Connecting the Dots in Idea Markets: A Study of Inventor Diversity and its Implications for Idea Development
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Connecting the Dots in Idea Markets: A Study of Inventor Diversity and its Implications for Idea Development

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A Master's Thesis from Copenhagen Business School on innovation management in Novozymes A/S. ...

A Master's Thesis from Copenhagen Business School on innovation management in Novozymes A/S.

This thesis examines the abilities of online idea markets to support idea generation and screening in the fuzzy front-end of the innovation process. Idea markets – spun out from the present digital revolution – is a growing phenomenon that may have potential to facilitate innovation, greater participation, development of knowledge, and increased diversity. The proliferation of interconnectivity of diverse and geographically dispersed individuals enabled by the refinement of the Internet is hypothesized to offer opportunities for the development of creative and novel ideas. Due to the embryonic stage of the idea market concept, further research is considered relevant for both practitioners and scholars. This thesis thus attempts to provide empirical evidence of the implications of diversity for the development of ideas. The research is embedded in a case study of Novozymes A/S (NZ) – a leading biotechnology company in the industrial enzyme industry – and an idea market conducted in the fall of 2011. For the analysis in this thesis, I use statistical measures of quantitative data collected from (i) the external consultancy firm NOSCO who specializes in idea markets, (ii) the HR department in NZ, and (iii) the Screen Team in NZ. The findings from the analysis support the hypothesis that the quality of ideas emerging from online idea markets increase with the diversity of inventors involved in developing the ideas. This finding may support NZ and other organizations when designing forthcoming idea markets. Furthermore, to support the notion of combinatorial innovation, one could argue that idea markets facilitate new connections of skills and disciplines by engaging a diverse crowd of participants. By implementing the idea market tool in NZ, R&D Management was able to mobilize and connect a large crowd of organizational members, provide a channel that could leverage ideas, and increase the quality of go/kill decisions in the idea screening process. The fact that NZ has scheduled nine other idea markets in 2012 is considered an indicator of the success of the tool.

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Connecting the Dots in Idea Markets: A Study of Inventor Diversity and its Implications for Idea Development Connecting the Dots in Idea Markets: A Study of Inventor Diversity and its Implications for Idea Development Document Transcript

  • Connecting the Dots in Idea Markets A Study of Inventor Diversity and its Implications for Idea Development Copenhagen Business School Cand. merc. (SOL) Strategy, Organization, and Leadership September 2012 Maria Carlsen Advisor: Prof. Finn Valentin Dept. of Innovation and Organizational Economics Std. Pages: 79.9 (STUs: 181.791)
  • Executive Summary This% thesis% examines% the% abili.es% of% online% idea% markets% to% support% idea% genera.on% and% screening%in%the%fuzzy%front:end%of%the%innova.on%process.%Idea%markets%–%spun%out%from%the% present% digital% revolu.on% –% is% a% growing% phenomenon% that% may% have% poten.al% to% facilitate% innova.on,% greater% par.cipa.on,% development% of% knowledge,% and% increased% diversity.% The% prolifera.on%of%interconnec.vity%of%diverse%and%geographically%dispersed%individuals%enabled% by%the%refinement%of%the%Internet%is%hypothesized%to%offer%opportuni.es%for%the%development% of%crea.ve%and%novel%ideas.%Due%to%the%embryonic%stage%of%the%idea%market%concept,%further% research%is%considered%relevant%for%both%prac..oners%and%scholars.%This%thesis%thus%aDempts% to%provide%empirical%evidence%of%the%implica.ons%of%diversity%for%the%development%of%ideas.% The%research%is%embedded%in%a%case%study%of%Novozymes%A/S%(NZ)%–%a%leading%biotechnology% company%in%the%industrial%enzyme%industry%–%and%an%idea%market%conducted%in%the%fall%of%2011.% For%the%analysis%in%this%thesis,%I%use%sta.s.cal%measures%of%quan.ta.ve%data%collected%from%(i)% the%external%consultancy%firm%NOSCO%that%specializes%in%idea%markets,%(ii)%the%HR%department% in%NZ,%and%(iii)%the%Screen%Team%in%NZ.%The%findings%from%the%analysis%support%the%hypothesis% that% the% quality% of% ideas% emerging% from% online% idea% markets% increase% with% the% diversity% of% inventors% involved% in% developing% the% ideas.% This% finding% may% support% NZ% and% other% organiza.ons%when%designing%forthcoming%idea%markets.%Furthermore,%to%support%the%no.on% of%combinatorial%innova.on,%one%could%argue%that%idea%markets%facilitate%new%connec.ons%of% skills%and%disciplines%by%engaging%a%diverse%crowd%of%par.cipants.% %By%implemen.ng%the%idea% market% tool% in% NZ,% R&D% Management% was% able% to% mobilize% and% connect% a% large% crowd% of% organiza.onal%members,%provide%a%channel%that%could%leverage%ideas,%and%increase%the%quality% of%go/kill%decisions%in%the%idea%screening%process.%The%fact%that%NZ%has%scheduled%nine%other% idea%markets%in%2012%is%considered%an%indicator%of%the%success%of%the%tool.%% % % % % %
  • Acknowledgements The author would like to thank the Three Wise Men for the contributions to this thesis. Professor Finn Valentin, CBS Thank you for immeasurable guidance and for enabling me to develop and broaden analytical skills. Frank Hatzack, Senior Innovation Manger at Novozymes Thank you for encouragement and inspiration. Your drive and passion for biotech innovation has been the building blocks for this thesis. Giancarlo Lauto, Research Fellow at CBS Thank you for showing me that statistics can be fun. It has been rewarding to work with you.
  • ! 1! Table of Contents List%of%Figures%and%Tables%............................................................................................................................%4% 1.%Introduction%........................................................%6! 1.1%Problem%Statement%............................................................................................................................%8! 1.2%Research%Relevance%...........................................................................................................................%8! 1.3%Disposition%.........................................................................................................................................%10! 2.%Literature%Review%..........................................%12! 2.1%What%is%Innovation?%........................................................................................................................%12! 2.2%Knowledge:%the%Source%of%Innovation%.......................................................................................%14! 2.3%The%Fuzzy%FrontLEnd%of%the%Innovation%Process%...................................................................%16! 2.3.1!Idea!Generation!and!Online!Opportunities!.....................................................................................!17! 2.3.2!Quality!of!Ideas!............................................................................................................................................!19! 2.4%Crowdsourcing%Ideas%......................................................................................................................%21! 2.4.1!Idea!Markets!.................................................................................................................................................!23! 2.5%The%Implications%of%Diversity%......................................................................................................%25! 2.5.1!Geographical!Diversity!.............................................................................................................................!28! Hypothesis!1!..........................................................................................................................................................................!28! 2.5.2!Functional!Diversity!..................................................................................................................................!29! Hypothesis!2!..........................................................................................................................................................................!29! 2.5.3!Hierarchical!Diversity!...............................................................................................................................!30! Hypothesis!3!..........................................................................................................................................................................!30! 2.5.4!Tenure!Diversity!.........................................................................................................................................!30! Hypothesis!4!..........................................................................................................................................................................!31! 2.5.5!Diversity!Aggregated!across!Multiple!Dimensions!......................................................................!31! Hypothesis!5!..........................................................................................................................................................................!31! 2.6%Research%Gap%.....................................................................................................................................%31! 3.%Company%and%Case%Profile%...........................%34! 3.1%Novozymes%in%Brief%.........................................................................................................................%34! 3.2%The%Innovation%Office%.....................................................................................................................%35!
  • ! 2! 3.3%Growth%Bets%2011%............................................................................................................................%36! 3.3.1!Rules!of!the!Game!.......................................................................................................................................!37! 3.3.1.1!Mobilize!People!.....................................................................................................................................................!38! 3.3.1.2!Conceive!Ideas!.......................................................................................................................................................!38! 3.3.1.3!Screen!Ideas!............................................................................................................................................................!40! 3.3.1.4!Mature!Ideas!...........................................................................................................................................................!41! 3.3.1.5!Pitch!and!feedback!from!R&D!Management!.............................................................................................!41! 3.3.1.6!Reflection!.................................................................................................................................................................!41! 4.%Methodology%....................................................%46! 4.1%Research%Philosophy%......................................................................................................................%46! 4.2%Research%Approach%and%Design%..................................................................................................%47! 4.3%Data%Collection%..................................................................................................................................%49! 4.3.1!Qualitative!data!...........................................................................................................................................!50! 4.3.2!Quantitative!data!........................................................................................................................................!50! 4.3.2.1!Dependent!variable!.............................................................................................................................................!51! 4.3.2.2!Independent!variables!.......................................................................................................................................!52! 4.3.2.3!A!twoSfold!examination!of!diversity!............................................................................................................!53! 4.4%Limitations%.........................................................................................................................................%53! 5.%Analysis%.............................................................%56! 5.1%Analysis%Part%I:%Patterns%of%Performance%and%Participation%.............................................%56! 5.1.1!The!Output!From!GB11!............................................................................................................................!57! 5.1.2!Idea!Characteristics!...................................................................................................................................!58! 5.1.3!Comment!Characteristics!........................................................................................................................!61! 5.1.4!Participant!Characteristics!.....................................................................................................................!62! 5.1.5!Conclusion!to!Analysis!Part!I!.................................................................................................................!66! 5.2%Analysis%Part%II:%The%Implications%of%Diversity%......................................................................%68! 5.2.1!Idea!Inventors!..............................................................................................................................................!68! 5.2.1.1!Geographical!diversity!of!inventors!.............................................................................................................!70! 5.2.1.2!Functional!diversity!of!inventors!..................................................................................................................!70! 5.2.1.3!Hierarchical!diversity!of!inventors!...............................................................................................................!71! 5.2.1.4!Tenure!diversity!of!inventors!.........................................................................................................................!72! 5.2.1.5!Conclusion!to!diversity!of!inventors!............................................................................................................!73! 5.2.2!Commentators!.............................................................................................................................................!74!
  • ! 3! 5.2.2.1!Geographical!diversity!of!commentators!...................................................................................................!75! 5.2.2.2!Functional!diversity!of!commentators!........................................................................................................!76! 5.2.2.3!Hierarchical!diversity!of!commentators!....................................................................................................!77! 5.2.2.4!Tenure!diversity!of!commentators!...............................................................................................................!78! 5.2.2.5!Conclusion!to!diversity!of!commentators!..................................................................................................!79! 5.2.3!Diversity!Aggregated!across!Multiple!Dimensions!......................................................................!79! 5.2.3.1!Idea!inventors!........................................................................................................................................................!80! 5.2.3.2!Commentators!.......................................................................................................................................................!82! 5.2.4!Conclusion!to!Analysis!Part!II!...............................................................................................................!83! 6.%Discussion%.........................................................%86! 6.1%Igniting%the%Sparks%in%the%Crowd%................................................................................................%86! 6.2%New%Combinations%..........................................................................................................................%90! 6.3%The%Strength%of%Diversity%..............................................................................................................%91! 7.%Connecting%the%Dots%......................................%97! 7.1%Conclusion%..........................................................................................................................................%97! 7.2%Further%Perspectives%......................................................................................................................%98! Bibliography%.......................................................%100! Articles%and%Books%...............................................................................................................................%100! TED%Talks%...............................................................................................................................................%104! Appendices%.........................................................%105! Appendix%I:%Survey%..............................................................................................................................%105! Appendix%II:%Distribution%of%No.%of%inventors%.............................................................................%112! ! ! !
  • ! 4! List of Figures and Tables ! FIGURE!1:!DISPOSITION!OF!THESIS!....................................................................................................................................!10! FIGURE!2:!GB11!PROCESS!..................................................................................................................................................!37! FIGURE!3:!IDEAS!WITH!MULTIPLE!VS.!SINGLE!INVENTORS!............................................................................................!69! FIGURE!4:!IDEAS!WITHOUT!VS.!WITH!COMMENTS!..........................................................................................................!74! FIGURE!5:!DIVERSITY!SCALE!...............................................................................................................................................!80! FIGURE!6:!DIVERSITY!SCORES!OF!IDEA!INVENTORS!........................................................................................................!81! FIGURE!7:!DIVERSITY!SCORES!OF!COMMENTATORS!.......................................................................................................!82! ! TABLE!1!S!DESIGN!OF!GB11!...............................................................................................................................................!43! TABLE!2!–!PARTICIPANTS,!IDEAS,!AND!COMMENTS!IN!THE!DATASET!.........................................................................!57! TABLE!3!–!DESCRIPTIVE!STATISTICS!OF!OUTPUT!FROM!PARTICIPANTS!.....................................................................!57! TABLE!4!–!DISTRIBUTION!OF!CATEGORIES!OF!IDEAS!.....................................................................................................!59! TABLE!5!–!DEPTH!OF!IDEAS!................................................................................................................................................!60! TABLE!6!S!COMMENT!CATEGORIZATION!...........................................................................................................................!61! TABLE!7!S!DISTRIBUTION!OF!GENDER!OF!PARTICIPANTS!..............................................................................................!63! TABLE!8!S!DISTRIBUTION!OF!SITES!OF!PARTICIPANTS!I!.................................................................................................!64! TABLE!9!S!DISTRIBUTION!OF!SITES!OF!PARTICIPANTS!II!...............................................................................................!64! TABLE!10!–!DISTRIBUTION!OF!RANKS!OF!PARTICIPANTS!.............................................................................................!65! TABLE!11!–!DISTRIBUTION!OF!SENIORITY!OF!PARTICIPANTS!......................................................................................!66! TABLE!12!–!DISTRIBUTION!OF!IDEAS!WITH!SINGLE!VS.!MULTIPLE!INVENTORS!........................................................!69! TABLE!13!–!DIVERSITY!OF!INVENTORS:!SITE!..................................................................................................................!70! TABLE!14!–!DIVERSITY!OF!INVENTORS:!DEPARTMENTS!...............................................................................................!71! TABLE!15!–!DIVERSITY!OF!INVENTORS:!RANK!................................................................................................................!72! TABLE!16!–!DIVERSITY!OF!INVENTORS:!SENIORITY!.......................................................................................................!73! TABLE!17!–!IDEAS!WITH!VS.!WITHOUT!COMMENTS!.......................................................................................................!75! TABLE!18!–!DIVERSITY!OF!COMMENTATORS:!SITE!........................................................................................................!76! TABLE!19!–!DIVERSITY!OF!COMMENTATORS:!DEPARTMENTS!.....................................................................................!76! TABLE!20!–!DIVERSITY!OF!COMMENTATORS:!RANK!......................................................................................................!77! TABLE!21!–!DIVERSITY!OF!COMMENTATORS:!SENIORITY!.............................................................................................!78! TABLE!22!–!DIVERSITY!SCORES!OF!IDEA!INVENTORS!....................................................................................................!81! TABLE!23!–!DIVERSITY!SCORES!OF!COMMENTATORS!....................................................................................................!82! !
  • ! 5! ! ! ! ! ! ! ! ! ! “Innovation is all about making new connections. Most breakthrough innovation is about combining known knowledge in new ways or bringing an idea from one domain to another”. – Mike Addison, New Business Development Manager, Procter & Gamble ! ! ! ! ! ! ! ! ! ! ! ! Chapter 1 Introduction
  • ! 6! 1. Introduction The!digital!revolution!is!opening!the!world!making!knowledge!widely!accessible.!It!is! only!a!few!hundred!years!ago!that!society!was!revolutionized!by!the!printing!press!that! gave! us! access! to! new! knowledge.! Today,! the! Internet! has! revolutionized! society! enabling!us!to!not!only!get!access!to!knowledge!but!to!be!the!producer!of!knowledge.! Moreover,!“The!Internet!of!yesterday!was!a!platform!for!the!presentation!of!content.!The! Internet!of!today!is!a!platform!for!computation”! (TED! Talk:! Don! Tapscott,! 2012).! The! connectivity!of!people!in!the!online!sphere!enables!heterogeneous!groups!to!share!and! collectively! develop! ideas! through! virtual! communities! of! interaction.! The! world! has! indeed! become! smaller! and! the! business! environment! more! complex! and! ambiguous.! The!vast!technological!advancements!and!developments!in!communication!technology! have!caused!organizational!boundaries!to!become!more!porous!and!fluid;!giving!rise!to! concepts!such!as!open!innovation!and!crowdsourcing.!! ! The!notion!of!combinatorial!innovation!derived!from!Schumpeter!(1939)!refers!to!the! acknowledgement!that!innovation!is!in!essence!‘new!combinations’.!As!argued!by!Mike! Addison,!“Innovation!is!all!about!making!new!connections.!Most!breakthrough!innovation! is!about!combining!known!knowledge!in!new!ways!or!bringing!an!idea!from!one!domain!to! another.”!(Dodgson,!et!al.,!2006:337).!Innovation!is!increasingly!being!recognized!as!the! primary! source! from! which! organizations! gain! and! maintain! competitiveness.! Making! the!‘right’!go/kill!decisions!early!on!in!the!‘fuzzy!frontSend’!of!the!innovation!process!is! rewarding!albeit!challenging.!Practitioners!continue!to!emphasize!the!need!for!creativity! and! innovation! however! as! argued! by! McAdam! and! McClelland! (2002:86),! “[…]! the! literature!and!organizational!practice![…]!remain!somewhat!lacking!in!regard!to!the!front! end! of! creativity! and! innovation,! namely! idea! generation.”! It! is! therefore! necessary! to! draw! attention! to! the! conditions! under! which! ideas! are! developed! and! look! at! the! reflective! people! who! take! part! in! their! development.! I! thus! wish! to! provide! further! insights! of! the! idea! generation! process! and! the! opportunities! offered! by! the! digital! revolution.!! !
  • ! 7! An!effort!to!support!idea!generation!by!means!of!an!online!tool!was!recently!explored!in! the!Research!&!Development!organization!(R&D)!in!Novozymes!A/S!(NZ).!NZ,!being!the! world!leader!in!industrial!enzymes,!found!resting!on!the!laurels!highly!unfeasible.!To! boost! the! enzyme! business! in! NZ,! the! Innovation! Office! experimented! with! an! idea! market.!An!idea!market!is!an!online!competition!used!for!idea!brainstorming!and!idea! ranking.! R&D! employees! from! around! the! world! were! invited! to! participate! in! a! 17S daysSlong!idea!market!in!which!it!was!possible!to!submit!ideas,!mature!each!other’s!idea! by!commenting!on!them,!and!rank!ideas!by!trading!virtual!shares!in!them.!The!outcome! from!the!idea!market,!which!was!given!the!name!Growth!Bets!2011,!was!222!ideas!with! 636!comments!submitted!by!a!crowd!of!145!participants.!As!a!result,!25!highSquality! ideas!were!identified!from!which!one!idea!was!crowned!the!winner.!The!winning!idea! has!subsequently!received!research!funding!and!two!patent!applications!have!been!filed.!! ! The!growing!phenomenon!of!online!idea!markets!is!considered!to!facilitate!innovation,! greater! participation,! production! and! dissemination! of! knowledge,! and! increased! diversity!(Bothos!et!al.,!2012).!In!this!thesis,!I!shall!thus!examine!the!case!of!NZ’s!idea! market!and!explore!the!conditions!under!which!ideas!emerge.!Moreover,!I!shall!examine! the!diversity!of!people!involved!in!developing!the!ideas!as!theory!suggests!that!diversity! is!positively!associated!with!creativity!and!innovation!(BassettSJones,!2005).!I!therefore! hypothesize!that!the!connectivity!of!diverse!people!in!idea!markets!contributes!to!the! development!of!creative!and!innovative!ideas.!! ! !
  • ! 8! 1.1 Problem Statement The!present!thesis!studies!the!abilities!of!idea!markets!as!a!tool!for!idea!generation!and! filtering.!As!argued!by!a!number!of!scholars,!the!body!of!literature!on!the!fuzzy!frontSend! of!the!innovation!process!is!far!from!exhaustive.!!The!purpose!of!this!thesis!is!therefore! to! contribute! to! the! existing! literature! with! empirical! evidence! from! the! case! of! NZ’s! Growth!Bets!2011.!The!exploratory!nature!of!the!research!has!led!to!an!investigation!of! the!effects!of!inventor!diversity!on!the!development!of!ideas.!The!question!examined!is! thus:! ! Does%the%quality1%of%ideas%emerging%from%online%idea%markets%increase%with%the% diversity%of%inventors%involved%in%developing%the%ideas?% ! 1.2 Research Relevance As!I!stumbled!upon!a!quote!by!Poul!R.!Rasmussen!(Chairman!of!the!Board,!LEO!Pharma),! I!recognize!the!unique!opportunity!I!had!been!given!as!a!researcher.!The!quote!read,! “The!strength!of!today!is!diversity.”!(Dansk!Biotek,!2012:50).!The!Eureka!moment!was! obtained!by!the!recognition!that!I!had!been!provided!an!opportunity!to!‘measure’!the! strength!of!diversity.!The!opportunity!was!given!to!me!by!NZ!who!searched!for!further! enlightenment!on!the!strengths!and!weaknesses!of!using!idea!markets!to!support!the! idea!generation!process.!When!reviewing!the!literature!on!idea!markets,!it!became!clear! that!it!was!an!understudied!phenomenon.!Given!these!insights,!I!set!out!to!connect!the! dots!in!idea!markets!and!thereby!attempt!to!contribute!to!existing!theory!with!empirical! evidence! from! NZ’s! Growth! Bets! 2011.! The! relevance! of! the! research! is! therefore! considered!abundant.!Firstly,!the!research!is!relevant!for!NZ!in!their!forthcoming!idea! markets!so!that!they!are!able!to!customize!and!design!the!basis!for!the!desired!outcome.!!! Secondly,! the! research! is! relevant! to! existing! innovation! theory! that! emphasizes! the! combinatorial!nature!of!the!concept;!however!fails!to!provide!details!as!to!how!these! new!combinations!emerge!and!develop!in!the!fuzzy!frontSend!of!the!innovation!process.! Lastly,!this!thesis!is!the!culmination!of!five!years!of!studying!at!Copenhagen!Business! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 1!The!concept!of!quality!will!be!defined!in!the!Literature!Review.!
  • ! 9! School.!During!these!years,!I!have!obtained!knowledge!of!and!interest!in!organizations! and! their! pursuit! and! management! of! innovation.! Moreover,! by! studying! the! SOL! (Strategy,!Organization,!&!Leadership)!programme!as!well!as!the!BBIP!(BioBusiness!and! Innovation!programme),!I!am!convinced!that!I!am!well!equipped!for!the!task!at!hand! and!I!shall!therefore!attempt!to!provide!a!dissertation!that!not!only!fulfills!the!formal! requirements,!but!also!provides!valuable!insights!to!the!dynamic!and!innovationSdriven! company,!Novozymes.!
  • ! 10! 1.3 Disposition The!disposition!of!this!thesis!is!illustrated!in!Figure!1!below:!! ! Figure!1:!Disposition!of!thesis! !
  • ! 11! ! ! ! ! ! ! ! ! ! “Although ideas are formed in the minds of individuals, interaction between individuals typically plays a critical role in developing these ideas. That is to say, ‘communities of interaction’ contribute to the amplification and development of new knowledge.” – Ikujiro Nonaka, 1994 ! ! ! ! ! ! ! ! ! ! ! Chapter 2 Literature Review
  • ! 12! 2. Literature Review In!this!chapter,!I!shall!review!the!literature!relevant!to!the!study!of!idea!markets.!I!set! out!to!discuss!innovation!and!knowledge!theories!to!elucidate!some!underlying!concepts! to!the!embryonic!phenomenon!idea!markets.!The!objective!of!this!chapter!is!to!identify!a! research!gap!in!current!theory!in!which!the!present!thesis!aims!to!make!a!contribution.! In! this! effort,! I! review! literature! on! the! topics! of! the! idea! generation! phase,! online! opportunities,!crowdsourcing,!idea!markets,!and!diversity.!By!combining!these!research! fields,!it!is!attempted!to!shed!some!light!on!the!phenomenon!under!scrutiny.!The!reS organizing!of!prevailing!theories!and!claims!from!extant!literature!offers!opportunity!for! new! interpretations! and! thereby! contributions! to! current! theory.! The! notion! of! combinatorial! innovation! is! firstly! discussed! to! present! the! motivating! argument! throughout! the! discussions.! The! thesis! is! then! positioned! in! the! social! constructivist! school!of!thought!by!drawing!on!theory!of!complex!processes!of!knowledge!creation.!The! clarification!of!the!fuzzy!frontFend!of!the!innovation!process!then!leads!to!a!discussion!of! the!opportunities!offered!by!the!growth!of!the!Internet.!In!light!of!this,!discussions!of! crowdsourcing! and! idea! markets! are! provided.! Finally,! the! concept! of! diversity! is! elucidated!and!thereby!five!hypotheses!are!developed.!! 2.1 What is Innovation? Innovation!in!its!widest!sense!is!considered!to!be!anything!that!is!new!to!a!business! (Abernathy!&!Utterback,!1978;!in!Hine!&!Kapeleris,!2006).!The!term!originates!from!the! Latin!innovare,!which!means!‘to!make!something!new’!(Flynn!et!al.,!2003).!To!provide!a! more! narrow! definition! of! innovation,! a! distinction! must! be! drawn! between! an! innovation!and!the!process!of!innovation.!Van!de!Ven!(1986:591)!provides!a!definition!to! the! former! as! “A! new! idea,! which! may! be! a! recombination! of! old! ideas,! a! scheme! that! challenges!the!present!order,!a!formula,!or!a!unique!approach!which!is!perceived!as!new!by! the! individuals! involved”.! The! latter! is! defined! as! “[…]! the! development! and! implementation!of!new!ideas!by!people!who!over!time!engage!in!transactions!with!others! within! an! institutional! context”! (Ibid.:591).! The! definitions! provided! by! Van! de! Ven! (1986)! include! both! technical! (products,! services,! and! processes)! and! nonStechnical!
  • ! 13! (organizational! processes,! and! administration! systems)! innovations! (in! Hine! &! Kapeleris,! 2006).! According! to! Rothwell! and! Gardiner! (1985)! innovation! does! not! necessarily!imply!the!implementation!of!only!major!advance!in!the!technological!state!of! the! art! (a! radical! innovation);! it! includes! the! utilization! of! even! small! changes! in! technological!‘knowShow’!(an!improvement!or!incremental!innovation)!(in!Flynn!et!al.,! 2003).! This! assertion! is! also! supported! by! Abernathy! &! Clark! (1985:4)! who! state! “Innovation! is! not! a! unified! phenomenon:! some! innovations! disrupt,! destroy! and! make! obsolete!established!competence;!others!refine!and!improve.”! Furthermore,! it! is! argued! that! organizations! must! bestow! a! balanced! attention! to! both! incremental! and! radical! innovation! in! order! to! gain! and! maintain! competitiveness.! That! is! to! say,! they! must! divide!resources!between!exploitation!and!exploration!activities!(March,!1991).!! A!distinction!must!also!be!drawn!between!an!innovation!and!an!invention.!As!the!above! definitions!suggest,!innovation!is!the!successful!implementation!of!inventions.!Hence,!an! invention! is! not! an! innovation! until! it! is! commercialized.! Invention! refers! to! the! development! of! a! new! idea! or! act! of! creation! (Ahuja! &! Lampert,! 2001).! Schumpeter! (1939)! offers! an! interesting! analog! to! the! distinction! between! an! innovation! and! an! invention.!In!his!work!‘Business!Cycles’,!he!compares!the!concept!on!an!invention!with! Columbus’!discovery!of!America.!He!states,!“![…]!both!create!new!possibilities!and!are!no! doubt!among!the!most!important!causes!of!economic!and!social!change.!However!they!are! external!factors!in!a!sense.![…]!They!acquired!relevance!only!when!the!new!possibilities!are! turned!into!commercial!and!industrial!reality,!and!then!the!individual!acts!of!realization,! and!not!the!possibilities!themselves,!are!what!concern!us.”! (Schumpeter,! 1939:15).! The! Schumpeterian! perspective! of! innovation,! from! which! the! concept! of! combinatorial! innovation! has! its! roots,! commonly! inspires! innovation! scholars.! Schumpeter! (1939)! argued! that! innovation! is! in! essence! ‘new! combinations’.! His! definition! is! thus,! “Innovation! combines! factors! in! a! new! way,! or! it! consists! in! carrying! out! New! Combinations.”!(Ibid.:84).!These!combinations!refer!to!the!introduction!of!a!new!product! or!new!quality!of!a!product,!a!new!method!of!production,!a!new!market,!a!new!source!of! supply! of! raw! materials,! or! the! implementing! of! a! new! organization! in! any! industry! (Ibid.:84S85).!His!definition!has!been!criticized!of!being!restricted!to!only!include!the! introduction! of! innovations! –! lacking! the! subsequent! and! consequent! steps! that!
  • ! 14! constitute! innovations.! According! to! Hagedoorn! (1996),! Schumpeter! did! not! demonstrate! a! great! interest! in! the! early! phases! of! technical! change,! the! inventive! activities! of! economic! actors,! the! preSmarket! developments! of! technology,! or! the! diffusion! of! technological! knowledge.! However,! “[…]! there! seems! to! be! a! number! of! similarities! between! Schumpeter’s! discussion! of! innovation! and! modern! ‘heterodox! theories! of! innovation.’”! (Ibid.:892).! In! line! with! the! Schumpeterian! perspective,! Flemming! and! Sorensen! (2004)! argue! that! invention! is! a! recombinant! search.! An! invention!comes!either!from!combining!technological!components!in!a!novel!manner!or! through!reconfiguring!existing!combinations.!These!technological!components!refer!to! the! “[…]! fundamental! bits! of! knowledge! or! matter! that! inventors! might! use! to! build! inventions.”! (Ibid:.910).! Furthermore,! they! argue! that! even! though! complex! physical! systems!clearly!combine!multiple!elements,!many!inventions!intuitively!seem!like!one! component.!However!by!deeper!examination,!these!inventions!reveal!a!recombination!of! discrete!components!and!processes!(ibid.).! ! The! discussion! of! the! innovation! concept! has! led! to! the! assertion! that! innovation! is! based!on!new!combinations!of!knowledge.!Invention!thus!refers!to!the!search!for!new! combinations!or!the!reconfiguring!of!existing!combinations.!It!then!becomes!pertinent! to!take!a!step!back!and!discuss!how!knowledge!is!created!and!how!the!connectivity!of! individuals!enables!the!development!of!new!combinations!of!knowledge.! ! 2.2 Knowledge: the Source of Innovation It! is! difficult! to! discuss! the! development! of! ideas! without! first! addressing! how! knowledge! is! created! and! developed.! The! knowledge! phenomenon! has! been! widely! researched! among! organization! and! strategy! scholars.! From! the! traditional! resourceS based!perspective,!knowledge!has!been!recognized!as!a!principal!source!for!competitive! advantage! because! knowledge! is! idiosyncratic! and! difficultStoSimitate! (Teece,! et! al.,! 1997;! Winter,! 1987).! In! line! with! this,! Kogut! and! Zander! (1992:384)! argue,! “[…]! the! central! competitive! dimension! of! what! firms! know! how! to! do! is! to! create! and! transfer! knowledge! efficiently! within! an! organizational! context.”! ! The! resourceSbased! view! of!
  • ! 15! knowledge! triggered! a! vast! amount! of! subsequent! research,! which! built! upon! the! arguments!of!knowledge!creation,!the!notion!of!dynamic!processes.!!!! ! In! the! early! work! by! Hayek! (1945),! organizational! knowledge! is! seen! as! fragmented! units!held!in!individuals.!He!argued,!“[…]!the!knowledge!of!the!circumstances,!of!which!we! must!make!use,!never!exists!in!concentrated!or!integrated!form,!but!solely!as!the!dispersed! bits!of!incomplete!and!frequently!contradictory!knowledge,!which!all!separate!individuals! possess.”!(Hayek,!1945:519).!This!notion!of!fragmented!knowledge!is!further!developed! by!Kogut!and!Zander!(1992:383)!who!assert,!“[…]!knowledge!is!held!by!individuals,!but!is! also! expressed! in! regularities! by! which! members! cooperate! in! a! social! community.”!! Central! to! Kogut! and! Zander’s! (1992:385)! argument! is! that! knowledge! is! socially! constructed!and!“rests!in!the!organizing!of!human!resources”.!! ! In! Nonaka’s! (1994)! organizational! knowledge! creation! theory,! dynamic! processes! are! emphasized.! Nonaka! (1994:15)! argue,! “[…]! although!ideas!are!formed!in!the!minds!of! individuals,! interaction! between! individuals! typically! plays! a! critical! role! in! developing! these!ideas.!That!is!to!say,!‘communities!of!interaction’!contribute!to!the!amplification!and! development!of!new!knowledge.”! ! Nonaka’s! argument! provides! a! further! dimension! to! knowledge! creation! that! involves! the! creation! of! knowledge! by! social! interaction! between! individuals! in! communities! –! communities! that! might! span! departmental! or! organizational!boundaries!(ibid).!In!the!famous!work!‘The!Knowledge!Creating!Company’! by! Nonaka! and! Takeuchi! (1995),!the! essential! contribution! to! theory! is! the! notion! of! knowledge! conversion! that! explains! how! two! diverse! concepts! –! tacit! and! explicit! knowledge!–!interact!along!a!continuum!(Nonaka!&!von!Krogh,!2009).!Their!notions!of! tacit! and! explicit! knowledge! were! inspired! by! Michael! Polanyi! (1966)! who! described! tacit!knowledge!as!subjective!knowledge,!which!is!hard!to!formulate!and!communicate!–! as! he! put! it:! “we! can! know! more! than! we! can! tell.”! ! (Nonaka,! 1994:16).! ! Contrarily,! Polanyi! described! explicit! knowledge! as! objective! codified! knowledge! that! is! transmittable! in! informal! systematic! language! (ibid).! ! Nonaka! and! Takeuchi! (1995)! added! to! Polanyi’s! descriptions,! the! element! of! a! dialectic! process! between! tacit! and! explicit!knowledge.!In!the!dialectic!process!it!is!possible!to!transform!the!subjective!tacit! knowledge!into!objective!explicit!and!thereby!practical!knowledge.!The!transformation!
  • ! 16! occurs! through! language,! which! renders! it! possible! for! tacit! knowledge,! held! in! the! individual,!to!become!available!to!others!trough!its!transformation.!Stacey!(2001)!built! upon! Nonaka! and! Takeuchi’s! (1995)! notion! of! knowledge! transformation! with! the! concept!of!Complex!Responsive!Processes.!According!to!Stacey,!knowledge!is!not!stored!in! individuals! but! is! continually! in! flux.! He! states,! “Complex! Responsive! Processes! perpetually!construct!human!futures,!particularly![…]!they!perpetually!construct!human! knowledge! in! organizations.! Relating! between! diverse! people! in! their! local! situation! is! understood!as!the!process!in!which!knowledge!is!reproduced!and!potentially!transformed.”! (Stacey,! 2001:6).! The! complexity! perspective! of! knowledge! promoted! by! Nonaka! and! Takeuchi! (1995)! and! Stacey! (2001),! claims! that! social! interaction! of! individuals! reproduces! and! creates! new! knowledge.! The! dynamic! processes! thus! allow! for! the! combination! or! recombination! of! knowledge,! which! is! transformed! from! tacit! into! explicit!knowledge!through!social!communities!of!interaction.!! ! What!are!the!implications!for!idea!markets?!It!is!held!that!idea!markets!offer!a!tool!for! knowledge!conversion.!That!is!to!say,!the!virtual!community!of!interaction!enables!the! articulation! of! tacit! knowledge! and! thereby! transforms! it! into! practical! knowledge.! Moreover,! the! dynamic! processes! of! social! interaction! facilitate! the! amplification! and! development! of! new! knowledge.! This! is! because! idea! market! participants! not! only! submit! ideas;! they! collectively! develop! each! other’s! ideas! through! the! feature! of! commenting.! It! is! thereby! possible! to! transform! and! increase! the! quality! of! ideas! through!a!dialectic!process!of!tacit!and!explicit!knowledge!conversion.!Having!discussed! the!concept!of!knowledge!and!its!implications!for!idea!markets,!the!subsequent!sections! shall!discuss!how!ideas!are!generated,!developed!and!filtered!in!the!preliminary!stages! of!the!innovation!process.!!! ! 2.3 The Fuzzy Front-End of the Innovation Process A! vast! amount! of! innovation! theory! and! practical! tools! are! concerned! with! the! later! stages!of!the!innovation!process.!The!StageSGate!system!(Cooper,!1990)!has!become!the! most! used! innovation! management! tool! in! organizations! worldwide.! While! the! stageS gate! model! of! innovation! does! include! the! idea! generation! phase,! it! fails! to! provide!
  • ! 17! details! of! how! ideas! are! generated,! developed! and! filtered.! This! argument! is! also! supported!by!Poetz!and!Schreier!(2012:245)!who!state,!“Despite!its!obvious!importance! to!the!ultimate!success!of!a!firm,!the!idea!generation!process!is!an!area!where!scholars! generally!still!have!limited!insights!with!regard!to!the!‘ideal’!process.”! ! The! uncertainty! concerning! the! preliminary! activities! of! idea! generation! has! provided! the! phase! with! fuzzy! connotations.! This! phase,! however,! is! critical! to! any! subsequent! phase! in! the! innovation!process.!As!argued!by!Flynn!et!al.!(2003:418),!“It!is!logical!to!maximize!the! output! of! the! idea! generation! phase,! as! it! is! relatively! less! costly! than! the! later! development! stages! of! the! innovation! process.”! ! It! is! therefore! important! to! ‘fail! fast’! rather!than!‘late’!in!order!to!optimize!the!use!of!resources.!In!the!following!section,!a! brief! description! of! the! idea! generation! phase! will! be! provided! and! followed! by! a! discussion!of!the!opportunities!offered!by!the!refinement!of!the!Internet.!! ! 2.3.1 Idea Generation and Online Opportunities The! idea! generation! phase! involves! not! only! generating! ideas! but! also! filtering! and! maturing.!The!first!step!in!this!process!is!typically!to!host!brainstorming!sessions!for! small!groups!of!organizational!members.!The!brainstorming!sessions!(also!referred!to!as! ideations)! involve! bringing! colleagues! together! in! groups! to! discuss! and! develop! solutions!to!a!predefined!problem!or!opportunity.!!Ideations!can!vary!in!scope!and!size! however!the!objective!is!to!have!as!many!contributions!as!possible!as!this!increases!the! likelihood! of! arriving! at! a! viable! solution! (Flynn! et! al.,! 2003).! Various! creative! techniques! can! be! implemented! to! facilitate! the! generation! of! ideas! including! groupS work!and!high!levels!of!social!interaction.!The!subsequent!step!in!the!idea!generation! phase!is!filtering!the!generated!ideas.!The!ideas!may!be!ranked!in!order!of!priority!or! importance! to! the! organization! (ibid.).! Usually,! the! managers! are! the! judges! however! some! ideations! may! take! a! more! collectivist! approach! where! ideas! are! scored! by! the! participants!and!subsequently!filtered!based!on!the!average!scores!(ibid.).!The!filtering! of!ideas!is!an!important!step!as!it!involves!making!go/kill!decisions!of!which!ideas!to! accept! or! reject.! The! generated! ideas! may! not! only! bring! about! solutions! to! the! prevailing!problems,!they!may!indeed!offer!solutions!to!problems!not!yet!identified.!The! challenging!yet!rewarding!task!of!managers!is!thus!to!effectively!evaluate!ideas.!The!last! step! in! the! idea! generation! phase! is! to! mature! the! ideas! that! have! passed! the! first!
  • ! 18! screening.! Maturation! typically! involves! further! elucidation! of! technical! feasibility,! IP,! and!customer!need!assessment.!In!practice,!the!first!two!steps!–!generating!and!filtering! –! are! often! interconnected! activities.! This! is! because! the! social! interaction! of! participants! in! ideations! effects! how! and! what! is! articulated.! By! discussing! possible! solutions!in!the!group,!the!initial!reactions!to!proposals!from!other!group!members!will! arguably!steer!the!direction!of!proposals.!In!the!creation!of!new!solutions!there!is!thus! an! important! relationship! between! formulating! something! new! and! at! the! same! time! being! subject! to! a! screening! process! S! acceptance! or! rejection.! The! two! processes! however! touch! upon! two! different! performances;! we! might! be! able! to! think! of! something!new!but!our!screening!abilities!involve!entirely!different!capabilities.!These! capabilities!primarily!rely!on!whether!organizational!members!are!informed!about!how! ideas!fit!into!a!particular!context.!Physical!proximity!and!social!interaction!and!control! in! traditional! ideations! thus! have! implications!on!idea!generation.! These!implications! can! arguably! both! have! positive! and! negative! effects! on! idea! development.! On! the! positive! side,! mutual! understanding! and! familiarity! breed! trust,! which! facilitates! successful! collaboration! (Nooteboom,! 2007).! On! the! negative! side,! mutual! understanding! and! familiarity! can! kill! creativity! (ibid.).! Furthermore,! the! pursuit! of! social! acceptance! in! groups! with! high! social! interaction! and! control! can! have! detrimental!effects!on!novelty!because!the!costs!of!articulating!a!‘wild’!or!‘unpolished’! idea!may!be!too!high.!! ! The!idea!generation!phase!in!organizations!is!increasingly!being!transformed!by!means! of! online! tools.! The! Internet! has! provided! opportunity! to! not! only! share! information! with! a! global! community,! but! also! to! develop! information! by! means! of! computation.! Meaning!that!the!web!–!the!grand!network!of!networks!–!facilitate!idea!exchange!both!in! real!time!and!asynchronously!which!renders!it!possible!to!aggregate!disparate!flows!of! ideas!in!one!stream!(Brabham,!2008).!Furthermore,!“The!nature!of!the!web!mimics!the! very!way!we!think!as!humans![therefore]!humans!should!see!themselves!in!the!medium!as! actors,!creators,!innovators,!as!implicated!in!the!information!flow!rather!than!witnesses!to! it.”!(Ibid.:81).!Increasingly,!ideations!are!being!held!by!means!of!online!tools,!which!offer! opportunity!to!brainstorm!ideas!in!groups!of!geographically!dispersed!individuals.!The! decrease! of! social! interaction! and! control! arguably! offers! the! opportunity! for! the!
  • ! 19! articulation!of!more!novel!solutions!by!participants.!An!idea!market!arguably!legitimizes! the!presentation!of!‘wild’!or!‘unpolished’!ideas.!Furthermore,!it!is!held!that!using!idea! markets!for!idea!generation!enables!a!separation!of!the!activities!of!idea!generation!and! filtering.!The!screening!of!ideas!is!done!at!a!later!stage!rather!than!simultaneously!with! idea! proposals.! This! allows! for! the! development! of! ideas! before! they! are! subject! to! filtering!activities.!That!is!to!say,!online!ideations!offer!the!opportunity!to!increase!the! quantity! and! quality! of! ideas! at! an! earlier! stage! than! in! traditional! ideations.! The! importance!of!identifying!the!quality!of!ideas!is!considered!paramount!in!order!to!make! the!right!go/kill!decisions.!Due!to!the!scope!of!this!thesis,!a!definition!of!quality!will!be! provided!in!the!following!section.!! ! 2.3.2 Quality of Ideas In!order!to!derive!at!a!definition!of!quality,!the!concepts!of!creativity!and!novelty!shall! be! discussed.! Creativity! and! novelty! are! believed! to! be! key! characteristics! of! ideas;! however!the!degree!to!which!they!contribute!to!the!quality!of!an!idea!is!arguably!a!very! difficult!and!subjective!measure.!!In!this!thesis,!I!shall!thus!rely!on!the!judgments!from! ‘experts’!in!the!idea!market!to!be!able!to!identify!ideas!with!high!quality.!! ! An!idea!is!commonly!understood!to!be!a!concept!or!a!plan!to!be!implemented!that!offers! a!solution!to!a!problem.!Ideas!and!creativity!is!often!argued!to!be!two!sides!of!the!same! coin!–!one!does!not!exist!without!the!other.!In!line!with!the!Schumpeterian!perspective,! creativity! is! that! which! “results! in! the! generation! of! new! and! useful! ideas! or! the! combination!of!existing!ideas!into!new!and!useful!concepts!to!satisfy!a!need”!(FaridSFoad! et!al.,!1993;!in!Flynn!et!al.,!2003:419).!However,!Vandenbosch!et!al.!(2003:260)!argue! that!ideas!are!not!necessarily!creative!to!be!useful;!there!exists!‘ordinary’!ideas,!that!is,! “managers!often!rely!on!old,!ordinary!ideas!or!new!but!imperfect!ones!to!cope!with!the! challenges!they!face.”!!In!line!with!this,!Ward!(2000)!argues!that!initial!ideas!may!not!be! creative!solutions!in!themselves.!Rather!they!represent!candidate!ideas!or!preventive! forms! that! may! or! may! not! lead! to! a! creative! solution! once! they! are! explored,! transformed,! modified,! and! extended.! Similarly,! Amabile! (1983:126)! asserts! that,! “Creativity!is!the!production!of!novel!and!useful!ideas!by!an!individual!or!small!group!of! individuals!working!together”.!I!suggest!that!the!degree!of!creativity!in!ideas!may!vary!
  • ! 20! from! idea! to! idea! and! is! arguably! a! subjective! measure! bound! to! the! nature! of! the! problem.!It!is!therefore!held!that!there!exists!creativity!even!in!incremental!solutions! and!the!importance!of!fostering!creative!thinking!in!organizations!is!thus!paramount.!!!! ! Novelty! of! ideas! refers! to! the! degree! in! which! they! offer! new! solutions! to! problems.! According!to!Abernathy!and!Clark!(1985),!novelty!refers!to!the!application!of!a!known! technology! to! a! new! purpose.! Arguably,! technological! novelty! is! the! pursuit! of! all! scientists.! It! is! the! novelty! of! an! invention! that! provides! scientific! merit! and! peer! recognition.!In!order!for!a!technology!to!be!patented,!it!needs!to!exhibit!a!certain!degree! of!novelty.!The!degree!of!novelty!is!thereby!measured!by!the!hitherto!scientific!frontier.! However,!what!can!be!regarded!as!relatively!mundane!changes!in!technology!can!have! major!ramifications!in!the!market!(Abernathy!&!Clark,!1985).!Contrarily,!“what!may!be!a! startling!breakthrough!to!the!engineer!may!be!completely!unremarkable!as!far!as!the!user! of!the!product!is!concerned.”!!(Ibid.:6).!! ! How! is! quality! defined! in! this! thesis?! As! discussed,! creativity! and! novelty! are! two! important! characteristics! of! ideas.! It! is! therefore! held! that! the! ideas’! quality! initially! refers! to! the! degree! in! which! they! offer! creative! and! novel! solutions! to! problems! subjectively!recognized!by!management!who!are!the!ultimate!judges.!The!definition!of! quality!adopted!in!this!thesis!is!thus:!ideas!with!high!quality!are!those!that!are!perceived! by!organizational!members!to!exhibit!creative!and!novel!solutions!to!problems!recognized! by!an!organization.!In!this!thesis,!the!identification!of!ideas!with!high!quality!is!based!on! the! judgments! from! ‘experts’! within! the! organization! examined.! By! drawing! on! their! expertise! and! knowledge! of! what! constitute! high! quality! ideas,! the! research! can! be! focused!on!the!dynamics!shaping!high!quality!ideas!rather!than!attempting!to!identify! them.!! ! What!are!the!implications!for!idea!markets?!The!above!discussions!on!the!fuzzy!frontS end!of!the!innovation!process!have!elucidated!the!processes!of!generating,!filtering!and! maturing!ideas.!It!was!argued!that!traditional!ideations!might!have!negative!effects!on! the!formulation!of!something!radically!new.!This!is!because!close!social!interaction!and! control!facilitate!internal!filtering!of!ideas!by!participants.!The!cost!of!articulating!‘wild’!
  • ! 21! or! ‘unpolished’! ideas! in! idea! markets! is! argued! to! be! low! because! of! the! reduced! familiarity! and! social! control.! Furthermore,! the! simultaneous! activities! of! generating! and! filtering! ideas! in! traditional! ideations! render! it! impossible! for! the! further! development! of! an! idea! before! its! evaluation.! In! idea! markets,! the! ideas! have! the! opportunity!to!be!developed!with!additional!information!provided!by!other!participants.!! Idea!markets!are!thus!argued!to!enable!increased!quality!of!go/kill!decisions!because! the!decisions!are!based!on!more!mature!ideas.!In!the!subsequent!section,!I!will!discuss! the!concept!of!crowdsourcing!as!a!means!of!tapping!into!a!wider!selection!of!ideas.! ! 2.4 Crowdsourcing Ideas The! concept! of! crowdsourcing! relies! on! the! notion! of! the! wisdom! of! the! crowd.! The! wisdom!of!the!crowd!refers!to!“[…]!the!discovery!that!the!aggregate!of!a!set!of!proposed! solutions! from! a! group! of! individuals! performs! better! than! the! majority! of! individual! solutions.”! (Yi! et! al.,! 2012:452).! The! effect! has! been! demonstrated! through! various! experiments;! for! example! counting! the! number! of! jellybeans! in! a! jaw;! guessing! the! weight! of! the! ox;! and! finding! the! position! of! the! missing! submarine! (Williams! &! Williams,! 2012).! By! calculating! the! mean! of! the! suggestions! from! the! crowd,! nearly! perfect! estimates! were! found.! The! wisdom! of! the! crowd! phenomenon! is! also! used! to! predict!future!events!in!prediction!markets!or!information!markets.!It!is!thereby!held!that! information!about!the!likelihood!of!future!events!is!better!predicted!by!many!people!i.e.! the!crowd!than!by!few!individuals.!This!is!because!(i)!informants!seldom!have!access!to! all!relevant!information!and!(ii)!using!multiple!informants!lowers!the!error!component! of!the!group's!forecast!(Van!Bruggen!et!al.,!2010).!Furthermore!Stasser!and!Titus!(1985)! claim,! “Groups! can! benefit! from! pooling! members'! information,! particularly! when! members!individually!have!partial!and!biased!information!but!collectively!can!compose!a! less! biased! characterization! of! the! decision! alternatives.”! (in! Van! Bruggen! et! al.,! 2010:404).! The! central! finding! in! the! wisdom! of! the! crowd! research! is! that! when! judgments!are!made!by!a!group!of!people,!the!judgment!obtained!by!aggregating!their! judgments!is!often!as!good!as,!or!might!even!be!better!than,!the!best!person!in!the!group.! Therefore! the! wisdom! of! the! crowd! phenomenon! relies! on! being! able! to! remove! the! noise! in! individual! judgment! to! get! closer! to! the! truth! (Surowiecki,! 2004;! in!Yi! et! al.,!
  • ! 22! 2012).! However,! there! are! limits! to! the! applicability! of! the! wisdom! of! the! crowd! technique!for!knowledge!retrieval!because!many!forms!of!practical!knowledge!cannot! be!represented!with!single!continuous!or!discrete!answers!(Yi!et!al.,!2012).!That!is,!for! combinatorial!problems!it!is!not!feasible!to!take!the!mean!or!mode!of!individual!answers! to!obtain!a!group!answer!(ibid.).!This!leads!to!the!question!of!how!can!the!wisdom!of!the! crowd!technique!be!applied!to!idea!generation!in!organizations?!! ! The!case!for!crowdsourcing!ideas!externally!is!built!on!the!assertion!that,!“no!matter! who!you!are,!most!of!the!smartest!people!work!for!someone!else”.! (Lakhani! &! Panetta,! 2007:97)!The!rather!bold!statement!emphasizes!that!“[…]!in!any!given!sphere!of!activity! most! of! the! pertinent! knowledge! will! reside! outside! the! boundaries! of! any! one! organization,!and!the!central!challenge!for!those!charged!with!innovation!mission!is!to! find!ways!to!access!that!knowledge.”!(Ibid.)!!The!concept!of!open!innovation!deals!with! this! challenge! by! inviting! externally! sourced! ideas! to! solve! internal! problems! in! an! organization.! Chesbrough! (2011:69)! defines! open! innovation! as! “the! use! of! purposive! inflows! and! outflows! of! knowledge! to! accelerate! internal! innovation! and! expand! the! markets! for! external! use! of! innovation,! respectively”.! Arguably,! the! impediment! to! the! concept!is!the!high!risks!involved!concerning!the!protection!of!knowledge.!Nevertheless,! the!concept!has!gained!increased!attention!in!organizations.!Crowdsourcing!draws!on! users!or!external!experts!to!contribute!with!ideas!for!either!a!monetary!compensation! or!other!kinds!of!incentives!in!a!widely!broadcast!idea!generation!competition!(Poetz!&! Schreier,!2012).!An!example!of!crowdsourcing!ideas!is!provided!by!Don!Tapscott!(TED! Talk,!2012)!who!describes!the!successful!use!of!crowdsourcing!by!a!mining!company.! The!geologists!in!the!mining!company!could!not!locate!any!gold!in!the!mine!but!instead! of!giving!up,!they!published!the!geographical!data!on!the!Internet!and!held!a!contest! called!the!Gold!Corp!Challenge.!There!was!a!prize!of!500.000!USD!for!the!idea!that!could! tell! them! where! the! gold! was.! Some! of! the! best! submissions! did! not! come! from! geologists!but!from!computer!scientists!and!engineers.!In!fact,!the!winning!idea!came! from!a!computer!graphics!company.!The!winning!idea!helped!locate!3.5!billion!dollars’! worth!of!gold,!which!consequently!led!the!market!value!of!the!company!to!go!from!90! million!to!10!billion!USD.!Needless!to!emphasize!that!in!this!case,!the!smartest!people! did!work!for!someone!else.!!
  • ! 23! A! recent! study! by! Poetz! and! Schreier! (2012)! found! that! crowdsourcing! might! complement! the! work! of! a! firm’s! professionals! in! the! idea! generation! phase.! The! scholars!compared!ideas!created!by!both!selfSselected!users!and!professionals!in!an!idea! contest!in!the!consumer!goods!market!for!baby!products.!Their!findings!indicated!that! the!user!ideas!scored!higher!on!average!in!terms!of!novelty!and!customer!benefit!than! the! ones! generated! by! the! firm’s! professionals.! The! study! also! revealed! that! the! best! ideas!tended!to!be!more!heavily!concentrated!among!users!(ibid.).!Why!the!conclusion! can!be!drawn!that,!“firms!who!rely!too!heavily!on!their!internal!expertise!might!be!blocked! from!finding!alternative,!potentially!more!successful!solutions.”!(Ibid.:248).!! ! What!are!the!implications!for!idea!markets?!The!examples!of!crowdsourcing!ideas!have! shown!promising!results.!The!research,!however,!is!more!concentrated!on!businessStoS consumer!firms!than!on!businessStoSbusiness!firms.!What!is!more,!advanced!scientific! knowledge! held! in! highStechnology! firms! is! more! difficult! to! aggregate! and! more! unlikely!to!be!found!among!external!individuals.!The!crowdsourcing!technique!thus!has! its! limits! of! applicability! when! concerned! with! businessStoSbusiness! firms! whose! operations!involve!complicated!scientific!research.!As!argued!by!Bos!et!al.!(2007:653),! “Scientists!generally!work!with!ideas!that!are!on!the!cutting!edge!of!what!is!understood.! This!knowledge!often!requires!specialized!expertise,!is!difficult!to!represent,!may!be!tacit,! and!changes!rapidly.”!!!They!find!that!advanced!scientific!knowledge!is!the!most!difficult! to! manage! over! distances! or! disseminate! over! large! groups! (ibid.).! Furthermore,! the! protection!of!IP!and!the!requirement!of!advanced!equipment!render!it!problematic!for! highStechnology! firms! to! find! ideas! externally.! For! these! types! of! businesses,! internal! crowdsourcing!–!i.e.!idea!markets!–!can!perhaps!be!a!better!solution!for!idea!generation.!! ! 2.4.1 Idea Markets An!idea!market!is!an!online!ideaSgenerating!tool!relying!on!internal!crowdsourcing.!That! is!to!say,!an!idea!market!is!a!tool!comparable!to!external!crowdsourcing!but!involves!the! selection! of! promising! idea! contributors! from! among! the! firm’s! own! employees! (Soukhoroukova!et!al.,!2012).!As!theory!of!this!phenomenon!is!lacking!(ibid.),!this!thesis! will!investigate!the!case!of!NZ’s!Growth!Bets!2011.!The!design!and!process!of!NZ’s!idea!
  • ! 24! market! will! be! described! in! greater! detail! in! Chapter! 3;! this! section! will! thus! be! delimited!to!provide!an!overview!of!the!concept.! ! Idea!markets!serve!the!purpose!of!online!collaborative!brainstorming!and!idea!ranking.! The!purpose!of!collaborative!brainstorming!of!ideas!is!rooted!in!the!notion!that!there!is! a! large! dormant! reservoir! of! useful! ideas! in! many! companies,! however! there! is! a! shortage!of!effective!channels!to!communicate!these!ideas!(van!Dijk!&!van!den!Ende,! 2002).!The!idea!market!provides!opportunity!for!a!large!group!of!diverse!participants!to! submit!their!ideas,!develop!these!ideas!by!submitting!comments,!and!rank!ideas!through! virtual!transactions.!Ideas!are!thus!ranked!in!accordance!to!the!wisdom!of!the!crowd!as! participants!can!buy!and!sell!shares!in!all!ideas!with!play!money.!The!participants!in!the! market!have!an!opportunity!to!display!their!creativity!to!management!and!colleagues! from!all!over!the!world.!The!incentives!for!participation!can!thus!be!intrinsic!(e.g.!peer! recognition)!and!extrinsic!(e.g.!prizes!for!best!ideas!and!research!funding).!Regardless!of! the!design!of!incentives,!the!markets!provide!an!organized!and!structured!process!for! idea! extraction! and! followSup,! which! in! itself! is! a! motivational! factor! for! participants! (van! Dijk! &! van! den! Ende,! 2002).! As! argued! by! Chan! et! al.! (2002),! “[idea! markets]! improve! upon! traditional! […]! methods! by! encouraging! greater! honesty! from! the! participants,!providing!participants!with!valuable!feedback!from!other!participants,!and! offering! participants! the! ‘joy! of! competitive! play’.”! (in! Spears! et! al.,! 2009:18)! Furthermore,!Spears!et!al.!(2009)!argue!that!traditional!means!of!encouraging!new!ideas! within! businesses! such! as! suggestions! boxes! and! brainstorming! sessions! have! considerable! limitations.! This! is! because,! “suggestion! boxes! often! go! unused! because! contributors!receive!little!or!no!feedback!about!their!idea!or!visibility!into!others'!ideas.! Brainstorming! sessions! are! often! infeasible! for! soliciting! ideas! from! large,! globally! distributed!teams!with!potentially!thousands!of!contributors.”!(Spears!et!al.,!2009:19)!! ! As!previously!stated,!theory!and!research!on!idea!markets!is!far!from!exhaustive.!!Given! the!novelty!of!the!tool!and!the!vast!possibilities!for!its!further!development,!research!is! highly! relevant! for! both! practitioners! and! scholars.! Furthermore,! the! case! for! idea! markets!is!found!in!the!notion!of!combinatorial!innovation!and!that!the!biggest!‘sparks’! are!ignited!when!pieces!of!ideas!come!together!from!a!diverse!set!of!individuals.!In!the!
  • ! 25! following! section,! I! shall! therefore! draw! on! diversity! theory! to! gain! insights! of! the! implications!for!idea!development!by!the!connectivity!of!diverse!participants.!! ! 2.5%The%Implications%of%Diversity%% Diversity!in!its!widest!sense!means!‘variety’!or!‘point!or!respect!in!which!things!differ’! (Milliken!&!Martins,!1996).!The!implications!of!diversity!have!been!vastly!studied!in!a! wide!array!of!research!fields.!In!an!organizational!context,!diversity!has!been!positively! associated! with! creativity,! innovation,! and! competitive! advantage! where! it! has! been! recognized!as!a!catalyst!of!creativity!in!teams!(West!&!Anderson,!1996;!in!BassettSJones,! 2005).!Furthermore,!Milliken!and!Martins!(1996:402)!studied!the!body!of!literature!on! diversity! and! found! that! “Diversity! in! the! composition! of! organizational! groups! affects! outcomes! such! as! turnover! and! performance! through! its! impact! on! effective,! cognitive,! communication,! and! symbolic! processes”.! The! effects! of! diversity! on! organizational! or! team! performances! are! thus! paradoxical! in! nature.! On! the! one! hand,! a! high! level! of! diversity! can! lead! to! less! integrated! groups,! dissatisfaction! and! higher! turnover! (ibid.:403).! Similarly,! BassettSJones! (2005:171)! argues! that! diversity! damages! cohesiveness,! reduces! communication! and! produces! inSgroups! and! outSgroups.! “This! results! in! discord,! distrust,! poor! quality! and! lack! of! customer! focus! and! market! orientation.”!!On!a!more!positive!note,!research!also!suggests,!“More!diverse!groups!have! the!potential!to!consider!a!greater!range!of!perspectives!and!to!generate!more!highFquality! solutions! than! less! diverse! groups.”! (Milliken! and! Martins,! 1996:403).! Also,! “[…]! when! diversity!is!managed!well,!it!can!enhance!creativity,!resulting!in!increased!commitment,!job! satisfaction! and! a! better! interface! with! the! market! place.”! (BassettSJones,! 2005:171).! Furthermore,! teams! that! are! characterized! by! high! network! heterogeneity! whereby! relationships!in!the!team!cut!across!salient!demographic!boundaries,!enjoy!an!enhanced! learning!capability!(Reagans!&!Zuckerman,!2001).!McAdam!and!McClelland!(2002:90)! found!that!“While!diverse!teams!are!often!more!creative!than!homogeneous!teams,!they! are! also! more! likely! to! fail! if! their! diversity! is! not! positively! managed.”! Resource! heterogeneity! provides! the! potential! for! learning! and! innovation! especially! when! dealing! with! exploration! activities! (Nooteboom,! 2007).! The! doubleSedge! sword! of! diversity!is!thus!found!by!the!increased!opportunity!for!learning!and!creativity!along!
  • ! 26! with! a! higher! risk! of! dissatisfaction,! misunderstanding! and! lack! of! cohesiveness! (Milliken!&!Martins,!1996).!! A! distinction! must! be! drawn! between! types! of! diversity.! Inspired! by! Milliken! and! Martins! (1996),! the! first! type! is! observable! attributes! such! as! nationality,! ethnic! background,!gender,!and!age.!The!second!type!is!less!visible!skillFbased!attributes!such!as! education,! technical! abilities,! functional! background,! and! tenure! in! the! organization.! Leonard! and! Swapp! (1999)! argue! that! it! takes! more! than! ethnic! and! demographic! diversity!to!result!in!creativity!that!leads!companies!to!perform!better!(in!BassettSJones,! 2005).! Diversity! in! personalities,! values! and! beliefs! can! have! large! effects! on! collaboration!in!teams!(Schein,!1985).!As!the!research!in!this!thesis!is!concerned!with! idea! markets,! the! relevance! of! diversity! in! personalities! is! arguably! not! great.! This! is! because!the!online!connectivity!of!geographical!dispersed!individuals!in!idea!markets,! results! in! less! social! interaction! and! control! than! traditional! group! work.! The! consequences! of! diversity! such! as! dissatisfaction,! misunderstanding! and! lack! of! cohesiveness! shall! not! be! examined! in! this! thesis.! Rather,! the! impact! on! cognitive! outcomes!(i.e.!quality!of!ideas)!is!what!is!investigated.!It!is!therefore!hypothesized!that! lack! of! physical! proximity! and! familiarity! offers! an! opportunity! to! articulate! wild! or! unpolished! ideas! regardless! of! social! acceptance! and! cohesiveness.! The! diversity! attributes!that!are!particular!relevant!in!the!idea!market!context!is!arguably!diversity!in! organizational!affiliation.!More!specifically,!the!dimensions!examined!in!this!thesis!are! diversity!in;!geographical!location;!functional!background;!hierarchical!level!and!tenure! in!the!organization.!These!dimensions!thus!include!both!observable!attributes!and!skillS based!attributes.!! Nooteboom!et!al.!(2007)!studied!the!concept!of!cognitive!distance,!which!refers!to!the! extent! that! people! have! developed! along! different! life! paths! and! in! different! environments,!they!interpret,!understand!and!evaluate!the!world!differently.!They!argue! that!for!organizations!to!achieve!a!common!purpose,!organizational!members!need!not! agree! on! personal! goals! however! they! need! to! share! certain! basic! perceptions! and! values! to! sufficiently! align! their! competences! and! motives.! The! research! of! cognitive! distance!by!Nooteboom!et!al.!(2007)!focused!on!collaboration!between!technology!firms! and! its! relation! to! innovation! performance.! The! research! proposed! that! there! is! an!
  • ! 27! invertedSU!shaped!relationship!between!cognitive!distance!and!innovation!performance.! As! cognitive! distance! increases,! it! has! a! positive! effect! on! learning! by! interaction! because! it! yields! opportunities! for! novel! combinations! of! complementary! resources! (ibid.).! ! At! a! certain! point,! however,! “[…]! cognitive! distance! becomes! so! large! as! to! preclude!sufficient!mutual!understanding!needed!to!utilize!those!opportunities.”!(Ibid.:3).! The! challenge,! they! argue,! is! to! find! partners! at! sufficient! cognitive! distance! to! tell! something!new,!but!not!so!distant!as!to!preclude!mutual!understanding.!! In!the!case!of!idea!markets,!I!argue!that!the!invertedSU!shaped!relationship!is!discarded! on!behalf!of!a!continuous!upward!sloping!line.!My!argument!is!twoSfold.!Firstly,!because! idea!markets!rely!on!participants!selected!internally!from!the!same!organization.!It!is! therefore!argued!that!the!mutual!understanding!of!the!firm’s!purpose!and!goals!is!great,! which!result!in!less!cognitive!distance!between!individuals.!Furthermore,!the!multiple! firmSlevel! study! by! Nooteboom! et! al.! (2007)! involves! large! and! more! heterogeneous! groups! than! in! the! present! case! of! idea! markets,! which! only! involves! small! inventor! teams.!The!research!in!this!thesis!is!therefore!only!concerned!with!the!upwardSsloping! effect.! Secondly,! the! variety! of! perspectives! involved! in! developing! ideas! through! the! feature!of!commenting!does!not!have!a!detrimental!effect!on!cognitive!outcomes.!That!is! to!say,!diversity!of!commentators!can!only!contribute!to!the!quality!of!ideas!by!adding! additional!information!to!the!previously!articulated!information.!Because!comments!are! added!over!time!instead!of!immediately!through!inSgroup!discussion,!the!comments!will! not!result!in!a!downward!sloping!effect.!Rather,!if!an!added!comment!is!out!of!context! (e.g.! a! sign! of! misunderstanding),! the! comment! can! be! disregarded.! The! cognitive! outcomes! from! added! comments! can! thus! only! have! an! upwardSsloping! effect.! Misunderstandings!and!lack!of!cohesiveness!do!thereby!not!decrease!the!value!of!ideas! but!rather!provide!opportunity!to!combine!and!build!new!knowledge.!The!decrease!in! social! interaction! and! control! thus! allow! for! more! creative! and! novel! solutions! to! be! articulated! by! a! diverse! set! of! participants.! I! therefore! argue! that! diversity! of! participants! can! increase! the! quality! of! ideas.! The! diversity! parameters! and! the! hypotheses!examined!in!this!thesis!shall!be!presented!in!the!following!sections.!! ! !
  • ! 28! 2.5.1 Geographical Diversity Multinational!organizations!depend!on!people!throughout!the!world!to!carry!out!their! operations!and!it!is!therefore!held!that!the!distinctiveness!of!workforce!competencies! derived!from!different!nationalities!contribute!with!organizational!diversity!(Caliguiri,! 2010).!Hofstede!!(1983)!argue!that!nationalities!of!employees!play!an!important!role!in! organizational! management! for! at! least! three! reasons.! The! first! reason! is! political! because!nations!are!political!units,!rooted!in!history,!with!their!own!institutions:!form!of! government,! legal! systems,! educational! systems,! labor! and! employer’s! association! systems! (ibid).! The! second! reason! is! sociological! because! nationality! has! a! symbolic! value!to!citizens.!It!is!held!that!we!all!derive!part!of!our!identity!from!it!(ibid).!The!third! reason! why! nationality! is! important! is! psychological! because! our! thinking! is! partly! conditioned! by! national! cultural! factors! (ibid).! Hofstede! (1983)! refers! to! ‘mental! programming’!as!a!consequence!of!past!experiences,!which!effects!our!interpretation!of! new! experiences.! He! argues! that! we! become! mentally! programmed! when! we! share! experiences! with! other! members! of! our! nation! (ibid.).! Hofstede’s! (1983)! longitudinal! study!of!50!nations!and!regions!indicated!clear!differences!in!cultural!dimensions!such! as! individualism! vs.! collectivism,! power! distance,! uncertainty! avoidance,! and! masculinity!vs.!femininity.!In!this!thesis,!geographical!diversity!refers!to!the!countries!in! which! employees! carry! out! their! operations.! Milliken! and! Martins! (1996)! draw! on! a! study! by! Watson! et! al.! (1993)! who! found! that! diversity! in! nationality! have! different! impacts!on!group!performance.!In!the!initial!stages!of!group!interaction,!homogenous! groups!performed!better.!However!in!later!stages!of!group!interaction,!diverse!groups! (in! terms! of! nationality)! scored! higher! on! two! aspects! of! performance:! range! of! perspectives! and! alternatives! generated! (Milliken! &! Martins,! 1996).! The! range! of! perspectives! and! alternatives! generated! are! elements! that! are! consistent! with! the! benefits!of!diversity!investigated!in!this!thesis.!I!thus!posit!the!following!hypothesis:! Hypothesis 1 H1:% Geographical!diversity!will!increase!the!quality!of!ideas!presented!and! developed!in!idea!markets! !
  • ! 29! 2.5.2 Functional Diversity Functional!diversity!refers!to!the!differences!in!skills!and!competences!acquired!from! working!in!specific!functional!areas!in!an!organization.!In!line!with!the!combinatorial! view!of!innovation,!it!is!held!that!radical!innovations!often!happen!at!the!intersection!of! disciplines! (Lakhani! &! Jeppesen,! 2007).! Furthermore,! “The!more!diverse!the!problemF solving!population,!the!more!likely!a!problem!is!to!be!solved.!People!tend!to!link!problems! that!are!distant!from!their!fields!with!solutions!they’ve!encountered!in!their!own!work”.! (Ibid.:1).!It!is!therefore!key!to!bring!people!together!from!upstream!and!downstream! functional!areas!so!that!they!can!communicate!and!bring!coordinated!knowledge!to!bear! on!a!project!(Keller,!2001).!Milliken!and!Martins!(1996)!found!that!diversity!along!skillS! or! knowledgeSbased! dimensions! have! some! positive! cognitive! outcomes! for! project! teams.!This!is!because!diversity!translates!into!a!greater!variety!of!perspectives!being! brought! to! bear! on! decisions! and,! thereby,! increases! the! likelihood! of! creative! and! innovative!solutions!to!problems!(ibid.).!Ancona!and!Caldwell!(1992)!found!conflicting! outcomes! of! functional! diversity.! Although! their! study! indicated! a! negative! effect! on! teamSrated!performance,!an!indirect!positive!effect!was!found!on!innovation!through!its! association! with! an! increased! frequency! of! communication! with! those! outside! the! project!group.!The!positive!effect,!they!argue,!may!lie!in!the!creation!of!linkages!to!those! not!in!the!team!(ibid).!Furthermore,!Simons!(1995)!argue!“Functional!diversity!will!only! be! positively! associated! with! organizational! performance! when! the! team! uses! decision! processes!that!allow!debate”! (in!Milliken! &! Martins,! 1996:410).! The! positive! effects! of! functional!diversity!are!thus!consistent!with!the!idea!market!concept,!which!allow!for! debate!by!the!feature!of!commenting.!The!benefits!of!functional!diversity!are!advocated! by!Hansen!and!Birkinshaw!(2007:3)!who!found!that,!“the!biggest!sparks![…]!are!ignited! when! fragments! of! ideas! come! together! –! specifically! when! individuals! across! units! brainstorm![…]”.!I!thus!posit!the!following!hypothesis:! Hypothesis 2 H2:! ! Functional! diversity! will! increase! the! quality! of! ideas! presented! and! developed!in!idea!markets! !
  • ! 30! 2.5.3 Hierarchical Diversity Hierarchical! diversity! refers! to! employees’! job! classifications! and! ranks! in! the! organization.! Although! organizational! tenure! (discussed! in! the! following! section)! is! sometimes! argued! to! include! the! hierarchical! level! of! employees,! for! the! sake! of! this! thesis,!hierarchical!diversity!is!separated!from!tenure.!Hierarchical!diversity!is!relevant! to! consider! as! it! is! held! that! the! higher! one! climbs! the! hierarchical! ladder,! the! less! scientific! and! specialized! becomes! one’s! daily! tasks.! Scientists! who! are! lower! in! the! hierarchy! are! expected! to! work! with! highly! specialized! and! technical! tasks! that! can! provide! solutions! to! highStechnological! and! complicated! problems.! Managers,! on! the! other!hand,!are!expected!to!effectively!manage!these!scientists!and!furthermore!focus!on! the! organization’s! overall! strategy.! It! is! therefore! managers’! task! to! secure! that! resources!are!spent!on!activities!that!fit!into!the!organization’s!strategy.!Theory!on!the! effects!of!hierarchical!diversity!is!scarce,!however,!it!is!only!logical!to!assume!that!by! hierarchical! diversity! comes! more! diverse! perspectives! and! more! critical! evaluation.! This!is!because!the!synergy!between!specialized!and!nonSspecialized!tasks!provide!both! highStechnological!knowledge!and!knowledge!on!the!overall!organizational!context!in! which!it!has!to!fit.!I!thus!posit!the!following!hypothesis:! Hypothesis 3 H3:!!Hierarchical!diversity!will!increase!the!quality!of!ideas!presented!and! developed!in!idea!markets! 2.5.4 Tenure Diversity Tenure!diversity!refers!to!the!difference!in!seniority!of!organizational!members.!More! specifically,! tenure! refers! to! the! amount! of! time! members! have! worked! in! the! organization.! Research! suggests! that! individuals! identify! with! others! who! enters! an! organization! or! department! at! the! same! time! and! that! this! identification,! in! turn,! influences! behavior! (Milliken! &! Martins,! 1996).! ! According! to! Ancona! and! Caldwell! (1992),! teams! that! draw! their! members! from! different! cohorts! achieve! higher! performance! because! members! who! have! entered! the! organization! at! different! times! know!different!set!of!people,!have!different!technical!skills,!and!different!perspectives! on! the! organization’s! history.! Homogeneous! groups! in! terms! of! tenure! may! be! more!
  • ! 31! harmonious,! however! the! performance! of! such! teams! is! limited! by! the! relative! redundancy! of! members’! perspectives,! information,! and! resources! (Reagans! &! Zuckerman,!2001).!Milliken!and!Martins!(1996:414)!state,!“Arguments!for!the!impact!of! team! tenure! heterogeneity! on! organizational! actions! are! based! on! the! idea! that! tenure! heterogeneity! reduces! groupthink! and! increases! creativity.”! I! thus! posit! the! following! hypothesis:! Hypothesis 4 H4:! ! Tenure! diversity! will! increase! the! quality! of! ideas! presented! and! developed!in!idea!markets! ! 2.5.5 Diversity Aggregated across Multiple Dimensions As! discussed! above,! research! suggests! that! diversity! in! observable! attributes! (i.e.! nationality)! affect! the! cognitive! outcomes! (e.g.! quality! of! ideas)! in! groups! in! positive! ways! (Milliken! &! Martins,! 1996).! Similarly,! diversity! on! skillSbased! dimensions! (i.e.! functional!background,!hierarchical!level,!and!tenure)!also!generally!has!been!found!to! be!associated!with!cognitive!benefits!(ibid.).!The!final!hypothesis!in!this!thesis!is!thereby! concerned! with! diversity! aggregated! across! these! dimensions.! I! thus! posit! the! final! hypothesis:!!! Hypothesis 5 H5:! ! Diversity! aggregated! across! multiple! dimensions! will! increase! the! quality!of!ideas!presented!and!developed!in!idea!markets! ! The!five!hypotheses!presented!above!shall!be!tested!in!the!Analysis!and!thereby!lead!to! the!conclusions!answering!the!research!question.!The!subsequent!section!shall!briefly! summarize!the!discussions!provided!in!this!Literature!Review!and!further!elucidate!the! research!gap!that!is!sought!filled!in!this!thesis.!! 2.6 Research Gap The! review! of! literature! and! theoretical! discussions! provided! in! this! chapter,! have! elucidated!concepts!relevant!to!the!phenomenon!under!scrutiny!–!a!phenomenon!that!
  • ! 32! may!have!potential!to!support!organizations!with!activities!in!the!fuzzy!frontSend!of!the! innovation!process.!It!has!been!argued!that!an!idea!market!is!a!tool!for!the!conversion!of! knowledge!from!tacit!into!explicit!through!interaction!of!participants.!The!tool!provides! a!channel!for!the!articulation!of!dormant!ideas!and!improving!these!by!amplified!and! new!knowledge!facilitated!by!the!virtual!community!of!interaction.!Furthermore,!idea! markets!enable!the!separation!of!two!activities!most!often!interconnected!in!the!idea! generation!phase:!idea!generation!and!filtering.!The!separation!of!these!activities,!it!is! argued,! results! in! the! development! of! higher! quality! ideas! by! allowing! ‘wild’! or! ‘unpolished’! ideas! to! flourish! and! develop! before! they! are! subject! to! evaluation! –! acceptance!or!rejection.!This!in!turn!enables!managers!who!ultimately!make!the!go/kill! decisions! to! base! their! decisions! on! a! more! informed! foundation.! Furthermore,! the! wisdom!of!the!crowd!technique!used!in!idea!markets,!ads!quality!to!the!go/kill!decisions! of!ideas.!This!is!because!when!judgments!are!made!by!a!group!of!people,!the!judgment! obtained!by!aggregating!their!judgments!is!often!as!good!as,!or!might!even!be!better! than,!the!best!person!in!the!group.!The!research!gap!identified!in!this!thesis!concerns!the! implications!of!diversity!in!idea!markets.!By!examining!diversity!theory,!it!was!found! that! diversity! in! groups! of! individuals! have! positive! effects! on! problemSsolving! and! innovation!capabilities.!This!is!because!diversity!leads!to!a!greater!range!of!perspective! and!more!critical!evaluation.!!The!notion!of!an!inverted!USshaped!relationship!between! cognitive!distance!and!innovation!capabilities!provided!by!Nooteboom!et!al.!(2007)!was! discarded!in!the!case!of!idea!markets!on!behalf!of!an!upward!sloping!relationship.!The! hypotheses!developed!thus!assert!that!in!the!case!of!idea!markets,!diversity!will!lead!to! increased!quality!of!ideas.!The!gap!that!the!research!attempts!to!fill!is!thus!concerned! with!the!empirical!findings!from!an!investigation!of!the!implications!of!diversity!for!the! development!of!ideas.!!! ! !
  • ! 33! ! ! ! ! ! ! ! ! ! “[GB11] is a much more efficient way for idea generation than traditional ideations where you are ‘forced’ to create ideas. In GB11 it was possible to look into other aspects of ideas because of the longer period of time in comparison to traditional ideations.” – GB11 participant ! ! ! ! ! ! ! Chapter 3 Company and Case Profile
  • ! 34! 3. Company and Case Profile In!this!chapter,!I!shall!provide!a!short!description!of!the!case!company!Novozymes!and! the! department:! the! Innovation! Office.! Furthermore,! I! shall! provide! a! detailed! description!of!NZ’s!idea!market:!Growth!Bets!2011.! ! 3.1 Novozymes in Brief Novozymes!A/S!is!a!Danish!biotech!company!spun!out!from!Novo!Nordisk!A/S!in!2000.!! With! 47%! market! share! in! the! enzyme! industry,! NZ! has! become! the! world! leader! in! industrial!enzymes!and!microorganisms2.!NZ!is!a!businessStoSbusiness!company!selling! over! 700! products! in! 130! different! countries! and! in! 40! different! industries.! NZ! is! a! highly! international! company! with! 50%! of! the! 5,400! employees! working! outside! Denmark.! NZ’! solutions! are! used! in! the! production! of! numerous! products! such! as! biofuel,! detergents,! feed! and! food.! By! having! such! a! diverse! product! portfolio,! NZ’s! vision!is!to!provide!their!customers!with!sustainable!and!green!products!that!will!lead!to! a!complete!bioFbased!society.!!Enzymes!are!efficient!biological!catalysts!known!from!any! living!organism.!They!are!used!in!production!to!increase!efficiency!and!yield!of!a!wide! range!of!processes!in!our!society.!With!enzymes!‘we!can!produce!more!with!less’!and! contribute!to!the!decoupling!of!economic!growth!and!use!of!natural!resources.!! The!key!element!to!NZ’s!success!is!innovation.!NZ!is!a!highly!innovationSdriven!company! with!over!7,000!pending!and!issued!patents!and!164!new!patent!families!filed!in!2011.! Furthermore,!NZ!is!spending!14%!of!annual!turnover!in!R&D.!As!a!result,!NZ!is!able!to! launch!many!new!products!every!year!(8!new!products!scheduled!for!2012)!and!new! products!accounts!for!25%!of!the!annual!turnover.!The!R&D!organization!in!NZ!consists! of!1,024!employees!of!which!40%!are!working!outside!Denmark.!!NZ’s!Enzyme!Business! operates!in!five!main!areas:! 1. Household!Care!enzymes!–!used!in!household!and!industrial!laundry!and! dishwashing!detergents.! 2. Other!Technical!enzymes!–!used,!among!other!things,!in!the!transformation!of! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 2!Information!about!the!company!is!gathered!from!an!internal!presentation!from!March!2012.!
  • ! 35! starch!into!different!kinds!of!sugars.!This!also!includes!enzymes!for!the!textile! industry.! 3. Food!enzymes!–!enhance!quality!and/or!efficiency!in!the!manufacture!of!food! products!such!as!bread,!wine,!juice,!beer,!noodles,!pasta,!and!alcohol.! 4. Feed!enzymes!–!when!added!to!animal!feed!increases!the!nutritional!value!of!the! feed.! 5. Bioenergy!–!enzymes!used!for!the!production!of!biodiesel,!biogas!and!other! biofuels.! As!competition!grows!worldwide,!the!continued!success!of!NZ!depends!on!its!ability!to! innovate! in! all! parts! of! the! organization.! Providing! an! enabling! environment! for! the! organization’s!highly!skilled!workforce!is!therefore!paramount.!!! ! 3.2 The Innovation Office The!case!examined!in!this!thesis!was!determined!in!collaboration!with!the!Innovation! Office! (IO)! where! I! have! held! a! student! position! since! September! 2011.! IO! is! a! department!in!NZ’!R&D!organization!composed!of!a!small!team!of!Managers,!Directors,! and!a!Vice!President.!The!raison!d’être!of!the!office!is!ensuring!that!NZ!maintains!its! leadership!position!as!the!most!innovating!biotech!company!in!the!world.!The!office’s! efforts! are! focused! on! developing! and! administering! projects! and! tools! that! facilitate! idea! generation! and! maturation.! Furthermore,! The! office! is! also! involved! in! political! debate! in! the! EU! and! OECD! with! the! goal! of! promoting! more! favorable! laws! and! subsidies!for!a!bioSbased!society.!The!goal!of!IO!is!catalyzing!innovation!throughout!the! entire! R&D! organization! by! means! of! implementing! and! administrating! a! variety! of! tools,!which!include!ideations!(brainstorming!sessions),!the!Idea!Web!(suggestion!box! on!the!Intraweb),!and!RIC!projects!(maturation!of!ideas).!! ! Ideations!are!administered!by!the!IO!and!involve!bringing!together!a!team!of!scientists! to! brainstorm! ideas! relating! to! specific! challenges! or! opportunities.! They! typically! unfold! in! a! very! organized! workshop! setting! during! one! or! two! days.! As! the! R&D!
  • ! 36! workforce!is!spread!throughout!the!world,!much!time!and!resources!are!being!spent!on! travelling.!! ! A!second!idea!generation!tool!administered!by!the!IO!is!the!Idea!Web,!which!is!an!online! suggestion!box.!The!Idea!Web!is!open!to!all!in!the!R&D!organization!all!year!round!and!it! only!takes!a!couple!of!clicks!on!the!Intraweb!to!post!an!idea.!It!is!the!IO’s!responsibility! to! screen! the! ideas! and! pass! them! on! to! relevant! idea! champions.! In! practice,! the! screening!of!ideas!is!done!by!a!single!member!of!the!office!who!checks!the!Idea!Web!a! couple! of! times! a! week! and! then! either! disregards! or! forwards! by! eSmail! the! idea! to! relevant!people!in!the!organization.!!This!screening!process!is!arguably!suboptimal!and! often!leaves!very!little!feedback!to!the!idea!contributor.!! ! A!third!initiative!steered!by!the!IO!is!the!Radical!Innovation!Catalysts!(RIC).!RIC!involve! maturing!ideas!from!Ideations!and!developing!them!into!New!Lead!projects.!RIC!is!built! of!a!volunteering!community!of!employees!called!the!RIC!Community!who!are!allocated! projects!with!the!purpose!of!maturing!them.!! ! With!increasing!growth!ambitions!for!2011,!R&D!Management!recognized!the!need!to! kick! off! more! large! growth! initiatives.! The! strategy! was! therefore! to! implement! new! processes!that!could!help!identify!and!mature!at!least!two!new!DKK!500!million!bets.!It! was!IO’s!responsibility!to!develop!and!steer!the!new!processes!that!would!help!boost!the! enzyme!Business.!The!IO!therefore!experimented!with!the!idea!market!tool!in!the!fall!of! 2011.!! ! 3.3 Growth Bets 2011 The! overall! goal! of! GB11! was! to! identify! at! least! two! new! ideas! that! had! substantial! growth!potential!to!expand!Novozymes’!product!pipeline.!By!applying!the!untraditional! idea!generation!tool,!it!was!possible!to!combine!and!build!upon!the!traditional!methods! used!for!idea!generation!and!maturation!in!a!novel!and!entertaining!manner.!The!GB11! tool!combined!two!key!aspects!of!the!traditional!tools!by!involving!a!pool!of!selected! employees!and!having!an!online!setup.!Furthermore,!GB11!offered!a!setting!of!a!global!
  • ! 37! ideation!uniting!employees!who!nonShabitually!work!together!to!share!ideas,!developed! each!other’s!ideas,!and!additionally!rank!ideas!by!buying!and!selling!shares.!Inspiration! to!the!setup!of!GB11!and!the!online!platform!were!provided!by!an!external!consultancy! firm!called!NOSCO!that!specializes!in!idea!markets.!NOSCO,!besides!administrating!the! global! online! ideation,! organized! workshops! for! the! GB11! Taskforce! (organizing! committee)!where!the!specific!setSup!and!features!of!the!idea!market!were!designed.! The!following!sections!will!account!for!the!process!and!design!of!GB11.! ! 3.3.1 Rules of the Game The!course!of!GB11!ran!from!September!2011!to!January!2012!and!was!steered!by!an! organizing! committee! referred! to! as! the! GB11! Taskforce.! The! Taskforce! consisted! of! eight!people!(three!form!Denmark,!three!from!the!US,!and!two!from!China)!who!were! invited! by! the! Innovation! Office.! The! Taskforce! together! with! the! consultant! from! NOSCO!held!two!workshops!(three!hours!each).!At!the!two!workshops,!the!process!and! design!of!GB11!were!discussed!and!determined!based!on!NOSCO’s!recommendations.! The!process!of!GB11!can!be!divided!into!six!phases!as!illustrated!in!Figure!2!below.! ! Figure!2:!GB11!Process% ! !
  • ! 38! 3.3.1.1 Mobilize People The!first!phase!involved!recruiting!people!to!participate!in!the!game.!Two!teams!were! formed:!(i)!a!Screen!Team!and!(ii)!a!Maturation!Champions!team.!The!Screen!Team!was! formed!of!seven!R&D!managers!and!directors!who!had!the!responsibility!to!screen!TopS 25!best!ideas!and!select!TopS5!ideas!from!these.!The!Maturation!Champions!were!a!team! of!five!R&D!managers!who!committed!to!spend!30%!of!their!work!time!for!three!to!four! weeks!to!work!on!maturing!the!TopS5!ideas.!The!Maturation!Champions!were!selected! by!the!Screen!Team.!The!Screen!Team!and!the!Taskforce!could!invite!five!to!ten!people! each!to!participate!in!the!idea!market.!The!invited!participants!were!selected!based!on!a! recognized!ability!to!problemSsolve!and!generate!ideas!by!the!inviters.!Participants!in! GB11! were! thus! ‘handpicked’! rather! than! randomly! selected.! Additionally,! R&D! Management!(Senior!Directors,!Vice!Presidents!and!the!Executive!Vice!President)!was! invited!to!participate!as!‘observers’!in!the!market.!The!Screen!Team!and!Taskforce!were! also!participants,!which!resulted!in!a!total!of!145!invited!participants.!!!!! ! 3.3.1.2 Conceive Ideas The! second! phase! involved! the! 17SdaysSlong! online! ideation! where! the! 145! invited! participants!could!submit!an!unlimited!amount!of!ideas!and!comments.!The!idea!market! was!commenced!with!an!online!meeting!where!NOSCO’s!consultant!briefed!participants! on!the!practicalities!and!features!of!the!game.!All!participants!had!an!online!profile!with! name!and!picture!(if!they!wished)!similar!to!a!Facebook!profile!where!they!could!see!a! summary! of! recent! activity! on! the! site.! R&D! Management! had! the! option! to! be! anonymous! in! the! market.! They! were! therefore! able! to! comment! on! and! trade! ideas! anonymously.!Participants!were!encouraged!to!submit!ideas!by!writing!a!brief!summary! and!attach!documents!and!links!to!support!their!idea.!There!were!three!predetermined! categories!for!ideas!determined!by!the!Taskforce!and!Screen!Team.!The!ideas’!scope!was! thus!delimited!to!fit!into!one!of!the!following!three!categories:! ! 1) Entirely% new% enzymeLusing% industries:% refers! to! ideas! that! involve! enzymes! and!applications!in!industries%that!are!currently!not!using!enzymes.!This!category! is!arguably!the!most!radical!because!of!the!difficulty!involved!with!penetrating!an!
  • ! 39! entirely!new!industry.!It!can!therefore!be!argued!that!this!category!is!the!farthest! away!from!the!core!business!in!NZ.% 2) New%industrial%applications%for%existing%enzymes:%refers!to!ideas!that!involve! new!applications!of!enzymes!that!NZ!currently!have!on!the!‘shelf’!in!industries! that! NZ! currently! supply! with! enzymes.! This! category! is! semiSradical! as! it! is! arguably!more!difficult!to!develop!new!applications!than!new!enzymes!in!NZ.% 3) Industrial%applications%for%new%enzymes%/%new%enzyme%classes:%refers!to!the! development! of! new! enzymes! /! enzyme! classes! for! existing! industries.! This! category!is!arguably!the!least!radical!as!enzyme!discovery!is!the!expertise!of!NZ! and!is!thus!the!closest!to!the!core!business.% ! From! the! point! of! view! of! R&D! scientists,! the! three! categories! are! very! broad! and! thereby!leave!room!for!a!wide!array!of!ideas.!An!additional!feature!of!the!market!was!to! comment!on!the!submitted!ideas!to!support!the!idea!with!additional!information,!raise! questions!to!the!idea!submitter,!and/or!show!appreciation!or!concerns!of!the!idea.!This! feature! enabled! participants! to! build! on! each! other’s! ideas! and! concepts! with! their! knowledge.!The!comments!were!visible!for!all!participants!and!it!was!possible!to!attach! documents! and! links! in! the! comment! threads! as! well.! If! multiple! colleagues! had! discussed!an!idea!that!they!wished!to!share!in!the!game!(whether!it!was!participants!or! employees!not!participating!in!GB11),!it!was!possible!to!include!coSinventors!in!the!idea! description.!A!third!distinct!feature!of!GB11!was!the!trading!of!ideas,!which!enabled!the! crowd!of!participants!to!rank!ideas.!All!participants!were!allocated!100.000!$!of!fictive! money.!They!could!then!buy!shares!in!their!favorite!ideas!(except!in!their!own!ideas)! and! sell! the! shares! again! if! the! idea! in! which! they! had! bought! shares! became! less! attractive!by!either!the!comments!or!because!other!ideas!became!more!attractive.!The! trading!feature!was!open!during!the!entire!online!ideation!and!the!transactions!were! made!between!the!participant!and!the!system,!hence!not!with!other!participants.!The! value! of! the! invested! shares! increased! by! the! amount! of! shares! bought! by! other! participant! in! the! same! ideas.! Likewise,! the! value! of! invested! shares! decreased! when! participants!sold!their!shares!in!the!idea.!At!the!closing!of!the!market!on!November!9th! 2011,!the!ideas!where!ranked!by!the!value!of!their!shares!bought!by!participants.!The!
  • ! 40! value!of!the!ideas!where!based!on!the!value!of!the!shares!bought!and!not!on!the!amount! of!investors.!! ! 3.3.1.3 Screen Ideas The! third! phase! was! to! screen! ideas! in! order! to! identify! the! best! ideas! with! a! large! growth!potential.!GB11!had!generated!222!ideas!submitted!by!the!participants.!The!first! selection!process!was!to!identify!TopS25!ideas,!which!would!move!on!to!an!additional! review!and!screening!by!the!Screen!Team.!The!pool!of!TopS25!ideas!consisted!of:!(i)!the! 10!ideas!with!the!highest!market!value!by!the!virtual!stock!trading;!and!(ii)!15!ideas! selected! as! ‘wildcards’! by! R&D! Management! immediately! after! closing! of! the! game.! These! 25! ideas! where! then! reviewed! by! the! Screen! Team! and! scored! on! seven! parameters!by!each!member!of!the!Screen!Team.!The!parameters!on!which!they!were! scored!with!a!fiveSpoint!scale!(1!lowest,!5!highest)!were:!! ! 1) Technical%feasibility:!The!idea!had!a!strong!feasibility!rationale,!based!on! proven!scientific/technical!facts!from!published!articles!or!inShouse!unpublished! knowledge.! 2) Customer%Need:!The!idea!related!to!a!proved!customer!need.! 3) Resources:!NZ!had!the!necessary!resources!(i.e.!knowledge,!competencies!and! assets)!or!could!source/acquire!them.! 4) Sales%potential:!The!idea!held!the!potential!of!DKK!500!million!turnover!in!the! long!term.! 5) Competitive%advantage:!The!concept!gave!NZ!a!unique!competitive!advantage! over!competitor’s!enzyme!or!nonSenzyme!solutions.! 6) Gut%feel:!One’s!gut!feeling!says!“go!with!it”!OR!“this!will!never!fly!in!the! organization”.! 7) XLfactor:!The!idea!was!something!really!surprising,!something!NZ!had!not! realized!before.! ! Once!the!members!of!the!Screen!Team!had!scored!the!TopS25!ideas,!the!ideas’!average! scores!were!calculated!and!the!Screen!Team!held!a!twoShour!meeting!to!collectively!pick!
  • ! 41! the!TopS5!ideas!for!further!maturation!and!pitch!for!R&D!Management!eight!weeks!later.! According! to! one! of! the! members! of! the! Screen! Team,! the! ranking! based! on! average! scores!of!the!ideas!produced!the!day!before!the!meeting!was!almost!completely!turned! around! during! the! discussion.! Hardly! any! parameter! seemed! predictive! to! the! final! selection!of!Top!5!ideas!–!except!the!scoring!by!‘XSfactor’.! ! 3.3.1.4 Mature Ideas The! next! phase! was! to! mature! the! TopS5! ideas! and! to! prepare! a! pitch! for! R&D! Management! in! January! 2012.! Each! TopS5! idea! was! appointed! a! maturation! team! consisting!of;!a!maturation!champion,!the!inventor(s)!of!the!idea;!two!or!three!selected! experts!who!was!solicited!from!the!GB11!Taskforce!or!from!GB11!participants;!and!one! coach!from!the!Screen!Team.!! ! 3.3.1.5 Pitch and feedback from R&D Management The!next!phase!involved!pitching!the!TopS5!ideas!for!R&D!Management!in!January!2012.! The! ideas! competed! on! becoming! one! of! the! new! large! growth! bets,! which! would! consequently!receive!research!funding.!The!goal!was!to!identify!two!ideas!that!had!large! growth!potential,!however,!the!jury!(R&D!Management)!crowned!only!one!winner!as!the! other!ideas!proved!unfeasible!for!immediate!attention!in!regards!to!incubating!scarce! resources.!The!winning!idea!has!consequently!received!research!funding!and!two!patent! applications! have! been! filed.! Due! to! the! novelty! of! the! idea! and! the! pending! patents,! specific!details!of!the!idea!cannot!be!provided.!!! ! 3.3.1.6 Reflection The! final! phase! was! to! evaluate! the! GB11! pilot! project! to! decide! whether! this! untraditional!idea!generation!tool!should!be!used!going!forward!as!support!in!the!idea! generation!phase.!I!(in!collaboration!with!NOSCO)!conducted!an!evaluation!survey!of!the! participants!in!GB11,!which!showed!predominantly!positive!attitudes!towards!the!tool! (see!appendix!1).!!The!vast!majority!of!participants!would!like!to!participate!in!a!similar! idea!market!in!the!future!and!thought!that!the!game!was!entertaining!and!easy!to!use.!
  • ! 42! There! were,! however,! suggestions! on! how! to! improve! the! tool! for! future! use.! The! suggestions!included:!(i)!inviting!fewer!participants;!(ii)!having!a!narrower!scope!of!idea! categories;! (iii)! eliminating! the! trading! function! due! to! ‘day! trading’! activity;! (iv)! involving!marketing!and!business!development!colleagues;!(v)!and!securing!more!time! for!participation!by!limiting!other!tasks.!A!critique!put!forth!by!a!participant!was!that!“In! many!parts!of!R&D!we!have!very!scarce!resources!at!the!moment,!which!means!it!is!often! difficult!to!deliver!on!the!lower!hanging!fruits!within!our!existing!business.!That!may!easily! render! the! GB11! process! obsolete! as! it! will! not! be! the! most! obvious! place! to! spend! our! resources”!(see!appendix!1).!This!assertion!is!arguably!supported!by!the!fact!that!R&D! Management! initially! only! chose! one! idea! to! incubate! with! research! funding.! Nevertheless,!the!winning!idea!is!promising!and!it!just!might!become!a!breakthrough! innovation!that!will!boost!the!enzyme!business!in!NZ.!The!idea!market!thus!enabled!the! development!of!an!idea!that!otherwise!may!not!have!been!identified.!In!an!interview3,! the! inventor! of! the! winning! idea! explains! that! the! idea! had! been! articulated! in! more! simple! terms! before! in! an! Ideation! where! it! did! not! attract! much! attention! from! colleagues!or!managers.!The!inventor!did!thus!not!bother!to!upload!it!on!the!Idea!Web! or!promote!it!to!the!RIC!community.!However,!GB11!offered!an!opportunity!to!articulate! it!again!where!there!was!a!higher!chance!that!the!idea!would!receive!attention!and!could! be! developed! in! a! sound! process.! Also,! the! fact! that! very! renowned! and! insightful! colleagues!were!on!the!Screen!Team!and!had!ownership!of!the!process!was!encouraging.! The!handpicked!participants!in!GB11!contributed!to!the!development!of!the!idea!and! due! to! the! target! of! GB11! (large! growth! bets);! the! idea! was! presented! in! a! broader! industry!context!rather!than!in!its!initial!narrow!version.!! ! The!process!of!GB11!has!now!been!examined!and!discussed!in!terms!of!the!goals,!how!it! was!organized,!and!how!GB11!was!perceived!by!participants.!To!get!an!overview!of!the! many!features!involved!in!the!design,!the!Idea!Market!Framework!borrowed!from!Spears! et!al.!(2009)!is!provided!in!Table!1!below:!! ! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 3!The!interview!is!not!included!in!appendices!due!to!confidentiality.!
  • ! 43! Table!1!S!Design!of!GB11! Feature! Purpose! ! Initial!seed!securities! ! The!market!was!seeded!with!500(+)!‘old’!ideas!from! earlier!ideations!dated!as!far!back!as!the!early!1990s.! The! seeded! ideas! had! the! dual! purpose! of! being! securities! enabling! the! feature! of! trading! from! the! very!start!of!the!game!and!to!inspire!participants!to! generate!ideas.! ! Cash! Each! participant! was! allocated! 100.000! $! in! fictive! money!to!buy!virtual!shares.!The!participants!could! buy!and!sell!shares!unlimited!during!the!entire!game.!! ! Trading! All!participants!could!buy!and!sell!shares!in!all!ideas! –! except! in! their! own! ideas.! The! transactions! were! made! with! the! system! and! not! with! other! participants.! ! Scope The! scope! of! the! game! was! to! identify! at! least! two! new! ideas! that! had! substantial! growth! potential! to! boost!the!enzyme!business!in!the!R&D!organization.! There! were! three! predetermine! categories! for! the! ideas;! (1)! Entirely! new! enzymeFusing! industries;! (2)! New!industrial!applications!for!existing!enzymes;!and! (3)! Industrial! applications! for! new! enzymes/new! enzyme!classes.!! % Ideas Participants! could! submit! an! unlimited! amount! of! ideas!during!the!entire!game.!The!ideas!could!include! a! headline,! a! summary! of! the! idea,! attachments! of! supportive!documentation,!and!URLs!(links).!! ! Comments The! participants! could! comment! on! all! ideas! in! an! unlimited! amount! during! the! entire! game.! The! comments! were! visible! to! all! participants! and! attachment! and! links! could! also! be! included! in! the! comments.!! ! !
  • ! 44! Motivation!&!Prizes! The! motivation! for! participation! included! peer! recognition! and! acknowledgement! by! R&D! Management!as!the!tool!provided!an!opportunity!to! display! inventiveness.! Another! incentive! was! the! possibility!of!the!participant’s!idea!winning!the!game! and!thereby!receiving!research!funding.!Additionally,! there!were!prizes!in!form!of!toy!animals!for!the;!(i)! top! ranking! idea! in! game;! (ii)! the! best! online! commentator;!and!(iii)!the!best!trader!(highest!value! portfolio!of!virtual!shares).!! ! The!description!above!of!GB11!has!provided!an!overview!of!the!process!and!detailed! information! on! the! design! features! of! the! idea! market.! The! following! chapter! will! present!the!methodological!approach!to!the!research!in!this!thesis.!! ! !
  • ! 45! ! ! “The world is not a solid continent of facts sprinkled by a few lakes of uncertainties, but a vast ocean of uncertainties speckled by a few islands of calibrated and stabilized forms.” – Bruno Latour, 2005 ! ! ! ! ! ! ! Chapter 4 Methodology
  • ! 46! 4. Methodology In! this! chapter,! I! present! the! methodological! considerations! for! the! research! in! this! thesis.! The! philosophical! vantage! point! shall! first! be! discussed! in! light! of! social! constructivism.!The!social!constructivist!perspective!adopted!in!this!thesis!has!led!to!an! exploratory! and! explanatory! research! approach! and! an! abductive! research! design.! Furthermore,! the! research! in! this! thesis! is! concerned! with! a! case! study! of! NZ’s! idea! market,! which! has! led! to! an! inSdepth! investigation! of! multiple! sources! of! data.! The! process! by! which! the! data! –! both! qualitative! and! quantitative! –! have! been! collected,! explored,!and!analyzed!shall!be!explained!in!detail!below.!The!method!of!reasoning!in! this!thesis!should!be!regarded!as!a!dialectic!process!where!the!theoretical!discussion,! the!empirical!findings,!and!the!methodological!approach!all!play!an!important!role!for! the!development!of!discussions!and!conclusions.! 4.1 Research Philosophy The!social!constructivist!perspective!adopted!in!this!thesis!is!built!on!the!assumption! that! reality! is! created! by! one’s! acknowledgement! of! it.! The! ontological! approach! is! therefore! rooted! in! relativism! rather! than! realism.!Because! reality! is! created! through! processes!of!social!exchange,!historically!situated,!social!constructivists!are!interested!in! the!collective!generation!of!meaning!among!people!(Hu,!1998;!in!Winner,!1993).!It!is! therefore!held!that!society!is!not!the!mere!sum!of!individuals.!Rather,!the!system!formed! by! their! association! represents! a! specific! reality,! which! has! its! own! characteristics! (Durkheim,!1895).!Winner!(1993)!suggests!that!to!explain!or!examine!technical!fields,! we!need!to!look!closely!at!the!artifacts!and!varieties!of!technical!knowledge!and!at!the! social!actors!whose!activities!affect!their!development.!This!notion!corresponds!with!the! research!in!this!thesis!of!idea!markets!in!that!I!wish!to!examine!the!connectivity!of!social! actors! and! its! implications! for! the! development! of! knowledge.! The! epistemological! approach!–!how!knowledge!is!created!–!is!therefore!inspired!by!the!notion!that!there!are! no! objective! bases! for! knowledge! because! it! is! always! a! human! construction.! The! emphasis!in!this!thesis!is!thus!on!the!process!of!knowledge!construction!by!the!social! group!and!the!subjectivity!established!through!the!interaction!of!the!group!(Hu,!1998;!in! Winner,! 1993).! I! therefore! find! it! suitable! to! draw! on! Nonaka’s! (1994)! notion! of!
  • ! 47! knowledge! creation! through! social! communities! of! interaction.! Central! to! the! social! constructivist! school! of! thought! is! that! language! is! a! prerequisite! for! knowledge! creation.!Language!is!not!a!mere!tool!for!thinking,!but!rather,!language!and!its!concepts! are!decisive!factors!for!what!we!are!able!to!think!(Fuglsang!&!Olsen,!2007).!! ! From!this!social!constructivist!perspective,!it!should!be!recognized!that!the!empirical! research! in! this! thesis! does! not! depict! reality! in! itself.! Rather,! the! reality! that! is! presented!to!and!observed!by!me.!That!is!to!say,!the!conclusions!developed!are!formed! by! my! transactional! and! situated! cognitive! perspective! and! does! not! represent! an! objective!truth.!This!is!because!researchers!are!part!of!the!constructed!environment!and! the! environment! is! in! turn! one! of! the! characteristics! that! constitute! the! researcher! (Bredo,! 1994;! Gredler,! 1997).! Therefore,! if! the! environment! and! social! relationships! among! group! members’! change,! the! tasks! of! each! individual! also! change! (ibid).! This! notion!of!change!of!environment!is!pertinent!to!the!research!of!idea!markets!because!it! is! held! that! the! environment! in! which! ideas! emerge! plays! a! decisive! role! for! their! development.!When!ideas!emerge!through!social!interaction!of!individuals,!a!change!in! the!environment!or!social!group!will!result!in!change!of!ideas.!It!is!therefore!argued!that! the! conditions! for! social! interaction! play! a! critical! role! in! the! development! of! ideas.! These!conditions!are!thus!examined!in!the!case!of!NZ’s!idea!market!with!the!purpose!of! exploring!how!the!connectivity!of!diverse!inventors!can!effect!the!development!of!ideas.!! 4.2 Research Approach and Design The!point!of!departure!in!this!thesis!has!been!to!investigate!a!case!of!NZ’s!idea!market.! The! single! case! approach,! it! is! often! argued,! is! limited! by! the! lack! of! objectivity! and! generalizability.! Durkheim! (1895)! however! emphasized! the! validity! of! a! single! case! study!by!asserting!that!even!one!wellSmade!observation!will!be!enough!in!many!cases,! just!as!one!wellSconstructed!experiment!often!suffices!for!the!establishment!of!a!law.! Furthermore,! the! single! case! approach! enables! me! to! provide! an! inSdepth! analysis! of! empirical!data!from!a!field!where!research!is!scarce.!The!research!approach!is!in!essence! exploratory.!The!research!question!has!therefore!been!changed!throughout!the!process! of!my!research.!Rather!than!describing!occurrences!of!events,!the!exploratory!approach!
  • ! 48! allows! for! a! cyclical! process! of! checking! and! rechecking! against! observations! made,! which! in! turn! has! modified! the! hypotheses! (LevinSRozalis,! 2000).! The! hypotheses! developed!through!the!research!process!of!both!theory!and!empirical!data!are!tested!in! the!analysis!with!the!purpose!of!explaining!the!implications!of!inventor!diversity!for!the! quality!of!ideas.!Hence,!this!thesis!has!a!dual!approach!to!research;!(i)!an!exploration!of! theory!and!empirical!data;!and!(ii)!statistical!analyses!of!empirical!data!with!the!purpose! of! explaining! the! association! of! variables.! The! dual! research! approach! enables! me! to! shed!some!light!on!the!broader!understanding!of!the!situation!investigated!rather!than! merely!explaining!the!association!of!the!variables!examined.!! ! The!research!design!is!inspired!by!an!abductive!method!of!reasoning.!That!is!to!say,!the! research!has!been!a!result!of!an!iterative!movement!of!theorizing!and!data!collection.! Abduction! is! a! third! logic! of! scientific! enquiry,! in! addition! to! the! two! familiar! logical! methods,!induction!and!deduction!(LevinSRozalis,!2000).!Abduction!is!referred!to!as!a! process! of! drawing! conclusions! that! include! preferring! one! hypothesis! over! others! which!can!explain!facts,!when!there!is!no!basis!in!previous!knowledge!that!could!justify! this! preference! or! any! checking! after! the! hypothesis! was! subjected! to! a! trial! period! (ibid.).!By!such!method,!I!have!encountered!a!situation!where!satisfactory!examinations! are!not!yet!carried!out!to!support!the!hypothesis,!however,!I!prefer!it.!Therefore,!the! standing! of! the! hypotheses! is! solely! held! in! the! laws! of! logic! (ibid.).! The! facts! in! this! sense! should! be! regarded! as! the! objects! of! my! interpretation! and! the! process! that! precedes! every! purposeful! action! that! takes! place! in! our! minds! (ibid.).! Therefore,! abduction! is! inference! to! the! best! explanation! (Fox,! 1998).! For! quantitative! data! analyses,!the!most!common!approach!is!deduction.!However,!I!argue!that!the!deductive! approach!is!not!well!suited!for!my!research!inquiries!because!deductive!logic!fails!when! dealing! with! new! phenomenon.! The! deductive! process! of! deriving! assumptions! is! structured! in! a! way! that! makes! the! hypothesis! ‘the! thing! explained’! of! the! deductive! statement.!Thus!there!is!nothing!novel!in!the!hypothesis!for!the!explainer!is!an!a!priori! theoretical! assumption! (LevinSRozalis,! 2000).! Conclusions! drawn! in! an! abductive! process!usually!show!a!new!idea,!whereas!deductive!conclusions!generally!stem!from! their! predecessors,! continuing! them! forward! (Takeda! and! Nishida,! 1994).! In! short,! “Deduction!is!a!process!of!checking!theories;!induction!is!a!process!of!checking!hypotheses;!
  • ! 49! and!abduction!is!a!method!for!their!discovery.”!(LevinSRozalis,!2000:422).!The!abductive! design! of! my! research! thus! allow! me! to! prefer! the! hypotheses! developed! in! the! Literature! Review! over! an! infinite! number! of! possible! hypotheses! to! be! tested.! The! hypotheses!have!been!subjected!to!various!logical!tests!such!as!similarity,!symmetry,! analogy,!and!authority!(ibid.).!The!stage!of!abduction!is!thus!found!when!the!hypotheses! are!formulated,!chosen!and!explained.!! ! 4.3 Data Collection The!process!of!collecting!data!has!been!extensive.!As!discussed!above,!the!exploratory! nature! of! the! research! has! resulted! in! a! dialectic! process! by! which! data! has! been! collected!from!multiple!sources!and,!through!ongoing!research,!been!revisited!to!gain! new! insights.! The! research! for! this! thesis! was! instigated! by! participation! in! the! organizing!of!GB11.!Data!has!been!collected!since!GB11’s!beginning!in!September!2011.! The!longitudinal!study!of!the!market!has!enabled!both!qualitative!and!quantitative!data! collections,!which!in!turn!has!contributed!to!an!inSdepth!understanding!of!the!research! inquiry.! The! preliminary! methods! of! collecting! data! included! observation! of,! participation!in,!and!multiple!methods!of!communication!with!people!involved!in!the! market.!The!aim!was!to!get!an!idea!of!‘what!is!going!on!here’!as!a!researcher.!The!second! step! in! the! data! collection! process! was! commenced! in! January! 2012! once! the! idea! market!had!ended.!This!data!included!a!vast!amount!of!quantitative!data!from!multiple! sources!such!as!NOSCO,!the!Screen!Team,!and!the!Human!Resource!department!in!NZ.! The!third!step!of!the!data!collection!involved!visiting!and!revisiting!participants!in!the! market,!organizers,!R&D!Management,!NOSCO,!and!external!sources!to!guide!my!further! research.!Throughout!the!entire!research!process,!data!has!been!collected!internally!and! externally! via! semiSstructured! interviews,! surveys,! eSmail! correspondence;! and! meetings.! The! analyses! in! this! thesis! are! dominantly! concerned! with! the! quantitative! data! collection;! albeit! it! is! held! that! without! the! qualitative! data! collection,! the! development! of! hypotheses! and! the! subsequent! development! of! discussions! and! conclusions!could!not!have!been!completed.!The!specific!data!collections!–!qualitative! and!quantitative!–!will!be!presented!in!the!following!sections.! !
  • ! 50! 4.3.1 Qualitative data The!qualitative!data!collection!is!predominantly!presented!in!Chapter!3!–!Company!and! Case!Profile.! To! explain! the! process! of! the! market! and! the! considerations! behind! the! rules! of! the! game,! various! qualitative! collections! were! applied.! This! included! observation! of! the! market’s! process,! surveys! of! participants,! and! semiSstructured! interviews! with! participants,! the! Screen! Team,! and! the! GB11! Taskforce.! Furthermore! visiting!and!revising!eSmail!correspondence!and!taking!contact!to!relevant!people!within! NZ! and! NOSCO! have! facilitated! an! inSdepth! understanding! of! GB11.! These! qualitative! data!collections!have!besides!enabled!the!accounts!in!Chapter!3,!guided!the!research!of! the!quantitative!data.!The!discussions!and!conclusions!in!this!thesis!are!thus!built!on!a! method!of!triangulation!drawing!on!(i)!theory,!(ii)!qualitative!and!(iii)!quantitative!data.! “Triangulation!refers!to!the!use!of!different!data!collection!techniques!within!one!study!in! order! to! ensure! that! the! data! are! telling! you! what! you! think! they! are! telling! you.”! (Saunders!et!al,!2007:139).!The!qualitative!data!collections!are!therefore!important!in! the!methodological!considerations!albeit!the!quantitative!data!are!the!dominant!in!this! thesis’!analyses.!! ! 4.3.2 Quantitative data This! thesis’! analyses! draw! on! quantitative! data! collected! from! multiple! sources.! The! primary!source!of!data!is!extractions!from!the!NOSCO!platform.!The!format!of!these!data! extractions!was!Excel!spreadsheets!with!information!on;!(i)!ideas;!(ii)!comments;!(iii)! transactions;!and!(iv)!participants.!(i)!The!information!available!on!ideas!included!time! of! submission,! idea! submitter(s),! idea! title,! idea! category,! and! idea! price! based! on! transactions.! (ii)! The! data! on! comments! included! time! of! submission,! the! comment! content,!the!comment!submitter,!and!the!idea!title!associated!to!the!comment.!(iii)!The! data! on! transactions! included! amount! of! shares! bought! or! sold,! price! of! shares,! the! investor,!and!the!idea!associated!to!the!transaction.!(iv)!The!data!on!participants!was! scarce! and! included! only! name,! and! time! of! first! and! last! login! to! the! system.! These! spreadsheets! extracted! from! the! NOSCO! platform! represent! the! primary! data! source,! however!due!to!the!scope!of!this!research,!additional!information!from!other!sources! have!been!collected!and!implemented!in!the!spreadsheets.!! !
  • ! 51! The!second!source!of!data!was!collected!from!the!human!resource!department!in!NZ.!A! list!of!participants!was!sent!to!a!HR!employee!who!extracted!employee!information!from! the! SAP! system.! The! available! data! included! gender,! age,! nationality,! seniority! in! NZ,! department,!site,!and!rank.!These!variables!were!included!in!the!spreadsheets!and!thus! associated!with!the!ideas,!comments,!and!transactions.!Furthermore,!data!on!the!R&D! organization! in! terms! of! size! of! sites! and! distribution! of! gender! of! employees! was! collected!from!the!HR!responsible!in!R&D.!! ! The!third!source!of!data!was!collected!from!the!Screen!Team!who!had!ranked!TopS25! ideas!after!the!market!had!ended.!It!was!thereby!possible!to!identify!the!TopS25!ideas!in! the!spreadsheet.!! ! These!multiple!collections!of!quantitative!data!enabled!the!analyses!in!this!thesis.!The! statistical!measurements!of!data!involve!calculations!of!means!and!standard!deviations.! Furthermore,!I!shall!present!contingency!tables!of!various!variables!to!test!for!statistical! significance!using!Fisher’s!exact!tests,!Chi!Squared!tests,!and!WilcoxonSMannSWhitney! tests.!The!specific!variables!examined!in!the!analysis!will!be!explained!in!the!following! sections.! 4.3.2.1 Dependent variable The! dependent! variable! in! most! of! the! analyses! is! based! on! categorical! data! of! the! performance!of!ideas.!In!order!to!identify!ideas!with!high!quality!in!the!dataset,!ideas!are! divided!into!two!categories!–!TopF25!and!NonFtopF25.!TopS25!ideas!are!those!identified! as!highSquality!ideas!by!the!participants’!ranking!as!well!as!R&D!Management’s!pick!of! wildcards!in!GB11.!These!25!ideas!are!thus!selected!to!undergo!further!evaluation!by!the! Screen! Team! who! ranked! them! and! thereby! identified! TopS5! ideas.! The! NonStopS25! ideas!are!therefore!the!deselected!ideas!that!did!not!meet!the!same!standards!of!high! quality!as!TopS25!ideas.!The!indicator!in!the!statistical!analyses!is!therefore!TopS25!and! NonStopS25!ideas.!The!mission!of!the!indicator,!as!described!by!De!Solla!Price!(1978),!is! to! find! the! simplest! pattern! in! the! data! at! hand,! and! then! look! for! more! complex! patterns,!which!modify!the!first!(in!van!Raan,!2004).!The!more!complex!patterns!in!the!
  • ! 52! dataset! are! thus! the! diversity! of! inventors! involved! in! developing! ideas.! The! independent!variables!explained!in!the!following!section.! 4.3.2.2 Independent variables The!independent!variables!are!based!on!the!diversity!of!participants!in!developing!ideas! in!GB11.!As!I!have!hypothesized,!diversity!in!several!dimensions!has!a!positive!effect!on! the! quality! of! ideas.! The! four! independent! variables! in! the! analyses! are:! (i)! Site;! (ii)! Department;!(iii)!Rank;!and!(iv)!Seniority.!(i)!The!site!variable!refers!to!the!country!in! which!the!participant!lives!and!works.!I!shall!use!this!variable!to!test!the!hypothesis!of! geographical! diversity.! (ii)! The! department! variable! refers! to! the! organizational! affiliation! of! the! participant.! The! departments! in! NZ! are! associated! with! a! fiveSdigit! number,! which! has! enabled! me! to! distinguish! between! departments.! I! shall! use! this! variable!to!test!the!hypothesis!of!functional!diversity.!(iii)!The!rank!variable!refers!to!the! level!in!the!organizational!hierarchy.!As!there!are!numerous!different!job!titles!in!NZ,!the! hierarchical!level!is!based!on!five!categories:!Executive!Vice!President;!Vice!President;! Director;! Manager;! and! Professional.! The! first! is! the! highest! level! and! the! last! is! the! lowest! level! in! the! hierarchy.! I! shall! use! this! variable! to! test! the! hypothesis! of! hierarchical! diversity.! (iv)! The! last! variable! is! the! seniority! of! the! participants.! The! seniority!is!based!on!number!of!years!employed!in!NZ.!Due!to!the!high!variance!of!the! variable,!the!seniority!years!have!been!grouped!into!six!categories:!0S5;!6S10;!11S15;!16S 20;!21S25;!and!26+!years.!This!variable!thus!has!its!limitation!as!a!given!participant’s! seniority!can!be!put!in!the!highest!end!of!a!category!and!then!associated!with!another! participant!whose!seniority!is!put!in!the!lowest!end!of!the!category!above.!Thereby!the! actual!distance!in!seniority!could!be!lower!than!two!participants!in!the!same!category.!In! other!words,!two!employees!in!the!same!category!can!vary!between!one!and!five!years! whereas!two!employees!in!two!adjacent!categories!can!very!between!one!and!ten!years.! Albeit!this!limitation,!the!variable!is!believed!to!be!valid!in!most!cases!and!the!chance!of! this! being! the! case! is! moderate! compared! to! the! large! variance! of! the! variable.! This! variable!shall!be!used!to!test!the!hypothesis!of!tenure!diversity.!! ! To! test! the! last! hypothesis! –! diversity! aggregated! across! multiple! dimensions! –! the! independent!variables!are!converted!into!a!diversity!scale,!which!then!is!associated!to!
  • ! 53! the!ideas.!Each!diversity!variable!represents!one!point!on!the!diversity!scale.!The!ideas! are! subsequently! scored! from! zero! to! four! points! –! zero! being! no! diversity! and! four! being!maximum!diversity.!! 4.3.2.3 A two-fold examination of diversity The!measure!of!diversity!of!people!involved!in!developing!ideas!is!twoSfold.!The!first! measure!is!on!idea!inventors,!which!refer!to!the!participants!who!submitted!an!idea!and! the! people! who! are! mentioned! as! coSinventors! in! the! idea! descriptions.! These! coS inventors! are! either! participants! in! the! GB11! or! colleagues! who! were! not! invited! participants! in! GB11.! The! second! measure! is! on! commentators! who! consequently! contributed! to! the! development! of! ideas.! The! comments! associated! with! ideas! are! therefore!also!measured!based!on!the!diversity!of!the!commentator!by!the!same!method! as! the! inventors! of! ideas.! The! hypotheses! are! thereby! being! tested! twice! –! firstly! on! inventors!and!secondly!on!commentators.!! ! 4.4 Limitations The!single!case!approach!in!this!thesis!is!arguable!limited!in!terms!of!objectivity!and! generalizability.! The! promotion! of! depth! over! scope! has! enabled! the! exploratory! approach! to! the! case! examined.! As! discussed,! the! social! constructivist! perspective! adopted!in!this!thesis!emphasizes!the!subjective!nature!of!the!research.!It!is!therefore! not!pursued!to!identify!the!objective!truth!of!the!situation.!Rather,!the!situation!in!which! I!as!researcher!participate!and!observe!is!explored!by!means!of!developing!and!testing! hypotheses! that! are! based! on! my! subjective! logical! assumptions.! I! thereby! seek! to! identify!the!best!explanation!rather!than!the!explanation.!The!case!explored!is!anchored! in! the! R&D! organization! in! NZ,! which! as! a! consequence! limits! diversity! of! other! functions! from! the! organization.! Functions! such! as! marketing,! communications,! and! business!development!are!not!represented!among!the!idea!market!participants,!which! would! have! increased! diversity! of! participants’! skills! and! competences.! However,! by! only!involving!‘experts’!from!the!R&D!organization,!it!was!possible!to!remove!‘noise’!to!a! greater!extent!than!had!it!been!for!the!entire!organization.!Time!is!also!a!limitation!to! the!research.!As!explained,!the!dependent!variable!is!based!on!the!performance!of!ideas.!
  • ! 54! The!measure!of!quality!is!thereby!found!in!the!subjective!ranking!and!selection!of!TopS 25!and!NonStopS25!ideas,!why!I!am!not!able!to!determine!the!‘actual’!quality!of!ideas.! Had! time! not! been! a! constraint,! quality! could! have! been! better! measured! on! the! monetary! returns! from! the! ideas’! commercial! implementation.! It! should! be! noted,! however,! that! the! selection! of! TopS25! ideas! are! based! on! ‘expert’! opinion! from! Management! and! scientists! from! the! worldSleading! company! within! the! enzyme! industry.!The!selectors’!wisdom!is!therefore!considered!to!be!a!valid!indicator!of!which! ideas!have!high!quality.!! ! The! empirical! data! consists! of! both! qualitative! and! quantitative! data! however! the! dominant!use!of!quantitative!data!in!the!analyses!has!its!implications.!The!quantitative! data!is!used!to!simplify!the!answer!to!the!research!question.!The!Analysis!is!arguably! limited!by!the!use!of!quantitative!data!in!that!it!fails!to!capture!the!complex!nature!of!the! situation.! The! case! for! quantitative! data! analyses! is,! however,! that! it! reduces! the! interpretative! and! subjective! elements! in! the! research! inquiry.! Through! the! use! of! quantitative!data,!it!is!possible!to!support!my!assumptions!by!the!testing!of!hypotheses! to!a!greater!extent!than!with!qualitative!data.!The!information!available!in!the!data!set! has!inevitably!guided!the!research.!That!is!to!say,!the!limitations!of!data!have!resulted!in! the!chosen!diversity!variables;!other!diversity!variables!could!have!been!examined!had! different! data! been! available.! The! four! chosen! diversity! variables,! however,! are! consistent!with!the!suggestions!from!theory!presented!in!the!Literature!Review!and!it!is! therefore!held!that!they!are!important!diversity!dimensions!in!relation!to!the!scope!of! this!thesis.!! ! !
  • ! 55! ! ! ! ! ! ! ! ! ! ! ! ! “Don’t judge each day by the harvest you reap but by the seeds that you plant” – Robert Louis Stevenson Chapter 5 Analysis
  • ! 56! 5. Analysis In!this!chapter,!I!present!the!results!from!a!twoSstep!analysis!of!GB11.!The!aim!of!the! following! analyses! is! (i)! to! provide! an! overview! of! the! patterns! of! performance! and! participation! (ii)! to! test! the! hypotheses! developed! in! the! Literature! Review.! The! empirical!findings!presented!in!this!chapter!shall!be!further!discussed!in!the!subsequent! chapter!with!the!aim!of!answering!the!research!question.!! ! The!first!part!of!the!analysis!addresses!the!patterns!of!performance!and!participation!in! GB11.! By! analyzing! the! output! from! the! market! i.e.! the! ideas,! the! comments,! and! the! participants,!an!overview!of!the!data!will!be!provided!leading!to!the!second!part!of!the! analysis.!!! ! In!the!second!part!of!the!analysis,!I!shall!examine!the!implications!of!diversity!by!testing! the!hypotheses.!As!explained!in!the!Methodology,!the!investigation!is!twoSfold.!Firstly,!I! shall!test!the!hypotheses!on!the!idea!inventors!and!secondly,!I!shall!test!the!hypotheses! on! the! commentators.! It! is! thereby! intended! to! provide! an! inSdepth! analysis! of! the! implications!of!diversity!for!the!performance!of!ideas.!! ! 5.1 Analysis Part I: Patterns of Performance and Participation The!description!of!the!process!and!design!of!GB11!previously!provided,!explained!the! organizing!and!scope!of!the!idea!market.!This!section!will!investigate!the!quantitative! output! from! GB11! by! examining! some! characteristics! of! ideas,! comments,! and! participants.!Firstly,!I!shall!provide!descriptive!statistics!of!the!total!output!from!the!145! participants!to!determine!the!activity!in!the!market.!Secondly,!the!222!generated!ideas! will!be!examined!based!on!idea!categories!and!idea!depth.!Thirdly,!the!636!comments! generated! in! the! market! have! been! categorized! in! order! to! determine! their! level! of! improvement! to! ideas.! Lastly,! four! characteristics! of! participants! (gender,! site,! rank,! seniority)!will!be!examined!by!looking!at!the!distribution!of!activity!(active!participants,! inactive!participants,!all!participants).!Due!to!the!scope!of!this!thesis,!the!trading!activity! will!not!be!investigated.! !
  • ! 57! 5.1.1 The Output From GB11 The!total!number!of!participants,!ideas,!and!comments!in!the!dataset!are!presented!in! Table!2!below:! ! Table!2!–!Participants,!ideas,!and!comments!in!the!dataset!! ! No.! Total!no.!of!participants! 145! Total!no.!of!active!participants! 109! Total!no.!of!ideas! 222! Total!no.!of!idea!submitters!! 69! Total!no.!of!comments! 636! Total!no.!of!comment!submitters! 82! ! As!shown!above,!a!total!of!145!people!participated!in!GB11!and!out!of!these!a!total!of! 109!people!(75%)!were!active!participants.!Active!participants!are!defined!here!as!those! who!exerted!at!least!one!of!the!following!activities:!(i)!submitted!at!least!one!idea,!or!(ii)! submitted!at!least!one!comment.!Contrarily,!inactive!participants!are!defined!as!those! that!did!not!submit!any!ideas!or!comments!but!were!invited!to!participate!in!the!market.! Considering!the!fact!that!participants!were!invited!rather!than!required!to!volunteer!or! signSup!for!participation,!the!amount!of!active!participants!is!high.!It!should!be!noted! that!participants!were!not!exempted!from!their!other!daily!tasks!during!the!market.!A! total! of! 222! ideas! were! generated! during! the! 17SdaysSlong! market.! 69! principal! idea! submitters4!submitted! the! 222! ideas.! A! total! of! 636! comments! were! submitted! by! 82! unique!commentators.!The!average!output!of!ideas!and!comments!from!participants!is! shown!in!Table!3!below:! ! Table!3!–!Descriptive!statistics!of!output!from!participants! ! Active!participants! All!participants! ! Mean! SD! Min! Max! Mean! SD! Min! Max! Ideas!per!participant! 2.03! 2.94! 0! 17! 1.53! 2.69! 0! 17! Comments!per!participant! 5.83! 8.74! 0! 59! 4.39! 7.98! 0! 59! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 4!Principal!idea!submitters!refer!to!those!who!uploaded!the!ideas,!however,!some!ideas!were!‘invented’!by! more!than!one!person.!These!ideas!will!be!examined!later!on!in!the!analysis.!
  • ! 58! Looking!at!ideas!per!active!participant,!the!average!is!roughly!2!with!a!minimum!of!0! and!a!maximum!of!17.!This!is!arguably!a!rather!high!average!considering!the!relatively! short!duration!of!the!market.!The!maximum!of!17!signifies!a!wide!distribution;!17!ideas! are!equivalent!to!one!idea!each!day!of!the!game.!Looking!at!comments!per!participant,! the! average! for! active! participants! is! nearly! 6,! which! are! three! times! as! many! as! submitted!ideas.!The!distribution!is!ranging!from!0!to!59!indicating!that!one!participant! submitted!59!comments;!equivalent!to!3.5!comments!each!day!of!the!game.!From!these! numbers,!it!is!fair!to!conclude!that!the!quantitative!output!from!participants!was!at!a! high!level.!To!strengthen!this!conclusion,!I!have!compared!GB11!with!General!Electric’s! (GE)!idea!market!conducted!for!a!subdivision!of!GE's!Energy!Business!(description!of! GE’s!idea!market!is!found!in!the!article!by!Spears!et!al.,!2009).!The!comparison!shows! that!GB11!generated!a!much!higher!average!of!ideas!per!participant!than!GE’s!market.! GE!invited!1,236!employees!out!of!which!only!186!(15%)!registered!for!participation!in! the!threeSweekSlong!game!(ideas!were!only!accepted!the!first!two!weeks!of!the!game).! The!scope!of!GE’s!market!involved!an!entire!subdivision!whereas!for!GB11!it!was!‘by! invitation!only’.!GE’s!market!generated!54!ideas!equivalent!to!an!average!of!0.3!ideas!per! registered! participant.! GB11! generated! an! average! of! ideas! per! active! participant! equivalent!to!6.6!times!as!many!as!GE’s!idea!market.!One!could!assume!that!by!actively! registering!or!selfSselection!in!GE’s!market!would!motivate!the!registered!participants!to! contribute! by! submitting! ideas.! In! fact,! one! could! assume! that! GE’s! participants! were! generally! more! motivated! to! participate! than! GB11! participants,! as! they! had! to! take! action!in!order!to!participate.!On!the!other!hand,!the!honor!and!feeling!of!exclusivity!by! being!invited!in!GB11!may!have!had!a!motivating!factor!for!participants.!Nevertheless,! the!difference!in!number!of!generated!ideas!is!remarkable!in!favor!of!GB11!participants.! This! could! indicate! that! NZ! employees! are! more! willing! to! share! ideas! and/or! more! capable!of!coming!up!with!ideas!than!GE!employees.!! ! 5.1.2 Idea Characteristics To!determine!some!general!characteristics!of!the!222!submitted!ideas,!the!distribution! of!categories!and!depth!of!ideas!will!be!presented!next.!! !
  • ! 59! As!described!in!Chapter!3,!the!scope!of!ideas!involved!three!predetermined!categories:! 1) Entirely!new!enzymeSusing!industries! 2) New!industrial!applications!for!existing!enzymes! 3) Industrial!applications!for!new!enzymes!/!new!enzyme!classes! ! These!categories!represent!an!escalation!of!radicalness:!the!first!being!the!most!radical! category! and! the! last! being! the! least! radical! or! closest! to! core! business! ideas.! The! distribution!of!the!three!categories!is!presented!in!Table!4!below:! ! Table!4!–!Distribution!of!categories!of!ideas! ! TopS25! %! NonS Top!25! %! All! Ideas! %! 1.!Entirely!new!enzymeSusing! industries! 7! 28%! 78! 40%! 85! 38%! 2.!New!industrial!applications! for!existing!enzymes! 5! 20%! 65! 33%! 70! 30%! 3.! Industrial! applications! for! new! enzymes! /! new! enzyme! classes! 13! 52%! 54! 27%! 67! 32%! Total! 25! 100%! 197! 100%! 222! 100%! ! A!Chi!Squared!test!shows!differences!between!TopS25!and!NonStopS25!to!be!significant! at! the! 5%! level! (p! =! 0.0405).! The! difference! indicates! that! the! most! radical! ideas! (category!1)!are!deselected!whereas!the!least!radical!ideas!(category!3)!are!selected!to! be!among!TopS25!ideas.!Looking!at!TopS25!ideas,!52%!are!category!3!ideas!that!involve! discovering!new!enzymes!to!existing!applications,!which!as!argued,!is!the!expertise!of! NZ.!The!most!radical!ideas!(category!1)!represent!only!28%!even!though!the!majority!of! all!ideas!(38%)!are!within!this!category.!The!reason!for!this!deSselection!of!radical!ideas! might!be!a!matter!of!reluctance!towards!high!risks.!For!NZ,!it!is!more!straightforward!to! introduce! new! enzymes! to! existing! industries,! than! to! create! enzymes! and! industrial! applications! to! new! industries! because! the! core! competency! of! NZ! is! new! enzyme! creation! rather! than! new! business! creation.! The! selection! of! ideas! in! this! case! may! depend!on!the!view!that!financial!returns!from!radical!ideas!are!often!distant,!uncertain,! and! negative;! whereas! for! incremental! ideas,! financial! returns! are! often! proximate,!
  • ! 60! predictable,! and! positive! (March,! 1991).! It! should! be! recognized,! however,! that! with! higher!risks!comes!higher!returns.!Furthermore,!given!that!the!objective!of!GB11!was!to! identify! large! growth! bets,! this! deSselection! may! mitigate! against! the! purpose! of! the! market.!An!interesting!observation!is!that!the!winning!idea!was!categorized!in!the!most! radical!category!(1).!One!could!therefore!argue!that!despite!the!general!deSselection!of! radical!ideas,!the!most!feasible!of!those!was!still!identified!and,!what!is!more,!found!to! be!the!best!growth!bet.!! ! Next,! I! wish! to! investigate! the! ideas’! depth! based! on! three! parameters:! (i)! the! no.! of! words!in!the!idea!descriptions;!(ii)!the!percentage!of!ideas!with!attachments;!and!(iii)! the!percentage!of!ideas!with!URLs.!!This!will!allow!for!a!comparison!of!the!TopS25!and! NonStopS25! ideas! to! see! if! there! is! a! significant! difference! in! the! depth! of! idea! descriptions.! The! aim! is! to! determine! whether! lengthy! ideas! i.e.! more! thoroughly! described!ideas!have!performed!better!than!less!thoroughly!described!ideas.!Firstly,!I! have!calculated!the!number!of!words!in!the!222!ideas!and!found!the!mean!and!standard! deviation.!Secondly,!I!have!counted!the!number!of!ideas!with!attachments!i.e.!supportive! documentation!such!as!PowerPoint!slides,!internal!documents,!or!patents.!Lastly,!I!have! counted!the!number!of!ideas!with!URLs!i.e.!links!to!websites!–!both!external!and!internal! –!such!as!articles!or!project!descriptions.!The!results!can!be!seen!in!Table!5!below:! ! Table!5!–!Depth!of!ideas! ! TopS25! ! NonStopS25! ! No.!of!words!in!idea! description! 195.3!(mean)! 129.3!(SD)! 190.5!(mean)! 127.5!(SD)! Ideas!with! attachment(s)! Ideas!with!URL(s)! ! 12%!(3)! 20%!(5)! ! ! 11%!(22)! 15%!(30)! ! ! Total! 100%!(25)! ! 100%!(197)! ! ! For!the!number!of!words!in!idea!descriptions,!a!WilcoxonSMannSWhitney!test!shows!a! difference! between! TopS25! and! NonStopS25! to! be! significant! at! the! 5%! level! (p! =! 0.0445).!The!difference!is!not!great!however!still!significant!indicating!that!lengthy!ideas!
  • ! 61! have!a!higher!probability!to!be!selected!as!TopS25!ideas.!For!ideas!with!attachments,!a! Fisher’s!exact!test!shows!no!significant!difference!between!TopS25!and!NonStopS25!(p!>! .10).!This!indicates!that!ideas!with!attachments!do!not!have!a!higher!probability!to!be! selected! as! TopS25! ideas.! For! the! ideas! with! URLs,! a! Fisher’s! exact! test! shows! no! significant!difference!between!TopS25!and!NonStopS25!(p!>!.10).!This!also!indicates!that! ideas!with!URLs!do!not!have!a!higher!probability!to!be!selected!as!TopS25!ideas.!! ! 5.1.3 Comment Characteristics In!order!to!examine!some!characteristics!of!comments,!they!have!been!read!through!and! categorized!from!A!to!H.!This!allows!me!to!distinguish!between!informative!comments! and!nonSinformative!comments.!The!distribution!of!comments!in!the!8!categories!can!be! seen!in!Table!6!below:! ! Table!6!S!Comment!categorization! Comment!categories! !Category! No.! %! Replies!from!the!inventor! ! ! !! ·!!!!!!Informative!reply!from!inventor! A! 137! 21.5%! ·!!!!!!NonSinformative! B! 25! 3.9%! Comments!from!others!than!inventor! ! ! !! ·!!!!!!Appreciation!without!improvements! C! 10! 1.6%! Improvements! ! ! !! ·!!!!!!With!referral!to!other!idea! D! 55! 8.6%! ·!!!!!!Without!referral!to!other!idea! E! 328! 51.6%! Bad!rejection!without!improvements! F! 14! 2.2%! Questions!! G! 41! 6.4%! Comment!from!Screen!Team! H! 26! 4.1%! Total! !! 636! 100%! ! I!shall!first!explain!the!different!categories.!Category!A!comments!are!replies!from!the! inventor!of!the!idea!that!include!new!information!to!the!idea.!These!comments!can!be! answers!to!questions!posed!by!others!or!additional!information!to!the!idea!description.! Category! B! comments! are! also! replies! from! the! inventor! of! the! idea;! however! these! comments!do!not!add!any!new!information.!These!comments!can!be!simple!statements! e.g.! ‘thank! you’.! Category! C! is! comments! from! other! participants! than! the! inventor,!
  • ! 62! which!show!appreciation!of!the!idea!but!do!not!bring!any!additional!information!to!the! idea.! Category! D! comments! are! from! others! than! the! inventor! that! provide! improvements!to!the!idea.!These!comments!also!include!a!referral!to!other!ideas.!The! ideas! referred! to! can! both! be! ideas! submitted! in! the! market! or! ideas! from! previous! ideations.!Category!E!comments!are!likewise!improvements!to!the!idea!from!others!than! the! inventor! that! does! not! include! referrals! to! other! ideas.! Category! F! comments! are! from!others!than!the!inventor!that!reject!the!feasibility!of!the!idea!without!providing! additional!information.!These!comments!can!be!‘I!don’t!think!it!is!possible’!etc.!Category! G!comments!are!questions!raised!to!the!idea!by!others!than!the!inventor.!Category!H! comments! are! from! the! Screen! Team! submitted! after! the! market! had! ended.! These! comments!provide!feedback!to!the!selected!TopS25!ideas.!! ! If!we!look!at!the!comments!that!provide!improvements!to!the!ideas!(categories!A,!D,!E),! it!shows!that!82%!of!the!636!comments!are!improvements!whereas!nonSimprovements! (categories!B,!C,!F)!represent!only!8%!of!the!comments.!Category!G!S!questions!S!(6%)! are! not! included! in! either! improvement! or! nonSimprovements! as! these! can! lead! to! improvements!by!others!by!raising!questions,!however!they!do!not!offer!a!solution!per! se.! Category! H! –! Screen! Team! –! (4%)! are! likewise! not! included! here! as! they! are! submitted!after!the!market!had!ended.!It!is!impressive!that!82%!of!the!comments!add! value!to!the!ideas.!This!arguably!reflects!the!fact!that!there!is!a!willingness!to!accept! other’s!ideas!by!evaluating!them!and!providing!qualified!input!to!them.!I!believe!this! result!reflects!that!the!R&D!organization!is!supportive!and!openSminded!as!participants! work! diligently! with! ideas! coming! from! other! employees! in! the! organization.! The! categorization! of! ideas! will! be! used! further! on! in! my! analysis! of! the! implications! of! inventor!diversity!for!the!performance!of!ideas.!!! ! 5.1.4 Participant Characteristics In!order!to!examine!some!characteristics!of!the!145!invited!participants,!data!has!been! collected!from!the!Human!Resource!department!in!NZ.!The!following!tables!illustrate! the! distribution! of:! gender,! site,! rank,! and! seniority! of! the! participants.! The! four! parameters!will!be!examined!with!an!activity!variable!of!active!vs.!inactive!participants.! Furthermore,!data!on!the!entire!R&D!organization!have!been!collected!with!the!purpose!
  • ! 63! of! comparing! the! invited! participants! with! the! general! R&D! organization.! Firstly,! the! distribution!of!gender!is!shown!in!Table!7!below:! ! Table!7!S!Distribution!of!gender!of!participants! ! No.!of! active! %! No.!of! inactive! %! All! part.!! %! Total! R&D!! %! Male!!!!!!!!!!!!!!! 82! 75.2%! 26! 72.2%! 108! 74.5%! 455! 44.0%! Female! 27! 24.8%! 10! 27.8%! 37! 25.5%! 569! 56.0%! Total! 109! 100%! 36! 100%! 145! 100%! 1.024! 100%! ! The!table!illustrates!that!the!majority!of!invited!participants!were!male!(75%)!and!the! minority! female! (25%).! The! difference! between! active! and! inactive! participants,! however,!is!not!significant!(p!>!.10).!When!comparing!the!distribution!of!gender!with!the! entire!R&D!organization,!the!difference!between!invited!participants!and!all!employees! is!notable.!Out!of!the!total!of!1.024!R&D!employees,!44%!are!male!and!56%!are!female.! A! Fisher’s! exact! test! shows! that! the! difference! between! the! distribution! of! gender! of! invited!participants!and!the!general!R&D!organization!is!significant!at!the!0.1%!level!(p! =!0.000).!The!strong!significance!indicates!that!there!was!a!clear!tendency!to!invite!male! rather!than!female!participants!in!spite!of!the!fact!that!females!represent!the!majority!in! R&D.! It! should! be! noted,! however,! that! information! about! the! job! classifications! and! ranks!in!the!hierarchy!are!not!collected!on!the!entire!R&D!organization.!Discussing!the! reasons! behind! the! favoring! of! male! employees! in! GB11! will! therefore! only! be! speculations!and!shall!not!be!further!addressed.!!! ! Secondly,! participants! are! distributed! over! six! sites! (the! country! in! which! they! are! employed).! The! distribution! of! sites! of! participants! compared! with! the! entire! R&D! organization!is!illustrated!in!Table!8!below:! ! ! ! !
  • ! 64! Table!8!S!Distribution!of!sites!of!participants!I! ! Participants!! %! Total!R&D! %! Brazil! 2! 1.4%! 10! 1.0%! China! 12! 8.3%! 105! 11.0%! Denmark! 85! 58.6%! 537! 56.1%! India! 4! 2.8%! 57! 5.9%! Japan! 4! 2.8%! 31! 3.2%! USA! 38! 27.1%! 218! 22.8%! Total! 145! 100%! 9585! 100%! ! As! shown! in! the! table,! the! distribution! of! participants! compared! with! the! total! R&D! organization!is!fairly!equal!with!a!slight!underrepresentation!of!employees!from!China! and!India!and!a!slight!overrepresentation!of!employees!from!DK!and!the!US.!The!vast! majority! of! participants! and! R&D! employees! are! from! DK! and! the! US! (85%).! The! distribution!of!sites!in!relation!to!active/inactive!participants!is!shown!in!Table!9!below:! ! Table!9!S!Distribution!of!sites!of!participants!II! ! No.!of! active! %! No.!of! inactive! %! All!! %! Brazil! 2! 100%! 0! 0%! 2! 100%! China! 9! 75%! 3! 25%! 12! 100%! Denmark! 55! 65%! 30! 35%! 85! 100%! India! 4! 100%! 0! 0%! 4! 100%! Japan! 4! 100%! 0! 0%! 4! 100%! USA! 35! 92%! 3! 8%! 38! 100%! Total! 109! ! 36! ! 145! ! ! The!table!shows!that!100%!of!participants!from!Brazil,!India,!and!Japan!were!active!in! GB11.!75%!of!participants!from!China!were!active!and!92%!from!the!US.!Only!65%!from! DK! were! active.! As! the! US! and! DK! represent! the! majority! of! participants,! I! find! it! interesting!to!compare!the!difference!in!distribution!of!active!participants!from!these! two! sites.! A! Fisher’s! exact! test! shows! that! the! difference! between! the! US! and! DK! is! significant!at!the!1%!level!(p!=!0.002).!This!observation!could!reflect!the!fact!that!R&D! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 5!The!remaining!employees!from!the!R&D!organization!are!from!other!sites!not!represented!among!the! participants!in!GB11.!
  • ! 65! management!and!NZ!headquarter!is!located!in!DK!(with!an!exception!of!one!member!of! R&D!Mgmt.!in!China).!The!underrepresentation!of!active!participants!in!DK!compared!to! the! US! could! be! because! Danish! employees! work! in! physical! proximity! to! R&D! Management,! whereas! US! employees! more! rarely! interact! with! R&D! Management.! Therefore!ambitious!US!participants!may!see!GB11!as!an!opportunity!to!get!exposed!to! Management!and!demonstrate!their!value!to!the!company.!Furthermore,!a!small!portion! of! the! Danish! inactive! participant! is! from! R&D! Management! as! they! were! invited! to! participate!as!observers!rather!than!contributors.!!! ! The!participants!are!distributed!across!five!ranks!(level!in!the!organizational!hierarchy).! The! highest! rank! is! EVP! (Executive! Vice! President)! of! which! there! is! only! one,! the! second!highest!rank!is!VP!(Vice!President)!of!which!there!are!five,!the!third!highest!is! Director!of!which!there!are!18,!the!second!lowest!rank!is!Manager!of!which!there!are!65,! and! finally! the! lowest! rank! is! Professional! of! which! there! are! 56.! The! distribution! of! ranks!is!shown!in!Table!10!below:!!! ! Table!10!–!Distribution!of!ranks!of!participants! ! No.!of! active! %! No.!of! inactive! %! All!! %! EVP! 0! 0%! 1! 100%! 1! 100%! VP! 4! 80.0%! 1! 20.0%! 5! 100%! Director! 14! 77.8%! 4! 22.2%! 18! 100%! Manager! 45! 69.2%! 20! 30.8%! 65! 100%! Professional! 46! 82.1%! 10! 17.9%! 56! 100%! Total! 109! ! 36! ! 145! ! ! The!least!active!of!the!participants!is!at!the!EVP!rank,!which!is!logical!given!the!observer! role!and!that!there!is!only!one!EVP.!The!VP!rank!participants!however!are!very!active! (80%)!considering!their!observer!role.!This!–!together!with!the!high!score!of!Directors! (78%)! –! indicate! a! high! involvement! from! R&D! Management.! The! least! active! participants!are!at!the!manager!level!(69%)!and!the!most!active!are!at!the!professionals! level!(82%).!A!hypothesis!to!explain!this!difference!could!be!that!at!the!high!end!of!the! hierarchy,!the!VPs!and!Directors!are!involved!in!formulating!business!strategy!and!in!in!
  • ! 66! the! expansion! of! the! company.! They! are! therefore! arguably! very! informed! about! the! challenges! and! opportunities! for! the! business.! At! the! lower! end! of! the! hierarchy,! the! Professionals!are!typically!doing!bench!work!in!the!laboratory!creating!new!ideas!and! technologies.!The!fact!that!they!are!very!active!in!the!market!could!reflect!that!they!see! GB11!as!an!opportunity!to!get!exposed!to!R&D!Management.!The!middle!level!managers,! however,!are!arguably!spending!less!time!in!the!laboratory!and!more!time!on!dealing! with!administrative!and!HR!tasks,!thus,!less!time!for!idea!generation.!! ! I!have!also!studied!the!distribution!of!participants!in!regards!to!their!seniority!(number! of! years! employed! in! NZ).! ! The! actual! years! of! seniority! have! been! grouped! into! six! intervals.!The!distribution!of!the!seniority!of!participants!is!shown!in!Table!11!below:!! ! Table!11!–!Distribution!of!seniority!of!participants! Years! No.!of! active! %! No.!of! inactive! %! All!! %! 0!to!5! 35! 77.8%! 10! 22.2%! 45! 100%! 6!to!10! 24! 72.7%! 9! 27.3%! 33! 100%! 11!to!15! 20! 74.1%! 7! 25.9%! 27! 100%! 16!to!20! 13! 68.4%! 6! 31.6%! 19! 100%! 21!to!25! 8! 100%! 0! 0%! 8! 100%! Above!25! 9! 69.2%! 4! 30.8%! 13! 100%! Total! 109! ! 36! ! 145! ! ! As!demonstrated,!there!are!a!quite!impressive!number!of!active!participants!from!all! seniority!groups.!The!table!shows!that!participation!is!quite!equally!distributed!across! all!seniority!levels.!It!can!therefore!be!argued!that!the!market!succeeded!in!motivating! active!participation!from!both!newcomers!and!very!experienced!people.! ! 5.1.5 Conclusion to Analysis Part I Part! I! of! the! analysis! has! provided! an! overview! of! the! patterns! of! performance! and! participation.!Firstly,!descriptive!statistics!of!the!output!and!activity!of!participants!was! presented.! It! was! shown! that! 75%! of! invited! participants! were! active! by! either!
  • ! 67! submitting! an! idea! and/or! comment.! The! average! numbers! of! ideas! and! comments! submitted!by!participants!were!at!a!high!level!compared!to!GE’s!idea!market.!! ! Secondly,! some! characteristics! of! the! 222! ideas! generated! in! GB11! were! found! by! examining! idea! categories! and! idea! depth.! It! was! shown! that! there! is! a! significant! difference!between!the!distribution!of!idea!categories!between!TopS25!and!NonStopS25! ideas.!There!was!a!tendency!to!deselect!radical!ideas!in!favor!of!less!radical!ideas.!There! was! also! found! a! small! but! significant! difference! between! number! of! words! in! idea! descriptions! between! TopS25! and! NonStopS25! ideas.! The! selected! ideas! were! more! thoroughly! described! i.e.! longer! on! average! than! the! deselected! ideas.! There! was,! however,!found!no!significant!difference!between!ideas!with!attachments!or!URLs.!! ! Thirdly,!the!comments!were!characterized!from!A!to!H.!The!categorization!revealed!that! the!vast!majority!of!comments!were!valuable!to!the!ideas.!It!was!found!that!82%!of!the! 636!comments!added!some!additional!information!to!the!ideas.!Only!8%!of!comments! were!found!to!add!no!additional!information!to!the!ideas.! ! Lastly,! the! participants! were! characterized! based! on! the! distribution! in! gender,! site,! rank,! and! seniority.! The! distribution! of! gender! showed! that! the! vast! majority! of! participants! were! male.! Comparing! the! gender! of! participants! with! the! total! R&D! organization! revealed! that! there! was! a! strong! tendency! to! invite! male! participants.! Amongst!the!participants,!however,!there!was!no!significant!difference!between!males! and!females!in!regards!to!their!activity!in!the!market.!The!distribution!of!participants!in! regards! to! sites! revealed! that! US! participants! were! significantly! more! active! than! DK! participants.! It! was! argued! that! this! result! reflects! the! fact! that! R&D! Management! is! headquartered! in! DK,! which! means! that! US! participants! might! see! GB11! as! an! opportunity!to!get!exposed!to!management.!Investigating!the!rank!of!active!participants! suggested! that! middle! managers! might! be! underrepresented! compared! to! higher! and! lower!levels!in!the!hierarchy!because!they!are!dedicated!to!more!administrative!and!HR! tasks.! The! investigation! of! seniority! of! participants! revealed! that! employees! are! very! active!across!all!seniorities!and!that!there!is!no!tendency!to!be!less!active!with!increased! seniority.!!
  • ! 68! 5.2 Analysis Part II: The Implications of Diversity Having!provided!an!overview!of!the!patterns!of!performance!and!participation!allows! for!an!inSdepth!investigation!of!the!diversity!of!idea!presenters!and!developers!and!its! implications!on!the!performance!of!ideas.!The!hypotheses!developed!in!the!Literature! Review!will!be!tested!on!two!levels.!In!the!first!section,!diversity!of!idea!inventors!shall! be!measured.!In!the!second!section,!diversity!of!commentators!shall!be!measured.!In!the! third! section,! diversity! aggregated! across! multiple! dimensions! shall! be! examined! on! both!idea!inventors!and!commentators.! ! 5.2.1 Idea Inventors As! previously! found,! the! 222! ideas! generated! in! the! market! were! submitted! by! 69! principal! idea! submitters.! Some! of! the! ideas,! however,! were! ‘invented’! by! multiple! inventors! i.e.! coSinventors,! which! were! included! in! the! idea! descriptions.! These! coS inventors!include!both!other!participants!in!GB11!as!well!as!NZ!employees!not!invited!to! participate! in! GB11.! The! coSinventors! who! were! nonSparticipants! in! GB11! could! therefore!not!submit!ideas!or!comments!themselves.!I!have!collected!data!on!the!17!nonS participating! coSinventors! in! order! to! examine! the! effects! of! diversity! of! multiple! inventors!on!the!performance!on!ideas.!! ! I!shall!first!investigate!if!there!is!a!significant!difference!between!the!performance!of! ideas!with!a!single!inventor!and!ideas!with!multiple!inventors.!The!distribution!of!single! vs.!multiple!inventors!of!ideas!is!shown!in!Figure!3!and!Table!12!below:! !
  • ! 69! Figure!3:!Ideas!with!multiple!vs.!single!inventors! ! ! Table!12!–!Distribution!of!ideas!with!single!vs.!multiple!inventors! ! Single!inventor! Multiple!inventors! Total! NonStopS25! 88.8%!(175)! 11.2%!(22)! 100%!(197)! TopS25! 76%!(19)! 24%!(6)! 100%!(25)! Total! (194)! (28)! (222)! ! A!Fisher’s!exact!test!shows!that!the!difference!between!NonStopS25!and!TopS25!ideas!is! weakly!significant!at!the!10%!level!(p!=!0.101).!The!significance!is!thus!just!above!the! 10%!level,!which!indicate!that!there!is!a!trend!that!ideas!with!multiple!inventors!have! performed!slightly!better!than!ideas!with!a!single!inventor.!For!the!NonStopS25!ideas,! 11%! have! more! than! one! inventor.! For! the! TopS25! ideas,! 24%! have! more! than! one! inventor.!A!total!of!28!ideas!(13%)!out!of!222!ideas!have!multiple!inventors6.!! ! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 6!See!appendix!2!for!the!distribution!of!no.!of!inventors!on!multiple!inventor!ideas.! 0%# 10%# 20%# 30%# 40%# 50%# 60%# 70%# 80%# 90%# 100%# Non$top$25) Top$25) Ideas)with)mul6ple)vs.)single)inventors) Mul0ple#inventors# Single#inventor#
  • ! 70! In!order!to!test!my!hypotheses,!I!will!examine!the!diversity!of!inventors!presenting!ideas! in! GB11.! The! following! four! sections! thus! investigate! geographical,! functional,! hierarchical,!and!tenure!diversity!of!inventors.! ! 5.2.1.1 Geographical diversity of inventors The!first!hypotheses!is:! ! H1:% Geographical!diversity!will!increase!the!quality!of!ideas!presented!and! developed!in!idea!markets! ! To! test! geographical! diversity! of! idea! presenters,! I! have! calculated! the! number! of! different! sites! of! idea! inventors! for! each! of! the! 222! ideas.! The! ideas! with! a! single! inventor!thus!have!only!one!site!represented.!The!distribution!of!ideas!with!same!site! and!different!sites!is!shown!in!Table!13!below:! ! Table!13!–!Diversity!of!inventors:!Site! ! Same!site! Different!sites! Total! NonStopS25! 99.5%!(196)! 0.5%!(1)! 100%!(197)! TopS25! 96.0%!(24)! 4.0!%!(1)! 100%!(25)! Total! 99.0%!(220)! 1.0%!(2)! 100%!(222)! ! The! table! shows! that! only! two! ideas! have! inventors! from! different! sites.! The! observations!are!thus!too!low!to!be!tested.!It!is!still!interesting!to!note!that!there!are!so! few!ideas!originated!from!multiple!sites.!This!could!indicate!that!physical!proximity!is! important!for!coSinventorship!of!ideas.!! ! 5.2.1.2 Functional diversity of inventors The!second!hypothesis!is:! ! H2:! ! Functional! diversity! will! increase! the! quality! of! ideas! presented! and! developed!in!idea!markets!
  • ! 71! To!test!functional!diversity!of!idea!presenters,!I!have!calculated!the!number!of!different! departments!of!idea!inventors!for!each!of!the!222!ideas.!The!departments!refer!to!the! specific!functional!area!in!which!the!participant!operates.!Departments!in!NZ!are!each! given!a!fiveSdigit!number,!which!enabled!me!to!distinguish!between!departments.!The! distribution! of! ideas! with! inventor(s)! from! one! or! multiple! departments! is! shown! in! Table!14!below:! ! Table!14!–!Diversity!of!inventors:!Departments! ! 1!dept.! 2!depts.! 3!or!4!depts.! Total! NonStopS25! 90.4%!(178)! 8.1%!(16)! 1.5%!(3)! 100%!(197)! TopS25! 80.0%!(20)! 12.0%!(3)! 8.0%!(2)! 100%!(25)! Total! 89.2%!(198)! 8.5%!(19)! 2.3%!(5)! 100%!(222)! ! A!Fisher’s!exact!test!shows!that!the!difference!between!NonStopS25!and!TopS25!ideas!is! significant! at! the! 10%! level! (p! =! 0.071).! This! reveals! that! TopS25! ideas! have! more! inventors!from!different!departments!than!NonStopS25!ideas.!The!maximum!of!different! departments! of! inventors! associated! to! an! idea! is! four.! For! TopS25! ideas,! 8%! have! inventors!from!3!or!4!different!departments,!whereas!for!NonStopS25!ideas!only!1.5%! have.!Similarly!for!TopS25!ideas,!20%!originates!from!2!or!more!departments!whereas! for! NonStopS25! ideas! only! 9.6%! represents! 2! or! more! departments.! It! is! therefore! demonstrated!that!if!multiple!departments!are!represented!in!the!inventor!team,!there! is!a!statistical!significant!higher!probability!of!the!idea!being!amongst!the!selected!TopS 25.!H2%is%thereby%accepted.!!! ! 5.2.1.3 Hierarchical diversity of inventors The!next!hypothesis!is:! ! H3:!!Hierarchical!diversity!will!increase!the!quality!of!ideas!presented!and! developed!in!idea!markets! !
  • ! 72! To! test! hierarchical! diversity! of! idea! presenters,! I! have! calculated! the! number! of! different!ranks!of!idea!inventors!for!each!of!the!222!ideas.!The!distribution!of!ideas!with! inventor(s)!from!one!or!multiple!ranks!is!shown!in!Table!15!below:! ! Table!15!–!Diversity!of!inventors:!Rank! ! 1!rank! 2!or!3!dif.!ranks! Total! NonStopS25! 92.4%!(182)! 7.6%!(15)! 100%!(197)! TopS25! 76.0%!(19)! 24.0%!(6)! 100%!(25)! Total! 90.5%!(201)! 9.5%!(21)! 100%!(222)! ! A!Fisher’s!exact!test!shows!that!the!difference!between!NonStopS25!and!TopS25!ideas!is! significant! at! the! 5%! level! (p! =! 0.019).! This! reveals! that! TopS25! ideas! have! more! inventors!from!different!ranks!than!NonStopS25!ideas.!The!maximum!of!different!ranks! of!inventors!associated!to!an!idea!is!three.!For!TopS25!ideas,!24%!have!inventors!from!2! or!3!different!ranks,!whereas!for!NonStopS25!ideas!only!7.6%!have.!It!is!therefore!clearly! demonstrated! that! if! multiple! ranks! are! represented! in! the! inventor! team,! there! is! a! statistical!significant!higher!probability!of!the!idea!being!amongst!the!selected!TopS25.! Diversity!in!the!rank!dimension!reflects!that!an!idea!is!not!only!developed!at!e.g.!the! technical!level!but!also!in!a!broader!context,!which!adds!to!the!value!of!the!idea.!H3%is% thereby%accepted.!!! ! 5.2.1.4 Tenure diversity of inventors The!next!hypothesis!is:! ! H4:! ! Tenure! diversity! will! increase! the! quality! of! ideas! presented! and! developed!in!idea!markets! ! To! test! tenure! diversity! of! idea! presenters,! I! have! calculated! the! number! of! different! seniority!levels!of!idea!inventors!for!each!of!the!222!ideas.!The!seniority!levels!refer!to! the!number!of!years!hired!in!NZ.!The!distribution!of!ideas!with!inventor(s)!from!one!or! multiple!seniority!levels!is!shown!in!Table!16!below:! !
  • ! 73! Table!16!–!Diversity!of!inventors:!Seniority! ! 1!sen.! 2!dif.!sen! 3!or!4!dif.!sen.! Total! NonStopS25! 92.4%!(182)! 5.6%!(11)! 2%!(4)! 100%!(197)! TopS25! 80%!(20)! 12%!(3)! 8%!(2)! 100%!(25)! Total! 91.0%!(202)! 6.3%!(14)! 2.7%!(6)! 100%!(222)! ! A!Fisher’s!exact!test!shows!that!the!difference!between!NonStopS25!and!TopS25!ideas!is! significant! at! the! 10%! level! (p! =! 0.052).! This! reveals! that! TopS25! ideas! have! more! inventors! from! different! levels! of! seniority! than! NonStopS25! ideas.! The! maximum! of! different!seniority!levels!of!inventors!associated!to!an!idea!is!four.!For!TopS25!ideas,!8%! have!inventors!from!3!or!4!different!seniority!levels,!whereas!for!NonStopS25!ideas!only! 2%! have.! Similarly! for! TopS25! ideas,! 20%! originates! from! 2! or! more! seniority! levels! whereas!NonStopS25!ideas!only!represents!2!or!more!levels!in!7.6%!of!the!cases.!It!is! therefore!demonstrated!that!if!multiple!seniority!levels!are!represented!in!the!inventor! team,!there!is!a!statistical!significant!higher!probability!of!the!idea!being!amongst!the! selected!TopS25.!H4%is%thereby%accepted.!!! ! 5.2.1.5 Conclusion to diversity of inventors The!above!tests!of!the!four!diversity!dimensions!have!shown!overall!positive!effects!of! inventor! diversity! on! the! performance! of! ideas.! The! first! hypotheses! of! geographical! diversity!could!not!be!tested,!as!observations!were!too!low!to!be!meaningful.!The!second! hypothesis! of! functional! diversity! was! accepted! at! the! 10%! level! of! statistical! significance.!The!level!of!significance!is!not!very!strong!however!still! meaningful!and! revealed!that!more!diversity!in!departments!represented!in!the!inventor!team!resulted! in!higher!likelihood!of!the!idea!being!amongst!the!selected!TopS25.!The!third!hypothesis! of!hierarchical!diversity!was!accepted!at!the!5%!level!of!statistical!significance.!The!level! of!significance!is!thus!stronger!than!with!functional!diversity.!This!revealed!that!if!more! diversity!in!rank!is!represented!in!the!inventor!team,!there!is!a!higher!likelihood!of!the! idea!being!amongst!the!selected!TopS25.!The!fourth!hypothesis!of!tenure!diversity!was! accepted! at! the! 10%! level! of! statistical! significance.! This! also! revealed! that! more! diversity!in!levels!of!seniority!represented!in!the!inventor!team!increases!the!likelihood! of!the!idea!being!amongst!the!selected!TopS25.!
  • ! 74! In!the!following!section,!I!shall!test!the!same!four!hypotheses!on!the!idea!developers!i.e.! commentators.!! ! 5.2.2 Commentators The!commentators!in!GB11!contributed!to!the!development!of!ideas.!I!shall!therefore! investigate! the! effect! of! comments! and! the! diversity! of! commentators! on! the! performance!of!ideas.!The!comments!that!are!included!in!this!investigation!are!those! categorized!C,!D,!E,!F,!!&!G!(see!Table!6).!These!comments!have!in!common!that!others! than!the!inventor!have!submitted!them.!Albeit!not!all!comments!add!new!information!to! the!ideas,!the!comment!submitters!show!their!interest!in!the!idea!and!bring!diversity!of! perspectives! to! the! idea.! The! total! number! of! comments! examined! is! 448.! These! 448! comments!are!submitted!to!147!unique!ideas!leaving!75!ideas!or!34%!of!ideas!without! any! of! these! comment! categories.! To! see! the! distribution! of! ideas! without! vs.! with! comments!see!Figure!4!and!Table!17!below:! ! Figure!4:!Ideas!without!vs.!with!comments! ! ! 0%# 10%# 20%# 30%# 40%# 50%# 60%# 70%# 80%# 90%# 100%# Non$top$25) Top$25) Ideas)without)vs.)with)comments) Ideas#without#Comments# Ideas#with#Comments#
  • ! 75! Table!17!–!Ideas!with!vs.!without!comments! ! With!comments! Without!comments! Total! NonStopS25! 63.0%!(124)! 37.0%!(73)! 100%!(197)! TopS25! 92.0%!(23)! 8.0%!(2)! 100%!(25)! Total! 66.2%!(147)! 33.8%!(75)! 100%!(222)! ! A!Fisher’s!exact!test!shows!that!the!difference!between!NonStopS25!and!TopS25!ideas!is! strongly!significant!at!the!1%!level!(p!=!0.003).!For!TopS25!ideas,!92%!have!comments! whereas!for!NonStopS25!only!63%!of!ideas!have!comments.!It!is!hereby!shown!that!ideas! with!comments!have!performed!statistical!significantly!better!than!ideas!without.!This! could!reflect!that!the!best!ideas!–!as!appreciated!broadly!in!the!organization!–!attracted! comments!to!a!larger!extend!than!ideas!that!were!considered!poor!or!uninteresting.! ! In!order!to!test!my!hypotheses,!I!will!examine!the!diversity!of!commentators!involved!in! developing! ideas! in! GB11.! The! following! four! sections! thus! investigate! geographical,! functional,!hierarchical,!and!tenure!diversity!of!commentators.! ! 5.2.2.1 Geographical diversity of commentators The!first!hypothesis!tested!on!commentators!is:! ! H1:% Geographical!diversity!will!increase!the!quality!of!ideas!presented!and! developed!in!idea!markets! ! To! test! geographical! diversity! of! idea! developers,! I! have! calculated! the! number! of! different! sites! of! idea! commentators! for! each! of! the! 147! ideas! with! comments.! The! distribution!of!ideas!with!commentators!from!same!or!different!sites!is!shown!in!table! 18!below:! ! ! !
  • ! 76! Table!18!–!Diversity!of!commentators:!Site! ! 1!site! 2!dif.!sites! 3!or!4!dif.!sites! Total! NonStopS25! 57.3%!(71)! 32.3%!(40)! 10.5%!(13)! 100%!(124)! TopS25! 26.1%!(6)! 52.2%!(12)! 21.7%!(5)! 100%!(23)! Total! 52.4%!(77)! 35.4%!(52)! 12.2%!(18)! 100%!(147)! ! A!Fisher’s!exact!test!shows!that!the!difference!between!NonStopS25!and!TopS25!ideas!is! significant! at! the! 5%! level! (p! =! 0.013).! This! reveals! that! TopS25! ideas! have! more! commentators! from! different! sites! than! NonStopS25! ideas.! The! maximum! of! different! sites! of! commentators! associated! to! an! idea! is! four.! For! TopS25! ideas,! 21.7%! have! commentators! from! 3! or! 4! different! sites,! whereas! for! NonStopS25! ideas! only! 10.5%! have.! It! is! therefore! demonstrated! that! if! multiple! sites! are! represented! in! the! comments,!there!is!a!statistical!significant!higher!probability!of!the!idea!being!amongst! the!selected!TopS25.!H1%is%thereby%accepted.!!! ! 5.2.2.2 Functional diversity of commentators The!second!hypothesis!tested!on!commentators!is:! ! H2:! ! Functional! diversity! will! increase! the! quality! of! ideas! presented! and! developed!in!idea!markets! ! To!test!functional!diversity!of!idea!developers,!I!have!calculated!the!number!of!different! departments! of! idea! commentators! for! each! of! the! 147! ideas! with! comments.! The! distribution! of! ideas! with! commentators! from! the! same! or! different! departments! is! shown!in!table!19!below:! ! Table!19!–!Diversity!of!commentators:!Departments! ! 1!or!2!dept.! 3!or!4!depts.! 5!or!more!depts.! Total! NonStopS25! 68.5%!(85)! 24.2%!(30)! 7.3%!(9)! 100%!(124)! TopS25! 39.1%!(9)! 8.7!(2)! 52.2%!(12)! 100%!(23)! Total! 63.9%!(94)! 21.8%!(32)! 14.3%!(21)! 100%!(147)! !
  • ! 77! A!Fisher’s!exact!test!shows!that!the!difference!between!NonStopS25!and!TopS25!ideas!is! strongly!significant!at!the!0.1%!level!(p!=!0.000).!This!reveals!that!TopS25!ideas!have! more!commentators!from!different!departments!than!NonStopS25!ideas.!The!maximum! of!different!departments!of!commentators!associated!to!an!idea!is!12.!For!TopS25!ideas,! 52.2%!have!commentators!from!5!or!more!different!departments,!whereas!for!NonStopS 25!ideas!only!7.3%!have.!It!is!therefore!demonstrated!that!if!multiple!departments!are! represented!in!the!comments,!there!is!a!statistical!higher!probability!of!the!idea!being! amongst!the!selected!TopS25.!H2%is%thereby%accepted.!!! ! 5.2.2.3 Hierarchical diversity of commentators The!next!hypothesis!tested!on!commentators!is:! ! H3:!!Hierarchical!diversity!will!increase!the!quality!of!ideas!presented!and! developed!in!idea!markets! ! To! test! hierarchical! diversity! of! idea! developers,! I! have! calculated! the! number! of! different! ranks! of! idea! commentators! for! each! of! the! 147! ideas! with! comments.! The! distribution!of!ideas!with!commentators!from!same!or!different!ranks!is!shown!in!Table! 20!below:! ! Table!20!–!Diversity!of!commentators:!Rank! ! 1!rank! 2!ranks! 3!or!4!ranks! Total! NonStopS25! 51.6%!(64)! 34.7%!(43)! 13.7%!(17)! 100%!(124)! TopS25! 13.0%!(3)! 47.9%!(11)! 39.1%!(9)! 100%!(23)! Total! 45.6%!(67)! 36.7%!(54)! 17.7%!(26)! 100%!(147)! ! A!Fisher’s!exact!test!shows!that!the!difference!between!NonStopS25!and!TopS25!ideas!is! strongly!significant!at!the!0.1%!level!(p!=!0.001).!This!reveals!that!TopS25!ideas!have! more! commentators! from! different! ranks! than! NonStopS25! ideas.! The! maximum! of! different!ranks!of!commentators!associated!to!an!idea!is!four.!For!TopS25!ideas,!39.1%! have! commentators! from! 3! or! 4! different! ranks,! whereas! for! NonStopS25! ideas! only! 13.7%! have.! Similarly! for! TopS25! ideas,! 87%! have! comments! from! 2! or! more! ranks!
  • ! 78! whereas!for!NonStopS25!ideas!only!48%!have!commentators!from!2!or!more!different! ranks.! It! is! therefore! demonstrated! that! if! multiple! ranks! are! represented! in! the! comments,!there!is!a!statistical!significant!higher!probability!of!the!idea!being!amongst! the!selected!TopS25.!H3%is%thereby%accepted.!!! ! 5.2.2.4 Tenure diversity of commentators The!next!hypothesis!tested!on!commentators!is:! !! H4:! ! Tenure! diversity! will! increase! the! quality! of! ideas! presented! and! developed!in!idea!markets! ! To! test! tenure! diversity! of! idea! developers,! I! have! calculated! the! number! of! different! seniority! levels! of! idea! commentators! for! each! of! the! 147! ideas! with! comments.! The! distribution! of! ideas! with! commentators! from! same! or! different! seniority! levels! is! shown!in!Table!21!below:! ! Table!21!–!Diversity!of!commentators:!Seniority! ! 1!sen.! 2!sen.! 3!or!more!sen.! Total! NonStopS25! 41.9%!(52)! 37.1%!(46)! 21.0%!(26)! 100%!(124)! TopS25! 4.3%!(1)! 39.1%!(9)! 56.5%!(13)! 100%!(23)! Total! 36.1%!(53)! 37.4%!(55)! 26.5%!(39)! 100%!(147)! ! A!Fisher’s!exact!test!shows!that!the!difference!between!NonStopS25!and!TopS25!ideas!is! strongly!significant!at!the!0.1%!level!(p!=!0.000).!This!reveals!that!TopS25!ideas!have! more! commentators! from! different! seniority! levels! than! NonStopS25! ideas.! The! maximum!of!different!seniority!levels!of!commentators!associated!to!an!idea!is!five.!For! TopS25! ideas,! 56.5%! have! commentators! from! 3! or! more! different! seniority! levels,! whereas! for! NonStopS25! ideas! only! 21%! have.! Similarly! for! TopS25! ideas,! 96%! have! commentators! from! 2! or! more! levels! whereas! NonStopS25! ideas! only! have! commentators!from!2!or!more!levels!in!58%!of!the!cases.!It!is!therefore!demonstrated! that!if!multiple!seniority!levels!are!represented!in!the!comments,!there!is!a!statistical!
  • ! 79! significant! higher! probability! of! the! idea! being! amongst! the! selected! TopS25.! H4% is% thereby%accepted.!!! ! 5.2.2.5 Conclusion to diversity of commentators The!above!tests!of!the!four!diversity!dimensions!have!shown!strong!positive!effects!of! commentator!diversity!on!the!performance!of!ideas.!The!first!hypothesis!of!geographical! diversity!was!accepted!at!the!5%!level!of!statistical!significance.!This!revealed!that!more! diversity!in!sites!represented!in!the!comments!resulted!in!a!higher!likelihood!of!the!idea! being!amongst!the!selected!TopS25.!The!second!hypothesis!of!functional!diversity!was! accepted! at! the! 0.1%! level! of! statistical! significance.! The! level! of! significance! is! very! strong!and!thus!clearly!revealed!that!more!diversity!in!departments!represented!in!the! comments!resulted!in!a!much!higher!likelihood!of!the!idea!being!amongst!the!selected! TopS25.!The!third!hypothesis!of!hierarchical!diversity!was!accepted!at!the!0.1%!level!of! statistical!significance.!The!level!of!significance!was!again!very!strong!and!revealed!that! more!diversity!in!rank!represented!in!the!comments!resulted!in!much!higher!likelihood! of!the!idea!being!amongst!the!selected!TopS25.!The!fourth!hypothesis!of!tenure!diversity! was!accepted!at!the!0.1%!level!of!statistical!significance.!The!level!of!significance!was! again!very!strong!and!revealed!that!more!diversity!in!seniority!levels!represented!in!the! comments!resulted!in!a!much!higher!likelihood!of!the!idea!being!amongst!the!selected! TopS25.! ! In! the! following! section,! I! shall! test! the! fifth! and! final! hypothesis! developed! in! the! Literature!Review.!! ! 5.2.3 Diversity Aggregated across Multiple Dimensions In! this! final! section! of! the! Analysis,! I! shall! test! diversity! aggregated! across! multiple! dimensions!on!both!idea!inventors!and!commentators.!The!final!hypothesis!that!shall!be! tested!is!thus:! ! H5:! ! Diversity! aggregated! across! multiple! dimensions! will! increase! the! quality!of!ideas!presented!and!developed!in!idea!markets!
  • ! 80! The!four!dimensions!tested!above!of!geographical,!functional,!hierarchical,!and!tenure! diversity!is!aggregated!into!a!diversity!scale.!Each!idea!is!thereby!scored!with!diversity! points! ranging! from! zero! to! four! on! the! scale.! Ideas! with! zero! points! thus! have! no! diversity! and! ideas! with! four! points! have! maximum! diversity! (diversity! in! all! four! dimensions).!Each!of!the!four!diversity!dimensions!represents!one!point!on!the!diversity! scale.! If! an! idea! has! diversity! in! site,! for! example,! the! idea! receives! one! point! and! so! forth.!The!diversity!scale!is!divided!into!two!categories:!low!diversity!and!high!diversity! as!seen!in!Figure!5!below:! ! Figure!5:!Diversity!Scale! ! ! The!222!ideas!are!now!scored!on!the!diversity!scale!in!two!separate!measurements:!(i)! idea!inventors!and!(ii)!commentators.! ! 5.2.3.1 Idea inventors To! test! diversity! aggregated! across! multiple! dimensions! of! idea! presenters,! I! have! calculated! the! diversity! scores! of! idea! inventors! for! each! of! the! 222! ideas.! The! distribution! of! ideas! with! high! and! low! diversity! is! shown! in! Figure! 6! and! Table! 22! below:! !
  • ! 81! Figure!6:!Diversity!scores!of!idea!inventors! ! ! ! Table!22!–!Diversity!scores!of!idea!inventors! ! 0!to!1!points!(low)! 2!to!4!points!(high)! Total! NonStopS25! 91.9%!(181)! 8.1%!(16)! 100%!(197)! TopS25! 80.0%!(20)! 20.0%!(5)! 100%!(25)! Total! 90.5%!(201)! 9.5%!(21)! 100%!(222)! ! A!Fisher’s!exact!test!shows!that!the!difference!between!NonStopS25!and!TopS25!ideas!is! significant!at!the!10%!level!(p!=!.067).!This!reveals!that!TopS25!ideas!have!scored!higher! on!the!diversity!scale!than!NonStopS25!ideas.!For!TopS25!ideas,!20%!have!high!diversity,! whereas!for!NonStopS25!ideas!only!8.1%!have.!It!is!therefore!demonstrated!that!ideas! with! diversity! in! two! or! more! dimensions! in! the! inventor! team! have! a! statistical! significant! higher! probability! to! be! amongst! the! selected! TopS25.! H5% is% thereby% accepted.!!! ! 0%# 10%# 20%# 30%# 40%# 50%# 60%# 70%# 80%# 90%# 100%# Non$top$25) Top$25) Diversity)scores)of)inventors) High#Diversity# Low#Diversity#
  • ! 82! 5.2.3.2 Commentators To! test! diversity! aggregated! across! multiple! dimensions! of! idea! developers,! I! have! calculated! the! diversity! scores! of! commentators! for! each! of! the! 222! ideas.! The! distribution! of! ideas! with! high! and! low! diversity! is! shown! in! Figure! 8! and! Table! 23! below:! ! Figure!7:!Diversity!scores!of!commentators! Table!23!–!Diversity!scores!of!commentators! ! 0!to!1!points!(low)! 2!to!4!points!(high)! Total! NonStopS25! 61.4%!(121)! 38.6%!(76)! 100%!(197)! TopS25! 12.0%!(3)! 88.0%!(22)! 100%!(25)! Total! 55.9%!(124)! 44.1%!(98)! 100%!(222)! ! A!Fisher’s!exact!test!shows!that!the!difference!between!NonStopS25!and!TopS25!ideas!is! strongly!significant!at!the!0.1%!level!(p!=!0.000).!This!reveals!that!TopS25!ideas!have! scored!higher!on!the!diversity!scale!than!NonStopS25!ideas.!For!TopS25!ideas,!88%!have! high! diversity,! whereas! for! NonStopS25! ideas! only! 38.6%! have.! It! is! therefore! demonstrated!that!ideas!with!diversity!in!two!or!more!dimensions!in!comments!have!a! 0%# 10%# 20%# 30%# 40%# 50%# 60%# 70%# 80%# 90%# 100%# Non$top$25) Top$25) Diversity)scores)of)commentators) High#diversity## Low#diversity#
  • ! 83! statistical! significant! higher! probability! to! be! amongst! the! selected! TopS25.! H5% is% thereby%accepted.!!! ! 5.2.4 Conclusion to Analysis Part II In! Part! II! of! the! analysis,! I! have! examined! the! implications! of! diversity! on! the! performance!of!Ideas.!The!first!section!dealt!with!the!implications!of!multiple!inventors! involved!in!presenting!an!idea.!It!was!found!that!there!was!a!weak!significant!difference! between! ideas! with! multiple! vs.! single! inventors! (p! =! 0.10).! Ideas! with! multiple! inventors!generally!performed!better!than!ideas!with!a!single!inventor.!When!testing!the! hypotheses! of! the! four! diversity! dimensions! of! inventors,! overall! positive! effects! of! diversity!on!the!performance!of!ideas!was!demonstrated.!Albeit!geographical!diversity! of! inventors! could! not! be! tested,! the! remaining! three! dimensions! (functional,! hierarchical,! and! tenure)! of! idea! presenters! proved! to! increase! the! quality! of! ideas! presented!in!the!idea!market.!H2,!H3,!and!H4!were!thereby!accepted.!! ! In!the!second!section,!I!examined!the!implications!of!comments!on!the!performance!of! ideas.!It!was!found!that!ideas!with!comments!performed!significantly!better!than!ideas! without.!When!testing!the!hypotheses!of!the!four!diversity!dimensions!of!commentators,! strong!positive!effects!of!diversity!on!the!performance!of!ideas!were!demonstrated.!All! four! diversity! dimensions! of! idea! developers! proved! to! increase! the! quality! of! ideas! presented!in!the!idea!market.!H1,!H2,!H3,!and!H4!were!thereby!accepted.! ! In!the!third!section,!I!examined!the!implications!of!diversity!aggregated!across!multiple! dimensions!on!the!performance!of!ideas.!By!developing!a!diversity!scale,!I!was!able!to! score!ideas!based!on!diversity!points!(0S4)!and!thus!distinguish!between!ideas!with!high! and!low!diversity!regarding!both!idea!presenters!and!idea!developers!respectively.!By! testing! the! fifth! and! final! hypothesis,! positive! effects! of! aggregated! diversity! on! the! performance! on! ideas! was! demonstrated.! For! the! idea! presenters! (inventors)! a! significant!difference!between!TopS25!and!NonStopS25!ideas!was!found!at!the!10%!level.! For!idea!developers!(commentators)!a!strong!significant!difference!between!TopS25!and! NonStopS25!ideas!was!found!at!the!0.1%!level.!This!indicates!that!aggregated!diversity!of! both!inventors!and!commentators!increases!the!quality!of!ideas.!In!general,!there!were!
  • ! 84! more! commentators! than! inventors! and! the! dataset! revealed! a! stronger! effect! of! diversity!of!idea!developers!compared!to!idea!presenters.!The!conclusion!can!be!drawn! that!aggregated!diversity!increases!the!quality!of!ideas!presented!and!developed!in!the! idea!market.!H5!was!thereby!accepted!in!both!tests.!! ! In!the!following!chapter,!I!shall!discuss!the!empirical!findings!presented!in!the!Analysis.! In!order!to!derive!at!an!answer!to!the!research!question!in!this!thesis,!I!shall!draw!on!the! quantitative!data,!the!qualitative!data,!and!the!review!of!literature.!!
  • ! 85! ! ! ! ! ! ! ! “With time, all of science will come to be a continuum of description and explanation of networks of principals and laws; that is why you need training in not just one specialty but also require breath in other fields related to and even distant from your own initial choice.” – E.O. Wilson, 2012 ! ! ! ! ! ! ! ! Chapter 6 Discussion
  • ! 86! 6. Discussion This!thesis!set!out!to!research!the!concept!of!idea!markets.!–!A!concept!that!has!spun!out! from! the! present! digital! revolution.! As! a! response! to! the! need! for! creativity! and! innovation,!it!is!argued!that!idea!markets!can!support!organizations!in!the!challenges! they!face!in!the!fuzzy!frontSend!of!the!innovation!process.!The!embryonic!stage!of!the! research! enquiry! makes! it! difficult,! if! not! impossible,! to! predict! its! full! potential.! As! stated!by!E.!O.!Wilson!(TED!Talk,!2012),!“So!swift!is!the!velocity!of!the!technical!scientific! revolution,!so!startling!in!its!countless!twists!and!turns!that!no!one!can!predict!its!outcome,! even!in!a!decade!from!the!present!moment.”!!!With!this!in!mind,!the!curiosity!imbedded!in! the! study! has! led! to! an! exploration! rather! than! an! explanation! of! the! concept! under! scrutiny.! The! discussions! and! conclusions! presented! in! this! thesis! will! therefore! not! attempt!to!paint!a!generalizable!picture.!Rather,!they!will!attempt!to!shed!light!on!some! of! the! dynamics! shaping! the! situation! examined! and! hereby! attempt! to! answer! the! research! question! in! this! thesis:! Does! the! quality! of! ideas! emerging! from! online! idea! markets! increase! with! the! diversity! of! inventors! involved! in! developing! the! ideas?! ! The! subsequent!sections!shall!draw!on!the!review!of!literature!and!the!empirical!findings! with!the!aim!of!providing!holistic!arguments.!! ! 6.1 Igniting the Sparks in the Crowd The! growing! complexity! and! ambiguity! of! the! business! environment! has! rendered! organizational!adaptation!dependent!on!increased!transparency!resulting!in!porous!and! fluid! organizational! boundaries.! The! increasing! openness! in! organizations! has! necessitated! the! development! of! more! flexible! systems! and! tools! that! can! transfer! knowledge! across! departments,! organizations,! and! national! borders.! The! case! for! crowdsourcing!is!held!in!the!notion!of!the!wisdom!of!the!crowd.!As!argued,!it!refers!to! the! discovery! that! the! aggregate! of! a! set! of! proposed! solutions! from! a! group! of! individuals!performs!better!than!the!majority!of!individual!solutions!(Yi!et!al.,!2012).! Providing! an! environment! where! a! variety! of! solutions! can! connect! is! therefore! paramount! for! the! development! of! innovation! in! organizations.! The! proliferation! of! interconnectivity!and!interactivity!through!internetSbased!technologies!has!enabled!new! forms!of!support!for!new!product!development!(Soukhoroukova,!et!al,!2011).!In!the!case!
  • ! 87! of!NZ,!the!experimentation!with!idea!markets!was!an!effort!of!innovating!the!way!they! innovate.!The!traditional!tools!for!idea!generation!in!R&D!had!proven!obsolete!in!light!of! the!vast!technological!advancements!for!online!knowledge!sharing.!Idea!markets!enable! R&D! Management! to! tap! into! ideas! from! a! broader! and! more! diverse! group! of! organizational! members.! Furthermore,! the! pursuit! of! large! growth! bets! to! boost! the! enzyme! business! required! creative! and! outSofStheSbox! ideas! that! had! the! potential! to! enhance!its!competitiveness.!By!implementing!the!idea!market!tool!for!such!ambitious! targets,!R&D!Management!was!able!to!mobilize!and!connect!geographically!dispersed! employees,! provide! a! channel! that! could! effectively! leverage! a! large! reservoir! of! dormant!ideas,!and!increase!the!quality!of!go/kill!decisions.!A!strong!indication!of!the! success!of!the!tool!is!that!NZ!has!scheduled!nine!other!idea!markets!to!be!held!in!2012! alone.! ! GB11! involved! bringing! together! a! crowd! of! organizational! members! from! various! departments!and!sites.!The!crowd!of!participants!totaled!145!people!from!79!different! departments!and!six!different!countries!on!three!different!continents.!Connecting!such!a! widespread!crowd!for!idea!generation!purposes!was!arguably!only!feasible!through!a! virtual!community!enabled!by!the!Internet.!Participation!in!GB11!was!dependent!on!the! willingness!to!devote!extra!efforts,!as!there!was!no!time!allocated!in!the!participants! regular!work!schedules.!Participation!therefore!relied!heavily!on!intrinsic!motivation.! These!motivational!factors!include!receiving!valuable!feedback!on!ideas,!gaining!peer! recognition,!being!able!to!display!inventiveness!for!R&D!Management,!and!experiencing! the! joy! of! competitive! play.! Considering! the! rate! of! active! participants! (75%)! these! factors!deemed!successful.!The!‘by!invitation!only’!factor!in!GB11!arguably!facilitated! activity!as!the!feeling!of!exclusivity!or!of!being!selected!denoted!recognition!by!peers!and! superiors.! The! finding! of! the! distribution! of! active! participants! across! the! six! sites! indicated! that! the! involvement! of! R&D! Management! played! an! important! role! in! fostering!activity.!The!sites!in!which!members!from!R&D!Management!are!located!(DK! and! China)! had! a! lower! rate! of! active! participants! than! the! sites! without.! The! comparison!of!US!and!DK!participants!showed!a!significant!difference!between!the!rates! of!active!participants.!As!argued,!the!need!for!recognition!by!R&D!Management!might!be! smaller! for! participants! who! more! often! interact! with! them! enabled! by! the! physical!
  • ! 88! proximity!(DK).!Contrarily,!participants!who!less!often!interact!with!R&D!Management! (US)!may!have!a!larger!desire!to!display!inventiveness!and!initiative!in!order!to!gain! recognition.!! ! Because! of! the! complexity! of! the! knowledge! involved! in! R&D,! it! can! be! difficult! to! transfer!across!departments,!organizations,!and!long!distances.!As!argued!by!Bos!et!al.! (2007:653),!“Scientists!generally!work!with!ideas!that!are!on!the!cutting!edge!of!what!is! understood.!This!knowledge!often!requires!specialized!expertise,!is!difficult!to!represent,! may!be!tacit,!and!changes!rapidly.”!With!this!in!mind,!one!could!argue!that!the!obstacles! of!transferring!complex!knowledge!were!to!some!extent!circumvented!in!GB11!by!only! inviting!‘experts’!with!specialized!knowledge!from!the!R&D!organization.!It!was!thereby! possible!to!remove!‘noise’!in!the!market!from!potentially!less!informed!or!nonSscientific! participants.!On!the!other!hand,!the!bias!of!selection!of!the!participants!and!restricting! membership!to!only!include!R&D!employees!may!have!resulted!in!missed!opportunities.! As!some!of!the!participants!claim,!it!could!have!been!beneficial!to!include!members!from! marketing! as! many! of! the! ideas! were! technically! interesting! however! less! interesting! from! the! customers’! point! of! view! (see! appendix! 1).! A! dilemma! is! thus! recognized! concerning!the!selected!pool!of!participants.!On!the!one!hand,!by!solely!inviting!R&D! employees!it!was!possible!to!reduce!noise!from!cognitive!distant!members!and!thereby! optimize! the! development! of! complex! knowledge.! On! the! other! hand,! the! risk! of! functional!fixedness!of!participants!may!have!rendered!the!development!of!radical!and! customerSfocused!ideas!less!feasible.!However,!it!is!also!argued!that!the!potential!risk!of! functional! fixedness! was! to! some! extent! circumvented! by! the! wide! distribution! of! participants! from! all! levels! in! the! organizational! hierarchy.! That! is! to! say,! the! connectivity!of!people!working!very!specialized!scientifically!and!people!working!more! strategySfocused!and!with!management!contributed!to!the!development!of!more!holistic! solutions.!! ! Theory! suggests! that! the! connectivity! of! the! crowd! facilitates! the! amplification! and! development!of!ideas.!As!argued!by!Nonaka!(1994:15)!“[…]!although!ideas!are!formed!in! the!minds!of!individuals,!interaction!between!individuals!typically!plays!a!critical!role!in! developing! these! ideas.! That! is! to! say,! ‘communities! of! interaction’! contribute! to! the!
  • ! 89! amplification!and!development!of!new!knowledge”.!Nonaka’s!theory!traditionally!calls!for! qualitative! data! collections;! however! by! using! an! abductive! method! of! reasoning,! I! hypothesize! –! based! on! logical! assumptions,! theory! and! the! empirical! findings! –! that! idea!markets!facilitate!the!amplification!and!development!of!ideas.!Moreover,!through! dynamic!processes!of!interaction!in!GB11!ideas!are!amplified!and!developed.!To!support! this!argument,!I!found!that!participants!in!GB11!not!only!submit!ideas;!they!collectively! develop!each!other’s!ideas!through!the!feature!of!commenting.!I!therefore!posit!that!the! amount!of!comments!associated!with!ideas!is!an!expression!of!the!amount!of!interaction! between! the! inventor(s)! and! the! crowd.! In! the! analysis! it! was! demonstrated! that! the! ideas!with!comments!performed!better!than!ideas!without;!thus!supporting!Nonaka’s! theory!of!amplified!and!developed!ideas!through!interaction.!Furthermore,!I!argue!that! idea! markets! provide! a! channel! for! the! articulation! of! dormant! ideas! and! thereby! transposing!them!to!undergo!evaluation!and!further!development.!An!example!of!this! argument!was!found!in!the!case!of!the!winning!idea!in!GB11.!The!winning!idea!had!been! articulated!before!in!NZ,!however!in!a!more!unpolished!and!embryonic!version.!It!had! consequently!been!rejected.!By!submitting!the!idea!in!GB11,!the!idea!was!transformed!to! fit!the!ambitious!targets!of!large!growth!bets!and!was!additionally!developed!through! the!comments!from!other!participants.!It!is!therefore!also!argued!that!the!idea!market! tool!can!increase!the!quality!of!go/kill!decisions!in!the!fuzzy!frontSend!of!the!innovation! process.! This! is! facilitated! by! the! separation! of! idea! generation! and! idea! filtering! activities.!First!of!all,!ideas!had!the!possibility!to!be!matured!for!up!to!17!days!before! they! became! subject! to! the! screening! process.! During! those! days,! the! crowd! could! develop!ideas!through!comments.!Secondly,!the!filtering!of!ideas!was,!to!a!certain!extent,! based! on! the! evaluation! of! the! crowd.! Through!the!feature!of!buying!shares!in!ideas,! ideas!were!ranked!based!on!the!wisdom!of!the!crowd.!Idea!markets!are!thus!argued!to! enable!increased!quality!of!ideas!through!the!linking!of!a!wider!selection!of!perspectives! at!an!earlier!stage!than!with!traditional!idea!generation!tools.!The!go/kill!decisions!are! thereby!based!on!more!information!and!on!the!wisdom!of!the!crowd.!! !
  • ! 90! 6.2 New Combinations This!thesis’!fundamental!argument!has!relied!on!the!notion!that!innovation!is!in!essence! ‘new!combinations’!(Schumpeter,!1939).!As!discussed,!innovation!is!about!making!new! connections!and!combining!known!knowledge!in!new!ways!(Dodgson,!et!al.,!2006).!It!is! therefore! emphasized! that! idea! markets! enable! the! development! of! new! connections! and! new! combinations! by! providing! a! platform! for! interaction! of! a! larger! and! more! diverse!crowd!than!traditional!idea!generation!tools.!Furthermore,!the!online!setSup!of! idea! markets! facilitates! idea! exchange! both! in! real! time! and! asynchronously! which! renders!it!possible!to!aggregate!disparate!flows!of!ideas!in!one!stream!(Brabham,!2008).! The! pursuit! for! innovation,! as! argued! by! Flemming! and! Sorensen! (2004),! is! a! recombinant! search.! Thus! emphasizing! the! need! to! combine! or! reconfigure! various! technological! components! in! a! novel! manner.! It! is! therefore! argued! that! combining! knowledge!from!diverse!people!or!fields!can!enhance!the!development!of!creative!ideas.! An! argument! also! advocated! by! E.! O.! Wilson! who! state,! “With!time,!all!of!science!will! come!to!be!a!continuum!of!description!and!explanation!of!networks!of!principals!and!laws;! that!is!why!you!need!training!in!not!just!one!specialty!but!also!require!breath!in!other! fields! related! to! and! even! distant! from! your! own! initial! choice.”! (TED! Talk,! 2012).! Similarly,!Poetz!and!Prugl!(2010)!argue!that!the!development!of!highly!novel!solutions!is! dependent! upon! the! capability! of! organizations! to! overcome! local! search! bias! and! functional!fixedness.!They!suggest!that!organizations!should!draw!on!problem!solvers! from! contextually! distant! but! analogous! fields! (i.e.! fields! linked! by! similar! problems).! Idea!markets!offer!the!opportunity!for!participants!to!get!familiar!with!other!fields!than! they!normally!work!in.!Moreover,!ideas!are!generated!and!developed!through!diverse! skills! and! competences! by! means! of! computation.! It! was! therefore! argued! that! the! quality!of!ideas!is!enhanced.!Furthermore,!in!idea!markets!submitting!‘unpolished’!or! ‘wild’!ideas!are!legitimized!as!a!result!of!less!concern!with!social!acceptance!and!less! social!interaction!between!participants.!A!demonstration!of!this!argument!is!provided! by! the! examination! of! idea! categories.! The! majority! of! the! 222! generated! ideas! were! ‘radical’! in! the! sense! that! they! involved! entirely! new! enzymeSusing! industries.! It! can! therefore!be!argued!that!these!radical!ideas!were!more!legitimately!submitted!in!GB11! than! in! traditional! ideations.! The! trend! of! deSselecting! the! radical! ideas! (category! 1)! reflects! perhaps! that! these! ideas! were! more! ‘unpolished’! and! ‘wild’.! However! as! the!
  • ! 91! winning! idea! belonged! to! this! category,! it! is! argued! that! even! ‘unpolished’! and! ‘wild’! ideas!can!be!validated!and!matured!in!GB11.!Validating!ideas!is!the!process!of!finding! out! the! robustness! of! ideas.! It! is! essential! to! create! a! strong! framework! for! deciding!whether!NZ!should!continue!investing!in!a!given!idea.!Remember,!failing!fast! rather!than!late!is!crucial!in!order!for!a!company!to!succeed!with!its!innovation!efforts.!! ! 6.3 The Strength of Diversity In!order!to!answer!the!research!question:!Does!the!quality!of!ideas!emerging!from!online! idea!markets!increase!with!the!diversity!of!inventors!involved!in!developing!the!ideas?! I! developed!five!hypotheses!to!guide!my!research.!These!five!hypotheses!were!developed! through!the!review!of!extant!theory,!which!suggested!that!increased!diversity!in!groups! can! facilitate! better! decisionSmaking! and! problemSsolving! capability! (BassettSJones,! 2005).! I! set! out! to! measure! diversity! on! four! different! dimensions,! which! included! geographical,!functional,!hierarchical,!and!tenure.!! !!!! Theory! suggests! that! geographical! diversity! in! groups! can! increase! the! range! of! perspectives! and! alternatives! generated! (Milliken! &! Matins,! 1996).! Nationalities! of! people! play! an! important! role! for! the! development! and! interpretation! of! knowledge! because!of!mental!programming!as!a!consequence!for!past!experiences!with!the!nations’! political! institutions! and! culture! (Hofstede,! 1983).! ! Hofstede! thus! argued! that! we! become!mentally!programmed!when!we!share!experiences!with!other!members!of!our! nation,!which!affects!the!way!we!interpret!new!experiences.!It!is!thereby!argued!that!the! participants!in!GB11!are!mentally!programmed!by!their!experiences!in!the!country!in! which!they!are!located.! Furthermore,!this!results!in!more!diverse!perspectives!in!the! market,!which!in!turn!enhance!the!breadth!and!quality!of!ideas!generated.!It!should!also! be!noted!that!the!need!and!preference!for!products!can!vary!from!country!to!country! and!it!is!therefore!important!for!NZ!to!have!employees!working!in!proximity!with!their! diverse!customers!in!order!to!meet!their!demands.!This!argument!might!be!even!more! important!regarding!employees!who!are!in!direct!contact!to!customers!and!industries.! These! external! contacts! are! highly! influenced! by! local! conditions! and! opportunities,! which!mean!that!dispersing!employees!throughout!the!world!can!increase!the!likelihood!
  • ! 92! of! identifying! ideas! relevant! for! industries! in! their! local! environment! or! area! of! expertise.!In!GB11,!geographical!diversity!was!less!represented!among!ideas!presenters! than! among! idea! developers.! This! could! reflect! the! importance! of! being! in! physical! proximity! when! coSinventing! ideas.! The! implications! of! geographical! diversity! for! the! quality! of! ideas! was! examined! with! idea! developers! where! it! demonstrated! that! if! multiple!sites!are!represented!in!the!comments,!there!is!a!statistical!significant!higher! likelihood!(5%!level)!of!the!idea!being!amongst!the!selected!TopS25.!This!finding!thus! supports!the!literature!and!the!hypothesis!of!the!strength!of!geographical!diversity.! ! It!was!similarly!found!in!extant!theory!that!functional!diversity!in!groups!can!increase! the!likelihood!of!generating!creative!and!innovative!solutions!to!problems!(Milliken!&! Martins,!1996).!The!connectivity!of!diverse!fields!and!specializations!of!the!knowledgeS based!dimension!was!thus!argued!to!enhance!the!quality!of!ideas.!It!is!therefore!argued! that!the!difference!in!technological!knowShow!imbedded!in!the!different!departments!in! NZ!adds!to!the!variety!of!perspectives.!The!connectivity!of!the!different!departments!in! GB11! thereby! facilitates! a! recombinant! search! of! invention.! Functional! diversity! in! regards!to!the!variety!of!departments!of!presenters!and!developers!represented!in!ideas! was! demonstrated! to! have! positive! effects! on! the! performance! of! ideas.! For! idea! presenters,!it!was!found!that!if!multiple!departments!are!represented!there!is!a!weak! statistical! significant! higher! likelihood! (10%! level)! for! the! idea! being! amongst! the! selected!TopS25.!It!should!be!noted!that!the!weak!level!of!significance!might!reflect!the! relative!small!number!of!observations!in!this!category.!For!idea!developers,!it!was!found! that! if! multiple! departments! are! represented! there! is! a! strong! statistical! significant! higher! likelihood! (0.1%! level)! for! the! idea! being! amongst! the! selected! TopS25.! This! finding! thus! supports! the! literature! and! the! hypothesis! of! the! strength! of! functional! diversity.! ! Theory!on!the!implications!of!hierarchical!diversity!was!found!to!be!scarce,!however,!it! is!argued!that!given!the!differences!in!job!classifications!and!tasks,!hierarchical!diversity! generates!a!wider!array!of!perspectives!and!more!critical!evaluation.!It!was!argued!that! the!connectivity!of!highStechnological!knowledge!(represented!in!the!lower!end!of!the! organizational! hierarchy)! and! knowledge! about! the! overall! business! strategy!
  • ! 93! (represented!in!the!higher!end!of!the!hierarchy)!facilitates!the!development!of!holistic! ideas.! One! could! argue! that! the! higher! ranked! participants! in! GB11! may! be! in! closer! contact! with! customers! and! therefore! be! able! to! recognize! the! demands! in! the! industries;!however!they!may!be!less!informed!of!what!is!technically!feasible.!The!lower! ranked! participants! (scientists)! can! thereby! contribute! with! their! highStechnological! knowledge! thus! enabling! the! development! of! highSquality! ideas.! By! examining! the! diversity!in!ranks!of!participants,!it!was!demonstrated!that!there!was!positive!effects!of! hierarchical!diversity!on!the!performance!of!ideas.!!For!idea!presenters,!it!was!found! that!if!multiple!ranks!are!represented!there!is!a!statistical!significant!higher!likelihood! (5%!level)!for!the!idea!being!amongst!the!selected!TopS25.!For!idea!developers,!it!was! found! that! if! multiple! ranks! are! represented! there! is! a! strong! statistical! significant! higher! likelihood! (0.1%! level)! for! the! idea! being! amongst! the! selected! TopS25.! This! finding!thus!supports!the!hypothesis!of!the!strength!of!functional!diversity.!! ! Theory! suggests! that! tenure! diversity! reduces! groupthink! and! increases! creativity! (Milliken! &! Martins,! 1996).! Furthermore,! groups! of! members! who! have! entered! the! organization!at!different!times!achieve!higher!performance!because!they!thereby!know! different! people,! have! different! technical! skills,! and! different! perspectives! of! the! organization’s!history!(Ancona!&!Caldwell,!1992).!An!additional!advantage!of!having!a! diverse! group! in! terms! of! tenure! is! the! fact! that! the! more! senior! participants! might! remember! older! ideas! that! in! principal! were! very! good! and! attractive! for! customers;! however!the!technology!at!the!time!of!suggesting!the!ideas!were!not!developed!to!make! it! feasible.! The! ideas! were! ‘ahead! of! their! time’! so! to! speak.! Tis! situation! might! be! changed!at!a!later!point!in!time!when!new!technology!is!invented.!The!participants!with! less!tenure!might!be!able!to!identify!technology!that!could!render!the!idea!feasible.!The! most!famous!example!of!this!kind!is!Leonardo!da!Vinci’s!invention!of!the!helicopter.!–!A! brilliant! idea! but! not! feasible! before! the! engine! was! invented! centuries! later.! By! examining!the!diversity!in!seniority!(years!employed!in!NZ)!of!the!participants!in!GB11,! it! was! demonstrated! that! there! was! positive! effects! of! tenure! diversity! on! the! performance! of! ideas.! ! For! idea! presenters,! it! was! found! that! if! multiple! levels! of! seniority!are!represented!there!is!a!weak!statistical!significant!higher!likelihood!(10%! level)! for! the! idea! to! be! selected! as! TopS25.! For! idea! developers,! it! was! found! that! if!
  • ! 94! multiple!levels!of!seniority!are!represented!there!is!a!strong!statistical!significant!higher! likelihood!(0.1%!level)!for!the!idea!to!be!selected!as!TopS25.!This!finding!thus!supports! the!literature!and!the!hypothesis!of!the!strength!of!tenure!diversity.! ! By!aggregating!the!four!diversity!dimensions,!a!diversity!scale!was!developed.!The!aim! was!to!arrive!at!a!conclusion!to!whether!diversity!can!be!a!catalyst!for!creativity!and!the! generation!of!highSquality!ideas!(West!&!Anderson,!1996;!BassetSJones,!2005).!The!ideas! were! thus! categorized! based! on! their! diversity! scores! and! ideas! with! low! and! high! diversity!was!identified!for!both!idea!presenters!and!developers.!For!idea!presenters,!it! was!demonstrated!that!ideas!with!diversity!in!two!or!more!dimensions!(high!diversity)! have!a!statistical!significant!higher!likelihood!(10%!level)!to!be!amongst!the!selected! TopS25.!The!significance!is!thus!not!strong,!however,!this!could!reflect!the!fact!that!only! few! observations! were! made! of! ideas! with! coSinventors.! ! For! idea! developers,! it! was! demonstrated!that!ideas!with!diversity!in!two!or!more!dimensions!(high!diversity)!have! a!strong!statistical!significant!higher!likelihood!(0.1%!level)!to!be!amongst!the!selected! TopS25.!The!observations!in!this!case!were!plentiful!thus!adding!to!the!robustness!of!the! conclusion.!By!accepting!all!of!the!five!hypotheses!in!this!thesis,!it!can!be!concluded!that! my! empirical! findings! support! extant! theory! of! diversity! being! a! catalyst! for! the! development!of!creative!and!highSquality!solutions.!! ! As!discussed!in!the!Methodology,!quality!of!ideas!in!the!case!examined!was!identified!by! the! ranking! of! TopS25! ideas! based! on! the! wisdom! of! the! crowd! and! on! R&D! Management’s!pick!of!wildcards.!It!is!therefore!important!to!note!that!quality!measured! in!the!tests!of!the!hypotheses!is!based!on!a!subjective!evaluation!from!‘experts’!in!GB11.! It!was!not!feasible!to!measure!quality!of!ideas!based!on!their!actual!commercial!success! or!implementation!due!to!the!embryonic!stage!of!the!ideas.!The!evaluation!of!quality!of! ideas! is! however! considered! a! valid! indicator! of! quality! due! to! the! expertise! and! experience!of!the!evaluators.!!! ! In!order!to!fill!the!research!gap!identified!in!the!literature!review!and!finally!provide!a! concluding!answer!to!the!research!question,!I!argue!that!in!the!case!of!idea!markets,!the! relationship! between! increased! diversity! and! increased! quality! of! ideas! is! upward!
  • ! 95! sloping.! Thus! rejecting! the! argument! by! Nooteboom! et! al.! (2007)! of! an! inverted! US shaped! relationship.! I! acknowledge! the! study! and! notion! on! an! inverted! uSshaped! relationship!by!Nooteboom!et!al.!when!concerned!with!firmSsize!groups.!However,!the! observations! in! GB11! involve! smaller! groups! of! interacting! members! wherefore! it! is! argued!that!the!descending!part!of!the!inverted!USshape!cannot!be!measured.!The!sizes! of!the!groups!examined!in!this!thesis!were!for!the!idea!presenters!1!to!4!and!for!idea! developers! 1! to! 20.! Furthermore,! the! descending! part! of! Nooteboom! et! al.’s! study! is! concerned! with! a! cognitive! distance! so! great! that! it! precludes! sufficient! mutual! understanding!in!groups!(ibid.).!I!therefore!argue!that!in!the!case!of!idea!markets,!the! potential!negative!effects!from!a!loss!of!mutual!understanding!do!not!devalue!the!quality! of!ideas.!This!is!because!diversity!of!perspectives!generated!in!comments!adds!value!to! ideas! by! providing! new! information.! If! the! new! information! added! to! an! idea!is! nonS informative!or!out!of!context!it!can!simply!be!discarded!thus!not!resulting!in!devalue!of! the! quality! of! the! idea.! To! conclude,! the! empirical! findings! support! the! notion! of! the! quality! of! ideas! emerging! from! idea! markets! increase! with! the! diversity! of! inventors! involved! in! developing! the! ideas.! The! research! question! is! thus! answered! and! it! is! thereby! held! that! the! strength! of! diversity! can! be! found! in! ideas! emerging! from! idea! markets.! ! !
  • ! 96! ! ! ! ! ! ! ! ! ! “You can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something - your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.” – Steve Jobs, 2005 ! ! ! ! ! ! ! ! Chapter 7 Connecting the Dots
  • ! 97! 7. Connecting the Dots 7.1 Conclusion This!thesis!has!attempted!to!‘connect!some!of!the!dots’!in!idea!markets!by!examining!the! case! of! NZ’s! GB11! and! its! abilities! to! support! the! idea! generation! phase! in! the! fuzzy! frontSend!of!the!innovation!process.!The!interest!in!idea!markets!was!obtained!by!the! recognition! that! the! strength! of! today! is! diversity! and! that! the! development! of! innovation!pertinently!relies!on!the!connectivity!of!people!and!disciplines.!The!online! setting! of! the! idea! market! tool! enables! people! who! nonShabitually! work! together! –! separated! by! geographical! or! departmental! boundaries! –! to! interact! in! virtual! communities.! I! therefore! set! out! to! investigate! the! implications! of! diversity! for! the! development!of!ideas!in!idea!markets.!The!exploration!of!the!case!rendered!interesting! findings! that! are! believed! to! both! contribute! to! existing! theory! and! assist! NZ! in! the! pursuit!of!novel!and!creative!ideas.!! ! By!examining!the!quantitative!output!from!GB11,!it!was!demonstrated!that!75%!of!the! 145!invited!participants!were!active!in!the!market.!Furthermore,!the!active!participants! submitted! an! average! of! roughly! two! ideas! and! six! comments.! When! comparing! the! number! of! ideas! generated! in! GB11! with! GE’s! idea! market,! it! was! found! that! GB11! participants!submitted!an!average!of!6.6!times!as!many!ideas!as!GE’s!participants.!This! could!reflect!a!higher!willingness!and/or!ability!to!share!and!develop!ideas!in!NZ!than!in! GE.!When!examining!the!comments!submitted!in!GB11,!it!was!found!that!82%!of!the!636! comments!were!value!adding!or!improvements!to!the!ideas.!It!has!been!argued!that!one! of!the!potential!benefits!of!idea!markets!is!the!separation!of!idea!generating!and!filtering! activities!in!the!idea!generation!phase.!This!separation!makes!room!for!maturation!and! development! of! ‘unpolished’! and! ‘wild’! ideas! before! they! are! subject! to! a! screening! process.! Furthermore,! it! has! been! argued! that! idea! markets! can! improve! the! go/kill! decisions!in!the!screening!phase!because!of!the!diversity!of!perspectives!aggregated!in! the!comments!as!well!as!the!ranking!of!ideas!based!on!the!wisdom!of!the!crowd.!! ! The! investigation! of! the! effects! of! diversity! on! the! performance! of! ideas! involved! measuring!four!diversity!dimensions:!geographical,!functional,!hierarchical,!and!tenure.!
  • ! 98! It!was!argued!that!the!relationship!between!increased!diversity!and!increased!quality!of! ideas!is!upward!sloping!rather!than!inverted!USshaped.!This!is!because!the!diversity!of! perspectives!generated!in!comments!adds!value!to!ideas!by!providing!new!information.! When!information!is!nonSinformative!or!out!of!context,!it!can!simply!be!discarded!thus! not! resulting! in! devalue! of! the! quality! of! ideas.! By! testing! five! hypotheses! on! idea! presenters!(inventors)!and!idea!developers!(commentators),!it!was!demonstrated!that! increased!diversity!results!in!a!statistical!significant!higher!probability!of!ideas!being! amongst!the!selected!TopS25.!The!analysis!that!I!have!conducted!of!GB11!thus!supports! the!notion!that!the!quality!of!ideas!emerging!from!online!idea!markets!increase!with!the! diversity!of!inventors!involved!in!developing!the!ideas.!! ! 7.2 Further Perspectives The!findings!from!GB11!have!facilitated!interesting!discussions!and!conclusions.!It!has! not!been!feasible,!however,!to!examine!all!corners!of!the!concept.!It!is!therefore!held! that!there!are!various!other!interesting!findings!yet!to!be!discovered!in!relation!to!the! idea!market!tool.!! ! In!order!to!make!the!findings!in!this!thesis!more!generalizable,!similar!research!must!be! conducted!in!other!idea!markets!and!in!other!companies.!As!the!idea!market!examined! in! this! thesis! was! a! pilot! project! in! NZ,! forthcoming! idea! markets! might! call! for! alterations!and!improvements!in!order!to!reach!an!optimal!outcome.!Such!alternations! could! include! involving! employees! from! other! departments! such! as! marketing! or! business!development!in!order!to!leverage!more!customerSfocused!ideas.!This!was!also! suggested! by! GB11! participants! in! the! surveys! as! it! was! recognized! that! many! ideas! were!technically!interesting;!however!less!interesting!from!the!customers’!point!of!view.! Expanding!the!tool!even!further!could!involve!a!closer!collaboration!with!customers!by! inviting!them!to!participate!in!idea!markets.!It!could!thereby!be!possible!to!coScreate! solutions! to! the! prevailing! challenges! that! NZ’s! customers’! face! thus! narrowing! the! scope!of!ideas!and!limiting!resources!spend!on!‘uninteresting’!ideas!from!the!customer’s! point! of! view.! Involving! customers,! however,! will! introduce! new! challenges! such! as! ownership! of! IP! and! an! impediment! to! this! suggestion! could! be! that! technological!
  • ! 99! breakthrough!ideas!would!potentially!be!in!the!hands!of!one!customer!thus!eliminating! NZ’s!bargaining!power!and!the!market!size!of!the!relevant!products.! ! Further!research!on!the!diversity!of!participants!could!also!be!interesting.!As!research!in! this! thesis! was! limited! to! focus! on! four! diversity! dimensions,! examining! other! dimensions!may!lead!to!different!findings.!The!investigation!of!functional!diversity!could! be! further! supported! with! additional! data! collections.! As! functional! diversity! of! participants!was!limited!to!focus!on!the!specific!departments!in!which!they!worked!at! the! present! moment,! it! calls! for! further! research.! It! could! be! relevant! to! investigate! participant’s! prior! work! in! other! departments,! companies! and! their! educational! backgrounds.!Such!research!would!have!to!include!qualitative!methods,!as!quantitative! methods!could!not!retrieve!fulfilling!data!to!support!this!examination.!! ! Today!(approximately!one!year!after!GB11!was!initiated),!NZ!has!conducted!other!idea! markets! in! various! other! departments! and! sites.! Based! on! the! evaluation! of! GB11! through!surveys!and!interviews,!subsequent!idea!markets!have!taken!on!a!narrower!and! more!siteSspecific!focus.!The!increased!awareness!of!the!tool!in!NZ,!has!resulted!in!a! very!high!demand!leading!to!nine!idea!markets!scheduled!this!year.!I!consider!this!fact! to!be!a!strong!indication!of!the!success!of!GB11!in!Novozymes.! ! The!further!perspectives!touched!upon!in!this!section,!shall!be!further!discussed!at!the! oral!defense!of!this!thesis.! ! !
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