Knowledge and Process Management Volume 13 Number 3 pp 129–131 (2006) Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/kpm.252
& Guest Editorial
Continuous Innovation, Performance and Knowledge Management: An Introduction Ross L. Chapman1* and Mats G. Magnusson2 1
InCITe Research Group, College of Business, University of Western Sydney, New South Wales, Australia 2 Department of Technology Management and Economics, Chalmers University of Technology, Gothenburg, Sweden That knowledge is a key component of all forms of innovation, and consequently also in continuous innovation, is a widely accepted tenet of modern innovation management. Despite this, the deliberate management of knowledge in order to support innovation has still not found its way into all companies. While some researchers in the innovation field would regard this as a shortcoming of the organisations in question, others would argue that it is actually better for firms not to try to use overly structured approaches and tools to capture and diffuse knowledge, as this could even result in stifling innovation if undertaken in the wrong way. Hence, our understanding of how to manage knowledge processes in a way that truly contributes to innovation is still limited. In order to move away from a discussion based only on different theoretical assumptions about the nature of knowledge and its role in innovation, we need to bring this issue closer to practice, and expose our ideas to empirical testing. A fundamental step in moving the whole issue of knowledge management in innovation towards increased usability and usefulness is to put more emphasis on performance measurement and improvement. Only by investigating the relationships between innovation, knowledge and performance management can we arrive at improved theory and practice. This special issue is an early attempt to move in the desired direction. By combining conceptual *Correspondence to: Ross L. Chapman, InCITe Research Group, College of Business, University of Western Sydney, Locked Bag 1797, Penrith South D.C., NSW 1797, Australia. E-mail:
[email protected]
Copyright # 2006 John Wiley & Sons, Ltd.
and empirical works we aim at shedding light on a number of critical questions concerning continuous innovation, performance and knowledge management. The first two articles of this special issue are conceptual, addressing important themes for the management of knowledge and learning under the overarching framework of continuous innovation. In their article ‘Managing Innovation through Social Architecture, Learning and Competencies: A New Conceptual Approach’, Murray and Blackman point to the need to consider the perspective on knowledge that is applied in innovation management. In particular, they underline that an exaggerated use of a rational perspective on knowledge collection and sharing may hamper the development of fruitful innovation practice, and that there is a need to consider a social constructionist perspective on innovation and learning. Such a change of perspective shifts our attention from the direct management of knowledge and innovation to an increased emphasis on managing the supporting structures that allow individuals to engage in interaction and communication, which eventually result in new knowledge and innovation. This departure from the view of innovation as problem-solving based on information processing to a perspective in which interpretation and dialogue stand out as key aspects of innovation has direct implications for management, in terms of the use of new learning routines that can bridge the structured and the unstructured components of innovation processes. Liu’s contribution to this conceptual debate is entitled ‘Knowledge Exploitation, Knowledge
GUEST EDITORIAL Exploration and Competency Trap’. This article provides a theoretical exploration of the concept of competence traps. A central theme in innovation for more than a decade has been the joint handling of knowledge exploitation and knowledge exploration in organisations. Several studies have pointed to the need to address both these processes simultaneously, highlighting the inherent difficulties that organisations encounter when they try to handle this paradoxical challenge. Earlier studies have primarily highlighted the tendency in established firms to over-emphasise the exploitation of knowledge, and the problems in terms of competence traps that result from this behaviour. Liu instead suggests that there are different types of competence traps and that problems may also derive from too much emphasis on exploration, emphasising the need for balance between the two knowledge processes. By drawing on the organisational learning literature, the relationships between a wide range of factors and the different competence traps are elaborated upon, and their implications for business performance are discussed. Another article dealing with the duality of knowledge exploration and exploitation is the article ‘Dynamic Capabilities in Early-Phase Entrepreneurship—Observations from Mobile Internet StartUps’, by Boccardelli and Magnusson. This article combines theoretical and empirical approaches to examine the use of dynamic capabilities in earlyphase start-up companies. Earlier writings in this stream of the resource-based theory of strategic management have focused on the changes to companies’ resource bases that take place over time, primarily in terms of acquisition and creation of resources. Based on empirical observations of 59 start-up companies in the Swedish mobile Internet industry, it is seen that this predominant focus on substantial changes to the resource base is rarely seen, at least in terms of technologies. What is instead noted is that the market and customer side of the companies’ offerings are frequently altered, without any substantial changes to the technological knowledge that is deployed. Hence, only the capabilities derived from a specific set of resources are actually changed. Furthermore, the empirical findings indicate that the survival rate is higher among the firms that change market and customer focus. This gives rise to questions about the value of distinctive resources at the very early stages of firm development and instead underlines the need for resource flexibility in the process of matching resources and market needs in uncertain environments, thereby opening up new lines of inquiry in the fields of entrepreneurship and strategic management. Moreover, it highlights the differences
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Knowledge and Process Management between performance focus in new and established firms, respectively, as new firms are concerned with resource flexibility in order to survive while established firms rather strive for competitive advantage through the development and use of distinctive resources. Another study based on an empirical investigation in the telecom industry is the one by Fellar, Parhankangas and Smeds. In their article ‘Process Learning in Alliances Developing Radical and Incremental Innovations: Evidence from the Telecommunications Industry’, they draw on a survey of 105 R&D partnerships in the global telecommunications industry. The study shows that there are substantial differences between R&D alliances developing incremental innovations and the ones generating radical innovations in terms of the use of mechanisms supporting knowledge creation processes. Alliances aiming at incremental innovation use more of these mechanisms and also lead to partners learning more from each others’ R&D processes. A large part of studies of continuous innovation has this far dealt with innovations in manufacturing industry. The article ‘An Empirical Examination of Performance Measurement for Managing Continuous Innovation in Logistics’ by Soosay and Chapman, constitutes an extension of this focus to a wider area by emphasising the role of performance measurement of innovation in the supply-chain and logistics field. Starting from a model relating organisational capabilities and competencies to innovation performance, this article investigates the use of performance measures in ten logistics firms located in Australia and Singapore. Using in-depth case studies, it is seen that performance measurement related to innovation is seen as increasingly important in this field of activities. Corso, Giacobbe, Martini and Pellegrini have examined the issue of knowledge management in a highly dispersed and mobile workforce in their article ‘What Knowledge Management for Mobile Workers?’. This contribution adds to our understanding of knowledge management as it underlines the need to integrate the knowledge of dispersed workers, an increasingly demanding task for companies as their operations become more geographically distributed. Based on survey data from 410 Italian firms stating that they had dispersed workers, the authors investigate the use of different types of Knowledge Management Systems in relation to the knowledge work performed. The empirical study reveals that the main problems relating to knowledge management for distributed workers concern knowledge transfer
R. L. Chapman and M. G. Magnusson DOI: 10.1002/kpm
Knowledge and Process Management and the planning and control of distributed work activities, including the measurement of performance. A contingency-based approach for knowledge management is proposed, based on the different categories of knowledge work that may be identified. Another article extending the domain of continuous innovation from manufacturing industry to services is that written by Prajogo, ‘The relationship between innovation and business performance—A comparative study between manufacturing and service firms in Australia’. He investigates how innovation performance and business performance are related to each other, and whether there are any differences between this inter-relationship between manufacturing and service firms. Utilising survey data from 194 firms, Prajogo finds that innovation performance in service firms is not different from innovation performance in manufacturing firms. However, it is also found that service firms benefit less from innovation than their manufacturing counterparts, possibly being a result of service innovations being easier to copy than most product and process innovations in manufacturing firms. Altogether, the different articles yield a comprehensive picture of the complex relationship between continuous innovation, performance and knowledge management. That knowledge and learning are at the core of successful continuous innovation is hardly surprising. However, the
GUEST EDITORIAL contributions point out some difficulties in managing knowledge for innovation, ranging from the need to reconsider some of the basic perspectives we have on innovation and knowledge to the problems posed by the geographical distribution of knowledge in firms. Furthermore, the articles underline the tension between knowledge exploration and knowledge exploitation that is ever present in innovation. In trying to strike a balance between these two, knowledge processes stand out as the key components in achieving successful long-term continuous innovation. Finding the right mix of knowledge flexibility and distinctiveness may facilitate the avoidance of competence traps, but the right balance may also shift substantially over time as the goals and challenges of a specific organisation change. Performance measurement can play a major role in finding this balance, as it makes it possible to measure and adjust organisational behaviour over time and thereby observe when there is an exaggerated focus on one of the specific knowledge processes. In order to allow for this, there is however a need for refined performance measurement methods and tools that allow for reliable measuring of knowledge, innovation performance and business performance. A number of steps in that direction are taken in the contributions of this special issue, but many questions still need to be resolved.
Continuous Innovation, Performance and Knowledge Management DOI: 10.1002/kpm
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