordinating force is the
standardisation of norms, referred to as 'ideology' (see Mintzberg, 1998 pages
351352).
Holistic Holidays is a company that offers alternative holidays in Greece and
was established by two people interested in yoga, holistic life-styles and
humanistic psychology. This researcher spent a session of two weeks
observing the running of the Centre and then repeated the observation a
year later when several innovations in product, process and position had
been implemented.

355

This type of holiday attracts only a small proportion of those who travel to
Greece for holidays but there is a relatively high level of repeat attendance
(averaging 43%). Participants are recruited from magazine articles,
advertising, word-of-mouth, attendance by the principals at events and so on.
The cost of the holiday is above average and accommodation could not be
considered luxurioushowever, an ample diet of well-prepared vegetarian
food is provided.
The Centre has a structured regime of classes in such topics as yoga, tai chi,
shamanism, the tango and foot massage. These classes are run by visiting
teachers who receive little more than a free holiday in return for their
contribution. Many participants take the classes seriously, including arising at
dawn for chi kung classes.
During the first period of research observation an attempt was made to
understand the organisation from a sociological perspective and the following
conceptual framework was prepared (Figure A8.9).

Master
in India

Design of
Marketing

Principals as the
Guardians of
Values

Selection of
Teachers

Supervision
of Staff

Holistic
Tradition

Visiting
Teachers

Design of
Holiday
Experience

Socialisation
of Guests

Encouragement
of Community
Development

Figure A8.9: values driven organisation

In the diagram the circles represent components of the dominant ideology

and the boxes represent activities undertaken to disseminate, reinforce and

356

legitimise the ideology. This diagram shows only the main sources of
ideological transmission and was discussed, at length, with the Centre
Director towards the end of this researcher's first visit.
A year later this researcher returned for a second period of observation. A
number of changes had taken place, including:
6. A wider selection of courses offered
7. Alcohol served with dinner
8. Improved shady areas for informal conversation
9. Less emphasis on acetic life-styles in 'community meetings'
10. Positive acceptance of the less-healthy
11. Encouragement of humour and irreverence (modelled by principals)
12. Acceptance of the 'yoga-buffs' as 'just another sub-group' (yoga-buffs' not
given superior status in the Centre)
13. Revised advertising emphasising the relevance of the Centre's values to
anyone 'living in today's busy world'.
The underlying theme behind these changes/innovations was re-positioning
the Centre towards the mainstream of alternative lifestyles rather than for
yoga buffs. In an interview with the Centre director the process of innovation
was explained to this researcher and conceptualised thus (Figure A8.10):

357

CONSERVATIVE FORCES

MUCH
CHANGE

CHANGE FORCES

Non-Yoga
Types

Trusted
Teachers

Holistic
Tradition

Other
Centres

Sales
Office
New
Teachers

Master
in India

Yoga
Buffs

Principals as the
Guardians of
Values

Figure A8.10: pulls on values

The principals of the Centre engaged in multiple dialogues with various

individuals and groups whose opinion they wanted to obtain. Some groups
argued for retention of the current yoga-orientated business model whist
others believed that change was needed. Slowly, over months, the identity of
the Centre was redefined in the minds of the principals whose core values
appeared to remain the same but their manifestation (through ideology,
social control and activities) changed in the manner described above.
Holistic Holidays was an missionary organisation from the perspective of
Mintzberg's organisational forms. Its core was the shared ideology described
above. The founders acted as the guardians of ideology but the manner in
which core values were expressed changed over time. Staff were employed
who shared the values of the founders and were willing to be subordinate to
the dominant ideology.

358

8.7

Common features of the six cases

These examples provide illustrations of innovation initiatives undertaken in

different forms of organisation. From an examination of the case notes, 16
largely common features can be suggested. These are:
1. Learning facilitated innovation (i.e. deliberate processes had been
instituted for the development of concepts and/or skills)all cases
2. Dialogue was required for development of ideas and proposalsall cases
3. Top management commitment energised the processall cases
4. Individual innovation initiatives seen as elements within wider innovation
agendaall cases
5. Decision-making and commitment were keyall cases
6. Ad hoc groups set up to facilitate the management of the innovation
processall cases except less clear with the small firms (Quintock and
Holistic)
7. Strategy, intent and purpose provided an over-arching but evolving set of
conceptual maps within which innovation occurredall cases
8. A similar process of development of ideas into action can be seenall
cases except less structured in smaller firms
9. The development of a consensus amongst opinion leaders about what
needed to change and how this could be accomplished was seen as
importantall cases except Quintock
10. The proposed innovation initiative needed to be seen as 'do-able' before a
commitment to undertake it was madeall cases
11. Once an idea becomes a commitment then some of the disciplines of
project management were adoptedall cases
12. Decision-making required a significant amount of time and those
concerned took pains to understand the issues in depthall cases
13. Perspectives and frameworks (theories in action) needed to change in
order for an innovation initiative to be implementedall cases
14. Much work was needed to take the germ of an idea and develop it into a
proposalall cases

359

15. Innovation was largely enjoyed by the main actors involvedall cases
16. The quality of people making an input was seen as a significant factorall
cases
There were also differences between the organisational forms. Quintock
Estates was dominated by the personality and entrepreneurial competence of
the founder. Rely Rail institutionalised the innovation process using
techniques from change management. Alb Consultants were highly
participative and involved the whole organisation. Generic Holdings adopted
a results-orientated strategic process. The Cooker Workshop was a pure
adhocracy, remote from other distractions. Holistic Holidays developed new
ways of expressing core values through a revised ideology.

8.8

Consistency check

Research on Mintzberg's six configurational forms enabled common

attributes of companies (whatever their configuration) to be, tentatively,
identified. In order to provide a consistency check this list was compared with
the 18 components of the G2 reference model. The results are summarised in
the table below:
Table A8.2: common features and the G2 model
Common features of innovations in firms

Relevant components

Learning facilitated innovation

IVa

Dialogue required for development of ideas and proposals

Ib, IVb and IVa

Top management commitment energised the process

Ia, VIc

Innovation initiatives seen as a gestalt within a wider innovation agenda

Ib

Decision-making and commitment were key

VIb

Ad hoc groups set up to facilitate the management of the innovation process

Va

Strategy, intent and purpose provided an over-arching conceptual map

within which innovation occurred

Ib and VIa

A process of development of ideas into action

IIc

The development of a consensus amongst opinion leaders about what

needed to change and how this could be accomplished was seen as
important

IIIc

10

The proposed innovation initiative needed to be seen as 'do-able' before a

commitment to undertake it was made

VIa and VIb

11

Once an idea becomes a commitment then disciplines of project

management are adopted

IIc

360

Common features of innovations in firms

Relevant components

12

Decision-making required a significant amount of time and those concerned

took pains to understand the issues in depth

VIb

13

Perspectives and frameworks needed to change in order for an innovation

initiative to be implemented

Ic

14

Much work was often needed to take the germ of an idea and develop it into
a proposal

Vc

15

Innovation was largely enjoyed by the main actors involved

IIIc

16

The quality of people making an input was seen as a significant factor

IIa

All of the factors identified could be matched against at least one component
in the reference model. This finding supported the view that the reference
model was identifying significant components and elements of innovation
capability.

361

Abbreviations and technical terms

ABC

Activity Based Costing

AL

Action Learning

B2B

Business to business commerce via the internet

BBC

Basic Business Concept

BPR

Business Process Re-engineering

Business Link

A UK Government-supported consultancy service

CAPEX

Capital Expenditure

CBI

Confederation of British Industry

CI

Continuous Improvement

DCF

Discounted Cash Flow

DfEE

Department for Education and Employment

DI

Diffusion of Innovation

DTI

Department of Trade and Industry

e-tailing

Retailing via the world wide web

EBP

Education Business Partnership

EQM

European Quality Model

ESRC

Engineering and Science Research Council

FO

Foreign Office

Gestalt

Gestalt Psychologya holistic and humanistic approach to therapy

GTR

Global Team Room

GF

General Foods

ICdb

Innovation Capability database

IIP

Investors in People

InT

Innovation Theory

IPR

Intellectual Property Rights

IPT

International Project Team

IR

Industrial Relations

ISO 9000

International Standards Organisation: standard on quality management

IT

Information Technology

JIT

Just in Time

Kaizen

Continuous Improvement (Japanese Term)

KSF

Key Success Factor

LEAs

Local Education Authorities

MIS

Management Information System

MbO

Management by Objectives

NATS

Norms, assets, skills and technologies

NORWESCO

North West Co-operation (Ireland)

NUDIST

Non-Numerical Unstructured Data Indexing, Searching and Theorizing (a qualitative

research tool)

362

NPPD

New Product/Process Development

NPD

New Product Development

OD

Organisation Development

OI

Organisational Innovativeness

PC

Process Consultation

PEST

Political, Economic, Social and Technological (Analysis)

PIMS

Profit Impact of Marketing Strategies (a large multi-national database)

PT

Process Theory

PwP

Partnerships with People

QFD

Quality Function Deployment

SATs

Skills, Assets and Technologies

SBU

Strategic Business Unit

SMEs

Small and Medium Sized Enterprises

SMED

Single Minute Exchange of Dies

SWOT

Strengths, Weaknesses Opportunities and Threats (Analysis)

SPSS

Statistical Programme for the Social Sciences

T-Group

Training Group (Sensitivity Group)

TORI

Trust, openness, realisation and interdependence

TBC

Time-Based Competition

TQM

Total Quality Management

TPM

Total Productive Maintenance

voc

Voice of the Customer

WEI

Work Environment Inventory

WI

Workplace Innovationupwards flow of innovation

www

World Wide Web

363

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