Organizational Capacities for Sustained Product Innovation

This report is a very preliminary summary of the results of a study on the organization-level capacities that enable an organization to generate multiple new products or services over time. The intent is to develop the basis to assess the innovativeness of an organization, understand what managers need to change to improve their innovativeness, and identify how they can manage that change. This paper emphasizes the theory that underlies the phenomenon of " organizational capacities for innovation. " Before developing the theory on capacities for innovation, however, it is essential to define terms, since at least some of the conflicts and incongruities in the innovation management literature arise because people are simply talking about different things. In this paper, " product innovation " refers to the whole process of bringing a new product or service to the market, and includes product conceptualization, design and development, production or operationalization, marketing, distribution, and selling. Some think of " innovation " as the creative idea generation or technological invention parts of the process. However, these are limited views, since any or all of the steps in the innovation process may require creativity, and the most innovative aspect of a product may be the novel integration of apparently standard steps. combination of these that are unfamiliar to the organization. The first use of new-to-the-world inventions is a very limited subset of product innovation, so focusing only on them does not include most product innovation in most organizations. " New to the firm " as a definition of innovations includes imitations. However, a strategy of sustained innovation based on imitation is rarely effective (Freeman 1980; Mitchell and Singh 1992) so the definition does not overemphasize imitations. Product innovations also range from incremental to radical, but research