Value Creation and Games of Innovation: The Competencies That Lead Firms to Business Success Depend on the Demands of the Particular "Game" in Which They Compete, a Study Reveals

By Miller, Roger; Floricel, Serghei | Research-Technology Management, November-December 2004 | Go to article overview

Value Creation and Games of Innovation: The Competencies That Lead Firms to Business Success Depend on the Demands of the Particular "Game" in Which They Compete, a Study Reveals


Miller, Roger, Floricel, Serghei, Research-Technology Management


Many people believe that innovation is unmanageable, given the uncertainties involved, the tendency toward unduly optimistic forecasts and the difficulty of predicting consumers' responses. The solution they often propose, however, is to foster many "entrepreneurial flowers" and let markets select the best products. This romantic view of innovation is flawed because it allows too many resources to be allocated to "hot sectors," thereby creating "bubbles." The research we conducted, and which is explained in this article, has led us to a contrary view; namely, that innovation is manageable and is not totally a gamble.

Our study was carried out with senior R&D leaders from around the world, as part of an Industrial Research Institute subcommittee investigation on Managing R&D for Growth. Its original purpose was to identify: 1) the effective R&D strategies to manage for growth and (2) the best practices to achieve superior performance. Our central finding is that firms achieve high levels of performance in terms of profitability and growth not so much by adopting best practices but by adapting their capabilities and practices to the requirements of value creation and capture in the particular innovation "game," or "games," in which they have elected to compete. The competitive and technological contexts orient and structure each game differently.

In the first section of this paper, we outline the research methods, data sources and data analysis. Next, we describe the eight "games of innovation" that were identified by understanding value creation. Then, in the third section, the generic practices for managing innovation are shown to vary with value creation activities in each game of innovation. In the fourth section, the specific capabilities and practices that are significantly associated with high levels of sales growth are presented for four games. We conclude by summarizing our key findings and their strategic implications.

How the Study Was Conducted

As this research began, the context created by the "New Economy" challenged many received practices and theories related to the management of innovation. Novel ways of managing R&D were identified that included cross-functional teamwork, speed in bringing products to markets, technology outsourcing, and so forth (1,2). For our part, instead of relying on the management literature to identify best practices, we decided to build from reality and ask CTOs and R&D vice presidents in the United States, Canada and Europe which strategies and practices they had developed to face the new situation. From our extensive discussions, a theoretical model was elaborated and a survey instrument was designed to quantify value creation and capture best practices for managing innovation.

Then, the same executives as well as a broader group were invited to respond to the instrument in personal or virtual meetings. Seventy-three CTOs and R&D VPs in Europe (25), Canada (20) and the United States (28) agreed. From the data they provided, we identified 125 best practices for managing innovation in such areas as exploration, portfolio and project management, transfer to business units, and market shaping. We then asked our respondents to rate the extent to which these practices were actually used within their firms. Ratings were obtained on each of the 125 dimensions. Our sample was not random but designed for learning by including a substantial number of firms in fast-moving, R&D-intensive, sectors. The industries covered are both capital- and knowledge-intensive, but only 20 percent of our sample is from the IRI membership. Data on the financial performance of firms were gathered independently from public databanks and corporate websites.

The wealth of information we gathered made it possible to undertake statistical analyses. First, factor analyses were made to identify the underlying vectors that characterize the responses of the CTOs and VPs to their use of management practices. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Value Creation and Games of Innovation: The Competencies That Lead Firms to Business Success Depend on the Demands of the Particular "Game" in Which They Compete, a Study Reveals
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.