Strategic alignment of innovation to business: Balancing exploration and exploitation in short and long life cycle industries

177 Pages·2007·3.29 MB·English

by  Frances Fortuin

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Frances Fortuin
WWaaggeenniinnggeenn AAccaaddeemmIiiccnnovation and sustainability series – Volume 2
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Strategic alignment of innovation to business

Strategic alignment of
innovation to business
Balancing exploration and exploitation in
short and long life cycle industries
Frances Fortuin
Innovation and sustainability series – Volume 2
WWaaggeenniinnggeenn AAccaaddeemmiicc
PPPP uuuu bbbbb llll iiii ssssss hhhh eeeeee rrrr ssssss
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the material is concerned. Nothing from this
publication may be translated, reproduced,
stored in a computerised system or published in
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mechanical, reprographic or photographic,
ISBN: 978-90-8686-056-2 without prior written permission from the
e-ISBN: 978-90-8686-628-1 publisher, Wageningen Academic Publishers,
DOI: 10.3920/978-90-8686-628-1 P.O. Box 220, 6700 AE Wageningen, the
Netherlands,
www.WageningenAcademic.com
ISSN 1875-0702
The individual contributions in this publication
and any liabilities arising from them remain the
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The publisher is not responsible for possible
© Wageningen Academic Publishers damages, which could be a result of content
The Netherlands, 2007 derived from this publication.
Innovation and Sustainability series
The fields of innovation and sustainability are more and more recognized as the major drivers
of business success in the 21st century. Today’s companies are facing ever-faster changes in
their business environment, to which they must respond through continuous innovation.
The growing concern regarding the quality and environmental friendliness of products
and processes call for fundamentally new ways of developing, producing and marketing of
products. New ways of organizing supply chains, with new network ties between firms are
needed to cope with these new demands. This series aims to assist industry to conduct the
(interorganizational) innovations needed to meet the challenges that are fundamental for the
transition from a production orientation to a ‘cradle-to-cradle’ demand-orientation. However,
innovation can be disruptive, not only concerning the organization of the processes, but also
regarding the allocation of resources and power bases. Existing companies are increasingly
challenged by newcomers, e.g. start-up firms and spin-off ventures. In the transition process,
supplier bases might be reorganized, activities reallocated, and relations and role allocations
changed as new entities occur. We want to study these new organizational forms and their
consequences – as we view them as core for these business networks in transition.
About the Editor
Onno Omta is chaired professor in Business Administration at Wageningen University
and Research Centre, the Netherlands. He received an MSc in Biochemistry and a PhD in
innovation management, both from the University of Groningen. He is the Editor-in-Chief
of The Journal on Chain and Network Science, and he has published numerous articles in
leading scientific journals in the field of chains and networks and innovation. He has worked as
a consultant and researcher for a large variety of (multinational) technology-based prospector
companies within the agri-food industry (e.g. Unilever, VION, Bonduelle, Campina, Friesland
Foods, FloraHolland) and in other industries (e.g. SKF, Airbus, Erickson, Exxon, Hilti and
Philips).
Dedicated to my husband Onno and to my children Anne Willem and Ilonka
Table of contents
Innovation and Sustainability series 5
Preface 9
1. Introduction 11
2. Theoretical perspectives on strategy 15
2.1 Strategic management 15
2.2 The history of strategic management thought 17
2.3 Static versus dynamic strategy models 18
2.4 The two main theoretical perspectives on strategy 19
2.5 The industrial organization perspective 19
2.6 Competence perspective 22
2.7 The concept of strategic alignment 27
2.8 Concluding remarks 30
3. Study domain: innovation 31
3.1 The phenomenon of innovation 31
3.2 Innovation typologies 32
3.3 The R&D process 34
3.4 Barriers to innovation 37
3.5 Drivers of innovation 38
3.6 Best practices in innovation 42
3.7 Innovation strategy and the two perspectives on strategy 45
3.8 Analyzing strategic alignment in the case of innovation 47
3.9 Concluding remarks 49
4. Research design 51
4.1 The general conceptual framework 51
4.2 Overall research design 52
4.3 The cross-industry study 54
4.4 The longitudinal study 66
4.5 Concluding remarks 75
5. Cross-industry study results 77
5.1 Data collection and baseline description of the cross-industry companies 77
5.2 R&D Performance 80
5.3 Strategic alignment 83
5.4 R&D strategy 85
5.5 R&D competencies 88
Strategic alignment of innovation to business 7
5.6 R&D capabilities 91
5.7 R&D process 99
5.8 Methods to improve strategic alignment 103
5.9 Concluding remarks 106
6. Longitudinal study results 109
6.1 Baseline description 109
6.2 Study sample, reliability and validity 110
6.3 Comparison of R&D and BU/headquarters assessments 111
6.4 Factors related to strategic alignment (external fit) 113
6.5 The longitudinal analyses 115
6.6 Concluding remarks 124
7. Discussion and conclusions 125
7.1 The cross-industry study 126
7.2 The longitudinal study 130
7.3 General conclusion 133
7.4 Implications for innovation management 135
7.5 Concluding remarks 138
References 141
Appendices 155
Appendix A. General questions in the cross-industry study 155
Appendix B. Cross-industry survey questionnaire I 157
Appendix C. Cross-industry survey questionnaire II 165
Appendix D. Longitudinal survey questionnaire 168
Appendix E. terms used in the research questionnaires 170
About the author 173
8 Strategic alignment of innovation to business
Preface
For the several employments and offices of our fellows, we have twelve that sail into foreign countries
under the names of other nations (for our own conceal), who bring us the books and abstracts, and
patterns of experiments of all other parts. These we call Merchants of Light. We have three that
collect the experiments which are in all books. These we call Depredators. We have three that collect
the experiments of all mechanical arts, and also of liberal sciences, and also of practices which are
not brought into arts. These we call Mysterymen. We have three that try new experiments, such as
themselves think good. These we call Pioneers or Miners. We have three that draw the experiments
of the former four into titles and tables, to give the better light for the drawing of observations and
axioms cut of them. These we call Compilers. We have three that bend themselves, looking into
the experiments of their fellows, and cast about how to draw out of them things of use and practice
for man’s life and knowledge, as well for works as for plain demonstration of causes, means of
natural divinations and the easy and clear discovery of the virtues and parts of the bodies. These
we call Dowrymen or Benefactors. Then after divers meetings and consults of our whole number
to consider of the former labors and collections, we have three that take care out of them to direct
new experiments, of a higher light, more penetrating into Nature than the former. These we call
Lamps. We have three others that do execute the experiments so directed and report them. These we
call Inoculators. Lastly, we have three that raise the former discoveries by experiments into greater
observations, axioms, and aphorisms. These we call Interpretators of Nature. We have also, as you
must think, novices and apprentices, that the succession of the former employed men do not fail;
beside a great number of servants and attendants, men and women. And this we do also: We have
consultations, which of the inventions and experiences which we have discovered shall be published,
and which not: and take all an oath of secrecy for the concealing of those which we think fit to keep
secret: though, some of those we do reveal sometimes to the State, and some not.
Nova Atlantis (Sir Francis Bacon (1625) in Omta, 1995).
About 1625, Sir Francis Bacon magnificently described an organization that was totally
innovation oriented in the ideal world of Nova Atlantis. Today, R&D (Research and
Development) organizations can be found in the everyday world. This book will bring you into
this world. It describes the day-to-day activities of innovation management and the constant
struggle to align innovation to business strategy. It aims to answer such questions as:
• What causes the (lack of) strategic alignment between innovation and business?
• How can strategic alignment be achieved and maintained?
This book presents the findings of a cross-industry study into the management and organization
of innovation in ten technology-based companies in different industries typified by the length
of their product generation life cycles (PGLCs) and a six-year longitudinal study in one of
these companies to research the dynamics of strategic alignment. It aims to provide a sound
empirical basis for a number of ideas and statements about innovation management in general.
Parts of the book have been presented at scientific congresses and workshops, and the findings
Strategic alignment of innovation to business 9