Performance management through innovation capability in SMEs

Small and medium-sized enterprises (SMEs) are assuredly important to maintain strong economic growth. How to manage and maintain SMEs’ performance is a sizable challenge, and requires an understanding of the drivers of performance. Innovation capability has been suggested to be one of these key drivers. In order to manage innovation capability– performance relationship, it has to be measured. SMEs may have distinct characteristics that separate them being just smaller versions of large firms. Performance measurement and management of innovation capability is challenging, because SMEs usually have some drawbacks compared to large firms. Thus, it is unclear whether theories developed to understand large firms apply to SMEs. This research contributes to the existing discussion on performance management through innovation capability in the SME context. First, it aims at increasing understanding of the role of innovation capability in performance management. Second, it aims at clarifying the role of performance measurement in developing innovation capability. Thus, the main objective of the research is to study how to manage performance through measuring and managing innovation capability. The thesis is based on five research articles that follow a positivist approach. From a methodological point of view, quantitative and complementing conceptual methods of data collection are utilized. This research indicates that the performance management and measurement play a significant role in innovation capability in SMEs. This research makes three main contributions. First, it gives empirical evidence on the connection between innovation capability and SME performance. Second, it illustrates the connection between performance measurement and innovation capability. Thirdly, it clarifies how to measure the relationship between innovation capability and performance.

Reaching influential early adopters effectively in Finland : Rock Science – new generation board game

Innovations diffuse at different speed among the members of a social system through various communication channels. The group of early adopters can be seen as the most influential reference group for majority of people to base their innovation adoption decisions on. Thus, the early adopters can often accelerate the diffusion of innovations. The purpose of this research is to discover means of diffusion for an innovative product in Finnish market through the influential early adopters in respect to the characteristics of the case product. The purpose of the research can be achieved through the following sub objectives:  Who are the potential early adopters for the case product and why?  How the potential early adopters of the case product should be communicated with?  What would be the expectations, preferences, and experiences of the early adopters of the case product? The case product examined in this research is a new board game called Rock Science which is considered to be incremental innovation bringing board gaming and hard rock music together in a new way. The research was conducted in two different parts using both qualitative and quantitative research methods. This mixed method research began with expert interviews of six music industry experts. The information gathered from the interviews enabled researcher to compose the questionnaire for the quantitative part of the study. Internet survey that was sent out resulted with a sample of 97 responses from the targeted population. The key findings of the study suggest that (1) the potential early adopters for the case product are more likely to be young adults from the capital city area with great interest in rock music, (2) the early adopters can be reached effectively through credible online sources of information, and (3) the respondents overall product feedback is highly positive, except in the case of quality-price ratio of the product. This research indicates that more effective diffusion of Rock Science board game in Finland can be reached through (1) strategic alliances with music industry and media partnerships, (2) pricing adjustments, (3) use of supporting game formats, and (4) innovative use of various social media channels.

Conditions and practices in the commercialisation of innovations in wood industry

The report 'Conditions and practices in the commercialisation of innovation in wood industry' has been written as a part of the Wood Academy project. The report analyses the commercialisation conditions and practices of wood industry by utilising product categorisation based on a conceptual schema which combines the aspects of the transfer of the procession of utility and the degree of form/service utility (or value-added) created or provided by the company. Open innovation approaches help to perceive the possible new product and service innovations as well as the new business models and earning logics in the industry. The report also contains brief company cases to demonstrate theory-to-practice and showcase company examples from successful Finnish companies.

Intensification of hemicellulose hot-water extraction from spruce wood by parameter tuning

The growing population on earth along with diminishing fossil deposits and the climate change debate calls out for a better utilization of renewable, bio-based materials. In a biorefinery perspective, the renewable biomass is converted into many different products such as fuels, chemicals, and materials, quite similar to the petroleum refinery industry. Since forests cover about one third of the land surface on earth, ligno-cellulosic biomass is the most abundant renewable resource available. The natural first step in a biorefinery is separation and isolation of the different compounds the biomass is comprised of. The major components in wood are cellulose, hemicellulose, and lignin, all of which can be made into various end-products. Today, focus normally lies on utilizing only one component, e.g., the cellulose in the Kraft pulping process. It would be highly desirable to utilize all the different compounds, both from an economical and environmental point of view. The separation process should therefore be optimized. Hemicelluloses can partly be extracted with hot-water prior to pulping. Depending in the severity of the extraction, the hemicelluloses are degraded to various degrees. In order to be able to choose from a variety of different end-products, the hemicelluloses should be as intact as possible after the extraction. The main focus of this work has been on preserving the hemicellulose molar mass throughout the extraction at a high yield by actively controlling the extraction pH at the high temperatures used. Since it has not been possible to measure pH during an extraction due to the high temperatures, the extraction pH has remained a “black box”. Therefore, a high-temperature in-line pH measuring system was developed, validated, and tested for hot-water wood extractions. One crucial step in the measurements is calibration, therefore extensive efforts was put on developing a reliable calibration procedure. Initial extractions with wood showed that the actual extraction pH was ~0.35 pH units higher than previously believed. The measuring system was also equipped with a controller connected to a pump. With this addition it was possible to control the extraction to any desired pH set point. When the pH dropped below the set point, the controller started pumping in alkali and by that the desired set point was maintained very accurately. Analyses of the extracted hemicelluloses showed that less hemicelluloses were extracted at higher pH but with a higher molar-mass. Monomer formation could, at a certain pH level, be completely inhibited. Increasing the temperature, but maintaining a specific pH set point, would speed up the extraction without degrading the molar-mass of the hemicelluloses and thereby intensifying the extraction. The diffusion of the dissolved hemicelluloses from the wood particle is a major part of the extraction process. Therefore, a particle size study ranging from 0.5 mm wood particles to industrial size wood chips was conducted to investigate the internal mass transfer of the hemicelluloses. Unsurprisingly, it showed that hemicelluloses were extracted faster from smaller wood particles than larger although it did not seem to have a substantial effect on the average molar mass of the extracted hemicelluloses. However, smaller particle sizes require more energy to manufacture and thus increases the economic cost. Since bark comprises 10 – 15 % of a tree, it is important to also consider it in a biorefinery concept. Spruce inner and outer bark was hot-water extracted separately to investigate the possibility to isolate the bark hemicelluloses. It was showed that the bark hemicelluloses comprised mostly of pectic material and differed considerably from the wood hemicelluloses. The bark hemicelluloses, or pectins, could be extracted at lower temperatures than the wood hemicelluloses. A chemical characterization, done separately on inner and outer bark, showed that inner bark contained over 10 % stilbene glucosides that could be extracted already at 100 °C with aqueous acetone.

Alkavan yrityksen strategiset vaihtoehdot ja selviytyminen

Työn tavoitteena on soveltaa yrityksen perustamiseen, innovaation diffuusioon ja strategiseen suunnitteluun liittyvää teoriaa Delitaz Oy:n kehitykseen liiketoimintamahdollisuuden havaitsemisesta uudeksi yritykseksi. Työssä etsitään keinoja yrityksen kehittämän innovatiivisen tuotteen saamiseksi nopeammin markkinoille ja lähtökohtia tulevaa liiketoimintasuunnitelman päivitystä varten. Työssä kootaan yhteen uuden yrityksen perustamisen vaiheisiin, selviytymiseen ja menestymiseen liittyvää teoriaa liiketoimintamahdollisuuden havaitsemisesta uuden inno-vatiivisen tuotteen markkinoille tuomiseen ja yrityksen strategiseen suunnitteluun. Tapaus-osiossa perehdytään kohdeyrityksen perustamisen vaiheisiin, toimintaympäristöön, tuotteeseen ja liiketoimintaan. Työn menetelmänä on tapaus- kehittämis- ja toimintatutkimuksen yhdistelmä. Kehittämis- tai toimintatutkimuksen varsinainen käytännön testaamisvaihe jää työn ulkopuolelle, sillä haluttuja muutoksia lähdetään vasta toteuttamaan. Johtopäätöksinä kuvataan yhden liiketoimintamahdollisuuden kehittyminen ideasta tuotteeksi ja teknologiayritykseksi yrityksen perustamisen teoriaan verrattuna ja esitetään keinoja tuotteen markkinoille saamisen nopeuttamiseksi ja mahdollisia strategisia vaihtoehtoja liiketoimintasuunnitelman päivittämiseksi.

Study of the advancement of innovations in communications industry. Case study: Russian Post Company

This study attempted to provide a project based on the already tested and successful results of foreign business which can help to contain the final price of innovation on desired levels. The research will attempt to dig out most of available information related to aforementioned definitions and thus completing theoretical background. Next author will explain used methodology and the process of evidence collection. After that the study will show the analysis of collected data in order to obtain results which are going to be compared with stated objectives in the final part. The conclusion of the research and proposed possibilities for additional work will be given in the last part. For this study author has chosen the qualitative model because it performs very well for analysis of small scale of data. The case study method was used because it gave author an opportunity to make an in-depth analysis of the collected information about particular organization so it became possible to analyze system's details in comparison. The results have been early considered valid and applicable to other studies. As the result thesis has proposed undertakings which reflect researches aimed on solving problems with provision of services and development of communications. In addition thesis has proposed formulation of database of postal service for Russian Post when (by request) customer possess an account where he or she can access postal services via PC or info table in postal office and order delivery of postal products which will be given private identification code. Project's payoff period has been calculated as well.

Innovation process development and business process integration - a multiple case study

The main objective of this study was to find out the bases for innovation model formulation in an existing organization based on cases. Innovation processes can be analyzed based on their needs and based on their emphasis on the business model development or R&D. The research was conducted in energy sector within one company by utilizing its projects as cases for the study. It is typical for the field of business that development is slow, although the case company has put emphasis on its innovation efforts. Analysis was done by identifying the cases’ needs and comparing them. The results were that because of the variances in the needs of the cases, the applicability of innovation process models varies. It was discovered that by dividing the process into two phases, a uniform model could be composed. This model would fulfill the needs of the cases and potential future projects as well.

Gearing Towards Omnichannel Grocery Retail Through Business Model Innovation

Technological innovations and the advent of digitalization have led retail business into one of its biggest transformations of all time. Consumer behaviour has changed rapidly and the customers are ever more powerful, demanding, tech-savvy and moving on various plat-forms. These attributes will continue to drive the development and robustly restructure the architecture of value creation in the retail business. The largest retail category, grocery yet awaits for a real disruption, but the signals for major change are already on the horizon. The first wave of online grocery retail was introduced in the mid 1990’s and it throve until millennium. Many overreactions, heavy investments and the burst IT-bubble almost stag-nated the whole industry for a long period of time. The second wave started with a venge-ance around 2010. Some research was carried out during the first wave from a single-viewpoint of online grocery retail, but without a comprehensive approach to online-offline business model integration. Now the accelerating growth of e-business has initiated an increased interest to examine the transformation from traditional business models towards e-business models and their integration on the companies’ traditional business models. This research strove to examine how can we recognize and analyze how digitalization and online channels are affecting the business models of grocery retail, by using business mod-el canvas as an analysis tool. Furthermore business model innovation and omnichannel retail were presented and suggested as potential solutions for these changes. 21 experts in online grocery industry were being interviewed. The thoughts of the informants were being qualitatively analysed by using an analysis tool called the business model canvas. The aim of this research was to portray a holistic view on the Omnichannel grocery retail business model, and the value chain, in which the case company Arina along with its partners are operating. The key conclusions exhibited that online grocery retail business model is not an alterna-tive model nor a substitute for the traditional grocery retail business model, though all of the business model elements are to some extent affected by it, but rather a complementary business model that should be integrated into the prevailing, conventional grocery retail business model. A set of business model elements, such as value proposition and distribu-tion channels were recognized as the most important ones and sources of innovation within these components were being illustrated. Segments for online grocery retail were empiri-cally established as polarized niche markets in contrast of the segmented mass-market of the conventional grocery retail. Business model innovation was proven to be a considera-ble method and a conceptual framework, by which to come across with new value proposi-tions that create competitive advantage for the company in the contemporary, changing business environment. Arina as a retailer can be considered as a industry model innovator, since it has initiated an entire industry in its market area, where other players have later on embarked on, and in which the contributors of the value chain, such as Posti depend on it to a great extent. Consumer behaviour clearly affects and appears everywhere in the digi-talized grocery trade and it drives customers to multiple platforms where retailers need to be present. Omnichannel retail business model was suggested to be the solution, in which the new technologies are being utilized, contemporary consumer behaviour is embedded in decision-making and all of the segments and their value propositions are being served seamlessly across the channels.

Innovation Ecosystem Perspectives on Financial Services Innovation

The context of financial services has been characterised by changes in the regulatory, technological and societal landscape. Consumers are increasingly interested in mobile payments, crowdfunding and microfinance services, either for themselves or because collaborative consumption is viewed as a more sustainable. Retail branches are re-organised to further meet the expectations of customers, start-ups focusing on technology for financial services (i.e. Fintech) are ever growing and financial services companies reinforce their own innovation practices (e.g. creation of innovation labs or venture capital investment funds). The innovation ecosystem around financial services companies represents the many actors with whom they can co-create and co-produce innovative new services for their customers (or for themselves). The innovation process is no longer a closed internal effort but needs to include external actors from the innovation ecosystem. This topic is especially interesting in a small and open economy where the financial centre takes a prominent place in the economy. The research question is therefore “How does the innovation ecosystem influence the innovation process within financial services companies?”. The influence of the innovation ecosystem on the innovation process within financial service companies mainly comes from its social capital and value creation efforts. However learning to work and exchange in an innovation ecosystem is also expected to influence the innovation process in place. Realizing the potential of the innovation ecosystem requires sufficient capabilities to manage new information coming from the innovation ecosystem. The professional associations provide the necessary coordination among actors in the innovation ecosystem to co-create and appropriate value, while fostering co-evolution within the innovation ecosystem.

Critical elements underpinning the emergence of the medical game ecosystem: gamifying traumatic brain injury rehabilitation in Finland

The healthcare sector is currently in the verge of a reform and thus, the medical game research provide an interesting area of research. The aim of this study is to explore the critical elements underpinning the emergence of the medical game ecosystem with three sub-objectives: (1) to seek who are the key actors involved in the medical game ecosystem and identify their needs, (2) to scrutinise what types of resources are required in medical game development and what types of relationships are needed to secure those resources, and (3) to identify the existing institutions (‘the rules of the game’) affecting the emergence of the medical game ecosystem. The theoretical background consists of service ecosystems literature. The empirical study conducted is based on the semi-structured theme interviews of 25 experts in three relevant fields: games and technology, health and funding. The data was analysed through a theoretical framework that was designed based upon service ecosystems literature. The study proposes that the key actors are divided into five groups: medical game companies, customers, funders, regulatory parties and complementors. Their needs are linked to improving patient motivation and enhancing the healthcare processes resulting in lower costs. Several types of resources, especially skills and knowledge, are required to create a medical game. To gain access to those resources, medical game companies need to build complex networks of relationships. Proficiency in managing those value networks is crucial. In addition, the company should take into account the underlying institutions in the healthcare sector affecting the medical game ecosystem. Three crucial institutions were identified: validation, lack of innovation supporting structures in healthcare and the rising consumerisation. Based on the findings, medical games cannot be made in isolation. A developmental trajectory model of the emerging medical game ecosystem was created based on the empirical data. The relevancy of relationships and resources is dependent on the trajectory that the medical game company at that time resides. Furthermore, creating an official and documented database for clinically valdated medical games was proposed to establish the medical game market and ensure an adequate status for the effective medical games. Finally, ecosystems approach provides interesting future opportunities for research on medical game ecosystems.

Critical elements underpinning the emergence of the medical game ecosystem:gamifying traumatic brain injury rehabilitation in Finland

The healthcare sector is currently in the verge of a reform and thus, the medical game research provide an interesting area of research. The aim of this study is to explore the critical elements underpinning the emergence of the medical game ecosystem with three sub-objectives: (1) to seek who are the key actors involved in the medical game ecosystem and identify their needs, (2) to scrutinise what types of resources are required in medical game development and what types of relationships are needed to secure those resources, and (3) to identify the existing institutions (‘the rules of the game’) affecting the emergence of the medical game ecosystem. The theoretical background consists of service ecosystems literature. The empirical study conducted is based on the semi-structured theme interviews of 25 experts in three relevant fields: games and technology, health and funding. The data was analysed through a theoretical framework that was designed based upon service ecosystems literature. The study proposes that the key actors are divided into five groups: medical game companies, customers, funders, regulatory parties and complementors. Their needs are linked to improving patient motivation and enhancing the healthcare processes resulting in lower costs. Several types of resources, especially skills and knowledge, are required to create a medical game. To gain access to those resources, medical game companies need to build complex networks of relationships. Proficiency in managing those value networks is crucial. In addition, the company should take into account the underlying institutions in the healthcare sector affecting the medical game ecosystem. Three crucial institutions were identified: validation, lack of innovation supporting structures in healthcare and the rising consumerisation. Based on the findings, medical games cannot be made in isolation. A developmental trajectory model of the emerging medical game ecosystem was created based on the empirical data. The relevancy of relationships and resources is dependent on the trajectory that the medical game company at that time resides. Furthermore, creating an official and documented database for clinically validated medical games was proposed to establish the medical game market and ensure an adequate status for the effective medical games. Finally, ecosystems approach provides interesting future opportunities for research on medical game ecosystems

The Role of HR Management in the Corporate Matrix System

The successful performance of company in the market relates to the quality management of human capital aiming to improve the company's internal performance and external implementation of the core business strategy. Companies with matrix structure focusing on realization and development of innovation and technologies for the uncertain market need to select thoroughly the approach to HR management system. Human resource management has a significant impact on the organization and use a variety of instruments such as corporate information systems to fulfill their functions and objectives. There are three approaches to strategic control management depending on major impact on the major interference in employee decision-making, development of skills and his integration into the business strategy. The mainstream research has focus only on the framework of strategic planning of HR and general productivity of firm, but not on features of organizational structure and corporate software capabilities for human capital. This study tackles the before mentioned challenges, typical for matrix organization, by using the HR control management tools and corporate information system. The detailed analysis of industry producing and selling electromotor and heating equipment in this master thesis provides the opportunity to improve system for HR control and displays its application in the ERP software. The results emphasize the sustainable role of matrix HR input control for creating of independent project teams for matrix structure who are able to respond to various uncertainties of the market and use their skills for improving performance. Corporate information systems can be integrated into input control system by means of output monitoring to regulate and evaluate the processes of teams, using key performance indicators and reporting systems.