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SUMMARY:Innovation in Services: A comparative study of external learning p
 rocesses in incremental and radical service innovation - Henning Droegeand
   Juan Ramis\,  ESADE Business School (visitor to the CSA IfM)
DTSTART:20091117T120000Z
DTEND:20091117T130000Z
UID:TALK20474@talks.cam.ac.uk
CONTACT:Peter Wild
DESCRIPTION:Innovation in Services: A comparative study of external learni
 ng processes in incremental and radical service innovation *\n\n\nIn this 
 study we present findings on external learning processes in service innova
 tion projects and show how such processes operate in incremental and radic
 al innovation projects. While research on product innovation has revealed 
 already first valuable insights (e.g. Lane & Lubatkin\, 1998\; Jansen et a
 l.\, 2005)\, in service innovation literature\, external learning still be
 longs to one of least researched topics (Sundbo\, 2000\; Stevens & Dimitri
 adis\, 2004)\, although several researchers have called for more research 
 in this domain (e.g. Spohrer\, 2008\; Lane et al.\, 2006). This is surpris
 ing\, as due to differences in the ease with which service firms may ident
 ify and exploit external information (Mendonca et al.\, 2004)\, patterns o
 f absorbing external information may be shaped differently particularly in
  services innovation. In order to answer these questions\, we conducted ca
 se study research in the retail banking sector in Germany and Spain.  \n\n
 Our findings indicate that\, different from existing studies\, in incremen
 tal innovation projects\, the firm could readily acquire the novel informa
 tion to fit the information needs of the innovation project and could expl
 oit it subsequently. In contrast\, external learning in radical innovation
  activities involved external information from more distant or ambiguous s
 ources. This information\, could not be readily assimilated and exploited 
 after acquisition\, but needed additional intermediary steps. After the ac
 quisition stage\, an intense transformation stage was initiated. Only afte
 r the external information was transformed by internal experts in order to
  become understandable and to get closer to the existing knowledge base\, 
 the service development staff could integrate this information into the in
 novation activities in order to exploit it subsequently. In sum\, the abso
 rption process for external information related to incremental innovation 
 included the steps (1) recognizing\, (2) acquiring\, and (3) exploiting. I
 n contrast\, the process for radical innovation differed and included the 
 steps (1) recognizing (2) acquiring\, (3) transforming\,  and (4) exploiti
 ng. Particularly among the process steps during radical innovation\, we ob
 served frequent iterations. For example\, due to observed ambiguity and th
 e continuous changing of the external information available\, the project 
 development staff needed to acquire\, transform\, integrate and exploit ex
 ternal information several times again over the course of the radical proj
 ects. \n\nOur findings on the differences in learning from external source
 s depending on whether this takes place in incremental or radical innovati
 on projects\, support Todorova & Durisin’s (2007) conceptual argument on
  the contingency of external learning integration processes with regard to
  the type of knowledge absorbed. In addition\, our findings on the iterati
 ve nature of the external learning activities add to current literature a 
 dynamic perspective\, as existing process models have to date remained exc
 lusively static in nature (e.g. Zahra & George\, 2002). Future research sh
 ould apply our findings and investigate it in additional service industrie
 s. Via quantitative research\, our findings could further be extended in o
 rder to inquire whether they hold also for larger groups of observed organ
 izations. \n\nAs regards practical implications\, firms need to put extern
 al information absorption processes in place which are adaptable to the di
 fferent information needs of incremental and radical innovation projects. 
 In addition\, firms must be aware\, that external learning activities shou
 ld not be performed only at the beginning of an innovation project. Rather
 \, these absorption processes are highly iterative and need to be repeated
  on a continuous basis in order to be able to quickly react to environment
 al changes.\n\n* The authors would like to thank the IBM Global University
  Relations and Innovation Program as well as the European Union Social Fun
 d for financially supporting this research.
LOCATION:Seminar Room Three\, Institute for Manufacturing
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