1. Companies that exclusively follow one innovation type experience lower performance rates than those who pursue more innovation types at the same time.
Organisations that are innovating in multiple areas tend to do better than companies that only focus on one type of innovation. The typical scenario is where an organisation for example, only encourages product innovation. Whereas organisations that engage in innovation in terms of business models or core business processes as well will tend to engender a more creative and innovative culture and, as a consequence, they perform better overall.
2. The higher the environmental dynamism, the higher the number of innovation types pursued simultaneously.
Environmental dynamism refers to the dynamic within and without the company. Around Silicon Valley in California or the Biotech Triangle around Oxford, Cambridge and London, experts in the fields congregate and help each other spark. This dynamism helps innovation. Some people may be going through an exploitative approach such as a new app for a mobile device and others may be trying to use a molecule previously only used as an anaesthetic for the treatment of depression – the explorative approach.
3. The higher the number of simultaneous innovation types in dynamic environments, the higher a company’s performance.
With increased creativity in an organisation comes performance.
4. The smaller a company, the more its performance will be based on a single innovation type.
For example, a small internet start-up will be focusing on getting one thing right to make it big, while the internet giant tends to be investing in multiple projects.
5. The larger a company, the more will its performance be based on multiple innovation types.
6. The older a company, the higher its performance will be when using multiple innovation types.
7. The higher the degree of diversification, the higher a company’s performance if it uses multiple innovation types.
8. The higher the degree of de-centralisation there is in the organisation, the higher a company’s performance if it engages in multiple innovation types.
“As decentralisation allows for the interplay between a variety of perspectives and knowledge sources, it is supposed to increase an organisation’s exploratory activities beyond gradual adaptations.”
9. The higher the degree of complexity, the higher a company’s performance if it engages in multiple innovation types.
“Complexity increases the organisation’s awareness of a need for change, improves the dissemination of diverse ideas, and encourages knowledge transfer as an enabler of innovation.”
10. The higher the level of outside experience of individuals, the more often a company adopts multiple innovation types in order to increase performance.
11. The higher the educational level of individuals, the more often a company adopts multiple innovation types in order to increase performance.
12. The higher the combined function of knowledge diversity and previous experience in a team, the more often a company adopts multiple types to increase performance.
Those with diverse careers and higher academic qualifications will contribute to the company, working in multiple areas of innovation and coming up with different ideas and challenges. .
13. The more a company’s business is extended beyond its traditional boundaries (e.g. alliances, networks, mergers), the more innovation types are pursued and the higher is the resulting performance.
A Group of companies such as Royal Mail Group, with multiple areas of specific business will be able to innovate in multiple ways. Royal Mail has invested in a number of e-commerce software companies that in turn should help it yield returns in its core business of parcel and mail delivery. Through its multiple business interests, so the company will innovate constantly to help keep it competitive.
Guest blog contributed by David Wilkinson, Editor in Chief of The Oxford Review.
David Wilkinson lectures at the University of Oxford and a number of other universities. The Oxford Review finds the best academic research about organisational and people development and turns it into practical, easy to understand and interesting research briefs for developing businesses. http://www.oxford-review.com
Reference: Christiane Prange Bodo B. Schlegelmilch , (2016),"Towards a balanced view of innovations", Management Decision, Vol. 54 Iss 2