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Innovation Requires Implementation

The Oslo Manual describes an innovation as the implementation of something new. The OECD (2005a) argues that independently of the innovation at hand, this is a central point which is common for all innovations. A new product, a new service, a new process or any other kind of innovation has to be applied somewhere to be classified as an innovation. This dimension is the main difference between an innovation and an invention. According to Schumpeter (1934), an invention requires only the (technical) development of a new product based on creative ideas. The invention stops here. An innovation is more than the technical development of something new: by its implementation it integrates an important economic and social aspect (Garcia and Calantone, 2002; Schumpeter, 1934). An innovation is: “[A] discovery that moves from the lab into production, and adds economic value to the firm (even if only cost savings)” (Garcia and Calantone, 2002, p. 112). A product innovation is, for instance, a creative idea which has been implemented and introduced into the market, and as such may respond to specific customer needs (De Sousa, 2006; Freeman and Engel, 2007). This requires not only technical knowledge but all kinds of diverse skills such as market knowledge, financial skills, production knowledge, etc. (Fagerberg et al., 2005).
Freeman and Engel (2007) described an innovation as “a process that begins with a novel idea and concludes with market introduction” (p. 94). From this perspective and in accordance with Schumpeter, an invention is one part of a bigger process (innovation) but not automatically the most critical one (Pénin, 2016). An invention is only one step in this process and there must be at least an attempt to apply it (in a market or internally in the firm) in order to be classified as an innovation (Hauschildt, 1993; Loilier and Tellier, 2013; OECD, 2005a). Hence, it is rather a question about management and the coordination of several skills/competencies than about a pure technical concern (Pénin, 2016). In essence, scholars claim that an innovation is implemented somewhere; in a market, in the internal structure of an organization, in production processes, etc. Similarly, Bullinger (2008) argues that it can be distinguished from an invention, which is only the physical or technical part of innovation.

Categories of Innovation

According to the Oslo Manual, there are four categories of an innovation: product innovations (services and goods), process innovations, marketing innovations and organizational innovations (OECD, 2005a). A similar classification via innovation categories was also done by Schumpeter (1934); but instead of four, he distinguished five types of innovation considering new sources of supply as equally innovative (Fagerberg et al., 2005). Similar typologies have emerged in the literature, but many of them concentrate exclusively on product and process innovation where the latter has been characterized to produce the former (Fagerberg et al., 2005). However, some scholars agree that a third category should be included: organizational innovation. Organizational innovation does not only occur inside a firm, it is also possible that organizational innovation modifies entire fields of industry (Fagerberg et al., 2005). Several similar typologies are found in the innovation literature (see also Christensen, 1997; Tushman and O’Reilly, 2002); but almost all of them exclude marketing innovations (see Bullinger, 2008; Loilier and Tellier, 2013; Lundvall, 1992). Bullinger (2008) argues that marketing innovations are often considered to be a combination of the three other types. Product innovations generate competitive advantage and are designated for the external environment of a firm (Bullinger, 2008). Nevertheless, the term ‘implementation’ does not only refer to the commercialization of a new product. In the case of process or organizational innovations, a new idea might as well revolutionize the internal structure of a company or an industry.
These categorizations provide insight into the vast impact of innovation on firms and on their external environment. However, as each category is linked to different challenges, different actors and/or different applications, there are different ways to deal with them. All types of innovation merit equal attention due to their impact on organizations, but in order to respond to the necessary in-depth investigation of this thesis, a delimitation is required. This is the reason why the focus in the present dissertation is on product innovations. This choice is based on the fact that this is the prevailing type of innovation in the company cases.
This thesis considers product innovations and thus physical objects which are commercialized or which are at least intended for launch on the market. To assure sufficient care is taken regarding the topic, new services or other categories of innovation (process/organizational) are not considered.
Product innovations are perceived as novel compared to existing products on the market (Loilier and Tellier, 2013). Product innovations are new products or products integrating sensible modifications compared to what is currently available, generating a user benefit for customers (OECD, 2005a). This definition excludes seasonal changes or designs which do not significantly change the functionalities of a product (OECD, 2005a). A specific example of this is the high-tech industries, where product innovations do not target an innovation that is radically different for the market but primarily sustain the present activity (Christensen, 1997). Christensen (1997) uses the example of the Hard Disk Drive industry where the market continually demands increasingly powerful products. In this case, new products provide the exact same user benefit, but important efforts are necessary in order to reach this target.

The Degree of Novelty

Although the example dates from 1997, the Hard Disk Drive industry still illustrates that product innovations represent something radically new or sustain the core activity of organizations (Christensen, 1997). In fact, this example anticipates another way to classify innovations: by their degree of novelty.
Different types of innovation have varying impacts on an industry. An increased memory capacity of a new USB stick is less revolutionary than the first USB stick. The latter represents a radical innovation whereas its improvement is classified as incremental innovation. In the case of product innovations, radical innovations are new products where new knowledge or know-how was mobilized (Loilier and Tellier, 2013). If a new version of an existing product obtains a significant improvement in its performance, it is an incremental innovation (Loilier and Tellier, 2013). Scholars suggest that these kinds of innovation rely mainly on knowledge that already exists within the company (Song and Montoya-Weiss, 1998; Verworn et al., 2008). As incremental innovations assure the continuity of the business of a firm, the term continuous innovations is used henceforth (Veryzer, 1998).
Notwithstanding, the opposite of continuous innovations – discontinuous innovations – is not a synonym for radical innovations: multiple terms exists in the literature (Veryzer, 1998). For instance, Loilier and Tellier (2013) point out that radical innovations have a revolutionary character, but some radical innovations have a deeper impact on society than others. From this perspective, the digital camera caused the bankruptcy of leading companies in the analog photography industry (Loilier and Tellier, 2013). Scholars refer in such cases to game changers, which they describe as breakthrough or disruptive innovations (Christensen, 1997; Loilier and Tellier, 2013; Utterback and Acee, 2005). Utterback and Acee (2005) perceive, however, the compact disc as a radical innovation due to its revolutionary dimension but do not consider it a game changer. Consequently, the distinction between ‘new’ and ‘significantly improved’ in the Oslo Manual is not specific enough (Crawford and Di Benedetto, 2011). A resulting juxtaposition between incremental and radical innovations is not sufficient to capture entirely the degree of novelty (Loilier and Tellier, 2013). In many cases, scholars refer to the degree of technological newness (Veryzer, 1998). For instance, Crawford and Di Benedetto (2011) distinguish between first-to-market products, adaptations, and imitations, which differ according to their degree of technology. Also, the Oslo Manual specifies the term ‘new’ in more detail on subsequent pages. The document defines the novelty of an innovation via three aspects: new for the firm (lowest level of novelty), new to the market, and new to the world (highest level of novelty). Regarding the notion of new to the market, it is mentioned that it depends on the operational market of a firm which can be geographically limited or include international markets depending on the scope of the firm. This differentiation is similar to the notion of technological newness, but it acknowledges that non-technical solutions could sometimes be more innovative than products by integrating a radically new technology (Loilier and Tellier, 2013). This is why the Oslo Manual extends the definition of radical innovations as follows:
“[A radical innovation] can be defined as an innovation that has a significant impact on a market and on the economic activity of firms in that market. This concept focuses on the impact of innovations as opposed to their novelty.” (OECD, 2005a, p. 58).

The New Product Development (NPD) Process

Existing innovation processes are as numerous as the definitions about innovation. Depending on the innovation at hand, but also on the context of the company (size, strategy, etc.), innovation processes may differ (Pavitt, 2005). In general, the innovation process is a set of activities organized in a temporal succession (Bullinger, 2008). As the decision was made here to concentrate on new products, the underlying innovation process for this dissertation should also focus on processes for new products. One of the most widely diffused processes is the Stage-Gate process developed by Cooper (1990) and Cooper and Kleinschmidt (1990). This Stage-Gate process describes the alignment of activities in several stages. After each stage, the idea passes a gate which represents a Go/No-Go decision. They distinguish five stages: preliminary assessment, detailed investigation preparation, development, testing and validation, and full production and market launch.
Similar approaches in five stages are used elsewhere in the literature (e.g. Herstatt and Verworn, 2003; Wheelwright and Clark, 1992). In accordance with existing models, Crawford and Di Benedetto (2011) summarize them as follows: opportunity identification and selection, concept generation, concept/project evaluation, development (includes both technical and marketing tasks), and launch. From this perspective, the innovation process starts with an idea and ends with its commercialization. These activities can be synthesized into three subsequent phases (Koen et al., 2001; Pavitt, 2005):
· The pre-development phase or the fuzzy front-end (FFE) of innovation.
· The New Product Development (NPD); and.
· The commercialization phase.
The literature on innovation proposes a clear set of methods and models to manage the second phase, the NPD. However, attention has shifted in the last few years towards the consideration of innovation as a whole, where the detection of opportunities and the acquisition of new competences are equally crucial (Le Masson et al., 2006). By analogy with the model of Wheelwright and Clark (1992) shown in figure 5, many scholars refer to a funnel filtering ideas little by little when describing the innovation process (Bullinger, 2008; Loilier and Tellier, 2013).
From this perspective, many ideas should enter the process but only a few of them should be launched (Loilier and Tellier, 2013; Wheelwright and Clark, 1992). This underlines one of the main difficulties for organizations: selecting the best ideas. Indeed, scholars underline that the main challenge for organizations is in most cases not to create new ideas, but to select the best ones as early as possible and to insert them into the NPD (Reinertsen, 1999; Rice et al., 2001).
Furthermore, most representations of the innovation process suggest a linear follow-up of activities. However, in order to explain what innovation is not, Kline and Rosenberg (1986), demonstrated the limits of such linear approaches. As innovation is complex, it is not possible to apply a process which fits all types of innovation. In addition, innovation is generated from iteration, feedback-loops, and steps back and forth within the process (Crawford and Di Benedetto, 2011). As a result, scholars underline a non-sequential and iterative interpretation of their innovation processes (see for example Cooper, 2008).
A further point to note about the innovation process is its internal or external orientation. Many models do not explicitly address this problematic, but fundamental changes in society ask for fundamental changes in innovation processes. From this perspective, Chesbrough (2003b) claimed that it should be mandatory for organizations to open up their innovation processes towards the external environment. His open innovation model seeks to integrate external knowledge into the internal innovation process (‘outside-in’) and at the same time add value of the internal competencies in the external environment (‘inside-out’). He pronounced the necessity of collaborative projects with external partners. In the years following this research, the opening of the innovation process, together with technical evolutions of the internet, led to new approaches, for instance, crowdsourcing.

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Diversity of Models: From Process Approaches to Dynamic Capabilities

The frontiers of the FFE have been set up, but it is still not entirely clear what happens within this phase. Many models concentrate on a procedural alignment of tasks, but the research of Koen et al. (2001) weakens the perception that the FFE is only the alignment of specific tasks. Furthermore, current models confront the dilemma between space for creativity and a systematic approach (Gaubinger and Rabl, 2014; Verworn and Herstatt, 1999). This paragraph provides an overview about principal models from those dealing with process, decision-making and role models, to less structured approaches based on dynamic capabilities and bootlegging.

Process Models

Historically, academics focused on core activities at the FFE. Cooper and Kleinschmidt (1987, 1994) distinguished five activities which take place in the early phases of the Stage-Gate process mentioned earlier. The research of Cooper and Kleinschmidt has provided evidence in theory and in practice that their systematic approach helps organizations to increase the success of their innovation processes. However, its rigidity is often criticized as it does not provide sufficient flexibility (Verworn and Herstatt, 1999). From a similar perspective, Khurana and Rosenthal (1998) identified three activities – idea generation, market analysis, and technology appraisal – as core tasks of the pre-phase zero which ends in a feasibility study and project planning before the Go/No-Go decision and the New Product Development starts.
Disregarding slight variations, similar core activities are current in the FFE literature in other process perspectives with differing levels of complexity (Brem and Voigt, 2009). Compared to these models, the New Concept Development (NCD) of Koen et al. (2001) entails a differential approach. Even though the authors consider opportunity identification and analysis, idea generation and selection, and concept and technology development as core activities of a successful FFE, they apply an iterative framework instead of aligning tasks in a sequential process. At the end of the FFE, all five activities should be executed, but within the FFE, actors are given flexibility to absolve them in a way which suits the situation at hand.
Gaubinger and Rabl (2014) compared the three prevailing process approaches of Cooper, Khurana and Rosenthal as well as Koen et al. assessing their relative weaknesses and strengths. Based on this comparison, the authors developed a new conceptual design of the FFE to overcome the shortcomings of the three models. In their holistic framework, they not only include a flexible shift from incremental to radical innovations, but they also introduce technology development as a separate activity. At a specific routing gate (RG), the decision is taken if a technology development, a concept development or a lean concept development project is started. This decision depends on the level of novelty of the potential project and on its level of risk (Gaubinger and Rabl, 2014).

Table of contents :

PART I PREPARATION FOR THE EXPLORATION
1.1 THE CONTEXT: A SPATIAL JOURNEY
1.2 RESEARCH OBJECTIVE OF THE DISSERTATION
1.3 RESEARCH OUTLINE: A MISSION STATEMENT
PART II THEORETICAL FOUNDATIONS
2.1 IT STARTS WITH INNOVATION
2.1.1 Innovation: A definition
2.1.2 The Innovation Process
2.1.3 The Scope of this Research
2.2 CLARIFYING A FUZZY CONCEPT: THE FUZZY FRONT-END
2.2.1 A Multitude of Definitions
2.2.2 One Size Does Not Fit All
2.2.3 Removing the Fuzziness: A Conclusion
2.3 THINK ‘FUZZY’ – ACT GLOBALLY
2.3.1 Thinking International at the FFE: A Literature Review
2.3.2 Across Borders: International Management
2.3.3 The Research Question: A Paradox
PART III THE SETTING
3.1 EPISTEMOLOGICAL FOUNDATIONS
3.1.1 A Variety of Paradigms
3.1.2 Exploration vs Testing: Grounded Theory
3.1.3 Content vs Process Research
3.2 A CASE STUDY DESIGN
3.2.1 Case Studies: A Typology
3.2.2 The Phases of the Case Study
3.2.3 The Units of Analysis
3.2.4 Data Collection
3.2.5 Methods of Analysis
3.3 THE FIELD CONTEXTS
3.3.1 BÜRKERT – Fluid Control Systems
3.3.2 Data Collection at BÜRKERT
3.3.3 Replication Case Studies
3.4 CONCLUDING REMARKS
PART IV THE PROXIS-TELESCOPE
4.1 ORGANIZATIONAL PROXIMITY
4.1.1 Theoretical Specifications
4.1.2 Results
4.1.3 Analysis
4.1.4 Discussion
4.1.5 Concluding Remarks
4.2 SOCIAL PROXIMITY
4.2.1 Theoretical Specifications
4.2.2 Results
4.2.3 Analysis
4.2.4 Discussion
4.2.5 Concluding Remarks
4.3 COGNITIVE PROXIMITY
4.3.1 Theoretical Specifications
4.3.2 Methodological Specifications
4.3.3 Results
4.3.4 Analysis
4.3.5 Discussion
4.3.6 Concluding Remarks
4.4 DISCUSSION: COMPLETE THE PROXIS-TELESCOPE
4.4.1 What About the Positioning of the Lenses?
4.4.2 How To Know Where to Look in the Sky?
4.4.3 Which Part of the Telescope Should Be Improved as Priority?
PART V DYNAMIC EXTENSION OF THE PROXIS-MODEL
5.1 PROXIMITY AND GROWTH
5.1.1 Theoretical Specifications
5.1.2 Methodological Specifications
5.1.3 Results
5.1.4 Analysis
5.1.5 Discussion
5.1.6 Concluding Remarks
5.2 THE FFE AT THE REPLICATION CASES
5.2.1 3D PLUS: About Innovation in Space and Space in Innovation
5.2.2 Participative Innovation at ELECTRO
5.3 CROSS-CASE COMPARISON
5.3.1 Analysis
5.3.2 Discussion
5.3.3 Concluding Remarks
PART VI BACK TO EARTH – GENERAL CONCLUSION
6.1 RÉSUMÉ OF THE THESIS
6.1.1 General Structure of the Thesis
6.1.2 Empirical Findings
6.2 CONTRIBUTION
6.2.1 Theoretical Contributions
6.2.2 Managerial Contributions
6.3 OUTLOOK OF THE THESIS
6.3.1 Restrictions of the Framework
6.3.2 Extensions for Future Research
PART VII RESUME DE LA THESE
PARTIE I : LE POINT DE DÉPART
PARTIE II : LE CADRE THÉORIQUE
Chapitre 2.1 : L’Innovation
Chapitre 2.2 : Le Fuzzy Front-End et les Innovations Discontinues
Chapitre 2.3 : Une Approche Internationale du Fuzzy Front-End
PARTIE III : LES FONDEMENTS MÉTHODOLOGIQUES
Chapitre 3.1 : Les Fondements Epistémologiques
Chapitre 3.2 : La Méthode de la Recherche
Chapitre 3.3 : Les terrains de recherche
PARTIE IV : LE PROXIS-TÉLESCOPE
Chapitre 4.1 : La Proximité Organisationnelle
Chapitre 4.2 : La Proximité Sociale
Chapitre 4.3 : La Proximité Cognitive
Chapitre 4.4 : Discussion du ProxIS-Télescope
PARTIE V : UNE EXTENSION DYNAMIQUE DU PROXIS-MODÈLE
Chapitre 5.1 : La Proximité et la Croissance Organisationnelle
Chapitre 5.2 : Les Cas de Réplication
Chapitre 5.3 : L’Analyse Transversale – Le ProxIS-Modèle Dynamique
PARTIE VI : CONCLUSION GÉNÉRALE
REFERENCES

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