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Special Issue
Michael Gibbert and Liisa Välikangas
Theme Editors
Boundaries and Innovation
Charles Baden-Fuller Editorial
It is a pleasure to introduce the special issue on Boundaries
and Innovation, edited by Michael Gibbert and Liisa Välikangas. They
have brought together a fascinating group of writers from many different countries
and perspectives to explore this issue.
Crossing the cognitive boundaries
It is well known that managers are cognitively constrained by their circumstances
and their backgrounds. On the one hand, these constraints reflect the positive
benefits of a deep understanding and individual capacity around a limited
range of issues that enhance the organisation's capability. On the other hand,
these constraints can also hinder the ability of executives to see their surroundings
and respond to opportunities and threats.
Max Boisot and Ian MacMillan examine how the bounded mindset
of ‘managers’ can blindside them to the opportunities as seen
by ‘entrepreneurs’. They argue that these boundaries are rooted
in ways of thinking about the probabilities and possibilities of events occurring.
While entrepreneurs recognize ‘possible’ future states, managers
have a much less expansive ‘probable’ horizon that blocks them
out and leaves money on the table. They recommend companies adopt distinct
approaches to these different paths towards future value creation.
In two very different papers we see how play and playfulness
can break down barriers and allow innovative ideas and actions to flourish.
Johan Roos, Bart Victor and Matt Statler use action-based research to show
how introducing the tools of play executives (and boards) to overcome their
inhibitions. This article shows how the practices really work to release the
imaginative energies of managers towards innovative strategic ends.
Deborah Dougherty and Helen Takacs study innovative processes
among product development teams in large organisations to show how ‘team
play’ enables effectiveness. Team play allows individuals to cross boundaries
that are erected by discipline, hierarchy and role. They explore why team
play works so well and what others can do to replicate the experiences.
Crossing boundaries set by organisations
Organisations also appear to be constrained by boundaries. For example, competencies
and capabilities show remarkable resistance to being moved across either internal
or external boundaries. If one can overcome this challenge, new possibilities
are brought about.
Samina Karim and Will Mitchell document how Johnson &
Johnson have mastered the art of unpicking competencies and capabilities from
acquired businesses and transporting them elsewhere within the firm. This
is not easy. They explain that the process involves configuring and reconfiguring
internal boundaries many times. They document in impressive detail J&J's
achievements that suggests to me that J&J could be a best practice template.
Engaging with other firms to leverage internal advantages
is always difficult and typically requires some kind of formal relationships.
There are exceptions. Simon Grand, Georg von Krogh, Dorothy Leonard and Walter
Swap explore how companies can engage effectively with open-source software
(freely available) to leverage internal advantages. Their suggestions go far
beyond the simple use of open-source, and they show how this can lead to new
business models and new sources of competitive advantage.
In summary, this special issue has something for everyone.
Its contributions range from the conceptual and provocative to the useful
and immediately practical. It covers both the thinking and doing of management.
Thanks to both editors and contributors for some wonderful offerings.
Michael Gibbert and Liisa Välikangas Boundaries and Innovation:
Special Issue Introduction by Guest Editors michael.gibbert@uni-bocconi.it
Popular parlance has it that Necessity is the Mother of Invention.
Entrepreneurs invent around resource constraints, and, when they have to be,
problems get solved. Yet in many walks of life (including management) constraints
are seen predominantly as negative – obstacles rather than catalytic
opportunities for innovation. For example, inadequate resourcing is often
cited as a reason for the lack of innovation in large companies: but such
fiscal conservatism could just as well form an opportunity for entrepreneurship.
When they have to be, problems get solved
This tension between boundaries and innovation forms a starting
point for this special issue. In particular, we seek to reconcile the nature
of boundaries as catalysts on one hand and constraints on the other. But rather
than focusing on constraints as something that cannot be overcome, something
that is inherently negative, we hope to probe deeper into the enabling potential
of boundaries: How do boundaries foster innovation? More specifically, we
split this question in two sub-questions that guided our research:
• What are the types of boundaries that serve as an aid to innovation?
• How can we be more intentional about how we perceive and manage boundaries?
We have pondered these questions from a variety of angles.
From philosophy, Cilliers tells us ‘we often fall into the trap of thinking
of a boundary as something that separates one thing from another. We should
rather think of boundaries as something that constitutes that which is bounded.
This shift will help us to see the boundary as something enabling, rather
than constraining’ (emphasis in the original). And from architecture,
we appreciate Rittel's judgement that ‘constraints are not “natural,”
objective, and unavoidable – in short, inflicted on us. Rather, they
are the result of personal decisions. They are subjective. Different people
will see different constraints and might come to different decisions. It depends
on our fantasy, courage, resourcefulness, and the lack of respect, where we
set our constraints.’
In the business literature, organizational constraints are
echoed in the notions of innovation that happens ‘despite the system’
(to use Gary Hamel's term), or in a view of strategy as stretch and leverage.
Whereas boundaries as corporate controls — whether milestones, resource
constraints, or financial targets — are frequently used, they are rarely
evaluated as enablers to innovation in their own right. Typically the purpose
of such boundaries is to filter and select in order to facilitate resource
allocation, rather than to drive innovation activity.
Yet the business literature routinely addresses many kinds
of boundaries: geographic boundaries as globalisation, industry boundaries
as strategy, organizational boundaries as theory of the firm, and human cognition
as bounded rationality. Individual performance can be bounded by deadlines,
attitudes to risk, and aspiration levels. But the connection between boundaries
and innovation has been developed in only a few cases. For example, there
are scholars today comparing the effectiveness of open source software with
proprietary software, while others are studying the effect of different governance
structures on economic performance. Game theorists are exploring the role
of boundaries in the definition of a game, arguing that often these boundaries
are drawn too narrowly, impairing players' ability to innovate around the
game. International business research has been probing into the effects of
environmental regulations on incremental innovation. These studies point up
the need for further exploration – let this special issue be a step
to this direction.
Boundary-less environments, devoid of stimulation, make innovation difficult.
Max Boisot and Ian MacMillan Crossing Epistemological Boundaries:
Managerial and Entrepreneurial Approaches to Knowledge Management boisot@attglobal.net
It is possible to identify two distinct yet complementary
epistemological paths to knowledge development. The first one is holistic
and field dependent, and builds on the concept of plausibility, and we associate
this path with an entrepreneurial mindset. The second is object-oriented and
builds on the concept of probability; this path can be associated with the
managerial mindset. We believe that both managerial and knowledge management
practices have emphasized the second path at the expense of the first. To
restore the balance, knowledge management needs to develop processes and tools
– associated with scenarios and real options – that will allow
it to operate credibly in possible and plausible worlds, so as to extract
value from them. We propose a systems framework for thinking through the nature
of such tools.
Samina Karim and Will Mitchell Innovation Through Acquisition
and Internal Development: A Quarter-Century of Internal and External Boundary
Evolution at Johnson & Johnson samina@bu.edu
This article discusses how firms innovate within and across
firm boundaries by reconfiguring their resources and business units over time.
Focusing on acquisitions and internal development as key aspects of business
dynamics, the authors track the evolution of 87 product lines and 88 business
units in Johnson & Johnson's medical sector from 1975 to 1997. The study
highlights the dual importance of acquisitions and internal development as
sources of value and innovation for a firm, along with the complementary role
of business unit reconfiguration. The company commonly looked beyond its boundaries
for new resources, acquiring most of its product lines and units during the
period, and actively reconfiguring most acquired units in attempts to create
new value, rather than simply leaving them to operate within their original
boundaries. In addition, unit reconfiguration commonly preceded product line
movement across unit boundaries, providing evidence of the embedded nature
of resources within structure. At the same time, however, internally developed
resources and units were more likely to be retained: indeed, stable internally
created units, where business routines were most understood, were the most
common sources of innovations. The underlying message of these evolutionary
patterns is that innovation stems from maintaining a deep understanding of
organizationally-embedded routines, while undertaking careful ongoing redefinition
of unit and firm boundaries.
John Roos, Bart Victor and Matt Statler Playing Seriously
with Strategy johan@imagilab.org
This article details two cycles of interventions and reflection
in various executive development contexts led by the authors as facilitator/consultants.
Their hunch that changing the constraints of strategy processes would also
change the content generated was tested by changing the typical mode of work
to that of ‘serious play’ and modifying the usual medium from
verbal, computer and two-dimensional text and graphic by the introduction
of 3-D media (LEGO bricks). The authors examine the potential for using serious
play in the particular organizational challenge of making strategy, and highlight
the capacity of ‘action research’ to contribute simultaneously
to both academic understanding and practical value.
Deborah Dougherty and C. Helen Takacs Team Play: The Boundary
of Heedful Interrelating for Innovation doughert@rbs.rutgers.edu
A central function of organizational boundaries is to help
people know what they are to do with whom and how, which enables them to work
together. Sustained product innovation in very large organizations requires
that perhaps thousands of people across the organization know how to join
up, participate in, and move in and out of many new product teams, so a boundary
that can keep all these roles and relationships sensible is especially important
for innovation. Using grounded theory building, we find that a boundary of
team play enabled heedful interrelating and thus the easy formation of multiple
teams over time in the large organizations we studied, while a boundary of
detachment thwarted organization-wide innovation. Play embodies open, improvised,
fluid and energized relations, while team play reflects the emergent yet dynamic
space of heedful interrelating. Our study details how team play vs. detachment
enable or disable innovation teams, and suggests how managers can implement
or maintain the heedful social relations that are necessary for sustained
innovation..
Simon Grand, Georg von Krogh, Dorothy Leonard and Walter Swap Resource
Allocation to Open Source Innovation: Towards a Multi-Level Framework of Technological
Innovation Beyond Firm Boundaries simon.grand@unisg.ch
Successful technological innovation depends upon marshalling
sufficient knowledge resources to support continuous discovery, knowledge
creation and technical development. Current perspectives emphasize innovation
occurring either within firm boundaries or in the public arena. Open Source
[OS] software development represents a third mode, where privately funded
efforts contribute to the creation of a public good, which may presage future
models of innovation. The authors develop a four-level management model of
increasing private resource allocation based on a detailed discussion of how
and why software and IT firms engage in OS development where, paradoxically,
increased ‘public’ investment can lead to greater ‘private’
benefits. But each level implies greater outlay of private resources and increased
dependency upon publicly available knowledge assets, so managers will need
to select their firm's appropriate level of engagement carefully. Successful
development of such knowledge entails understanding the nature of OS innovation
and the distinction between freely available explicit knowledge and firms’
privately retained tacit knowledge, participating in the dynamic cumulative
process of gift exchange inherent in acceptance as a relevant player in an
OS community, and optimising firm-specific engagement over the four levels
of investment and involvement to establish the conditions for knowledge creation
and appropriation.
This issue is available in full on-line at www.sciencedirect.com
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