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The Theory, Science and Technology of Innovation: The Good, the Bad and the Ugly?
Jan Recker
Information Systems School, Queensland University of Technology
Innovation matters to Australia.
▪ Australian businesses that innovate are – 60 % more likely to report increases in income and profitability– four times more likely to increase the number of export markets
targeted– twice as likely to increase productivity and employment– three times more likely to report increases in investment in
training and IT expenditure– five times more likely to increase the range of goods and
services offered.
AUSTRALIAN INNOVATION SYSTEMREPORT 2015
The Systemic Australian Innovation Challenge
▪ 50 % of economic growth is accounted for by innovation activity (OECD, 2015).
▪ But: Australia ranks well below the OECD average in innovation performance (21st out of 32 countries).
▪ Suspected reasons:– Poor networking and collaboration– Poor innovation culture– Risk aversion– Poor innovation management capability– Geographically isolated economy– Obstructive policies and regulations
AUSTRALIAN INNOVATION SYSTEMREPORT 2014
The opportunity for IS research is now.
▪ Technology is meant to address & overcome the challenges identified in the innovation report.
▪ Coincidentally, the national agenda seems to align well (take Turnbull’s Innovation Statement for example):– New Innovation and Science government
department– Equipment of students with digital technology– Increased funding for collaboration between
university and industry– Promotion of science, maths
▪ IS research fits the “innovation challenge” bill perfectly.
What do I mean by Innovation System
Structure
People
Technology
Tasks
Social Sub‐System Technical Sub‐SystemAgile?Lean?Matrix?
C‐Inno‐O?Employee
involvement?Not‐invented‐
here?
Ideate?Incubate?Operate?Assimilate?
Collaborate?Filter?
Manage?Generate?
My Own Research Context
▪ The Woolworths Chair of Retail Innovation2012‐2018– Funding since 2012; > $1.5 million– “providing applied research services that can
be used to further develop desired innovation capabilities within the retail sector”
▪ A Theory of Innovation SystemsARC DP1601034072016‐2018– “developing theories to explain and design
information systems to assist organizational innovation”
– Jan Recker, Michael Rosemann
The Academic Innovation Systems Challenge
▪ IT is clearly meant to assist the innovation challenge.
▪ But at closer look, we don’t have all that much knowledge about how information systems can meaningfully support organisations in becoming innovative.
– Sometimes, information systems are used effectively as “innovation systems”. Next time around, they’re not.
– Sometimes “innovation systems” exist or are proclaimed but don’t actually work.
– Sometimes “innovation systems”‐enabled innovation succeeds or fails, without a clear pattern.
– Existing theories appear to fall short of explaining let alone predicting or prescribing innovation in the digital age
Addressing the Challenge
1. The Theory of Innovation– Predicting it.
2. The Science of Innovation– Explaining it.
3. The Technology of Innovation– Building it.
1. The Theory of Innovation
1. The Theory of Innovation
▪ The innovation space is filled with innovation‐relevant theories, e.g.,– Disruptive Innovation– The Corporate Garage– The Lean Organization– Open Innovation
▪ But:
1. Lack of actual evidence
2. Cases of both confirmation and refute
3. Lack of predictive and/or prescriptive power
One Example of our own research:
▪ “How an Innovative Organization Failed its Online Open Innovation Community Implementation”
– We explored the case of a failed open innovation initiative in an arguably innovative business that implemented an online open innovation community.
– Contrasts two prevalent viewpoints:▪ Open innovation as a panacea.▪ Research on success factors doesn’t explain failure.
Von Briel, F., Recker, J. (cond. accepted) "How an Innovative Organization Failed its Online Open Innovation Community Implementation", MISQ Executive
The Case
▪ ElectriCo: an electronics manufacturing company founded as a family business in the 1950s, following a breakthrough innovation invented by its founder.
▪ Today, remains a family business with subsidiaries as independent entities that fulfill different functions and serve different markets in more than 40 countries, making ElectriCo’s products available in more than 100 countries worldwide.
▪ Innovation‐fostering culture:– roots as the inventor of a breakthrough
innovation that shaped the entire industry– existence of a so‐called chief innovation
officer in the executive board– An applied research subsidiary– Company values highlighting customer
orientation and innovativeness– Top management committing to innovation
projects and acting as sponsors
▪ Goals of the OI initiative:– establishing a direct communication
channel between product development and its worldwide customers
– improving the public perception regarding the organization’s innovativeness
▪ Expected benefits:– Empowerment of staff and customers– Integration of global community– Fostering collective intelligence– Innovation contests
▪ Committed $200k on development and marketing.
▪ KPI: one idea per year worth implementing
▪ … but it didn’t work.
Why did it fail?
What does it mean?
Open
Innovation
Barrier
Potential Challenge Checkpoint
Industry
Context
Highly secretive customer processes Are your customers open to share their knowledge in your community?
Fear of idea theft How IP-focused is your industry sector?
Customer perspective Can you ask your customers for feedback in order to be able to address their actual needs?
Legal
framework
Data protection regulations Do the data protection regulations allow you to store, transfer, and process innovation information from both within and outside
your organization?
Corporate structure Do your corporate structures provide a governance model for open innovation?
Financial regulations How can open innovation participation and innovation ideas from outside the organization be incentivized? Who will benefit
financially from open innovation ideas?
Implementat
ion
Processes
Cycle times Do you have defined response times to provide feedback to open innovation ideas upon community implementation?
Idea management Does your community implementation include processes to filter, evaluate, select, and progress generated ideas?
Proactive feedback Does the community allow for processes to encourage, foster, and facilitate idea generation and participation in open
innovation?
Innovation
Mindset
Not-invented-here syndrome Are you willing to accept ideas from the outside and work with them?
Problem framing Loosely or undefined problems might yield disruptive ideas. Are you ready to realize potentially disruptive ideas that might be
2. The Science of Innovation
2. The Science of Innovation
▪ Many ‘scientific studies’ on how some innovation including some “innovation systems” should/could/would work– Open innovation, crowdsourcing, disruptive IT, social networks, communities…
▪ But:– Too many success cases. Too muchself‐fulfilling research
– Lack of systematic, generalizable knowledge– Lack of research on failure– Lack of explanatory and predictive studies– Situation compounded by misconduct and other allegations
16 |
Examples of our research:“Innovation Systems Failure”
17|
Using Social Networks (un‐) successfully for innovation
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Ideation BusinessCase
Development Testing Launch
Results of regression analysis predicting Innovation Idea Progress
Beta1. The Content of an innovation ideaImplicational explicitness 0.36**Acceptability 0.25*
2. The Content Flow of an innovation ideaDuration of discussion 0.24*
3. The UsersNetwork power of originator 1.05***Organizational position of originator ‐0.45**Organizational position of contributor 0.47***
* p ≤ 0.05, ** p ≤ 0.01, *** p ≤ 0.001Adjusted R2 = 0.80, F(6,16) = 15.32, p < 0.001.
Recker, J., A. Malsbender, and T. Kohlborn (2016) "Learning how to Effectively Use Enterprise Social Networks as Innovation Platforms", IT Professional (17), March/April
Not realizing the “innovation affordances” of IT platforms
▪ “The open, flexible affordances of pervasive digital technology are fundamentally shifting the nature of innovation processes.” (Yoo et al. 2014, p. 1400)
▪ Example: Proclaimed affordances of ESN platforms for innovation– Persistence– Visibility– Editability– Association– Generativity– Metavoicing– …
▪ Should all contribute to a generative and inclusive free flow of ideas and innovations through an organization.
▪ But do they really?
Recker, J. and D. Lekse (2016) "A Field Study of Spatial Preferences in Enterprise Microblogging", Journal of Information Technology (31), forthcoming
Not realizing the affordances of Innovation System platforms
Recker, J. and D. Lekse (2016) "A Field Study of Spatial Preferences in Enterprise Microblogging", Journal of Information Technology (31), forthcoming
Not realizing the affordances of Innovation System platforms
Recker, J. and D. Lekse (2016) "A Field Study of Spatial Preferences in Enterprise Microblogging", Journal of Information Technology (31), forthcoming
Empirical Analysis to build Predictive Theory: Example
▪ The Role of External Enablers in the Process of Creating a New Wave of Hardware Ventures
Emerging entrepreneurial firms that create new market offerings based on development of digital devices
Why are hardware ventures important
Hardware ventures are nothing new…
But are gaining importance in the global economy …
– Consumer electronic VC investment: from US$ 150 mil (2010) to US$ 848 mil (2013)
– Hardware venture investment: All‐time high of US$ 2.6 bio (2014)
What’s different about the (new) hardware industry?
“There is a reason they call it hardware—it is hard.” Tony Fadell, inventor of the iPod
• Require specific equipment, expertise, and distribution networks• High dependency on numerous external actors and resources• Scaling difficult
The Hardware venture resurgence
Current IT venture trends are… – compatible standard platforms– connectible devices– 3D printing– Social media platforms
…similar to trends that contributed to formation of the IS discipline‐ open architectures‐ Decreasing hardware costs‐ Compatible standard platforms
Theorizing Enabling Mechanisms of IT for hardware ventures
Create(generate)
Modify(substitute,
combine, expand)
Destroy
Preserve(compress, conserve)
Theorizing Enabling Mechanisms of IT for hardware ventures
IT Trend Prospecting Developing Exploiting
3D Printing ‐ Reduces prototyping time(compression)
‐ Allows for reproduction and improvement through third parties(generation)
‐ Reduces prototyping costs (conservation)
Single‐board computers/ microcontrollers
‐ Reduces prototyping time(compression)
‐ Reduces development time(compression)
‐ Reduces prototyping costs (conservation)
‐ Reduces development costs but increases production costs per piece(conservation)
‐ Provides access to technological / human resources(expansion)
‐ Enables core functionality through coupling with other modules(combination)
Inter‐connectable mobile devices
‐ Coupling with other devices is required for use(combination)
Crowdfunding ‐ Provides access to financial resources; replaces other sources(substitution)
‐ Provides access to financial resources; replaces other sources(substitution)
Social media ‐ Provides access to technological / human resources(expansion)
‐ Allows for reproduction and improvement through third parties(generation)
Cloud computing ‐ Allows for enhancement of functionality(generation)
‐ Allows for new business models / revenue streams(generation)‐ Extends functionality through coupling with other applications(combination)
3. The Technology of Innovation
The state of research
Observations
▪ Too many builts, not enough abstraction– Too much nascent, situated knowledge, not enough abstract, mature knowledge:
▪ what are kinds of innovation systems?
▪ Too many systems that inadvertently claim the name– Ill‐defined conceptualizations:
▪ what is an innovation system?
▪ Too many systems that do not work as intended– Lack of prescriptive theorizing:
▪ what are relevant design principles?
Conclusion1. The design challenge: how can we develop “innovation‐focused”
information systems that afford (enable and support) innovation practices?
2. The knowledge challenge: which “innovation affordances” exist in current or future information systems that are relevant or required to contribute to the innovation challenge of organizations?
3. The impact challenge: what are the impacts and outcomes from using Innovation Systems such that more organizations become more efficient or successful in their innovation initiatives?
Problems with current “Innovation Systems”
Problems with current “Innovation Systems”
▪ Too inefficientsome systems support only limited transactions during innovation and are restricted to specific operational outcomes, while others do not scale up and rely heavily on the expertise of facilitators and innovation professionals,
▪ Too affordingsome systems can be used for innovation activities but also for any other activity and therefore do not offer specific support for innovation,
▪ Too limitedsome systems support only parts of the innovation process without considering dependencies to other stages of the process, and
▪ Too rigidsome systems have hard‐to‐customize business processes embedded and therefore create inertia or unnecessarily complicate required changes.
Our research‐in‐progress: Components of a Design Theory
▪ What must innovation systems do?– Support innovation activities alongside the entire process
▪ How can they achieve that?– Provide relevant innovation affordances that build on an
understanding of▪ the symbolic expressions of information systems that communicate
innovation‐relevant functional affordances,▪ the innovation action goals of users, and▪ the required abilities to act on the technological objects.
Overview of the Organizational Innovation Process and Relevant Managerial Questions (Dreiling & Recker, 2013)
Affordances Theory
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Affordances Theory
1. Sufficient & correct information about an existing affordance– (Perceptible) affordance
2. Information suggests a non‐existing affordance– False affordance
3. Affordance exist – even if it is not visible– Hidden affordance
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Material Properties and Symbolic Expressions
An Innovation Systems Design Theory
Design Theory Propositions
1. Any kind of Innovation System instantiation needs to operate at the scope of ideation, incubation, implementation or operation of an innovation.
2. Any kind of Innovation System instantiation will be more effective the more scope of operations it encompasses.
3. Any kind of Innovation System instantiation needs to operate at least at the macro or the micro level of organizations.
4. Any kind of Innovation System instantiation will be more effective if it operates at both the macro and micro level rather than one level only.
5. To provide effective utility, any kind of Innovation System instantiation requires the provision of innovation‐relevant functional affordances that can be actualized at either the macro or micro level.
6. In any kind of Innovation System instantiation, innovation‐relevant functional affordances need to be designed such that required material properties are accompanied by suitable symbolic expressions appropriate for the intended user groups at the macro or micro level.
Example: MyStarbucksIdea.com
▪ Provides material properties relevant to the function “Sensing, collecting and composing ideas”
▪ Operates at a macro, i.e., organizational, level.
▪ achieves this function through a form that comprises material properties that allow for feedback forms, and ego representations of users. The chosen symbolic expressions involve a blog‐type news feed with additional content rating form through Star rating expressions.
Implications
▪ Comprehensiveness– The theory should be able to encompass kind‐
level Innovation System design theories.
▪ Explanation and Prediction– The theory should be able to account for
good/bad Innovation System designs and for their impact.
▪ Contrast– The theory should allow for discrimination
between Innovation Systems and “other‐IS”.
▪ Prescription– The theory should allow for development of
Innovation Systems.
Summary
▪ Innovation Systems is a core challenge for Australia and its scientific community.
▪ The IS field is extremely well‐placed to improve socio‐technical innovation systems
▪ Opportunity and Demand are provided to– Develop new, better theory of and for innovating
– Contribute rigorous, rich empirical evidence
– Develop better technological solutions
Selected Core Research Challenges
▪ Understanding digital innovation
▪ Assisting large organizations to innovate with IT
▪ Incorporating the socio‐aspect in socio‐technical innovation systems
Prof. Jan Recker, PhD
Information Systems SchoolScience and Engineering FacultyQueensland University of Technology
email [email protected] www.janrecker.comtwitter janrecker
Selected bibliography
– Recker, J. and D. Lekse (2016) "A Field Study of Spatial Preferences in Enterprise Microblogging", Journal of Information Technology (31), forthcoming
– Recker, J., A. Malsbender, and T. Kohlborn (2016) "Learning how to Effectively Use Enterprise Social Networks as Innovation Platforms", IT Professional (17, March/April) forthcoming
– Recker, J. (2016) “Reasoning about Discontinuance of Information System Use” Journal of Information Technology Theory and Application (17), forthcoming
– von Briel, F., Recker, J. (2016): “The Dual Nature of Information Systems in Enabling a New Wave of Hardware Ventures” 49th Hawaiian International Conference on Systems Sciences, Kuaui, Hawaii: IEEE
– von Briel, F., Recker, J. (conditionally accepted) “How an innovative SME failed its online open innovation community implementation” MISQ Executive