Managing Radical Innovation in an Open Environment

Dissertation

Research output: ThesisDissertationCollection of Articles

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Abstract

The capability to innovate is increasingly at the core of the success and survival of companies. The development of new products, services, and ways of doing business is needed to respond to changes in the companies' operating environments. Often it is not sufficient to improve existing products and services. Instead, companies aim to develop radical innovations which encompass novel technologies or require new markets, and have the potential to create paradigm shifts at the market, industry, or world level. The development of radical innovations is, however, difficult due to high uncertainties, and managers must implement changes to processes, organizational structures, firm culture, and external linkages to overcome these difficulties. Recently, researchers have paid particular attention on studying how open innovation, i.e. interactions with external sources of ideas and innovations, may help companies introduce radical innovations. In this dissertation, the challenge of developing radical innovations in an open environment is investigated through four studies, each of which will provide complementary viewpoints to this problem. The first study investigates how knowledge from customers and users may help B2B manufacturing companies develop digital innovations. The findings indicate that in a situation where new digital technologies have created vast opportunities for innovation, customers have limited abilities to predict their future needs and companies need to turn to their users and aim to understand their latent needs to be able to set goals for radical innovation. The second study investigates whether and how a company with a low level of internal R&D may introduce radical innovations based on its suppliers' technologies. The findings suggest that high investments in internal R&D are not necessary if the company has sufficient supplier management capabilities for establishing and managing successful collaboration. The third study addresses the integration of radical ideas from outside an R&D unit's usual idea sources. In this setting characterized of high uncertainty mechanisms, which typically promote turning ideas into new products, are not available, and the integration of ideas relies on coordination mechanisms that facilitate knowledge exchange across disciplinary and hierarchical borders. Finally, the fourth study addresses individual motivation in radical innovation development. It is found that multiple managerial actions at individual, team, and organization level related to goal assignment and organizational support influence the developers' motivation toward radical innovation development tasks. Therefore, it is important to evaluate the motivational effects of innovation methods. This general requirement is highly relevant also for open innovation. The dissertation brings attention to the variety in approaches that companies may adopt in using open innovation to promote radical innovation and reports of methods and challenges in doing so.
Original languageEnglish
QualificationDoctor Degree
Awarding Institution
  • Aalto University
Supervisors/Advisors
  • Eloranta, Eero, Supervisor, External person
Award date26 Jun 2018
Publisher
Print ISBNs978-952-60-8025-3
Electronic ISBNs978-952-60-8026-0
Publication statusPublished - Jun 2018
MoE publication typeG5 Doctoral dissertation (article)

Fingerprint

Radical innovation
Innovation
Open innovation
Uncertainty
New products
Industry
Organizational structure
Knowledge exchange
Developer
External linkages
Interaction
Assignment
Supplier management
Coordination mechanism
Digital technology
Organizational support
Managers
Suppliers
Manufacturing companies
Management capability

Keywords

  • innovation management
  • radical innovation
  • open innovation
  • case study

Cite this

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title = "Managing Radical Innovation in an Open Environment: Dissertation",
abstract = "The capability to innovate is increasingly at the core of the success and survival of companies. The development of new products, services, and ways of doing business is needed to respond to changes in the companies' operating environments. Often it is not sufficient to improve existing products and services. Instead, companies aim to develop radical innovations which encompass novel technologies or require new markets, and have the potential to create paradigm shifts at the market, industry, or world level. The development of radical innovations is, however, difficult due to high uncertainties, and managers must implement changes to processes, organizational structures, firm culture, and external linkages to overcome these difficulties. Recently, researchers have paid particular attention on studying how open innovation, i.e. interactions with external sources of ideas and innovations, may help companies introduce radical innovations. In this dissertation, the challenge of developing radical innovations in an open environment is investigated through four studies, each of which will provide complementary viewpoints to this problem. The first study investigates how knowledge from customers and users may help B2B manufacturing companies develop digital innovations. The findings indicate that in a situation where new digital technologies have created vast opportunities for innovation, customers have limited abilities to predict their future needs and companies need to turn to their users and aim to understand their latent needs to be able to set goals for radical innovation. The second study investigates whether and how a company with a low level of internal R&D may introduce radical innovations based on its suppliers' technologies. The findings suggest that high investments in internal R&D are not necessary if the company has sufficient supplier management capabilities for establishing and managing successful collaboration. The third study addresses the integration of radical ideas from outside an R&D unit's usual idea sources. In this setting characterized of high uncertainty mechanisms, which typically promote turning ideas into new products, are not available, and the integration of ideas relies on coordination mechanisms that facilitate knowledge exchange across disciplinary and hierarchical borders. Finally, the fourth study addresses individual motivation in radical innovation development. It is found that multiple managerial actions at individual, team, and organization level related to goal assignment and organizational support influence the developers' motivation toward radical innovation development tasks. Therefore, it is important to evaluate the motivational effects of innovation methods. This general requirement is highly relevant also for open innovation. The dissertation brings attention to the variety in approaches that companies may adopt in using open innovation to promote radical innovation and reports of methods and challenges in doing so.",
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author = "Matti Pihlajamaa",
year = "2018",
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Managing Radical Innovation in an Open Environment : Dissertation. / Pihlajamaa, Matti.

Aalto University, 2018. 157 p.

Research output: ThesisDissertationCollection of Articles

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T3 - Doctoral dissertations

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