A firm's strategic innovation orientation, which is aimed at discovering and satisfying emerging customer needs with novel technological solutions, has repeatedly been shown to be crucial for firm innovativeness and firm performance. Despite its apparent importance, relatively little research has addressed antecedents of a firm's strategic orientation that help explain heterogeneity in innovation strategies across firms. Especially the influence of top management teams (TMT) should be critical, since innovation strategies are shaped at the top management level. Building on the theory of upper echelon, this study investigates how TMT characteristics affect a firm's strategic innovation orientation, and how this relates to innovation outcomes and firm performance. Hypotheses are tested on a sample of goods manufacturers using a combination of survey data, document analysis, and objective capital market data for firm performance. Results indicate that TMT diversity, measured as heterogeneity in educational, functional, industry, and organizational background, has a strong positive effect on a firm's innovation orientation. A strong proactive focus on emerging customer needs and on novel technologies then lead to a portfolio of new products with higher market newness and technology newness, which both increase firm performance. The results therefore emphasize the importance of TMT characteristics as antecedent for innovation strategy and innovation outcomes.
The front end of innovation is recognized as an important driver for successful new products and business prosperity. On the one hand, companies must generate a sufficient number and variety of high‐quality ideas to obtain a well‐balanced portfolio of potentially successful innovation projects. On the other hand, companies must strictly select and prioritize promising ideas and concepts because resource constraints do not allow for the pursuit of every idea. Therefore, companies must practice ideation portfolio management to simultaneously support the variety and selection of ideas and concepts before they enter the innovation project portfolio. To date, there is no research on how ideation portfolio management affects the performance of the front end and of the eventual project portfolio.
The current study addresses this research gap in an empirical cross‐industry investigation of 175 medium‐sized and large firms in Germany using a double‐informant design. Ideation portfolio management is conceptualized with three elements: ideation strategy, process formalization, and creative encouragement. We find that all three elements independently and significantly contribute to front‐end success. The results also show that front‐end success mediates the relationship between the elements of ideation portfolio management and project portfolio success. More importantly, we find significant interaction effects between creative encouragement and process formalization and between creative encouragement and ideation strategy. The findings suggest that these elements of ideation portfolio management are complementary and should be balanced to maximize the performance of the front end and the eventual innovation project portfolio.
Social media technologies that enable interactive feedback during idea generation can complement existing modes of knowledge exchange in innovation management. Especially large, multinational companies use internal online idea competitions to promote intraorganizational knowledge exchange. Although current studies mainly focus on idea generation through crowdsourcing, little attention has been paid to the effect of online interaction between contributors on idea quality. Building on the organizational knowledge networks theory, this study examines online feedback activities, their contribution to knowledge exchange, and hence, how they increase idea quality. The authors identify three feedback characteristics of online idea generation presumed to affect idea quality: (1) the diversity of commentators (feedback diversity), (2) the extent to which feedback is elaborate and constructive (feedback constructiveness), and (3) the degree of facilitator interaction during idea discussion (feedback integration). This study also investigates how the idea authors' own feedback behavior moderates the relationships between feedback characteristics and idea quality. The results show that all three feedback characteristics relate independently and positively to idea quality. Author feedback shows a positive interaction effect with feedback diversity and a negative interaction effect with feedback constructiveness. The findings suggest that online feedback in idea competitions constitutes an important knowledge exchange process for idea generation. Companies that want to profit from firm-internal idea competitions should actively support online collaboration-e.g., through facilitators.
Practitioner PointsThis study empirically investigated how feedback characteristics affect idea quality in firm-internal online idea competitions.Online idea competitions need to be arranged as an iterative feedback process between idea authors and commentators to increase idea quality.Heterogeneity in commentators' skills and competencies and the constructiveness of feedback are related to higher idea quality.Facilitator comments are important for idea quality, because they interconnect ideas and competencies within the firm and avoid homogeneous knowledge creation.
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