Innovation Diffusion of Successful and Unsuccessful Projects

Innovation is often a catalyst that spreads change and adaptation through the industries it touches. Like a virus it moves from one industry to the next helping to make the economic system stronger. Because early adaptors of innovation create market advantages (Greve, 2009) such strategic incorporations are sought, adjusted and capitalized on. Great ideas create great interest and spread quickly even when new innovations are secreted by the industries that develop them. 

Most people understand the desire to understand and adopt new innovations when they are beneficial but few understand what happens when such innovations fail. Researchers know that such failure is important knowledge because it can either contribute to the next great success or provide key potholes to avoid when developing their own products or services. In either case success and failure both have a beneficial impact on the development of the economic market. 

When failures are apparent organizations often try and hide this failure. Such information provides insight into organizations approaches and strategic thinking. Failed projects also indicate lost revenue and the market capabilities of the firm. Yet even with no formal channel for innovative failure announcements the informal channels are used to disseminate information (Singh, 2005). What to do with that information is a key strategy an organization can consider. 

Henrich Greve (2011) investigates the innovative abilities of the ferry industry in Singapore to shed additional light on how disappointing innovations move within the local market. The work further helps industry leaders to understand how some firms reject innovation failures and some firms accept such failures to incorporate into their operations. After review and study the report comes to the following conclusions:

-Diffusion processes are sensitive outcomes. The acceptance or denials of innovations are based upon what it does for the firm. 

-When innovation has a positive result the findings are often kept secret to retard diffusion to other organizations. 

-When innovation fails there is less incentive to hide such information from competitors. However, organizations still attempt to hide such information even though it leaks out through informal channels in the market. 

-Theoretical models on risk-aversive decision making are less accurate than models on decision-making uncertainty.

Analysis:

Failure and success are flip sides of the same coin. Even when innovations fail organizations would do well to attempt to collect this information in an effort to incorporate such findings within their own innovative processes. At times such failures can lead to higher levels of development and greater understanding at less cost to the researching organizations. No matter how tightly an organization tries to keep both successful and unsuccessful innovations secret the information will make its way through informal networks and impact the market. Competitors actively seek this information in order to incorporate and influence their markets for positive results. 

Greve, H. (2011). Fast and expensive: the diffusion of a disappointing innovation. Strategic Management Journal, 32.

 

Greve, H. (2009). Bigger and safer: the diffusion of competitive advantage. Strategic Management Journal, 30 (1). 

Singh, J. (2005). Collaborative networks as determinants of knowledge diffusion patterns. Management Science, 51.

Knowledge Sharing Networks and Employee Motivation as Precursors to Organizational Innovation

We are in the massive explosive age of knowledge sharing and virtual information transference. Organizations are scrambling to find ways of capitalizing on the large movement of information in order to create more efficient and innovative firms. Research helps to support the concepts that effective knowledge sharing is part communication technology and part human motivation. 

Knowledge sharing creates opportunities for organizations to meet the needs of customers, generate solutions and create efficiencies that provide opportunity for organizations to more effectively compete on the open market (Reid, 2003). Through this sharing of knowledge workers can better enhance both their personal efforts as well as the resources of the organization. 

Organization innovation often rests on the ability to make meaning of important information and then applying it to solve important problems. According to Scarbrough (2003) knowledge sharing is essential to the development of higher levels of innovative output. Problem solving requires the collaboration of skills and information in order to effectively complete and this is where knowledge sharing has its value.

Simply because an organization has developed knowledge sharing networks does not necessarily mean that they will be utilized effectively. There are individual, organizational, and technology related factors to the success of such networks (Taylor and Write, 2004). Each of these factors can influence the viability and practical utility of such systems making them either profitable or sunk costs with no opportunity for recovery. 

Employees must also willingly engage in such knowledge sharing projects. Without employee participation and belief that the networks are important to them they won’t be utilized to their fullest extent. Thus such networks need to have value for the members and contribute to their personal goals. 

Research conducted by Hsiu-Fen from the National Taiwan Ocean University in 2007 helps to determine the individual, organizational, and technology related factors in the on knowledge sharing and where or not such factors influence organizational innovation.  After initial pilot testing the study included 172 participants from 50 organizations and analyzed results using the structural equation modeling (SEM). 

Results:

-Enjoyment of helping others and knowledge self-efficiency were strongly associated with employee willingness to share knowledge.

-Top management support was effective for employee willingness to share and collect knowledge on such networks. 

-Positive relationship of information networking and knowledge collecting but not necessarily with the desire to share knowledge. 

-The willingness of employees to both donate and share knowledge has a marked impact on a firm’s innovation capacity. 

Analysis:

Through the study it is possible to see that knowledge sharing networks have an impact on organizational innovative capacities. However, employees must find a beneficial use in the information they are finding as well as a willingness to donate their energy to sharing knowledge. This sharing motivation is rooted in the desire to help others but also is enhanced through the rewards of performance. Organizations that implement such knowledge sharing networks should also consider the human elements of motivation and ease of usage. 

Hsiu-Fen, L. (2007). Knowledge sharing and firm innovation capability: an empirical study. International Journal of Manpower, 28 (3/4). 

Reid, F. (2003). Creating a knowledge sharing culture among diverse business units. Employment Relations Today, 30 (3). 

Scarbrough, H. (2003). Knowledge management, HRM and innovation process. International journal of Manpower, 24 (5). 

Taylor, W. & Wright, G. (2004). Organizational readiness for successful knowledge sharing: challenges for public sector managers. Information Resource management Journal, 17 (2).

Measuring Innovation in Organizations

Organizational innovation is an important aspect of growing products and services for international markets. Without innovation new revenue streams will not be developed and older revenue streams will suffer from higher levels of international pressure. Encouraging organizations to grow, develop, and overcome their market challenges is tantamount to innovating the economic system. Research helps indicate what measures organizations are using to measure innovation in an effort to improve their operational and financial performance.

Innovating organizations are often seen as improving the system that works to produce better and more relevant outputs.  An innovative system consists of the participants or actors and their activities that create a socio-economic environment where these actors function together to determine innovative performance of the system (Eggink, 2012).  Under such a definition the entire organization is a social-economic group or bubble where the internal activities produce meaningful outputs.

The elements that make up the innovative system may be specifically designed or come together through a more organic method. “There is no presumption that the system was, in some sense, consciously designed, or even that the set of institutions involved works together smoothly or coherently.”(Nelson, 1996).  Generally, economic systems are more organic and due to their circumstantial and historic development while the socio-economic groups of organizations are better planned and thought out.

To see how effective innovation is and the methods used to understand innovation within the organization it is often necessary to conduct a comparative analysis. A comparison of time periods and different systems helps to create better measures of innovative systems (Edquist & Zambala, 2009).  Through such analysis business leaders can better determine the overall effectiveness of their own measurement systems and methods of improvement.

Literary research conducted by Becheikh, Landry & Amara (2006) helps to highlight how firms measure innovation performance within their organization.  They reviewed 108 studies and built a composite of the findings that help business leaders and government officials understand how innovation is being measured in the economy. 

Results:

-24% used firm-based surveys

-25% used an innovation count

-18% used patent registrations

-6% used research and development expenditures

-15% used comparative indices

-9% other measurements such as sales, trademarks, time use, etc…

-4% made no attempt to measure

The research helps identify that the major of innovative measurements are based in firms and counts of developmental outputs. Other may use comparative indices as well as patent development.  At present the majority of firms are not using a measure of multiple factors that includes surveys, counts, and indices in order to more accurately engage their development. 

Becheikh, N., Landry, R. & Amara, N. (2006). Lessons from Innovation Empirical Studies in the Manufacturing Sector: A Systematic Review of the Literature from 1993-2003. Technovation, 26, 644-664.

Edquist, C. & Zabala, J. M. (2009). Outputs of Innovation Systems: A European Perspective, [Online], Lund University, (Paper no. 2009/14).

Eggink, M. E. (2012). The Role of Innovation in Economic Development, D.Com. Thesis, University of South Africa, Pretoria.

Nelson, R. (1996). The Sources of Economic Growth, Harvard University Press, London.