Your research examines firm innovation with an eye toward understanding how firm attributes such as structure, positioning, and knowledge affect innovation outcomes by altering the motivation and ability of knowledge workers to innovate. What conclusions have you drawn from your research into this topic?
The exciting overall conclusion is that managers have many “levers” they can pull to affect innovation. The challenge is that these “levers” are complex and likely to affect and interact with other firm attributes. Take, for instance, my research on the potential impact of promotion structure on innovation. Results indicate that increasing potential rewards for promotion are likely to increase innovation outcomes. However, indications are that this increase also comes with decreased internal collaboration (due to the competition for promotion with peers) and increased reliance on external collaborators. Thus, this promotion “lever” is not a one-size-fits-all remedy to increase innovation. It is likely more effective for organizations that do not rely as heavily on internal innovative collaboration and are less sensitive to protection of their innovation from outside entities. Thus, the challenge to managing innovation is not only understanding tools that may lead to innovative improvements, in general, but pairing them with an understanding of the needs and capabilities of your organization.
You’ve also looked at how firm attributes affect top managers’ strategies for directing innovation. What have you found in that research?
We can think of a manager’s choice to innovate in two dimensions. The first dimension is the choice to invest in the process of innovation (e.g., R&D) versus in other things (e.g., marketing an existing product). The second dimension is the choice of how to invest those R&D expenditures. Firm attributes are likely to affect the incentive and ability of managers in both dimensions. For example, the long-term incentives offered to a CEO are likely to change the decision-making time horizon, leading to changes in the amount invested in innovation. Thus, CEOs governed by short-term incentives are less likely to invest in R&D than in other firm activities that generate revenue more quickly. Conversely, the technological breadth of the firm is likely to impact the potential uses of more basic research within the firm and, thus, likely to affect the type (basic versus applied) of research pursued by the CEO.