Teaching

Resources
and
Instructors’
Guidelines
Chapter 7: Search strategies for innovation

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 By the end of this chapter you will develop an
understanding of:

the different kinds of opportunity being sought in

terms of incremental or radical change

the different search needs at different stages of the

Learning innovation process

Objectives the different players involved in the search process,

and in particular the growing engagement of more
people inside and outside the organization

local search aiming to exploit existing knowledge

through to radical and beyond into new frames

mechanisms for enabling search

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 Search Strategies for Innovation
• Innovation relies on make sense of the potential input and act within the
limited resources
• What? – the different kinds of opportunities being sought in terms of
incremental or radical change
• When? – the different search needs at different stages of the innovation
process
• Who? – the different players involved in the search process, and in
particular, the growing engagement of more people inside and outside the
organization
• Where? – from local search aiming to exploit existing knowledge through to
radical and beyond into new frames
• How? – mechanisms for enabling search

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 Search Strategies for Innovation
• Start-up challenges
• Ambidexterity: Innovation involves two core principles:
• Creating possibilities through knowledge push and
• Simultaneously identifying and working with needs.
• Listening to the market too closely is explained as:
• Henry Ford: “If I had asked the market they would have said
they wanted faster horses!”

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 • The reality is that innovation is never a
simple matter of push or pull but rather
their interaction;
• There is a risk in focusing on either of
the ‘pure’ forms of push or pull sources.
Push or If we put all our eggs in one basket we
risk being excellent at invention but
pull? without turning our ideas into successful
innovations.

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 • Innovation can happen along a spectrum running
from incremental through to radical

• ‘Punctuated equilibrium’ with innovation

Incremental
• Occasionally a breakthrough creates a new
or radical trajectory – and the cycle repeats itself.

innovation? • Much of our attention in searching for innovation

triggers will be around incremental improvement
innovation.

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 Exploit or explore?
• Portfolio must include longer-range, higher risk, which might
led to the breakthrough and set up a new trajectory
• Portfolio includes most ‘do better’ incremental improvements
and few radical ‘new to the world’
• Incremental exploitation requires highly structured processes
and high-frequency, small-scale innovation carried out within
operating units
• Radical innovation involves occasional high-risk, often specific
and cross-functional combination of resources and a looser
approach to organization and management

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 Exploit or explore?
• ‘Safe’ way of doing so is to harvest a steady flow of benefits
derived from ‘doing what we do better’.
• ‘exploitation’
• The trouble is that in an uncertain environment the potential to
secure and defend a competitive position depends on ‘doing
something different’
• ‘exploration’: involves ‘long jumps or re-orientations that enable
a firm to adopt new attributes and attain new knowledge
outside its domain’.

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 When?
• Timing – at different stages in the product or industry life cycle
the emphasis may be more or less on push or pull.
• Mature industries will require a very different approach
compared to new industries. Mature industries focus on market
needs or pull.
• Diffusion – the adoption and elaboration of innovation over
time.
• Innovation adoption is not a binary process. Takes place
gradually over time, following some version of S-Curve
• Understanding diffusion processes and the influential factors is
important because it helps us understand where and when
different kinds of triggers are picked up.

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 Who?

KNOWLEDGE NETWORKS KNOWLEDGE CONNECTORS KNOWLEDGE FLOW KNOWLEDGE

CONCENTRATION

KNOWLEDGE KNOWLEDGE
ARCHITECTURE TRANSFORMATION,
ARTICULATION AND
ASSIMILATION

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 Who?
• Knowledge Networks
• Knowledge Connectors: “It is not what you know, but who you
know”
• Knowledge Flow

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 Who?
• Knowledge Concentration
• Groups of people with common interests collect and share
experience
• Knowledge Architecture
• Concentration of knowledge in a community could be
impacted when the knowledge game changes
• Other dimensions
• Knowledge transformation
• Knowledge articulation
• Knowledge assimilation

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 Where to search?
• Search for innovation opportunities systematically and
everywhere.
• Searching for innovation opportunities is not just that such firms
fail to get the balance between exploit and explore right but
also because there are choices to be made about the overall
direction of search.
• Search space is not one-dimensional.

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 Where? The innovation treasure hunt?
• Search involves:
• Detailed search around core business
• Less detailed view of adjacent areas which might hold promise
• Limited activity searching far away at the periphery, picking up
weak signals off what might become transformational
innovation at some stage
• Time based:
• Mostly on near future
• Look further ahead also, based on weak signals
• Peripheral vision: look at the organization through fresh eyes
• Challenge the mindset of the current business
• Steady-state innovation: focused on routines and failed to
understand new emerging challenges; search behaviour is
routinized
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 Where? The innovation treasure hunt?
• Sunk costs
• Sailing ship
• Must balance between explore and exploit
• Technology overshoot
• Humans learn from environment
• Architectural - as opposed to component innovation – requires
letting go of existing networks and building new ones.
• Easier for new players but hard for established players

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 Where? The innovation treasure hunt?
• Firms can be radical innovators but still be ‘upstaged’ by
developments outside their search trajectory. The problem is
that search behaviour is essentially bounded exploration and
raises a number of challenges:
• When there is a shift to a new mind-set
• This is not simply a change of personal or even group mind-
set –the consequence of following a particular mind-set is
that artefacts and routines come into place which block
further change and reinforce the status quo.
• The new frame may not necessarily involve radical change in
technology or markets but rather a rearrangement of the
existing elements.

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 A map of innovation search space
• Environment complexity: the number of elements and their
potential interactions
• Many attempts at reframing may fail
• Zone 1 (Exploit)
• Zone 2 (Bounded exploration)
• Zone 3 (reframing)
• Zone 4 (edge of chaos)

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A map of innovation search space

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 Sources of innovation
• Balance between push and pull and between incremental and
radical
• Difference between successful and less successful innovating
firms is the degree of “cosmopolitan” as opposed to “parochial”
• Move from ‘Research and Develop’ to ‘Connect and Develop’

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 Information sources for innovation
• Tension occurs between
intellectual property, around
appropriability and around the
mechanisms to make sure that
we can find and use relevant
knowledge

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 Increasing collaboration in innovation

• Open innovation model

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 Absorptive capacity
• One more broad strategic point concerns the question of where,
when and how organizations make use of external knowledge to
grow.
• Organizations differ widely in their ability to make use of trigger
signals – and the measure of this ability to find and use new
knowledge has been termed ‘absorptive capacity’(AC).
• Shifts our attention to how well firms are equipped to search
out, select and implement knowledge.
• AC is essentially about accumulated learning and embedding of
capabilities –search, acquire, assimilate, etc. –in the form of
routines which allow organizations to repeat the trick.

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 Absorptive capacity
• Firms differ in their levels of AC and this places emphasis on
how they develop and establish and reinforce these routines
• Some firms lack the capability to find and acquire new
knowledge
• Some firms lack effective use of new knowledge once identified
• Taking in external knowledge is not related to the size or age of
the firm
• Type 1 – adaptive learning
• Type 2 – generative learning

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 Managing internal connections
• Applied research
• Blue sky activities
• Open innovation
• Dynamic capability
• One area which has seen growing activity addresses a
fundamental knowledge management issue which is well
expressed in the statement – if only xxx (insert the name of any
large organization) knew what it knows!’

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 Managing internal connections
• Much of the knowledge lies in the experience and ideas of
‘ordinary’ employees.
• Increasingly organizations are trying to tap into such knowledge
as a source of innovation via various forms of what can be
termed ‘high involvement innovation’ systems such as
suggestion schemes, problem solving groups and innovation
‘jams’.
• Explosion in the use of internal online platforms to encourage
and enable idea submission, development and acceleration.

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 Enabling external connections
• Search strategies include:
• Sending out scouts
• Exploring multiple futures
• Innovation markets
• Working with active users
• ‘Deep diving’
• Probe and learn
• Corporate venturing
• Use brokers and bridges
• Give both permission and resources to enable employee-led
ideas to flourish. But, there is the risk of these resources being
dissipated with nothing to show for them
• Bootlegging: tacit support for projects that go against the grain

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 Enabling search for innovation
• Within this broad framework firms deploy a range of
approaches to organizing and managing the search process.
• R&D units can be structured to enable a balance between
applied research and more wide-ranging, ‘blue sky’ activities.
• Choice of techniques and structures depends on a variety of
strategic factors like those explored above – balancing their
costs and risks against the quality and quantity of knowledge
they bring in.

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 Search strategies for wider exploration
• Strong evidence of the importance of customers and suppliers
as sources of innovation

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Search strategies for wider exploration

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 Summary
• In this chapter we have been concerned not so much with the
many sources of innovation as with how to mobilise effective
search strategies to explore these systematically.
• We have also developed an understanding of the different kinds
of opportunity being sought in terms of incremental or radical
change.
• The different search needs at different stages of the innovation
process the different players involved in the search process, and
in particular the growing engagement of more people inside
and outside the organization.
• Local search aiming to exploit existing knowledge through to
radical and beyond into new frames.
• Mechanisms for enabling search.

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