Open innovation processes and roles in SMEs: The case of a network in its early stages

Verteramo S., De Carolis M., Greco...
internal needs and it is developing consulting services for other dealers. This case study can

be considered as an exampl...
1. Networking and innovation driven by lead user

Open Innovation can be defined as “the use of purposive inflows and outf...
regarding this topic and, in particular, the research questions that are addressed are as follows:

(1) how the open innov...
User-centered innovation processes are very different from the traditional, manufacturer-

centric model, in which product...
In a similar way, Lettl et al. (2006), discussing the users’ contribution to radical innovation,

distinguish between seve...
the Anglo-Saxon world these persons are called ‘champions’, in Europe the term ‘promotors’

(in the Latin version) is in u...
Organisational know
            Administrative                how, communication            Process promotor
             ...
intermediaries within the innovation process (e.g. foresight and diagnostics, scanning and

information processing, knowle...
analyzed the last three years selecting the articles on open innovation/lead user/SMEs/roles in

innovation processes.

Th...
3. The case study: innovation processes and roles in a network in its early stages

Basic information about Aster and its ...
Aster started in 1983 following a traditional dealership business model aiming at enrolling

key brands in its portfolio. ...
The point of reference in Aster for this project at that time was the Marketing manager

(successively appointed President...
Today, the marketing strategy of Aster Group addresses a customer base of 42,000 customers

and conducts approximately 200...
•   the “value drivers” that determine the positive or negative value of a customer to a

        marketing campaign;

   ...
that the developed experience can be the basis for design and sell a more general solution

aiming at supporting the decis...
supply side, to find the right technical competence, in order to create the right relationships

suitable for solving the ...
The conducted case study underlines also that, thanks to the building and management of

interorganizational relationships...
user which, bringing his market and product requirement knowledge, has co-

       developed the system used internally.

...
Chakrabarti A.K. (1974) “The role of champion in product innovation” California

Management Review, Winter, pp.58–62

Ches...
Hienerth C. (2006) “The commercialization of user innovations: the development of the rodeo

kayak industry”, R&D Manageme...
Urban, G.L. and von Hippel, E. (1988) “Lead user analyses for the development of new

industrial products” Management Scie...
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Open Innovation Processes And Roles In Sm Es Verteramo De Carolis Greco

  1. 1. Open innovation processes and roles in SMEs: The case of a network in its early stages Verteramo S., De Carolis M., Greco L. Department Business Science- University of Calabria Index 1.Networking and innovation driven by lead user..............................................................................3 1.1 Lead user and user-manufacturer............................................................................................4 1.2 Network innovation roles.........................................................................................................6 2.Research methodology....................................................................................................................9 3.The case study: innovation processes and roles in a network in its early stages...........................11 4.Lessons learned and conclusions...................................................................................................17 References........................................................................................................................................19 Abstract Open innovation has received increasingly attention, but so far it has mainly been analyzed in large enterprises. Focusing on open innovation processes leaded by SMEs, scholars point out the role of lead users (both user firms and individual end users), but there is a lack of studies focused on the formation of network driven by lead-users SMEs. The aim of the paper is to contribute to scholarly knowledge regarding this topic and, in particular, the research questions developed are: (1) how open innovation processes and inter-firm networks activated and led by a lead-user SMEs develop?; (2) which are the stages and the actors/roles of these processes and how they vary over time? The paper describes the results of the conducted literature review on the role of lead users in innovation processes and on the different innovation roles (with particular reference to SMEs). This analysis has enabled to conduct and interpret the presented case study: Aster Group. Aster is an Italian automotive dealer that has developed high level competences in marketing and CRM strategies. It carried out some innovative projects with IT partners for 1
  2. 2. internal needs and it is developing consulting services for other dealers. This case study can be considered as an example of open innovation driven by a lead user-manufacturer SME and based on the synergies developed by a network of complementary competences. The case study shows that (1) some phases of the innovative process conducted by a lead user SME can be emergent in nature; (2) the interorganizational relationships can provide the complementary competencies to let a lead user SME become a user manufacturer SME; (3) during the different phases of the innovation process, the active roles in the network of SMEs can change when unpredicted events happen. Keywords: open innovation models, lead user firm, Small and Medium Enterprises, network innovation roles 2
  3. 3. 1. Networking and innovation driven by lead user Open Innovation can be defined as “the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation” (Chesbrough et al., 2006, p.1). This notion, proposed by (Chesbrough, 2003a, b), has quickly gained the interest of both researchers and practitioners, illustrated by a number of special issue publications, dedicated conferences and a rapidly growing body of literature (Elmquist et al., 2009). Open innovation has received increasingly attention, but so far it has mainly been analyzed in large, high-tech multinational enterprises. Few studies have studied open innovation in smaller organizations (van de Vrande et al., 2009). This study addresses this gap by focusing on small-and medium-sized enterprises (SMEs). Small firms are recognized as being flexible and responsive to customer and market opportunities, but their size means they are especially vulnerable to resource constraints. Interfirm cooperation and networking is one way of overcoming resource constraints (Hanna and Walsh, 2008). Furthermore, co-development partnerships are increasingly important in open innovation models in which outside partners can be seen as peers rather than as suppliers (Elmquist et al., 2009). In an open innovation scenario, the networking competence of firms (Ritter, 1999; Ritter and Gemuenden, 2003) might become an increasingly important competence (Lettl et al., 2006). Several studies also underline that (1) while early models of innovation were focused on firm internal capabilities and R&D, later generations feature a more complex process of innovation, including internal as well as external sources of innovation (Hienerth, 2006) and (2) some of the most important and novel products and processes have been developed by users - both user firms and individual end users (Baldwin et al., 2006). However, little research exists that would systematically examine the formation of network driven by lead-users SMEs. The aim of the paper is to contribute to scholarly knowledge 3
  4. 4. regarding this topic and, in particular, the research questions that are addressed are as follows: (1) how the open innovation processes and inter-firm networks activated and led by a lead- user SMEs develop?; (2) which are the stages and the actors/roles of these processes and how they vary over time? The paper proceeds as follows: first, we describe the results of the conducted literature review on the role of lead user in the innovation processes and on the different network innovation roles (with particular reference to SMEs). This analysis is the theoretical basis that has enabled to conduct and interpret the analyzed case study presented in Section 3. Aster Group is an Italian dealer (partner to some of the most important German and Japanese automotive brands) that, in recent years, has developed high level competences in marketing and CRM strategies. Aster carried out some innovative projects with IT partners for internal needs (for this reason it can be considered a lead user) and it is developing consulting services for other dealers, leveraging the synergies developed by a SMEs network (partnerships with other software developing firms, commercial partners and technology brokers). Finally, the theoretical and practical implications of these findings are discussed (Section 4). 1.1 Lead user and user-manufacturer Von Hippel (1986) defines lead users as: ...users of a given product or service type that combine two characteristics: (1) they expect attractive innovation-related benefits from a solution to their needs and so are motivated to innovate, and (2) they experience needs for a given innovation earlier than the majority of the target market. So, lead users differ from ordinary users in two respects: lead users face needs months or years before the mass of the marketplace encounters them (trend leadership) and they benefit significantly from obtaining a solution to those needs, and are therefore highly motivated to engage in innovative endeavors (von Hippel 1986). 4
  5. 5. User-centered innovation processes are very different from the traditional, manufacturer- centric model, in which products and services are developed by manufacturers in a closed way, with the manufacturers using patents, copyrights, and other protections to prevent imitators from free riding on their innovation investments (von Hippel, 2005). According to the lead-user theory, these lead users should be integrated into corporate new product development efforts using the lead-user method (Urban and von Hippel, 1988). Here, companies try to learn from lead users about the needs and solutions they encounter at the leading edge of the market. Several studies provide strong evidence to support lead-user theory empirically both when the lead users are individual workers and when the lead users are firms (e.g. see the evidences in Schreirer and Prugl, 2008 and von Hippel 2005). At the same time, several pre-defined categories for user roles have been introduced; for example, Baldwin et al. (2006) distinguish among: • user-innovators. Innovators are people who break ‘‘patterns of accepted modes of thought and action’’ (Kirton, 1976) and who discover both problems and avenues of solution. They also tend to take control in un-structured situations are resistant to the customs of the past, and frequently challenge given rules in a risk-taking manner (Schreirer and Prugl, 2008). User-innovators seek to develop new designs for their own personal use or (in the case of user firms) internal corporate benefit. They have a direct personal need but usually no commercial interest (Hienerth, 2006); • user-manufacturers, that are user-innovators who make copies of their designs and sell them to user-purchasers (described below); • user-purchasers may wish to use an innovative or advanced model, but they do not want to innovate or produce the good themselves, so they will pay money to acquire it. 5
  6. 6. In a similar way, Lettl et al. (2006), discussing the users’ contribution to radical innovation, distinguish between several phases during which the users play different roles: • users as inventors of radical innovation. They faced severe difficulties in their day-to-day work that could not be solved by conventional manufacturers’ technology. So, they have high problem pressure and they search for radically new solutions; • users as entrepreneurs in building an innovation network. Users lacked the technological competencies and marketing knowledge that are required in order to implement their innovation into the market successfully. Therefore, they need to select the innovation network partners, to establish and to manage the network required to transform their radically new concepts into first prototypes and later into marketable products; • users as (co)-developers. These users can participate more or less actively on the innovative process. Despite the breadth of the literature on lead users, the study mentioned above is one of the few that, in part, emphasizes the role of lead users in activating inter-firm innovation networks. Relatively little is known about this topic, especially when the user is a lead user SME. In this paper, we present a case study of a lead user SME that has commercialized its innovation building a network of partners (other SMEs, research centers, universities, brokers) and that has become user manufacturer. 1.2 Network innovation roles To find an answer to our second research question (which are the stages and the actors/roles of these processes and how they vary over time?) we analyzed the literature about the roles that can support and develop open innovation processes. The success of innovations is to a great extent dependent upon the activities and the abilities of individuals who enthusiastically support the new product or process (Hauschildt, 2003). In 6
  7. 7. the Anglo-Saxon world these persons are called ‘champions’, in Europe the term ‘promotors’ (in the Latin version) is in use. Champions can be described as “individuals who informally emerge to actively and enthusiastically promote innovations through the crucial organizational stages” (Howell et al. 2005, 642), and as individuals who are innovative, who are prone to take risks, and who exhibit a transformational leadership style (Howell and Higgins ,1990). Moreover, Chakrabarti (1974) identifies the characteristics of champions as technical competence, knowledge about the company, knowledge about the market, drive and aggressiveness, and political astuteness. Promotors ca be defined as “individuals who actively and intensively support the innovation process” (Witte, 1977). This concept assigns the success of an innovation not only to one all- around “star”, but also to the cooperation of several different kinds of specialized promotors (Rost et. al, 2007). Ultimately, the champion role corresponds with the universal promotor. The champion literature and the promotor literature have developed in parallel. But these roles are only two of the variety of terms that has been proposed for those who actively promote innovation processes. Hauschildt (2003) proposes a small selection of this plethora: inventor, initiator, stimulator, legitimizer, decision-maker, executor, catalyst, solution giver, process helper, resource linker, technical innovator, product champion, business innovator, chief executive, technology promotor, power promotor. Focusing on promotor literature, Fichter (2009) summarizes the innovation barriers and related promotor roles (and power bases) that have to overcome those barriers (see table 1). Barrier type Power base Promotor role Knowledge Knowledge speciality Expert promotor Ignorance, opposition, Hierarchical potential, Power resources control of resources promotor 7
  8. 8. Organisational know Administrative how, communication Process promotor skills Networking competence, Relationship Cooperation, dependency potential for interaction promotor Table 1: Promotor roles (adapted from Fichter, 2009) The author, moreover, proposes three distinct system levels where collaboration of promotors can take place: (1) the company level; (2) the value chain level of innovating actors and (3) the level of framing and interlinking organizations. So, we can observe a shift of focus from the single firm to the relationships and networking capabilities. The same considerations can be carried out by analyzing the literature about champions. Gupta et al. (2006) underlines that when organizations function as part of a network, an external champion – that is, one external to all organizations in the network – may be required to act as a catalyst to enhance the operations of all firms in the networks. Network champions (as defined by Woodside, 1994) act as catalysts to build new linkages among multiple firms that have previously not communicated with one another in order that these firms could operate as a network. Those persons are involved in a new inter- organizational business model in order to identify one or more innovations. Focusing on inter-organizational roles that play as links among several firms, Howells (2006) has reviewed and synthesized the literature in several field of innovation about: (a) technology transfer and diffusion; (b) innovation research on the role and management of such activities and the firms supplying them; (c) the systems of innovation literature; (d) research into service organizations and more specifically Knowledge Intensive Business Services firms. The author has developed a typology and framework of the different roles (e.g. third parties, brokers, intermediary agencies, intermediary firms, knowledge brokers) or functions of 8
  9. 9. intermediaries within the innovation process (e.g. foresight and diagnostics, scanning and information processing, knowledge processing and combination/recombination, gatekeeping and brokering, testing and validation, protecting the results and commercialization). In this framework, Hanna and Walsh (2008) have analyzed the role of network brokers that facilitate cooperation among small firms and have a unique perspective on the cooperation process. The role of the network broker is to bring interested parties together and to develop the relationship between the partners. He has a clear understanding of what successful cooperation requires, he is able to assess the competencies of other potential network members and could articulate the types of arrangements that firms could potentially benefit from, suggesting appropriate goals for a fledgling network. The short outlined framework underlines the relevance of different roles in order to build a network of firms for innovation processes. However, the theoretical and specific empirical contributions on open innovation processes and the different network innovation roles, with particular reference to SMEs, are limited. In order to explore this topic, we have conducted the following case study. 2. Research methodology The research methodology was divided in two steps. 1. Literature review. After the analysis of the works of the main authors about the topics of our interest (eg. Von Hippel, Chesbrough), we have selected from ABS (Association of Business Schools) - Academic Journal Quality Guide – and Harzing - Journal Quality List - the most relevant academic journals and/or with specific topic on innovation (see table 2), and we have 9
  10. 10. analyzed the last three years selecting the articles on open innovation/lead user/SMEs/roles in innovation processes. The results of this analysis have been reported previously. Academy of management review Creativity and innovation management European journal of innovation management Industry and innovation International journal of innovation management International journal of technology management Journal of engineering and technology management Journal of high technology management research Journal of product innovation management Management science Organization science R&D Management Research policy Table 2 – List of the examined journals 2. Empirical research. Following the case-study methodology of research (Yin, 1994) the empirical work has been conducted during the last six months. Case-study research is especially appropriate for research into new topics (Gillham, 2000; Stake, 2000), for studies focused on understanding the ‘how’ and ‘why’ questions concerning a contemporary set of events, and for studies intended to develop theory further (Eisenhardt, 1989). Rogers (1995) claims that, in process research, data gathering and analysis via a case study research tries to determine the time-ordered sequence of events. Sessions of in-depth interviews have been conducted with the top management of the involved firms (network actors) and other key informants using a semi-structured interview guideline. Document acquisition was also carried out. The guideline topics were focused on key issues of our study and were aimed at (1) analyzing how the open innovation processes and inter-firm networks activated and led by a lead-user SMEs is developing and (2) identifying and discussing the different stages and the roles of these processes. The findings of this analysis have been read and confirmed by the informants themselves. 10
  11. 11. 3. The case study: innovation processes and roles in a network in its early stages Basic information about Aster and its experience in CRM systems Since 1983, Aster Group has been a leader in automotive sales and services and a commercial partner to some of the most important German and Japanese automotive brands. Today, Aster Group represents eight brands, has 80 employees, and generates 50 million Euros of revenue annually. Additionally, Aster Group collaborates with other important automotive dealers, consulting them on strategic decisions in Marketing and CRM. In this context, Aster Group plays the role of technology innovator, delivering solutions to improve dealership competitiveness. These consulting services are developed in partnership with other software developing firms, commercial partners and technology brokers. We argue that this case study can be considered as an example of open innovation driven by a lead user-manufacturer SME and based on the synergies developed by a network of complementary competences. The automotive market is a mature market characterized by a strong competition among few big companies. Taking into account the relatively recent EU directives for automotive distribution network (removal of limits on exclusive distribution for brand or localization) both phenomena mean more aggressive competition and decreasing profit margins in traditional selling activities. Therefore the dealer’s value chain is changing: the services area (enlarged to the entire car lifecycle) is becoming the main area where profit margin can arise: the selling phase in this context becomes just the starting point for a “relationship” with the customer. 11
  12. 12. Aster started in 1983 following a traditional dealership business model aiming at enrolling key brands in its portfolio. Since 1998 the engagement of young and high level educated people in the top management turned on a dime: an innovative strategy (respect to the local competitors) has been adopted as consequence of changes in automotive market previously described. Starting in 2000, Aster Group began a strategic corporate restructuring program focused on total customer service. The program resulted in the first multi-service center located in Rende, Italy, boasting 30,000 square-meters of space as well as numerous technological and business innovations. The restructuring process was driven by a strategy based on a holistic approach to customer relationship management (CRM). The main components of this strategy were: • the development of a knowledge platform to support the customer relationship process through a “value-based” approach; • the development of a central customer care team, which uses a centralized approach to manage all the inbound and outbound communications between the various business units and customers; • the development of a One-to-One Marketing strategy based on relationship value. The knowledge platform is a CRM solution specific for automotive dealers, developed through a partnership with Itkey (a software firm founded by people linked to the Computer Science Department at University of Calabria and specialized in CRM projects). This partnership started when Itkey proposed to Aster its CRM solution: in that time Aster did not know Itkey, but this proposal happened just as Aster’s marketing manager was looking for something suitable for improving the Contact Center . 12
  13. 13. The point of reference in Aster for this project at that time was the Marketing manager (successively appointed President): he had a central role in promoting this and other innovative projects, probably due to the high level education and the professional experience gained as a consultant (in the Telecom sector) before going back to work in his family firm (Aster). The Itkey CRM solution first proposed did not fit exactly Aster needs, but after 2 years of continuously improved releases, the outcome of this intensive collaboration between ITkey Technical Director and Aster President, produced an innovative CRM solution specific for automotive context. This solution made a significant contribution for gaining good results and consolidating the management of customer relationships. An unforeseen consequence of the Aster – Itkey partnership, has been the idea to produce and sell together a CRM solution (called “Leonardo”) for other dealers: so they became consultants for marketing and CRM aspects with other important Italian dealers1. Phase 1. The partnership with Exeura The internal CRM solution developed, strictly integrated with adopted ERP, allows to capture a large amount of data from the customers during all the relationship phases (from the first contact to the assistance service phase) and to release these data for each internal people interacting with customers. 1 Leonardo, in fact, is a CRM solution strongly specific for automotive dealers, based on the conjoint design and the synergy among their complementary competencies and, above all, refined by the empirical experiences developed on the field. 13
  14. 14. Today, the marketing strategy of Aster Group addresses a customer base of 42,000 customers and conducts approximately 200 One-to-One Marketing campaigns annually. Nevertheless, Aster recognized the need to leverage the large amounts of data produced by their marketing campaigns in order to improve the reach and effectiveness of its marketing efforts. Adopting a more general Customer Equity Management approach, this data can be exploited and analyzed in order to increase the customer value. Aster’s management was searching for a better means to analyze marketing data (2008), while another software firm (Exeura) was looking to improve applications with its cutting-edge tool supporting business analytics (Rialto™). Exeura is an academic spin-off of the University of Calabria operating as top level IT consulting firm and involved in several research projects. This product combines the functionality of multiple applications into a single tool supporting the entire data mining and analytics lifecycle at an affordable price. When the Exeura sales manager proposed these tools, Aster’s president perceived that this was exactly what he needed for exploiting the available large amount of data arising from his ERP and CRM systems. Therefore they decided to invest in business analytics that allowed for the evaluation of the value produced by each marketing campaign, as well as detected the causes and the influencing factors. By combining Aster’s experience with CRM solutions for the automotive industry and Exeura’s expertise in developing data mining models, they built together an innovative solution to optimize business decision-making. This solution, combining the predictive model adopted by Aster and the analytical tool provided by Exeura, allowed Aster to discover: 14
  15. 15. • the “value drivers” that determine the positive or negative value of a customer to a marketing campaign; • the automotive brands and models that are likely to produce positive customer response to a marketing campaign; • the most profitable stages of a customer relationship. The challenge for Aster Group was to develop One-to-One Marketing campaigns that maximized the value produced while using the results to further predict (leveraging multivariate regression) the optimal usage of assets and resources (time, budget, information, and human resources). The value produced by One-to-One Marketing campaigns is estimated by two main factors: 1. Actual value – the revenue produced during a time period. 2. Potential value – the value derived from the qualitative results of customer behavior (e.g., high customer loyalty increases future financial value.) The success of this experience has been fruitful for both partners: Aster improved as previously described and Exeura achieved interesting results too. Their platform supporting business analytics is general purpose and in its early stages, then it needs of successful applications in specific industries in order to refine it. Phase 2. The early stages of an Aster spin-off for innovative consultancy projects An interesting evolution of this case study is that the Exeura sales manager perceived that this collaboration could have been extended and thought to involve a partner, an IT consultant operating as technology broker in the USA market. He organized a meeting, where emerged 15
  16. 16. that the developed experience can be the basis for design and sell a more general solution aiming at supporting the decision making in marketing campaign in automotive industry. Referring to its personal contacts, the broker suggested that a business opportunity could be the proposal of this solution for other marketing services providers in the USA market: a direct approach to the USA dealers would not be economically viable for a joint venture of these three SMEs. The business idea has been to offer to these providers the management of an innovative additional service, the so called CSS (Campaign Support System), based on the complementary competences of the three partners (Aster, Exeura and the broker). The “entrance strategy” is based on the idea to leave at the end the total ownership of the developed software to the provider. The revenues come from a business consultancy relation and from royalties mechanisms (based on the additional provider revenues produced by selling CSS to the dealers). In this way it is possible for a newcomer to win the mistrust of these big players (providers for hundred of dealers) minimizing their risk. This business is still in the early stages in the USA market: the early negotiations will soon become actual contracts. Aster in this context decided to create a spin off, exclusively devoted to consultancy business opportunities. In some way Aster is changing its nature (from dealer to provider for dealers). The idea is to manage these innovative projects (at the moment focused on the automotive context) leveraging on network of medium term relationships based on complementary competences. The starting point of these projects is Aster’s need to solve an internal problem: the success of the implemented solutions (jointly designed with the technological partner) can successively become of more general interest for external firms too. In this network Aster plays a leading and central role: in the network value chain, its role is to exploit its market competence (in partnership with other actors if necessary) and, on the 16
  17. 17. supply side, to find the right technical competence, in order to create the right relationships suitable for solving the specific problem. 4. Lessons learned and conclusions We started this paper asserting that the open innovation processes are based on the use of purposive inflows and outflows of knowledge in order to innovate. This statement emphasizes the ability to predict and plan the innovation process as much as possible, taking less in account emerging issues. Our study, on the other hand, underlines the existence and importance of emerging phases in the open innovation process carried out by a lead- manufacturer SME. This is evident considering that, when Exeura contacted Aster, it was only to sell a specific product, but: (1) Aster was seeking new opportunities and, acting as a lead user, has been able to add value to the product for internal use and (2) when the Exeura sales manager tried to involve the USA technology broker, the new business idea (CSS - Campaign Support System) for the automotive industry emerged. The possibility to improve the offered product has emerged during the initial phase both for Exeura and Aster. So, a first event that could be considered based on serendipity is when Exeura discovered in Aster a lead user SME, even if this was not its initial purpose: in fact, Exeura was actually just searching for new clients. A second emerging event was the discover by Aster of the possibility to exploit an indirect link (through Exeura) with a technology broker on the USA market. This event enabled Aster to reach the American automotive sector. The emerging nature of these phenomena is coherent with the flexibility and creativity needed in innovation processes in all firms, and especially in SMEs. Nevertheless the presence of a general innovation approach and, more in general, a proactive approach in evaluating the external phenomena, seems to be critical in order to take the opportunities and to early perceive an evolutionary path. 17
  18. 18. The conducted case study underlines also that, thanks to the building and management of interorganizational relationships, Aster has evolved from being a lead user SME to a lead manufacturer. Indeed, Aster has activated some scanning and networking mechanisms to search for complementary knowledge (not owned internally): Exeura represented the technological partner, while the broker was able to present and promote the developed product (i.e. the CSS) to the American service providers. These technological and market knowledge, joint with Aster’s internal experience on the required product functionalities, form the needed value chain competences. The level of analysis of our study is, in fact, the “value chain level of innovating actors/firms” (Fichter, 2009), in which the central firm (Aster) has the most critical role. In our case, Aster has the task to act as the value chain coordinator (see figure 1). Figure 1 - The value chain of innovating actors User- Technological Technological manufacturer supplier broker firm (Exeura) (Aster) With regards to the roles within the single firms constituting the value chain, the analysis can be described tracing the innovative process phases: 1. PHASE 1: in Exeura (the technological supplier), the sales manager has been the champion (see the definition by Chakrabati, 1974, reported above), promoting and taking part actively on the innovative process. In Aster, the president has been a lead 18
  19. 19. user which, bringing his market and product requirement knowledge, has co- developed the system used internally. 2. PHASE 2: Aster’s president promotes a partnership with the Exeura sales manager in order to commercialize the co-developed product. The commercialization takes place also thanks to a technological broker. Aster’s president, thus, becomes an innovative process champion and, at the same time, Aster itself becomes an user-manufacturer. It is possible to note that, when some events have emerged, some new or different roles have come out contextually. Using concepts by Enkel et al. (2009), the innovative process can be described as follows: 1. in a first phase, Aster leads an outside-in process, enriching its knowledge base through the integration of technological suppliers’ knowledge; 2. in a second phase, Aster leads an inside-out process, through a spin-off and the partnership with Exeura. To summarize, the empirical findings suggest that (1) some phases of the innovative process conducted by a lead user SME can be emergent in nature; (2) the interorganizational relationships can provide the complementary competencies that are not owned internally (or that cannot be developed), to let a lead user SME become a user manufacturer SME; (3) during the evolution of the innovation process, the active roles in the network can change when unpredicted events happen. References Baldwin C., Hienerth C., von Hippel E. (2006) “How User Innovations Become Commercial Products: A Theoretical Investigation and Case Study” MIT Sloan School of Management, working paper, March 19
  20. 20. Chakrabarti A.K. (1974) “The role of champion in product innovation” California Management Review, Winter, pp.58–62 Chesbrough, H.W. (2003a), “The era of open innovation”, MIT Sloan Management Review, Vol. 44 No. 3, pp. 35-41. Chesbrough, H.W. (2003b), Open Innovation: The New Imperative for Creating and Profiting from Technology, Harvard Business School Press, Boston, MA. Chesbrough, H., Vanhaverbeke, W., West, J., (2006), Open Innovation: Researching a New Paradigm. Oxford University Press, London. Eisenhardt, K.M. (1989) “Building theories from case study research”. Academy of Management Review, 14, 4, 532–550. Elmquist M., Fredberg T., Ollila S. (2009) “Exploring the field of open innovation” European Journal of Innovation Management, Vol. 12 No. 3, pp. 326-345 Enkel L., Gassmann O., Chesbrough H. (2009) “Open R&D and open innovation: exploring the phenomenon” R&D Management, 39 (4), pp.311-316 Fichter K. (2009) “Innovation communities: the role of networks of promotors in Open Innovation” R&D Management, 39 (4), pp.357-371. Gillham, B. (2000) Case Study Research Methods. London: Continuum. Gupta S., Cadeaux J., Dubelaar C., (2006) “Uncovering multiple champion roles in implementing new-technology ventures” Journal of Business Research, 59, pp. 549–563. Hanna V., Walsh K. (2008) “Interfirm Cooperation among Small Manufacturing Firms” International Small Business Journal, Vol 26(3), pp. 299–321 Hauschildt J. (2003) “Promotors and Champions in Innovations: Development of a Research Paradigm” in The International Handbook on Innovation, ed. by Shavinina L.V., Elsevier Science Ltd, pp. 804-811 20
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