O’Conner & DeMartino (2006) –
Organizing for Radical Innovation: an Exploratory Study of the Structural
Aspects of RI Management Systems in Large Established Firms
Summary:
Literature suggests that RI should be managed by an identified group rather than a single
innovation champion
This study explores different organizational structures of firms’ RI groups (firms who intent to
engage in RI)
It finds 7 organizational models that are used by the firms to manage RI
These models differ with regard to the degree to which they incorporate and integrate the 3
competencies needed for RI:
o Discovery
o Incubation
o Acceleration
Not only the presence but especially the linkages and interfaces between these 3
competencies are necessary to successfully manage RI within a firm
The degree to which these 3 competencies are linked and interfaced depends on the degree
to which senior managers expect their subordinates to engage in ambidextrous management
The complexity of a companies organizational structures of the RI group depends on how
strategically important the company considers unaligned “white-space” innovations
o High importance of white-space innovations -> more elaborate org. structure, likely
featuring more (or more integration) of the three competencies
Definition radical innovation
Radical innovation = when opportunity are largely promising, and have high risk and
uncertainty
Radically innovative products offer:
o Wholly new benefits
o Significant improvement in known benefits, or
o Significant reduction in cost
Research interest
The need for RI dates back to Schumpeter’s theory of “creative destruction” – meaning that
new firms will disrupt the market at the expense of incumbent firms
Problem: established organizations have core competency areas which over time become
core rigidities – thus, they lack patience to explore RI (which often takes very long to
succeed)
However, radical innovation is necessary for growth & renewal
Research perspective
RI requires a whole management system – not only single elements of management
, This system needs to encourage learning and experimentation
All elements of the system need to be aligned
Research focus
Focus on the organizational structure element of this management system
Exploration of the organizational structures of firms that have declared the intent to achieve
radical innovation
Theory
Innovation Champion vs. identified group
Early literature often identifies champions as a success factor of innovation
In contrast, recent literature agrees on the need to establish an identified group dedicated to
RI – not just one single person (the champion)
Why?
o RI is not easy to achieve – it requires a clear set of roles / responsibilities to sustain
attention and resources ot transformational experience and to RI
o An identified group means experience accumulation – ideas are jointly interpreted
o An identified group is more likely to reflect on their progress and how it can improve
o An identified group with its own management system allows the group to be
internally consistent without impacting the mainstream organization
o The group must be allowed to develop competencies without being affected by
company rules and norms
Organizational structure of the group
Scholars argue that breakthrough innovation needs a mechanistic, hierarchical structure to
ensure both discipline and creativity
Physical separation vs. embeddedness in the mainstream organization
Scholars argue that the identified RI group needs to be embedded, closely interfaced and
NOT physically separated with the mainstream organization:
o To have access to assets and resources – resulting in a competitive advantage over
independent start-ups in the market
o To leverage and stretch current competencies and simultaneously build new ones
o To allow the assimilation of radical innovation into the mainstream orga
Research gap
What the appropriate organizational structure is that allows to build RI competencies
o Where does it report in the firm?
o How concentrated or dispersed is it?
o Whether a single orga can handle all the aspects of innovation (discovery, incubation
acceleration)
o Why these groups have not been successful over time?
Organizing for Radical Innovation: an Exploratory Study of the Structural
Aspects of RI Management Systems in Large Established Firms
Summary:
Literature suggests that RI should be managed by an identified group rather than a single
innovation champion
This study explores different organizational structures of firms’ RI groups (firms who intent to
engage in RI)
It finds 7 organizational models that are used by the firms to manage RI
These models differ with regard to the degree to which they incorporate and integrate the 3
competencies needed for RI:
o Discovery
o Incubation
o Acceleration
Not only the presence but especially the linkages and interfaces between these 3
competencies are necessary to successfully manage RI within a firm
The degree to which these 3 competencies are linked and interfaced depends on the degree
to which senior managers expect their subordinates to engage in ambidextrous management
The complexity of a companies organizational structures of the RI group depends on how
strategically important the company considers unaligned “white-space” innovations
o High importance of white-space innovations -> more elaborate org. structure, likely
featuring more (or more integration) of the three competencies
Definition radical innovation
Radical innovation = when opportunity are largely promising, and have high risk and
uncertainty
Radically innovative products offer:
o Wholly new benefits
o Significant improvement in known benefits, or
o Significant reduction in cost
Research interest
The need for RI dates back to Schumpeter’s theory of “creative destruction” – meaning that
new firms will disrupt the market at the expense of incumbent firms
Problem: established organizations have core competency areas which over time become
core rigidities – thus, they lack patience to explore RI (which often takes very long to
succeed)
However, radical innovation is necessary for growth & renewal
Research perspective
RI requires a whole management system – not only single elements of management
, This system needs to encourage learning and experimentation
All elements of the system need to be aligned
Research focus
Focus on the organizational structure element of this management system
Exploration of the organizational structures of firms that have declared the intent to achieve
radical innovation
Theory
Innovation Champion vs. identified group
Early literature often identifies champions as a success factor of innovation
In contrast, recent literature agrees on the need to establish an identified group dedicated to
RI – not just one single person (the champion)
Why?
o RI is not easy to achieve – it requires a clear set of roles / responsibilities to sustain
attention and resources ot transformational experience and to RI
o An identified group means experience accumulation – ideas are jointly interpreted
o An identified group is more likely to reflect on their progress and how it can improve
o An identified group with its own management system allows the group to be
internally consistent without impacting the mainstream organization
o The group must be allowed to develop competencies without being affected by
company rules and norms
Organizational structure of the group
Scholars argue that breakthrough innovation needs a mechanistic, hierarchical structure to
ensure both discipline and creativity
Physical separation vs. embeddedness in the mainstream organization
Scholars argue that the identified RI group needs to be embedded, closely interfaced and
NOT physically separated with the mainstream organization:
o To have access to assets and resources – resulting in a competitive advantage over
independent start-ups in the market
o To leverage and stretch current competencies and simultaneously build new ones
o To allow the assimilation of radical innovation into the mainstream orga
Research gap
What the appropriate organizational structure is that allows to build RI competencies
o Where does it report in the firm?
o How concentrated or dispersed is it?
o Whether a single orga can handle all the aspects of innovation (discovery, incubation
acceleration)
o Why these groups have not been successful over time?
