Constructing the Knowledge Foundations for Sustained Innovation in an Australian Commercial Enterprise

In 2001, Eagle Datamation International (EDI), a leader in the Australasian customs clearance and freight forwarding software market, embarked on a process of cultural transformation in response to changes in its regulatory environment. The first phase of this transformative process involved the execution of a strategy of ‘creative destruction’ through which a new ‘insurgent’ culture, focused upon rapid learning and knowledge-construction activities pertinent to its new purpose, was created in the midst of the old ‘incumbent’ organization. This paper documents the second phase of strategic action, aimed at strengthening the nascent culture of innovation at the ‘new’ EDI. Strategies developed for this purpose included revisiting, and collectively reconstituting, the strategic Core of the organization (vision, mission and core values); establishing regular forums of interactivity characterized by the principle of ‘creative abrasion’ – active and vigorous social debate around ideas; and the mediation of the CEO’s power by inviting a university researcher to play the role of an ‘external critic’. Using the analytical framework provided by the grounded theory generated by this phase of strategic action, the paper identifies three critical dimensions of the constructed environment that appear to facilitate creativity, learning and innovation at EDI: the capacity of the organization’s leadership ‘to work with’ culture; the recognition of creativity, learning, and knowledge as ‘social capital resources’ that are embedded in the social contexts of their acquisition and application; and the vital role played by the external critic in the provision of an ‘external’ perspective that challenges the perspectives of organizational ‘insiders’ that develop as a consequence of specific work and life histories, roles, and power relations.