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Wojciech Czakon

University of Economics in Katowice

Professor

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What does the research say on creating collective innovation?

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In the Italian renaissance times an astonishing number of great artists, scientists and innovators created masterpieces admired for centuries to follow. One of the most famous names, given the scope of his creations and visionary works, was Leonardo.

An individual very seldom reveals himself to be such an incredible innovator. We remember this exceptional period both for the quality of the masterpieces, and because it has not happened in such a short time span or such geographical concentration ever since. In management, individual innovation has long attracted diligent attention. Recently, Dariusz Jemielniak (2014) edited an insightful book capturing the changing roles and the meaning of work in knowledge-intensive environments.

Don’t tackle innovation at the individual level

Major issues arise when we tackle innovation at an individual level. How do we find the innovator? Some firms would opt for an outside search, by establishing interfaces with universities and research labs, or by monitoring patent applications, or by just waiting for the innovator to come by himself. Some others, like 3M or Google, would see the innovator in each of its employees. The challenge here is to release innovativeness by conceding time, and resources for creative work. Also, it is crucial to keep the innovator within the organization and avoid killing his ability to innovate. Yet, hierarchical control tools such as targets, budgets, reports and milestones typically kills creativity for the sake of operational efficiency. We know that quite well; therefore, many industries let the small entrepreneurial firms innovate, and when the technology is successfully developed, big firms buy the small ones (Gay, Doussett, 2005).

All in all, we have to recognize that: 1) geniuses do not appear very often, 2) technology becomes increasingly sophisticated, and 3) knowledge necessary for innovation may lie outside a firm’s traditional core competence. Indeed, individuals and firms typically seek partners, form working groups, or consortia, in order to successfully innovate. The locus of innovation is moving from within the firm to the space between firms (Powell, Koput, Smith-Doerr, 1996). In such a context, managers have to handle many teams, diverse cultures, various stakeholders, with goals that are only partially convergent. At the end of the day, each actor seeks the best possible share in the jointly generated value. Competition emerges between collaborators, a phenomenon called coopetition. Actually, innovation becomes a complex collective game, played by many actors entangled in an interorganizational context.

Moving towards a model of collective innovation

Massive interest from management scholars has been allocated to collective innovation for more than two decades now. We have established that agglomeration [gathering into a mass] of firms helps, as it fosters information sourcing, and it offers a critical-mass effect for knowledge creation. We also know that agglomeration alone is not enough. While some clusters are iconic for long term innovation output, many others underperform. The replication efforts of Silicon Valley have been largely disappointing for their sponsors. In order to understand why some collective innovation processes are repeatedly performing well, while others aren’t, academics have examined collective knowledge work from either a network, or a capability perspective.

‘Network’ methods of innovation

The network thread of research assumes that actors are connected by ties, which form configurations and define actor’s positions. There is ample evidence that central actors establish relevant ties more rapidly, thus accessing knowledge and developing technology faster. Yet, similar network structures do not always yield similar performance. Hence, the capability thread of research emphasizes that firms need to learn how to leverage interfirm relationships (Lorenzoni, Lipparini, 1999), and orchestrate innovation networks (Dhanaraj, Parkhe, 2006).

In short we know now from strategic management research that: 1) it is better to have a network than to go alone (Hakansson, Snehota, 2006); 2) innovation networks with capable leaders perform better than others (Ferrary, Granovetter, 2009); and 3) partners turn out to be competitors eventually (Ritala, Hurmelinna-Laukkanen, 2009).

Using sports as the role model

Well, from a human resource management perspective this is not much. What should we look for in order to better play the collective innovation game? I think that sports are a good benchmark. It offers inspiration on managing collective efforts, as well as fostering efficiency at individual and team level. Professional sports are a highly organized activity; one of the few constantly growing and innovating. Games have rules, structures, tactics, and specialized roles. There are typical team structures depending on how many defenders, midfielders and offensive players are involved, and what are they expected to do. American football, for instance, includes quarterbacks, running backs, center, defensive tackles, and many others. Beyond field roles, teams also have coaches, managers, scouts etc.

By analogy, what we need to unveil for collective innovation are the typical roles, successful tactics and simple rules. With technology development and product sophistication, innovation is and will remain a collective game in the foreseeable future. The challenge is to better perform. Intuitive, incremental learning is always a good thing, but productivity gains are elsewhere. We have much to learn from sports, if this game is to be better played.

References

Dhanaraj, C., Parkhe, A. (2006). Orchestrating innovation networks. Academy of Management Review, 31(3), 659-669

Ferrary, M., Granovetter, M. (2009). The role of venture capital firms in Silicon Valley’s complex innovation network. Economy and Society, 38(2), 326-359 Gay, B., Dousset, B. (2005). Innovation and network structural dynamics: Study of the alliance network of a major sector of the biotechnology industry. Research Policy, 34(10), 1457-1475

Håkansson, H., Snehota, I. (2006). No business is an island: The network concept of business strategy. Scandinavian Journal of Management, 22(3), 256-270

Jemielniak D. (ed.) (2014) The Laws of the Knowledge Workplace. Changing Roles and the Meaning of Work in Knowledge-Intensive Environments, Gower Applied Business Research, Farnham.

Lorenzoni, G., Lipparini, A. (1999). The leveraging of interfirm relationships as a distinctive organizational capability: a longitudinal study. Strategic Management Journal, 20(4), 317-338

Powell, W. W., Koput, K. W., Smith-Doerr, L. (1996). Interorganizational collaboration and the locus of innovation: Networks of learning in biotechnology. Administrative Science Quarterly, 116-145

Ritala, P., & Hurmelinna-Laukkanen, P. (2009). What’s in it for me? Creating and appropriating value in innovation-related coopetition. Technovation, 29(12), 819-828

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Wojciech Czakon

Professor

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