Innovation and new business through mutually beneficial collaboration and proactive procurement

ABSTRACT This dissertation focuses on new technology commercialization, innovation and new business development. Industry-based novel technology may achieve commercialization through its transfer to a large research laboratory acting as a lead user and technical partner, and providing the new technology with complementary assets and meaningful initial use in social practice. The research lab benefits from the new technology and innovation through major performance improvements and cost savings. Such mutually beneficial collaboration between the lab and the firm does not require any additional administrative efforts or funds from the lab, yet requires openness to technologies and partner companies that may not be previously known to the lab- Labs achieve the benefits by applying a proactive procurement model that promotes active pre-tender search of new technologies and pre-tender testing and piloting of these technological options. The collaboration works best when based on the development needs of both parties. This means that first of all the lab has significant engineering activity with well-defined technological needs and second, that the firm has advanced prototype technology yet needs further testing, piloting and the initial market and references to achieve the market breakthrough. The empirical evidence of the dissertation is based on a longitudinal multiple-case study with the European Laboratory for Particle Physics. The key theoretical contribution of this study is that large research labs, including basic research, play an important role in product and business development toward the end, rather than front-end, of the innovation process. This also implies that product-orientation and business-orientation can contribute to basic re-search. The study provides practical managerial and policy guidelines on how to initiate and manage mutually beneficial lab-industry collaboration and proactive procurement.

Supporting Business Model Modelling: a Compromise between Creativity and Constraints

Diagrams and tools help to support task modelling in engi- neering and process management. Unfortunately they are unfit to help in a business context at a strategic level, because of the flexibility needed for creative thinking and user friendly interactions. We propose a tool which bridges the gap between freedom of actions, encouraging creativity, and constraints, allowing validation and advanced features.

Three essays in control, entrepreneurship and innovation

One of the key emphases of these three essays is to provide practical managerial insight. However, good practical insight, can only be created by grounding it firmly on theoretical and empirical research. Practical experience-based understanding without theoretical grounding remains tacit and cannot be easily disseminated. Theoretical understanding without links to real life remains sterile. My studies aim to increase the understanding of how radical innovation could be generated at large established firms and how it can have an impact on business performance as most businesses pursue innovation with one prime objective: value creation. My studies focus on large established firms with sales revenue exceeding USD $ 1 billion. Usually large established firms cannot rely on informal ways of management, as these firms tend to be multinational businesses operating with subsidiaries, offices, or production facilities in more than one country. I. Internal and External Determinants of Corporate Venture Capital Investment The goal of this chapter is to focus on CVC as one of the mechanisms available for established firms to source new ideas that can be exploited. We explore the internal and external determinants under which established firms engage in CVC to source new knowledge through investment in startups. We attempt to make scholars and managers aware of the forces that influence CVC activity by providing findings and insights to facilitate the strategic management of CVC. There are research opportunities to further understand the CVC phenomenon. Why do companies engage in CVC? What motivates them to continue "playing the game" and keep their active CVC investment status. The study examines CVC investment activity, and the importance of understanding the influential factors that make a firm decide to engage in CVC. The main question is: How do established firms' CVC programs adapt to changing internal conditions and external environments. Adaptation typically involves learning from exploratory endeavors, which enable companies to transform the ways they compete (Guth & Ginsberg, 1990). Our study extends the current stream of research on CVC. It aims to contribute to the literature by providing an extensive comparison of internal and external determinants leading to CVC investment activity. To our knowledge, this is the first study to examine the influence of internal and external determinants on CVC activity throughout specific expansion and contraction periods determined by structural breaks occurring between 1985 to 2008. Our econometric analysis indicates a strong and significant positive association between CVC activity and R&D, cash flow availability and environmental financial market conditions, as well as a significant negative association between sales growth and the decision to engage into CVC. The analysis of this study reveals that CVC investment is highly volatile, as demonstrated by dramatic fluctuations in CVC investment activity over the past decades. When analyzing the overall cyclical CVC period from 1985 to 2008 the results of our study suggest that CVC activity has a pattern influenced by financial factors such as the level of R&D, free cash flow, lack of sales growth, and external conditions of the economy, with the NASDAQ price index as the most significant variable influencing CVC during this period. II. Contribution of CVC and its Interaction with R&D to Value Creation The second essay takes into account the demands of corporate executives and shareholders regarding business performance and value creation justifications for investments in innovation. Billions of dollars are invested in CVC and R&D. However there is little evidence that CVC and its interaction with R&D create value. Firms operating in dynamic business sectors seek to innovate to create the value demanded by changing market conditions, consumer preferences, and competitive offerings. Consequently, firms operating in such business sectors put a premium on finding new, sustainable and competitive value propositions. CVC and R&D can help them in this challenge. Dushnitsky and Lenox (2006) presented evidence that CVC investment is associated with value creation. However, studies have shown that the most innovative firms do not necessarily benefit from innovation. For instance Oyon (2007) indicated that between 1995 and 2005 the most innovative automotive companies did not obtain adequate rewards for shareholders. The interaction between CVC and R&D has generated much debate in the CVC literature. Some researchers see them as substitutes suggesting that firms have to choose between CVC and R&D (Hellmann, 2002), while others expect them to be complementary (Chesbrough & Tucci, 2004). This study explores the interaction that CVC and R&D have on value creation. This essay examines the impact of CVC and R&D on value creation over sixteen years across six business sectors and different geographical regions. Our findings suggest that the effect of CVC and its interaction with R&D on value creation is positive and significant. In dynamic business sectors technologies rapidly relinquish obsolete, consequently firms operating in such business sectors need to continuously develop new sources of value creation (Eisenhardt & Martin, 2000; Qualls, Olshavsky, & Michaels, 1981). We conclude that in order to impact value creation, firms operating in business sectors such as Engineering & Business Services, and Information Communication & Technology ought to consider CVC as a vital element of their innovation strategy. Moreover, regarding the CVC and R&D interaction effect, our findings suggest that R&D and CVC are complementary to value creation hence firms in certain business sectors can be better off supporting both R&D and CVC simultaneously to increase the probability of generating value creation. III. MCS and Organizational Structures for Radical Innovation Incremental innovation is necessary for continuous improvement but it does not provide a sustainable permanent source of competitiveness (Cooper, 2003). On the other hand, radical innovation pursuing new technologies and new market frontiers can generate new platforms for growth providing firms with competitive advantages and high economic margin rents (Duchesneau et al., 1979; Markides & Geroski, 2005; O'Connor & DeMartino, 2006; Utterback, 1994). Interestingly, not all companies distinguish between incremental and radical innovation, and more importantly firms that manage innovation through a one-sizefits- all process can almost guarantee a sub-optimization of certain systems and resources (Davila et al., 2006). Moreover, we conducted research on the utilization of MCS along with radical innovation and flexible organizational structures as these have been associated with firm growth (Cooper, 2003; Davila & Foster, 2005, 2007; Markides & Geroski, 2005; O'Connor & DeMartino, 2006). Davila et al. (2009) identified research opportunities for innovation management and provided a list of pending issues: How do companies manage the process of radical and incremental innovation? What are the performance measures companies use to manage radical ideas and how do they select them? The fundamental objective of this paper is to address the following research question: What are the processes, MCS, and organizational structures for generating radical innovation? Moreover, in recent years, research on innovation management has been conducted mainly at either the firm level (Birkinshaw, Hamel, & Mol, 2008a) or at the project level examining appropriate management techniques associated with high levels of uncertainty (Burgelman & Sayles, 1988; Dougherty & Heller, 1994; Jelinek & Schoonhoven, 1993; Kanter, North, Bernstein, & Williamson, 1990; Leifer et al., 2000). Therefore, we embarked on a novel process-related research framework to observe the process stages, MCS, and organizational structures that can generate radical innovation. This article is based on a case study at Alcan Engineered Products, a division of a multinational company provider of lightweight material solutions. Our observations suggest that incremental and radical innovation should be managed through different processes, MCS and organizational structures that ought to be activated and adapted contingent to the type of innovation that is being pursued (i.e. incremental or radical innovation). More importantly, we conclude that radical can be generated in a systematic way through enablers such as processes, MCS, and organizational structures. This is in line with the findings of Jelinek and Schoonhoven (1993) and Davila et al. (2006; 2007) who show that innovative firms have institutionalized mechanisms, arguing that radical innovation cannot occur in an organic environment where flexibility and consensus are the main managerial mechanisms. They rather argue that radical innovation requires a clear organizational structure and formal MCS.

Factors influencing the adoption of an innovation: an examination of the uptake of the Canadian Heart Health Kit (HHK)

BACKGROUND: There is an emerging knowledge base on the effectiveness of strategies to close the knowledge-practice gap. However, less is known about how attributes of an innovation and other contextual and situational factors facilitate and impede an innovation's adoption. The Healthy Heart Kit (HHK) is a risk management and patient education resource for the prevention of cardiovascular disease (CVD) and promotion of cardiovascular health. Although previous studies have demonstrated the HHK's content validity and practical utility, no published study has examined physicians' uptake of the HHK and factors that shape its adoption. OBJECTIVES: Conceptually informed by Rogers' Diffusion of Innovation theory, and Theory of Planned Behaviour, this study had two objectives: (1) to determine if specific attributes of the HHK as well as contextual and situational factors are associated with physicians' intention and actual usage of the HHK kit; and (2), to determine if any contextual and situational factors are associated with individual or environmental barriers that prevent the uptake of the HHK among those physicians who do not plan to use the kit. METHODS: A sample of 153 physicians who responded to an invitation letter sent to all family physicians in the province of Alberta, Canada were recruited for the study. Participating physicians were sent a HHK, and two months later a study questionnaire assessed primary factors on the physicians' clinical practice, attributes of the HHK (relative advantage, compatibility, complexity, trialability, observability), confidence and control using the HHK, barriers to use, and individual attributes. All measures were used in path analysis, employing a causal model based on Rogers' Diffusion of Innovations Theory and Theory of Planned Behaviour. RESULTS: 115 physicians (follow up rate of 75%) completed the questionnaire. Use of the HHK was associated with intention to use the HHK, relative advantage, and years of experience. Relative advantage and the observability of the HHK benefits were also significantly associated with physicians' intention to use the HHK. Physicians working in solo medical practices reported experiencing more individual and environmental barriers to using the HHK. CONCLUSION: The results of this study suggest that future information innovations must demonstrate an advantage over current resources and the research evidence supporting the innovation must be clearly visible. Findings also suggest that the innovation adoption process has a social element, and collegial interactions and discussions may facilitate that process. These results could be valuable for knowledge translation researchers and health promotion developers in future innovation adoption planning.

Management of nanomaterials safety in research environment

Despite numerous discussions, workshops, reviews and reports about responsible development of nanotechnology, information describing health and environmental risk of engineered nanoparticles or nanomaterials is severely lacking and thus insufficient for completing rigorous risk assessment on their use. However, since preliminary scientific evaluations indicate that there are reasonable suspicions that activities involving nanomaterials might have damaging effects on human health; the precautionary principle must be applied. Public and private institutions as well as industries have the duty to adopt preventive and protective measures proportionate to the risk intensity and the desired level of protection. In this work, we present a practical, 'user-friendly' procedure for a university-wide safety and health management of nanomaterials, developed as a multi-stakeholder effort (government, accident insurance, researchers and experts for occupational safety and health). The process starts using a schematic decision tree that allows classifying the nano laboratory into three hazard classes similar to a control banding approach (from Nano 3 - highest hazard to Nano1 - lowest hazard). Classifying laboratories into risk classes would require considering actual or potential exposure to the nanomaterial as well as statistical data on health effects of exposure. Due to the fact that these data (as well as exposure limits for each individual material) are not available, risk classes could not be determined. For each hazard level we then provide a list of required risk mitigation measures (technical, organizational and personal). The target 'users' of this safety and health methodology are researchers and safety officers. They can rapidly access the precautionary hazard class of their activities and the corresponding adequate safety and health measures. We succeed in convincing scientist dealing with nano-activities that adequate safety measures and management are promoting innovation and discoveries by ensuring them a safe environment even in the case of very novel products. The proposed measures are not considered as constraints but as a support to their research. This methodology is being implemented at the Ecole Polytechnique de Lausanne in over 100 research labs dealing with nanomaterials. It is our opinion that it would be useful to other research and academia institutions as well. [Authors]

Respecting the deal: Economically sustainable management of open innovation among co-opeting companies

Platforms like eBay allow product seekers and providers to meet and exchange goods. On eBay, consumers can return a product if it does not correspond to expectations; eBay is the third-party firm in charge of assuring that the agreement among seekers and providers will be respected. Who provides the same service for what concerns open innovation, where specifications might not fully defined? This paper describes the business model of an organizational structure to support the elicitation and respect of agreements among agents, who have conflicting interests but that gain from cooperating together. Extending previous studies, our business model takes into account the economic dimensions concerning the needs of knowledge share and mutual control to allow a third-party to sustainably reinforce trust among untrusted partners and to lower their overall relational risk.