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Innovation in an organization often relies on initiatives by employees who take action to develop their ideas and obtain

Innovation activities and, particularly, service innovations, impose high demands on a firm's information processing capabilities. IT tools are supposed to support internal and external information flows, thereby improving a firm's information processing capabilities. However, past research is indecisive about how IT tools influence innovation performance. Furthermore, past research has not considered that services have an increasingly relevant role in a firm's innovation portfolio that can complicate information processing. This study therefore draws on information processing theory and service innovation literature to develop a conceptual model that explains how IT use intensity—depending on the firm's business focus—affects innovation program performance. By using a cross‐industry, multi‐informant sample of the innovation programs of 116 firms, which were collected from 887 informants, this article provides empirical evidence that (i) intensive IT use in order to exchange information with internal and external stakeholders improves the firm‐wide market knowledge, which in turn has a positive impact on a firm's innovation program performance; (ii) the performance impact of market knowledge becomes stronger with increasing degrees of servitization; (iii) a higher degree of servitization reduces IT's use intensity. This research demonstrates the dilemma that servitized firms face: Their business focus hinders the use of IT tools, although the latter will enable them to gain more benefits from the improved market knowledge they create. Practitioner Points Intensive IT use positively influences the firm‐wide innovation performance. The intensive use of IT tools to strengthen internal information flows and IT tools to support exchange with external stakeholders increase a firm's market knowledge, which enhances the innovation program performance. Service innovations have higher information requirements than product innovations and profit therefore more from intensive IT use, but services' complexity hinders IT implementation. Firms with a higher degree of servitization use less IT, although they can profit more from the market knowledge IT tools create. Servitized firms need to install a flexible, modular, and open IT system for efficient IT use and to include all relevant internal and external stakeholders.

Both academics and practitioners have paid increased attention to design thinking over the past years. Yet, there is still little empirical evidence about its effectiveness for achieving success in innovation projects. Based on the existing design thinking literature, we conceptualize the common themes underlying design thinking to describe the application level of design thinking practices in projects. Then, we elaborate on the performance relevance of design thinking. Besides a direct impact on project performance, we draw on organizational behaviour literature and argue psychological empowerment to be a core mechanism through which design thinking affects project performance. We test our hypotheses with 160 students participating in 62 innovation projects for companies. We find the effect of the application level of design thinking practices on project performance to be fully mediated by psychological empowerment. Our study contributes to the literature by providing empirical support for the performance relevance of design thinking and the underlying mechanism. Furthermore, we shift the perspective on design thinking from being an approach to solve complex or wicked problems to an approach facilitating motivation and empowerment.

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