1 The Link between Technological Focus and Innovative Capacities – Innovation Management

Adrian Mäder, Christian Kunz, Andreas Ninck, Dominic Hurni, and Kim Oliver Tokarski*

1 The Link between Technological Focus and Innovative Capacities

Abstract: The common perception of innovation is colored by the mental image of high-tech laboratory facilities whose emphasis on cutting-edge technology is understood as proof of their ability to innovate. Does this perception reflect actual reality? This study uses expert interviews to operationalize the terms ‘technological focus’ and ‘innovative capacities’, whose presumed link is investigated in a series of qualitative interviews at companies in the service sector. The interviews reveal no immediate correlation between either variables.

1.1 Introduction

It seems a truism that the evolution of technology is important for innovation. The European Commission considers information and communication technology (ICT) in particular to be an important motor for growth and a source of innovation in the development of new products and processes [1]. Tschirky suggests that technological progress has gone beyond the realms of the manufacturing industry to leave its mark on the service sector, as evinced by the intensive reliance on ICT. Service sector companies are forced to engage much more intensively and on a strategic level with the fact that technology has become significant for their business [2].

A strategic confrontation with the issue of technology demands a more thorough investigation of aspects such as innovation and technology, without neglecting more traditional commercial concerns such as markets, personnel, or finances. In essence, a new means of measuring technology and innovation has to be found to understand whether there is indeed a link between the two. The following chapter considers the challenging proposition of operationalizing the two terms in the context of the service sector.

1.1.1 Purpose

This study explores the link between the intensity of the focus on technology and the ability of service sector organizations to innovate.

*Corresponding Author: Kim Oliver Tokarski: Bern University of Applied Sciences/Haute école spécialisée bernoise, Faculty of Business, Institute for Corporate Development. Head of Institute for Corporate Development. Professor of Business Management and Entrepreneurship. Email: kim.tokarski@bfh.ch

The inquiry covers service providers covering a diverse range of businesses. In terms of technology, the study is limited to information and communication technology (ICT). Its objective covers three distinct research questions:

  • – Which criteria can be employed to establish the degree of technology focus ata company, and how can these be integrated into a technology focus rating scale?
  • – Which elements determine the innovativeness of a company, and how can these be translated into an innovative capacity rating scale?
  • – What correlation is there between a company’s technology focus and its innovative capacities?

1.1.2 Study Design

Critiquing the assumption that a technological focus correlates directly with a company’s ability to innovate requires the terms ‘technology focus’ and ‘innovative capacities’ to be meaningfully operationalized.

A survey of current literature was used to develop the tools explained in the following, that is, the ‘technology focus gauge’ and the ‘innovative capacities maturity model’. Additional expert interviews were conducted to contribute to the ‘technology focus gauge’.

The ‘technology focus gauge’ was used for the purpose of making a heterogeneous selection of research objects: service sector companies displaying different degrees of technology focus. Expert interviews were conducted at these organizations with the ‘innovative capacities maturity model’ providing the basis for the interview guidelines and evaluation matrix. The data was analyzed by a comparison of the independent variable ‘technology focus’ with the dependent variable ‘innovative capacity’ to elicit any potential correlation between the two.

1.2 Theory

Technology and innovation in the context of the service sector needs to be defined in detail to allow the correct operationalization of the terms. A possible means of distinction can be found in treating technology focus as an independent variable and its effect on innovative capacities as a dependent variable.

1.2.1 Services

A study of current literature on the concept of ‘services’ results in the following definition used in this study [2] [3] [4] [5].

Services are activities,

  • – “that are based on potential capabilities which entail the ability and readiness to perform a service;
  • – in whose provision certain external factors are involved for whom or with whom the service is provided; and
  • – whose results represent certain material or immaterial effects on the external factors.”[4]

1.2.2 Technology

Current literature also leads to the following definition of technology [6] [7] [8] [9]:

Technology is the systematic, deliberate, and effective application of technological means to support or enable the provision of a service.

In terms of this definition, every company employs technology. The distinction lies in the strategic choice to make intensive use of modern technology or to develop such technology, which leads to the term ‘technology focus’.

1.2.3 Technology Focus

Current literature tends to use the terms ‘technologically focused’ and ‘technology-intensive’ interchangeably [10 [11] [12]. However, the similarities are only skin deep, as a closer investigation reveals distinct differences:

  • – “A ‘technology-intensive business’ is characterized by the strategic readiness and ability to take in and develop new and novel production processes and products and thus achieve greater growth” [10].
  • – “Technology focus [refers to] the dominant place of technology in the business and all of its organizational units that wish to provide that technology. The dominant feature is therefore the presence of technological problem-solving skills, which are primarily found in research and development and in production” [13].
  • – Companies are considered technologically focused if “the purpose of their business consists primarily in selling goods and services that are based on utilizing new technological ideas, scientific advances, or systems, with considerable technical development typically being required before production can be started” [14].
  • – “Technologically focused companies are companies that are heavily invested in research and development activities (input-side innovation) and offer products that possess strongly novel features, that is, innovative content (output-side innovation). Innovativeness therefore refers essentially to the lasting commitment of companies to promoting or supporting the trying out of new ideas in the sense of having the abilities, opportunity, and readiness to do so” [15].

These definitions owe a debt to the industrial perspective and are not immediately applicable to service sector businesses. In this respect, Gelbmann and Vorbach’s instrument for technology-oriented company analyses is used to define a meaningful definition of ‘technology focus’ [16]: In this sense, the “technological position of a company is determined by its internal technological resources (personnel and their know-how, available technical facilities), the access to external sources for technology, and its current position in terms of competitive technologies.”

Tschirky confirms this definition in that technological achievements are the product of transdisciplinary expertise. A prominent feature of the development of new technologies is the increasing interconnection of different technologies. For the purposes of this study, this concerns in particular the use of information technology in the service sector. Tschirky also emphasizes that modern service providers are intensively involved with the technologies that are relevant for them, for example by developing the right know-how in dedicated departments [17].

Gelbmann and Vorbach agree with Porter that all activities of a company relate to the use of technology and that any technological change has an impact on virtually all value-creating activities in terms of its competitiveness. Their conclusion is that technology can be used both to create new points of distinction in the sense of innovative or improved products and to reduce costs by optimizing production processes [16].

With these considerations in mind and with a view to the ambition to measure the degree of technology focus, the following definition is employed:

The degree of technology focus reflects how important technology is for a company to produce commercial performance. It is irrelevant whether technology is used in core or support processes.

The definition provides a generally accepted basis for the proposed technology focus gauge.

1.2.4 Gauging Technology Focus

There seems to be no universally accepted means of measuring an organization’s technology focus. Two reasons come to mind. First, there are different opinions about what technology and technology focus is or could be. Second, there is the difficult problem of finding suitable indicators and the relevant thresholds for measuring actual technology focus [18].

The Organisation for Economic Co-operation and Development (OECD) has established a clear scale for manufacturing businesses, ranging from low, low-medium, high-medium, and high sectors [19]. No such scale is available for service companies. A relevant measurement instrument is developed here, based on a review of current literature and expert interviews.

1.2.4.1 Literature

The OECD names only five knowledge intensive service sectors [20]: post and telecommunication (often not separable from each other), finance and insurance, service provision (without real estate), education, and healthcare.

Concerning the service sector, technology-intensive elements (without further specification) are seen in data processing and databases, research and development in the natural, engineering, agricultural, and medical sciences, architectural and engineering firms, and technical, physical, and chemical research [21].

The allocation to one of three technological phases pacemaker, key, and basis technologies represents another promising means of distinction. Pacemaker technologies are found in development, key technologies in concrete products and competitive processes, and basic technologies in competitively indifferent products and processes [9].

Another approach is proposed by Thudium, focusing on technology and affecting the management of technology-oriented companies in three ways [13].

Managing the development and transfer of technologies: The company acquires, develops, and sells technologies and technology-oriented products and/or services (e.g. quartz watches, high-power lasers, vaccines, rolling mills).

Managing the application of technology in business processes: The company uses technology in research and development, production, and service processes (e.g. computers in simulations, automated production, IT networks in corporate organizations).

Using technology to support business management: The company uses technology to manage the business and its processes (e.g. Management Information Systems [MIS], ICT for internal coordination, commissions, and controls).

1.2.4.2 Expert Interviews

Expert interviews were conducted with academics and business practitioners, covering possible qualitative and quantitative criteria. These were the results:

  • – A majority of the interviewees were in favor of using quantitative measures to allow for comparative responses, i.e. “more than” or “less than”.
  • – Research and development (R&D) investments are not recommended as criteria in view of the sensitive data in the area and the heterogeneous nature of the service sector companies in question.
  • – Access to data is the general challenge when using quantitative criteria.
  • – The interviews confirm the impression of the literature review that there are currently no established systems.
  • – The customer’s perspective can be applied to assess a company’s technology focus.
  • – The scaling should employ a more general, qualitative level than closely circumscribed quantitative indicators.

Fig. 1.1. Technology focus gauge

1.2.4.3 Gauging Tool

The technology focus gauge in Figure 1.1 was developed on the basis of the insights gained from literature and from the expert interviews.

The system proposed here for measuring technology focus distinguishes between four levels. Two levels each can be subsumed in the groups “more technologically focused” and “less technologically focused”. This grouping shows that level 4 represents maximum technology focus and level 1 minimum technology focus. Specific example companies are allocated to each level to make the three following criteria more immediately comprehensible.

 

 

Criteria

Two levels were defined for all four criteria, with fluent boundaries, rather than a linear progression between them. The line is intended to show that there are no clear distinctions in this area. The criteria are not fully selective; rather, they add to and build on each other when it comes to allocating a company to one of the technology focus levels.

The first criterion “knowledge” includes the elements “ICT knowledge” and “domain knowledge”. With increasing technology focus, the amount of ICT knowledge that the customers of a service company have also increases. In turn, an increase in the domain-specific knowledge occurs in companies with lower technology focus.

The second criterion “performance” covers “ICT performance” and “non-ICT performance”. Consequently, the balance of the elements that form the actual performance for the customer changes across the four levels.

The third criterion “expectation” refers to the customers’ expectations concerning the technologies and methods that the service company should employ when providing its services.

The fourth criterion “hardware” concerns the tangible elements of the services that the customer receives.

The following considerations and concrete examples help explain the gauging process in more detail:

 

 

Allocation

Customers of service providers on level 1 are not interested in the share of ICT in the provision of the service. For clients of solicitors, it matters that the litigation is successful and not whether the solicitor has gained his or her information from research in a library or in digital media.

Customers of level 2 companies, by contrast, expect a certain degree of ICT involvement. This can refer to e-banking services or web check-in for airlines. At the same time, the priority still lies on the actual financial transaction at the bank or the seats on planes.

Customers of service providers on level 3 demand services that consist mostly of ICT elements, for example because they do not have or do not want to acquire the necessary capabilities. This can concern IT system consulting or the coding of applications. One point of distinction from level 4 companies lies in the visible presence of ICT hardware. Advice on hardware aspects does not have priority in this type of service.

For customers of level 4 companies, the key distinction is the presence of hardware as part of the service. These services can, for example, be the operation of IT systems or the provision of broadcasting services via an internet infrastructure. For the customer, the hardware is an obvious element in the equation that cannot be taken away from the other parts of the service. In turn, it is less relevant for the client what the service provider could say about the TV shows it broadcasts or whether the service provider could develop the IT systems it hosts any further.

1.2.4.4 Assessing the Proposed Scale

The proposed scale essentially focuses on both the customer side of the equation and the core business of the company in question in the sense that both the providers and the users of services are often not interested in whether potential ICT elements are provided by the service provider itself or by a third party. The make-or-buy decisions of the service providers concerning these ICT elements do not therefore influence the perception of their technology focus. If this study had rated two or more insurance companies in terms of their innovative capabilities, they would have likely been awarded the same technology focus, irrespective of whether or not they host their own IT systems.

The chosen scale and its criteria also offer the opportunity to assess larger businesses in terms of their business areas.

Focusing on the customer’s perspective has one essential advantage and one grave disadvantage. The advantage is that researchers and other interested parties can readily allocate the companies to the right place on the technology focus gauge. The relevant information is often readily available, for example in public domain documents about offered services. At the same time, the narrow focus on this one perspective can be unhelpful. Other qualitative elements, such as the ICT expertise of the companies’ workforces, or quantitative elements, such as their involvement and investment into ICT, would add to the picture of the service providers’ technology focus.

1.2.5 Innovation

When trying to see how the innovative capacities of a company can be assessed, a look at the terminology and possible classification criteria can offer some initial meaningful insights. There are as many attempts at defining and classifying the concept of innovation as there are books about innovation.

1.2.5.1 Novelty as the Basic Characteristic

Many publications consider Schumpeter the godfather of innovation, as in 1911 he described innovation (without using the term) in the sense of new combinations of goods, production methods, markets, or supply sources, but also new organizations [22].

Many attempts at defining the terminology rely strongly on the Latin origins of the term ‘innovatio’, which refer to “renovation, the creation of something new” [23]. For Bergmann and Daub, innovation is a catch-all term for anything new or improved [24]. Haber considers the quality of novelty as the key constituent trait of all definitions of innovation, although only innovations that are perceived as such by clients are of actual relevance [25]. Schmalen and Pechtl explain this novelty as the difference between the old and the new offerings in the markets. Novelty plays an important role as a factor determining an innovation’s adoption on the demand side [26].

Hauschildt and Salomo name many attempts at defining innovation that relate to the aspect of novelty and consider this the terminological basis: “Innovations are qualitatively novel products or processes that are ‘noticeably’ different from the previous state” [27].

1.2.5.2 Classification

Innovation is seen from many different vantage points. A typical classification approach would distinguish between the contents, subjects, intensity, and success of innovations. [27–29]

Another dimension is the degree of involvement of external actors and thus the opening of the innovation process. The two poles of this dimension are open and closed innovation [30].

The innovation process represents the chronological dimension of innovation over time [22, 27, 29].

 

 

Conceptual Dimension

Hauschildt and Salomo distinguish between product and process innovations and state that innovation always represents a combination of both dimensions. In the case of service innovations, innovations to products and processes cannot be separated from each other, as this type of innovation does not imply a technological perspective. This relates to Schumpeter’s typology in that innovation can affect all functional aspects of business management and “the technical perspective is given up in favor of an administrative/managerial perspective” [27].

 

 

Subjective Dimension

The decision as to whether something is deemed innovative is, in the end, dependent on the number of people making that judgment. Interpersonal differences mean that the perspective that is applied by them becomes essential. Busse covers all possible subjects from the customers’/markets’ perspective and from the providers’ perspective [29].

 

 

Intensity

The dimension of intensity concerns the degree of novelty that the innovation brings. Current literature relies uncommonly heavily on the degree of innovation, either in dichotomous distinctions between radical and incremental, revolutionary versus evolutionary, or large versus small, or in multidimensional scales evaluating more complex degrees of innovativeness, as in Hauschildt and Salomon [27].

When using this dimension of intensity as a parameter for selecting the target companies for the study, the empirical link between their degree of innovativeness and their innovative capacities would need to be tested. If such a link is then established, the dimension ceases to be a suitable criterion, since the object of the inquiry, that is,is, innovative capacities, must not be influenced or postulated as an a priori premise.

 

 

Success

Another criterion can be seen in the success of the innovation. Since measuring success can be a complex endeavor with many problematic aspects concerning evaluation and judgment, this dimension does not seem suitable for the purposes of this study [28]. Another reason for its inclusion is named by Busse in that this dimension excludes future innovation in its limited retrospective focus on past successes [29].

 

 

Closed versus Open Innovation

Current literature on the open innovation theory tends to relate to Chesbrough’s description of how organizational boundaries are made permeable for the (co-)development of innovation with external actors: “In the new model of open innovation, a company commercializes both its own ideas as well as innovations from other firms and seeks ways to bring its in-house ideas to market by deploying pathways outside its current businesses” [31].

For Reichwald and Piller, this opening becomes the starting point for interactive value creation, with interactivity meaning “the cooperation between companies and external experts, clients, and consumers in the value-adding activities during the innovation process [. . . ]” [32].

As in the degree of innovativeness itself, the degree of the involvement of external actors needs to consider any empirical proof of effects on the innovative capacities. If such effects are indeed established, the dimension would seem unsuitable as a criterion for the purposes of the study, since they represent an unintended influence on the actual object of research, i.e. the innovative capacities (e.g. exploring only companies that have committed fully to open innovation processes).

 

 

Processes

A procedural perspective is relevant for the chronological definition of the term innovation. Depending on the author in question, the innovation process can cover several phases. This procedural dimension typically begins with the generation of ideas and ends with their launch in the market. This apparently generally accepted last step seems more important than the number of steps leading up to it: “There is no doubt that the innovation process has to cover at least the phases until the new product has been introduced in the markets” [27]. “A very narrow definition of the term innovation refers only to the process of establishing innovations in the market and thus to the point of their market launch [... ]” [29].

1.2.5.3 Service Innovation

The terms ‘service’ and ‘innovation’ have been treated separately up to this point. An integrated assessment and definition is now required for the purposes of this study. The relevant dimensions ‘potential’, ‘process’, and ‘output orientation’ have already been discussed above; innovation relates to all three of these dimensions. This means:

  • – service potential innovation in the sense of the ability and readiness to produce a service;
  • – service process innovation linking existing and established processes or adding new processes;
  • – service output innovation focusing on the impact of a service’s delivery on external objects.

1.2.5.4 Defining Service Innovation

The following perspective is applied in this study, distilled from the multitude of applicable definition and classification dimensions.

  • – The aspect of novelty is considered holistically. This aspect concerns novel products, services, processes, organizational structures, cultures, and business models.
  • – Since the degree of technology focus represents an explicit criterion in this study, the inquiry cannot limit itself to technological innovation alone.
  • – As the study is based on the experience and knowledge of experts in companies, it applies an internal, intraorganizational viewpoint from the perspective of the service providers.
  • – The procedural dimension reminds us that the perspective has to cover all steps from the generation of a novel idea to the launch of a marketable service. Innovation in this sense only refers to a novel service that has been actually established in the markets.
  • – The focus on services and on service innovation again points to the importance of an intraorganizational vantage point concerning the ability and readiness toto produce a service, but also to the importance of the procedural dimension. In this respect, the involvement of external factors (actors) is essential.

Schniering has proven the significant and positive impact of innovative capacities on the commercial success of service innovations [28]. No further exploration of the prospects of success of an innovative service is therefore required, and the study can focus exclusively on the innovative capacities of the organizations in question.

1.2.6 Innovative Capacities

The ability to innovate represents the key object of interest in this study and, as such, the variable measured in the empirical inquiry. Innovative capacities are defined and considered from a variety of viewpoints. A review of current literature reveals a specific set of elements that are preferred models when explaining innovative capacities:

  • – resource-based view
  • – competence-based view
  • – organizational structures (ambidextrous organization)
  • – knowledge-based view (absorptive capacity)
  • – learning-based view (learning organization)
  • – path dependency
  • – process-based view (innovation processes)

These explanatory concepts are used as the basis for the design of a maturity model to measure the innovative capacities of organizations.

1.2.6.1 Definitions

There are as many definitions of innovative capacities as there are different approaches to the subject. Studies that address the decisive elements for innovation on a meta level tend to define the ability to innovate as a multidimensional and dynamic meta-competence covering a set of unique elements [33].

1.2.6.2 Resource-Based Views

Burr and Stephan postulate that innovative capacities are available when companies manage to establish new capabilities for producing novel services [34].

Many empirical studies investigating the success factors in innovation follow this resource-based approach. For instance, Schniering considers innovative capacities in terms of resource-based indicators, which in turn relate to the successful innovation of services [28].

Kühnl posits human resources as relevant indicators in his concept of internal adoption, again relating directly to successful innovation [35].

For Burr and Stephan, the resources in Table 1.1 are required for service innovation.

1.2.6.3 Competence-Based Views

The competence-based approach represents an extension of the resource-based approach. Hamel and Prahalad consider the concept of ‘resource leverage’ to be an important element of such a competence-focused view. “By sufficiently concentrating, efficiently accumulating, creatively complementing, carefully conserving, and speedily recovering resources, firms close the gap between where they are and where they want to be” [36].

Table 1.1. Resources required for service innovation. Source: Author’s own, following Burr and Stephan [34].

Category Resources
Human assets Professionally qualified and motivated personnel
The ability to develop innovative services
The ability to produce offers and implement them on site at the client’s business
Reputation The company is seen as the successful provider of innovative services
A reputation that promotes the acceptance of new services
Brand Protection from imitation and communication with clients
Organization Efficient; development and innovation-oriented structures Planning, reporting, control, and coordination systems to support the development of innovations (e.g. project management tools, balance score card, service level management)
Technology IT systems that support the prototyping of new services Communication and information systems (intranet, knowledge databases, newsgroups)
IT systems for delivering the services in the market:
– Online offerings (e-commerce, e-banking, e-insurance)
– Communication platforms with the client (esp. for integrating lead users)
– Mobile technologies (e.g. on-site sales support)
Culture Innovation and customer-oriented behavior is rewarded Unplanned, spontaneous, and creativity-oriented practices are encouraged Problem and results-oriented actions and decisions are encouraged An open mind concerning ideas from outside the company is promoted Personal and informal communication and sharing of information is encouraged The failure of innovation ventures is tolerated (failure tolerance) Contradicting superiors is allowed or even encouraged
Finances * Cash and available credit
Material assets* Machines, facilities, real estate
* Factors of secondary importance

Competence-based approaches are subject to considerable debate and critical scrutiny. The key lies in the definition of competence. If competence is understood to mean self-organized problem-solving skills that are used to stabilize and maintain experiences and abilities, it is indeed of relevance for the challenge of innovation [24]. By challenge, we mean the traditional conflict between mechanistic and organic management systems. While mechanistic systems aim for the effective and efficient handling of repetitive activities, organic systems respond to a changing environment with ambiguous and changeable targets. With this in mind, Hauschildt and Salomo call for a combination of both systems in an innovation-oriented organizational concept with the focus elements in Table 1.2.

Table 1.2. Concept for innovation-oriented organizations. Source: Author’s own, following Hauschildt and Salomo [27].

Openness of the system Permanent public accessibility of the organization Conscious interaction with opinion leaders Readiness for taking in and releasing information Readiness for a dialogue about innovation Receptiveness to impulses and change
Degree of organization Definition of a degree of organization with as few rules and prohibitions as possible
Organization meaning freedom to act without constraints
Style of information As little regulation of the flow of information as possible Promotion of informal communication channels Discussion and negotiation of innovation as important as ad-hoc issues or routine problems
Promotion of cooperation Readiness for cooperation and encouragement of all involved and affected parties
Mutual appreciation of different departments and functional areas
Perception of conflicts Conscious acceptance of conflicts as a source of creativity
Constructive attitudes about conflict
Recruitment and HR HR development Demand for unconventional personnel who are able to produce and manage conflict
Competences for solving problems
Ability to assert new ideas
Competence and responsibility Flexibility in the allocation of responsibilities
Freedom for innovative pursuits outside of routine duties
Explicit encouragement of innovation initiatives

The ability to adapt to a changing environment is the primary point of criticism in traditional competence-oriented approaches [37]. A dynamic alternative is discussed in Section 1.2.6.4.

When trying to allocate competences to different levels, Freiling et al. mention ways to refine goods, promote competences for engaging with the market, and guarantee new development as part of their meta-competences (Table 1.3).

Sammerl distinguishes between two degree of competence. The first degree concerns everyday performance, whereas the second addresses the meta-ability to coordinate and develop resources effectively [33] (Table 1.4).

Table 1.3. Different levels of competence. Source: Author’s own, following Freiling et al. [38].

Refinement competences Refining of input goods in line with the resources currently in demand Developing currently available input goods, resources, and competences (also referring to the available decision-making authority and creative freedom)
Having access to external input goods, resources, and competences
Market interaction competences Activating the readiness to produce/provide a concrete service at a specific time
Conducting successful market transactions
Meta-competences Anticipating future requirements of the system’s environment and proactively shaping future performance potential
Ensuring permanent adaptation and change abilities (flexibility)
Ensuring deutero learning
Being aware of change underway in the environment

Table 1.4. Two degrees of competence. Source: Author’s own.

Degree 1 Alignment with the stabilizing system (maintaining experience and expertise)
Functional competences and core competences for producing routine performance with the available means (refining competence)
Low maturity
Degree 2 Potential of the company to evolve and adjust to its environment Dynamic outlook (dynamic capabilities), meta-competences
High maturity

1.2.6.4 Ambidextrous Organization

The St. Gallen Center for Organizational Excellence (CORE) conducted a longitudinal study with the 300 largest European enterprises between 1995 and 2004. One basic result was the insight that companies enjoying long-term profitable growth have focused their organizations on efficiency and flexibility [39]. This dual focus is described as organizational ambidextrousness. The study revealed four ambidextrous strategies: (1) cyclical change, (2) physical separation, (3) parallel organization, and (4) integrated networks.

For this to succeed, a holistic approach is decisive as it aligns such often disparate elements as the company’s culture, its leadership structure, and its HR system (Table 1.5).

Culture and (lateral) leadership are closely intertwined with the idea of (ambidextrous) organizations. They are important levers in managing the inherent contradictions. A closer analysis should check their potential application in the assessment of an organization’s innovative capacities.

Table 1.5. A holistic approach for an innovation-oriented organizational structure. Source: Author’s own, following Gomez et al. [39].

Organizational strategy Conscious choice and use of a suitable ambidextrous strategy (cyclical change, physical separation, parallel organization, integrated network)
Corporate culture Formation of unique cultural traits in different business units to respond more flexibly to individual customers’ needs Prevention of silo thinking and promotion of a sense of identification with the company as a whole (e.g. with ‘one brand’ programmes) Measures to promote a shared identity (one brand, interdepartmental networks, IT platforms, training, workshops)
Leadership structure Visionary leaders with creative ideas for new products and business opportunities Pragmatic leaders with implementation skills Promotion of diversity Diversification of the traditional focus with team work and cooperation models
HR systems Rewards for departmental performance and interdepartmental cooperation Promotion and support for managers engaging in lateral cooperation

Culture in Ambidextrous Organizations

The term culture is often the subject of controversial debates where innovation or the need for change are concerned. Schreyögg mentions the negative effect of corporate cultures on organizations’ ability to adjust. Clear guidelines, homogeneous frames of reference, consistent decision-making processes, and the motivation and esprit du corps promoted by clear values are essentially positive aspects of a strong culture. At the same time, they can promote rigidity and undermine flexibility. “Barriers to change are created when the members of an organization act in accordance with their accustomed frames of reference, values, and rituals” [40].

This seems to contrast with the everyday experience of innovation-oriented cultures. Schreyögg emphatically denies such an orientation, since innovative elements are inherently opposed to strong cultures. Strong corporate cultures that are constantly in flux are a contradiction in terms: “Systems in constant change cannot have a strong culture in the true sense of the term, since they do not follow any set norms” [40].

This suggests that strong corporate cultures cannot have a positive effect on the ability to innovate. To create enough leeway and freedom for new thinking, Schreyögg suggests escaping the shackles of a strong culture [40].

 

 

Lateral Leadership in Ambidextrous Organizations

By lateral leadership, Kühl and Schnelle mean the ability to establish cooperation processes without formal authority over other people. The need for such lateral leadership arises from so-called local rationalities, created by the diversification of functions or product units. The intended effect is the development of the ability to master highly complex challenges [41]. In ambidextrous organizations, these local rationalities are formed by flexible structures that promote innovation. For Kühl and Schnelle, mediation, power, and trust represent the means of control in lateral leadership. In the end, the right balance of these elements is key. Table 1.6 brings together the various mechanisms by which these elements operate and helps establish whether lateral leadership is actually in place.

Table 1.6. Elements of lateral leadership. Source: Author’s own, following Kühl and Schnelle [41].

Mediation Status quo Rigid patterns of thinking and explanations are recognized
Trick 1 The situation is recast by projecting it into the future
Speculative questions: “What would happen if?”
Trick 2 Incompatible axioms are applied by engaging with contradictions
Trick 3 Paradoxical interventions are made by artificially exaggerating current patterns
Trick 4 Irritation is created by producing instances of discrepancy
Trick 5 Partial mediation is accepted in favor of a full consensus
Power Status quo The current distribution of power is analyzed
Power is understood as asymmetric interactions
Option 1 A space is created for the negotiation of power
The lateral leader promotes the negotiation of power
A mediation process is introduced
Option 2 The distribution of power is changed by introducing new actors
Backup is brought in
Option 3 Available options are changed and shared by creating relevant exchanges
Trust Risk Trust can be abused (social transactions)
Trust quickly turns into distrust
Analysis Possible ‘battlefields’ for creating trust are identified
Option 1 The stakes are lowered
Option 2 Objective constraints are disclosed
Balance Mediation, power, and trust processes are always happening in parallel
Mediation, power, and trust processes can support, inhibit, or replace one another
The optimum balance depends on the given situation – there is no single correct balance

Absorptive Capacity

Cohen and Levinthal proposed the absorptive capacity of organizations as a key factor for successful innovations in 1990: “The ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities” [42].

Schreyögg relates the recognition, assimilation, and application of sources of knowledge to the organization’s learning track record. The development of knowledge only becomes available for organizations if they work permanently on their absorptive capacity. The poorer that ability, the shorter the reach of their innovations, which means that improvements are eventually only looked for in the organization’s closely circumscribed and familiar area of activity [43]. The company’s behavior becomes path-dependent, i.e. it unintentionally restricts itself more and more to patterns of perception and practice that have formed in its history. [43]

The operationalization of this factor for the purposes of this study needs to expand the restrictive focus on R&D to encompass the organization as a whole. In this respect, the absorptive capacity of an organization is a procedural ability that is expressed in established routines in the sense of automatic patterns of behavior and absorptive practices. Schreyögg names specific sub-competences for each phase (identification, assimilation, and implementation) that can be used to ascertain the actual absorptive capacities of a company (Table 1.7).

Table 1.7. Specific competences in the absorption process. Source: Author’s own, following Schreyögg [43].

Identification (Acquisition) Assignment of formal and informal gatekeepers as ‘integrating elements’ Presence of functions with cross-border relevance Support for partners’ aptitude for learning by cooperating with external partners (e.g. involving lead users in the development process) Ensuring the diversity of perspectives to recognize acquisition potential with a broad foundation in the organization (e.g. recruitment, development, and promotion) Avoidance of a too rigid corporate culture that over-intensifies pride in past achievements
Integration Will to distribute new knowledge Avoidance of silo thinking Regular contacts with other business areas Work in cross-functional project teams
Implementation (Exploitation) Use of change agents to support the changes Self-critical analysis of past learning and exploitation processes Application of reflective practices (feedback sessions, confrontations, quality circles) to promote the (deuteron) learning process

Learning Organizations

The ability to learn means the ability to innovate: “The innovative capacities of organizations depend [. . . ] strongly on individual’s ability to learn” [24].

The relationship between learning and not-learning is particularly relevant where ambidextrous organizations are concerned. “Organizational learning [. . . ] also implies [... ] intended not-learning, that is, the decision to not learn and not change in certain circumstances (stabilization). A learning system also needs to learn how to use the advantages of not-learning” [44].

The idea of the ‘learning organization’ has been hotly debated and interpreted in many different ways. Older concepts in didactics consider individuals and their experience-driven, adaptively rational learning processes as the engine of organizational learning [45]. Argris and Schön treat the knowledge of organizations in the form of action and practice theories that are unique to each organization; the organization here acts as a single entity [46]. Such organizational practice happens on three levels (Table 1.8).

Table 1.8. Levels of Learning. Source: Author’s own, following Argyris and Schön; Steinmann and Schreyögg [45, 46].

Single-Loop Learning Regulating cycle that corrects deviations from the target state Instrumental learning for better operational performance The basic values, norms, and strategies of the company remain unchanged
Double-Loop Learning The basic values, norms, and strategies of the company are challenged Learning leads to a change of values and guiding theories and strategies The target state itself is challenged Need for open and unbiased mindsets in the organization
Deutero Learning The third level is a meta-level of organizational learning Reviewing past learning processes is meant to produce continuous readiness for learning

Organizations will become most effective at learning by reflecting on their own learning processes. Single-loop learning cannot constitute a learning organization in this respect. However, more recent concepts have been criticizing this point. From the point of view of systems theory, organizations have been learning ever since they came into being: “Learning and developing or not learning and being unresponsive to certain impulses for change are two types of abilities that are equally important for the survival of organizations” [47]. This (natural) evolutionary learning mechanism forces us to consider whether organizations can access their own evolutionary mechanisms, i.e. learn how to change their way of learning. For Wimmer, the actual learning process is dependent on irritation at the place where systems and their environments meet. Wimmer defines eight success factors that have a positive effect on an organization’s susceptibility to irritation (learning impulses) and ability to process them (Table 1.9).

Table 1.9. Factors for managing irritation successfully. Source: Author’s own, following Wimmer [47].

Degree of environmental sensitivity (External contacts) Intensity of cooperation with the client (shared acquisition of know-how, processing of feedback, learning from customers’ problems) Monitoring of the markets and development beyond existing customers (industry analyses, economic data, market research institutes) Cooperation with suppliers in the value chain (supplier integration, business networks, loose cooperation) Constant monitoring of competitive dynamics Benchmark as incentives for development (instead of simple models to be copied)
Knowledge management (Knowledge base) Generation of implicit knowledge by acting personnel Dependence on holders of knowledge = intelligence of the organization (application and sharing) Management of the generation of information in the organization (accidental versus planned) Internal openness for sharing knowledge (culture of learning from each other) Openness for external influences Handling of the tension between maintaining (old) knowledge versus generation new solutions for problems (rules)
Manner of failure management (Deviation management) Type of error culture (avoiding a 0% error culture or perfectionism) Culture of continuous improvement, instead of error avoidance Promotion of a climate for experimenting and taking risks Freedom to fail and effective learning from experiences Intelligent questions, instead of fast answers
Maturity of leadership structures (Cooperativeness in the leadership team) Leadership constellation receptive to impulses for learning Clear distinctions between organizational levels with mutual respect for different responsibilities Cooperation and decision-making ability of the leadership team and cooperation across levels Conflicts as opportunities for creative problem-solving processes
Type and extent of cooperation (Extent and quality of cooperation) Integration of highly specialist areas of know-how (occasions for interprofessional cooperation) Integration of specific disciplines but mandatory search for interdisciplinary solutions Simultaneous cooperation of all areas in new developments (experts, production, sales, customers, development) instead of sequential problem-solving Promotion of forms of working that promote learning (teams, group work)
Self-reflection (Time as a crucial resource) Balance between operational acceleration and slack time for shared reflection Regular and high-quality target reviews Ensuring feedback for executives Auditing of management potential Reflective strategy workshops for regular status quo assessments
Innovation-positive HR management (Focus on the link between individual developmental potential and organizational innovative dynamics) Focused recruitment and integration of holders of specific know-how Focused potential development Horizontal mobility (diversity of career prospects) Promotion of self-reflective learning formats Access to the implicit experience of holders of specific know-how Suitable calculation of compensation that considers the mobilization of knowledge
Problem attribution and management (Handling of problems in in difficult situations) Avoidance of externalizing problems or personal blame (Personalization makes organizations immune to change) Handling and treating difficult situations constructively (maintaining integrity inin situations that can be embarrassing or threatening) Problems seen as opportunities for learning, instead of attributing lack of knowledge to personal incompetence Readiness to involve external persons (coaches) in difficult situations

1.2.6.5 Clients’ Integration in Services

In the previous argumentation we mentioned the importance of using external interfaces. In addition to being intangible, a key characteristic of services is the involvement of the client, since services cannot be provided without the presence of an external entity (object or person). The client represents a valuable resource for the innovation process, as the company can tap into the client’s knowledge [48].

Achieving this form of integration needs certain management and client integration skills. Vesshoff and Freiling define such client integration skills on several systemic levels, with the key implications in Table 1.10.

Table 1.10. Systemic levels of customer integration. Source: Author’s own, following Vesshoff and Freiling [49].

Strategic Logics Conscious management of different perceptions, judgments, and practices of providers and clients Establishment of conflict avoidance and management patterns Definition of a framework for conflict management Creation of a relationship-positive atmosphere
Management Processes Combination of strategic logics and management processes:
– Relevant coordination needs observed by management and included inin the subsequent design of the value creation process
– Impact on the provider’s basic market approach
– Focused investment as a result of innovation partnerships
Potential Identification of suitable clients – especially lead users – and the relevant external factors Management of the diversity of external factors during temporary integration Coordination with internal potential Definition of the scope of integration (poles: ‘design for the customer’ versus ‘design by the customer’)
Processes Provider’s ability to absorb knowledge Development of partner-oriented routines to improve efficiency and effectiveness in the innovation process without falling into path dependency Use of professional and power multipliers to create motivational forces Transparency about processes and roles with early and open communication
Effects Application of the results of the innovation process Adjustment and realignment of service provision processes as a condition for the later integration of clients

1.2.6.6 Path Dependency

Path dependency refers to practices and expectations stuck in the proverbial rut that force managers to act against their better instincts [50]. This effect occurs when the people involved lose the room and freedom to step back and think in their everyday work. Focusing on efficiency means less consideration for effectiveness (Are we producing what the markets want?). Breaking free from these paths is only possible if such instances of recognition are actually translated into real action, for example in the sense of individual targets implemented to achieve a new strategic direction.

Dievernich points to performance reviews as an instrument for organizational practice that should cover both the short-term, efficiency-oriented component and the long-term, innovation-oriented dimension: “Executives need to comply with the need for more short-term efficiency (single-loop learning) and pave the way for options that can only come true in the later future (double-loop learning)” [50].

1.2.6.7 Innovation Process and Implementation Competence

The ability to innovate as a meta-level competence as defined in this study also includes the ability for its practical implementation as a decisive element in the process: “The success of any innovation stands or falls with the structure and realization of the development process” [51]. In addition to the ability concerning the conscious swinging and switching between the phases, professional systems and methodology are key factors for the successful completion of all phases of the innovation process. Acquiring such methodological and systemic competences is an “indispensable precondition for the high-quality implementation of the innovation process” [22].

Stern and Jaberg emphasize the organization of the project (or its characteristic success factors) for the effective realization of innovations [52]:

  • – interdisciplinary teams
  • – project organization and project management
  • – available resources and responsibilities in the team
  • – staffing and cooperation; motivation, types, roles
  • – application of development techniques

As the interdisciplinary aspect (ambidextrous organizations) and the question of resources (resource-oriented approach) have already been analyzed in detail, the focus now lies on the aspects of project organization, project management, and team structure. The most important implications are summarized in Table 1.11.

1.2.7 Innovative Capacities Maturity Model

The analyzed aspects of innovative capacities are now classified into distinct degrees of maturity. Each level represents a defined level of innovativeness in the company in question. A higher degree can only be achieved if the requirements for the previous degree are fulfilled completely. This evolutionary model rates the innovative capacities of the participating companies from 1 (the lowest degree) to 5 (the highest degree). Every degree is a multidimensional construct, conceptualized with the relevant variable, indicators, and key questions described in the following.

Table 1.11. Factors for successful process organizations. Source: Author’s own, following Stern and Jaberg [52].

Project organization and milestones Regular checking of progress as defined points (milestones) Objectiveness and self-criticism as a condition for decision-making skills (e.g. stopping projects early if need be) Shared definition of targets with functional specifications (turnover, costs, timing, market, and customers) Requirements and specifications for technical implementation (use cases, production planning, technical specifications, timing and budgets, marketing and sales plans) Tests (usability tests), prototype construction for acceptance tests
Project management: Techniques and controlling Constant tracking of time, costs, and conceptual targets Definition of the optimum timing for market entries Constant identification and monitoring (network analysis and Gantt charts) of the parameters in the development process Awareness of the importance of time-to-market Application of suitable techniques for maximum the pace of development (parallelization, flexibility, teamwork, communication, simultaneous engineering) Definition of the right pace (daring to slow down) Risk management, risk portfolio, project monitoring (project FMEA)
Team staffing Optimum team structures and cooperation on the basis of a team culture Awareness of the great importance of soft skills (motivation) Definition of specific key roles in the innovation process:
– Functional multipliers (functional development competence; passion and commitment)
– Power multipliers (support for innovation from top management)
– Process multipliers (methodical, mediation, and integration skills)

1.2.7.1 Conceptual Definition of the Degrees of Maturity

The variables themselves represent complex forms that cannot be measured with single dimensions. Suitable indicators are chosen for each variable for the following application in the empirical study. These indicators reveal the aspects for which information needs to be sourced [53]. At the same time, the definition of the indicators also implies the definition of possible measuring criteria for assessing the interviewees’ statements in terms of their companies’ fulfillment of the requirements.

1.2.7.2 First Degree of Maturity

The first degree of maturity revolves around the necessary resources that underlie innovation activities (Table 1.12). The focus lies on human resources, as people and their competences represent a specific ability to develop novel and innovative services. The key criterion is the ability to recognize and seize such potential capability. Another resource of relevance is the brand of the company in question. It is both an important tool in communication with the client and a public signal of the innovative capacities of the company.

In accordance with the understanding of competence employed in this study, this first degree of maturity is limited to competence degree 1: Competences defined in the traditional sense. Competence here focuses on existing elements of competitiveness, concerning functional competences and core competences that combine with the available resources to make everyday performance possible.

The first degree of maturity is expressed conceptually with the variables ‘human assets’ and ‘brand’. The ability and readiness of employees, the recruitment of human resources, the value of the brand, and its link with innovation represent the relevant indicators in this respect.

Table 1.12. First degree of maturity – variables, indicators, and key questions. Source: Illustration by the author.

Table 1.13. Second degree of maturity – variables, indicators, and key questions. Source: Illustration by the author.

1.2.7.3 Second Degree of Maturity

The formation of organizational structures that promote innovation leads to the second degree of maturity (Table 1.13). In addition to the creation of suitable structures, this concerns in particular the response to the inherent friction of stability versus change. The relevant ability here concerns the ability to cope with this dynamic element, the transition from one form to another.

The development of flexible and ambidextrous structures produces locally specific rationalities. Frequently, executives do not have the necessary authority, but are forced to achieve a certain effect. Such pliant structures demand a lot from leadership, as it is a difficult balancing act to achieve. Executives with such lateral leadership skills therefore contribute massively to the ability of companies to innovate.

Corporate cultures are intrinsically linked with corporate structures. Strong corporate cultures can, however, introduce an element of rigidity and lack adaptability. Even the common parlance term of a ‘culture of innovation’ does not manage to reconcile the different elements of innovation and culture. For a company to be able to innovate, it needs to emancipate itself from any too-tight cultural corset.

The second degree of maturity is conceptually expressed in the variables ‘organization’, ‘leadership’, and ‘culture’. Dynamic forms of organization, the search for the right balance of stability and change, and the degree of reliance on the corporate culture are the relevant indicators.

1.2.7.4 Third Degree of Maturity

The essential element of the third degree of maturity is the company’s ability to learn (Table 1.14). The structural elements covered by the third degree allow the organization to develop certain absorption processes that can prevent a too rigid corporate culture or instances of silo thinking. These absorption processes give the company access to knowledge about events or needs in or from its environment. One important element of this receptiveness to outside influences is the integration of the client: Scouting, integrating, and implementing innovations in tandem with the client is a key motor in the innovation of services.

The degree of (external) receptiveness determines the company’s sensitivity to and irritability by outside forces. It leads to a way of handling knowledge that allows a conscious distinction between learning and not learning. The company then has the ability to decide in favor of change or in favor of stability.

The company’s ability to engage in self-reflection is closely linked to this aspect. This is only present if there is sufficient time for reflection and self-criticism. The greatest aptitude for learning can only be present if the company is able to reflect consciously on its own learning processes.

Table 1.14. Third degree of maturity – variables, indicators, and key questions. Source: Illustration by the author.

Current research tends to subsume these elements of the third degree under the term of ‘dynamic capability’. Sammerl reviews several definitions of this term and concludes that all relate to the development and modification (made possible by the right aptitude for learning) of existing resources and competences [33].

The third degree is conceptually translated into the variables of ‘receptiveness’, ‘client integration’, and ‘self-reflectiveness’, with the indicators relating to the sourcing of information, the role of the client, the review process, and the presence of organizational slack.

1.2.7.5 Fourth Degree of Maturity

The fourth degree of maturity is determined by considerations of path dependency or, specifically, the ability to liberate the company from it (Table 1.15). A common trait of the lower degrees of maturity – termed ‘dynamic capabilities’ – in short is their strong focus on existing resources. When it comes to the ability to innovate, these degrees of maturity will encounter natural limits that can only be crossed if additional competences are added to the equation. The reflective abilities mentioned in the third degree of maturity are important for being able to recognize positive feedback mechanisms, but they are not sufficient to overcome the constraints of path dependency. The additional management competences required here relate to the observers’ and consultants’ role and to the ability to decide in favor of short-term efficiency or long-term progress.

The fourth degree of maturity is expressed in the variables of ‘awareness of path dependency’ and ‘emancipation from path dependency’. Observation and decision-making represent the indicators relating to these variables.

1.2.7.6 Fifth Degree of Maturity

The elements of the first four degrees of maturity equip companies with substantial (decision-making) abilities, sufficient resources, organizational structures, and the ability to learn and stay receptive to information. Reflection skills allow the anticipation of the risks of path dependency. Finally, decision-making skills can help overcome path dependency or respond professionally to the conundrum of short-term versus long-term considerations. However, none of these elements automatically guarantee a successful launch of novel services, which the present study suggests to be an important condition for service innovation. The fifth degree of maturity alone equips companies with the applied competences that they need to launch novel services on time and with systematic and methodical professionalism in the sense of a good time-to-market approach (Table 1.16).

The fifth degree of maturity is expressed in the variable of ‘methodology’. The timing of market entries, financial controlling, and project management tools are the relevant indicators in this respect.

Table 1.15. Fourth degree of maturity – variables, indicators, and key questions. Source: Illustration by the author.

Table 1.16. Fifth degree of maturity – variables, indicators, and key questions. Source: Illustration by the author.

1.2.7.7 Summary

The degrees of maturity proposed above can be subsumed in one maturity model (Table 1.17

Table 1.17. Innovative capacities maturity model. Source: Illustration by the author.

1.3 Empirical Study

The ‘technology focus gauge’ and the ‘innovative capacities maturity model’ are used as empirical tools for measuring the possible link between the service providers’ technological affinity and their ability to innovate.

The selection of the service providers chosen for this study is made by means of the technology focus gauge (TFG), which establishes a broad spread of participating companies, TFG 1 to 4, for the comparison. The choice of experts at these companies takes their experience and knowledge into account in that they can be expected to provide meaningful expert answers for the questions developed from the maturity model. The analysis of their responses was used to allocate a level of maturity to each company and to allow a conclusion about the possible correlation with their technology focus.

1.3.1 Selection of Research Objects

The selection of the participants for the empirical study was made on the basis of the above definition of service providers and their technology focus as assessed by means of the gauging tool described before. The first factor, i.e. service provision, was simple to establish, whereas the actual challenge lay in the rating of the companies’ technology focus: this had to be produced before establishing contact with the target participants. The eventual selection was therefore the product of an analysis of their service offerings and a general company analysis, aimed at ensuring diversity in the sample in terms of company sizes, offerings, and customer groups.

Table 1.18 introduces all research objects with the allocated technology levels.

Table 1.18. The research objects in brief. Source: Author’s data.

1.3.2 Selection of Experts

The purpose of the experts’ selection lay in the identification of a person whose sophisticated insights, extensive experience, and awareness of the general relations between the market’s needs and their company’s innovative abilities enabled them to produce qualified judgments. The ideal expert possesses special access to information about groups of people or decision-making processes and has responsibility for certain solutions within the business [54].

The following criteria were applied in the selection of the experts. They were not cumulatively exclusive criteria, but treated as general guidelines:

  • – long-standing experience at the company in question
  • – profound knowledge of service development
  • – executive function at the company
  • – willingness to participate and availability for the expert interviews

1.3.3 Empirical Tools

The eventual selection of eight companies with different degrees of technological affinity was investigated by means of structured expert interviews.

The development of the innovative capacities maturity model has defined all variables, indicators, and relevant questions and measures to answer the study questions. This also provided the basis for the collection and processing of the data. The five maturity levels translated into five thematic parts of the empirical tool, which were expressed in the sections of the interview guidelines, the analysis of the data, and the interpretation of the results. The interview guidelines were also subjected to a pretest.

1.3.4 Analysis

All eight interviews were recorded digitally and transcribed in full. The participants’ responses were allocated to the defined thematic parts or their subdivisions. The aim of this approach was to establish the maturity of each company’s innovative capacities, revealing any potential correlation when contrasted with their defined technology focus.

1.3.4.1 Assessment of the Maturity Model

The previous sections have defined the eight participating companies’ achievement of the five maturity levels. The results are visualized in Figure 1.2.

The narrow sample notwithstanding, the results seem significant. There is no apparent correlation between technology focus and innovative capacities as described in this study.

Although KSP is perceived as the company with the lowest technological affinity, it can be accredited with maximum innovative capacities. The two companies with the strongest technology focus, by contrast, are awarded maturity level 2. This indistinct picture is reinforced by the three companies attributed with third-degree technology focus, but innovative capacities graded at levels 1, 3, and 5, respectively. Studimedia, Hotelplan, and Mobiliar are close to a line that would imply a linear correlation between technology focus and innovative capacities, but the other five surveyed companies deviate from that line by a considerable margin.

1.3.4.2 Points System Replacing the Maturity Model

When allocating the research objects to the right maturity level for their innovative capacities, all higher levels are excluded after the first level of maturity that is not attained. This can represent a disadvantage for the company in question, since certain qualities are forcibly excluded from the final assessment. The question of whether a maturity model is the suitable choice for this case in view of its essential exclusive structure should therefore be revisited. In particular, the following aspects might have a negative effect on the final assessment:

  • – sequence of the variables in each maturity level
  • – validity of the questions for the variable’s indicators
  • – quality of the questions asked in the interview
  • – interpretation of the responses

Fig. 1.2. Results of the maturity model

Figure 1.3 contrasts the maturity model employed here with a points system combining all points for each applicable level of maturity. Even with this calculation, no correlation between innovative maturity and technology focus could be ascertained.

1.4 Conclusions and Discussion

Our study ends with a discussion of the findings and conclusions as well as a critical assessment of the investigation.

1.4.1 Conclusions

The results are unequivocal for both the maturity model and the points system: There is no evident correlation between a company’s technology focus and its ability to innovate.It is striking that the maturity model proposed here awards greater innovative capacities in particular to smaller and younger enterprises. This can be explained with their greater flexibility, independence, and, above all, the pronounced culture of entrepreneurship that dominates at such companies when compared to their larger peers. Naturally, this conclusion should only be regarded as an indication that would need closer scrutiny in view of the small scale of the inquiry.

Fig. 1.3. Results of the maturity model (a) vs. points system (b)

1.4.2 Critical Assessment

The first factor to be considered is the subjective influence of the researchers. Both the design of the questionnaire and the collection and processing of the data are subject to the risk of conscious or subconscious interference by the researchers. Such subjective biases are most obvious in a review of the transcripts, comparing the phrasing of the questions across multiple interviews, and in the decision in favor of a certain level of maturity after interpreting the results.

The second factor again relates to the narrow scope of the inquiry. An analysis of the link between technology and innovation that has the ambition of producing statistically meaningful results is not possible under these circumstances.

1.4.3 Discussion

This paper concludes with a look ahead at possible lines of inquiry that could be pursued by following up or expanding on this study (Table 1.19).

Table 1.19. Follow-up questions for the current comparative study.

Issues Questions
Technology focus – Which externally measurable traits can be used to assess the technology focus of companies in general and service sector companies in particular?
– What are the differences between the manufacturing industry and the service sector in terms of the traits used to rate the technology focus of industry companies?
Innovative capacities – Are there similar approaches for measuring innovative capacities and how do they differ from the maturity model proposed here?
Client’s integration – Which options are there for promoting innovation by integrating clients in a mass market?

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