Using Stakeholder Dialogue as a Source for New Ideas: a Dynamic Capability Underlying Sustainable Innovation

This paper attempts to gain a deeper understanding of the firm’s ability to integrate stakeholder insights into the process of organizational innovation from a sustainable development viewpoint. Given the early stage of empirical research on the topic, we used an exploratory case study of two Spanish companies that have successfully learned from stakeholder dialogue and have generated innovations that are beneficial both for the company and for sustainable development in general. The evidence from the two case studies suggests the existence of two simple capabilities stakeholder dialogue and stakeholder knowledge integration for generating innovations in accordance with stakeholder needs. Whereas stakeholder dialogue leverages organizational resources that promote two-way communication, transparency and appropriate feedback to stakeholders, stakeholder knowledge integration relies on nonhierarchical structures, flexibility and openness to change. The paper sheds some light on the under-researched issue of linking stakeholder dialogue and sustainable innovation, and thus contributes to opening the “black box” of dynamic capabilities and advancing in the understanding of this fundamental organizational concept. * Postdoctoral Research Fellow, IESE ** Lecturer of General Management, IESE *** Professor of General Management, IESE