THE IDEA

"Fortune favors the prepared mind." What is true for individuals also applys to organizations. The merits of innovation activities like Collaborative User Innovation and Technological Competence Leveraging can be substantial to organizations. However, a necessary precondition to capitalizing on them is organizational preparedness. To really become an innovation champion and benefit from Collaborative User Innovation and Technological Competence Leveraging, organizations need to adapt their

  • strategies,
  • processes and routines,
  • structure, and
  • business models.

THE PROBLEM

Innovation does not only come with benefits for organizations. Whenever something new is created, it replaces existing ideas, products, processes, people, and values. In some cases, innovation may even turn whole industries upside down and call for completely new business models. Schumpeter referred to this phenomenon as "creative destruction". Because of the disruptive nature of innovation, psychological, organizational, and cultural barriers against novel ideas emerge in many established organizations. This reluctance to innovate is even stronger in the case of innovation activities that involve external stakeholders, e.g. Collaborative User Innovation and Technological Competence Leveraging. Firstly, such open and user innovation approaches yields in more radical, disruptive innovation than inhouse R&D. Secondly, they call for a substantial re-organization of innovation processes.

THE SOLUTION

Organizational Design for Innovation refers to the entirety of activities helping to prepare an organization for (open) innovation activities. To really benefit from innovative ideas, organizations have to develop dynamic capabilities and absorptive capacity. Dynamic capabilities refer to the organization's ability to deal with changes in its ecosystem and to adapt to them accordingly. Absorptive capacity is a necessary precondition to recognize, evaluate, and capitalize on innovative inputs from outside and inside the organization.

Depending on the specific nature of the organization's innovation strategy, organizational design activities have to address different organizational subsystems. For example, in the case of a one-time Lead User project, organizational design activities will have to focus on the training of the employees involved, on adequate incentive systems, and on setting-up efficient processes and co-operation templates. In the case of a long-term open innovation "ecosystem" strategy, the organizational structure, its goals, and its strategy will have to be adapted as well.

Learn more about Organizational Design for Innovation:

  • Paper on Org Design for Innovation.