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Iemc paper 2004 3

  1. 1. Balancing Centripetal and Centrifugal Forces in a Lifecycle Model of Innovation: A Meta-Analysis M.W. Werwath, PhD 1 Department of Industrial Engineering and Management Sciences, Northwestern University, Evanston, IL innovation.” Innovation is acknowledged to be an engineAbstract— Organizations struggle to become consistently for growth in both the technological as well asinnovative throughout their lifecycle. This struggle becomes organizational domains, yet ironically during thisespecially important to organizations when the capacity to economic downturn, investment in innovation has beeninnovate becomes depleted due to adverse economic andbusiness conditions. This study analyzes the antecedents to deferred in favor of cost reduction techniques. As a result,organizational innovation using a quantitative meta-analysis many organizations have deferred innovation thrusts atof the extant literature within the context of an established their own peril, starving the engine of growth that fueledtheoretical frame for the field. This study expands the the boom of the 1990s.theoretical frame of Willow Sheremata [114], whichdistinguishes between centrifugal and centripetal forces, by For purposes of this study, I chose to simplify the analysisanalyzing and categorizing ninety-four studies (outcomes) and look only at two different stages of innovationand analyzing their impact on innovation. (initiation and implementation) and two different types of innovation (radical and incremental). This contrasts withThis paper directly addresses the balance of centrifugal (newidea generating) and centripetal (integrating) forces the theoretical frame used by Fariborz Damanpour [35] inoptimally needed as a function of the organization’s lifecycle. his meta-analysis as he looked at moderating variablesIt is posited that organizations need more centrifugal forces such as type of organization (service, manufacturing, notduring the infant (initiation) stages of the lifecycle in order for profit, and for profit), type of innovation (Technical,to generate the ideas and energy needed to establish strategic administrative, radical and incremental), and stage ofdirection. Once established, more centripetal forces are adoption (initiation and implementation).needed to integrate the organization’s energy and channel ittoward implementation of the new strategy. It is further This study, while also generalizing to include bothposited that centrifugal forces are particularly neededduring the initiation stages of a radical innovation while incremental and radical types of innovations, also treatscentripetal forces are needed during all stages of the innovation type as a moderator variable to determine ifincremental innovation. the balance of forces needed to enable innovation is significantly different for incremental versus radicalA meta-analysis comparing subsets of the data innovations. This study will focus on and measure theconcluded that centripetal forces have a positive effects of different organizational forces (centripetalmoderating effect on both radical and incremental versus centrifugal) at two different stages of thetypes of innovations studied, and during the innovation process (initiation and implementation) forimplementation and initiation phases of innovation. It both radical and incremental innovation types, usingwas also shown that centrifugal forces have a positive innovation or innovativeness as the dependent variable.moderating effect only on radical innovations during As will be described, the relationships are posited to beboth initiation and implementation stages while different among these variables, particularly in the case ofpositively moderating incremental innovations during incremental innovations.only the initiation stage of innovation. Keywords—Meta-analysis, centripetal, centrifugal, innovation Similar to Damanpour [35], I also used type of innovation and stage of adoption as moderating variables. As a major I. INTRODUCTION departure from Damanpour’s research, my independent variable looks at centripetal or centrifugal forces as the Innovation is a critical topic for industry today in independent variable in the study of innovation. Inresponse to cost cutting measures that have substantially addition to this major departure, this study differs fromreduced Research & Development budgets. Most Damanpour’s [35] study in at least 2 additional ways:organizations are now managing with far less innovative 1. As a meta-analysis, there are 11 years of additionaltechnology and processes than they have historically. In a studies to incorporate into this analysis. Althoughrecent article by Lou Hirsh [61], he comments that “tough nearly all of the Damanpour [35] studies areeconomic times have forced major tech firms to slash applicable to this meta-analysis, they all had to be re-enterprise research and development spending, primarily analyzed and coded for purposes of interpreting thisbecause their larger customers are more focused on model.reducing costs than on exploring the latest cutting-edge0-7803-8519-5/04/$20.00 © 2004 IEEE
  2. 2. 2. This study codes all of the prior studies based on the sources. The various keywords used include innovation, Sheremata [114] theoretical frame, including codes organizational innovation and quantitative innovation. for innovation type, innovation phase and The search on the term innovation alone resulted in over organizational type in order to analytically validate 42,000 possible matches while the term organizational the hypotheses shown, using the definitions of innovation resulted in 5600 possible matches. These centrifugal and centripetal forces as defined by matches in turn yielded additional references that were Sheremata [114]. screened against the criteria for this meta-analysis. All 5600 matches were screened against the followingHypotheses criteria:Hypothesis 1 1. Quantitative studies from a refereed journal or fromOrganizations using centrifugal forces during the a published paperinitiation phase of a radical innovation will have a 2. Analysis showing rate of adoption of innovation orpositive moderating effect on innovation. innovativeness as the dependent variableHypothesis 2 3. Analysis showing measurable independent variablesOrganizations using centripetal forces during the and not just some model of innovation lackingimplementation phase of an incremental innovation will discrete independent variableshave a positive moderating effect on innovation.Hypothesis 3Organizations using centripetal forces during the initiation The search process yielded a total of 94 outcomes with asphase of a radical innovation will have a negative many germane bi-variate correlations with a combined nmoderating effect on innovation. of 11,723. This is a relatively large sample to study ratioHypothesis 4 (124 to 1). Statistics from these correlations could only beOrganizations using centripetal forces during the combined if they reflect similar study characteristics [40].implementation phase of a radical innovation will have a The studies on which this studied relied have similarpositive moderating effect on innovation. study characteristics as the categories ofHypothesis 5 incremental/radical and implementation/initiation haveOrganizations using centrifugal forces during the become well established in the extant empirical literatureimplementation phase of a radical innovation will have a and the studies were easily combined based on theirpositive moderating effect on innovation. similar study characteristics, i.e., they all used innovationHypothesis 6 as the dependent variable.Organizations using centrifugal forces during theimplementation phase of an incremental innovation will III. RESULTShave a negative moderating effect on innovation.Hypothesis 7 Hypothesis TestingOrganizations using centrifugal forces during the The hypotheses all involved analyzing multipleinitiation phase of an incremental innovation will have a moderating variables simultaneously. It is important tonegative moderating effect on innovation. note that the directionality of the moderating effect was Hypothesis 8 hypothesized as negative for hypotheses 3, 6, and 7. ThisOrganizations using centripetal forces during the initiation means that the presupposition in these hypotheses was forphase of an incremental innovation will have a positive a negative moderating effect on the dependent variable. Inmoderating effect on innovation. the case of hypotheses 3, 6, and 7, a negative moderating effect was not clearly witnessed as the 95% confidence II. METHODOLOGY interval for the Rc was not negative. Therefore, withThis meta-analysis codes and analyzes 94 quantitative respect to hypotheses 3, 6, and 7, the direction of thestudy outcomes from 22 different sources including hypotheses was not supported by the data as the Rcpublished doctoral papers. The goal of this research was confidence interval was in the positive and not negativeto test the relationship between the dependent and direction, and in the case of hypothesis 6, the confidenceindependent variables using the moderators described in interval did include zero; therefore, no moderatingthe theory of this paper, using the applicable quantitative relationship can be inferred between the dependent andstudies in the field, and to extend the theory based on independent variables.contextual variables such as innovation types and phase ofinnovation. In reviewing the subsets of data, grouped by hypothesis, this analysis indicates that improvements in best case RsStudies were selected using from two principal sources: were achieved in hypotheses 2, 3, 4, 5, and 8, whilepublished journal articles from peer reviewed professional degradations in best case R were clearly noted injournals and master’s level and doctoral papers. The hypotheses 1, 6, and 7. In order for best case Rs to besearch for published studies was conducted in the EBSCO significant, the 95% confidence intervals for the affectedhost databases, utilizing both academic and business hypothesis must not include zero. In this analysis, the best
  3. 3. case Rs are all significant, with the exception of 7(IN-INC- 4 .08 .13 Not supportedhypothesis 6, where the 95% confidence interval includes FG)zero. Note that best case Rs ranged from .1292 to .649. 8(IN-INC- 7 .58 .65 SupportedIt should also be noted that percentage variation due to PT)sampling error for the hypotheses tested increased for all Legend:hypotheses tested with the exception of hypotheses 4 and IN-Initiation phase of innovation5, while still staying well below the 60% criteria for the IM-Implementation phase of innovationpresence of moderators for all hypotheses. It seems INC-Incremental type of innovationapparent that although this framework does increase the RAD-Radical type of innovationexplained variance, in general we were well below the PT-Centripetal force dominated60% criteria used for assessing the presence of additional FG-Centrifugal force dominatedmoderators. Therefore, the presence of additionalmoderators is still likely. Possible additional moderators TABLE 2might include distinguishing by industry types, sector and Statistical results by subgroupstructure as Mintzberg [94] and Damanpour [35]suggested. One other avenue for future moderator Ro-investigations might include evaluating the threats to the uncoorganization and environmental opportunities as r- Rc-suggested by Butler [22]. This might be of particular recte correct-interest during dramatic business cycle shifts. d ed for Effec FixedAll hypotheses tested showed improvement in the percent K N t Size Effectsvariability indicator for inclusion of moderators with theexception of the hypotheses 4 and 5. The fixed effects All studies 94 11723 0.27 0.28range at a 95% confidence interval supports therelationships for all hypotheses except hypothesis 3, 6, Centripetal-All 48 4497 0.41 0.43and 7 at the 95% confidence interval for these hypotheses Centrifugal-All 39 4758 0.17 0.17are directionally incorrect as the data reflects the oppositerelationship from that hypothesized for hypotheses 3 and Centripetal radical 23 2394 0.37 0.397. As the interval for hypothesis 6 includes zero, it cannottherefore be concluded that hypothesis 6 shows any Centripetalrelationship between the independent and dependent incremental 23 2080 0.45 0.48variables. Centripetal implement-ation 33 3298 0.38 0.40 TABLE I Summary of results by hypothesis Centripetal initiation 12 935 0.52 0.58Hypothesis K Rc Upper Accept/reject Centrifugal radical 24 3105 0.33 0.34# corrected 95% for Fixed confidenc Centrifugal effect e interval incremental 16 1830 -0.02 -0.021(IN-RAD- 7 .14 .20 Supported CentrifugalFG) initiation 7 1674 0.09 0.092(IM-INC- 1 .42 .48 Supported CentrifugalPT) 6 implement-ation 34 5199 0.20 0.213(IN-RAD- 8 .46 .56 Not supported FG-RAD-IN-PT) Hypothesis 1 7 1324 0.14 0.144(IM- 1 .41 .45 Supported PT-INC-IM-RAD-PT) 9 Hypothesis 2 16 1282 0.40 0.425(IM- 2 .28 .31 Supported PT-RAD-IN-RAD-FG) 1 Hypothesis 3 8 397 0.43 0.466(IM-INC- 1 0 .04 Not supported PT-RAD-IM-FG) 2 Hypothesis 4 19 2078 0.39 0.41
  4. 4. Ro- enable the innovation process to succeed. These team-like unco environments are centripetal in nature and are often r- Rc- protected or isolated from the rest of the organization to recte correct- enable the innovation process to proceed unimpeded. d ed for Implications for Radical Innovations Effec Fixed The results of this study can be used by managers to K N t Size Effects properly staff innovation projects based on the scale of the innovation. As the stage of the innovation will notFG-RAD-IM- differentiate the type of team needed, what becomes clearHypothesis 5 21 3907 0.28 0.28 is that a blend of centrifugal and centripetal forces must be carefully architected for the entire lifecycle of theFG-INC-IM- innovation project. In practical terms, a project managerHypothesis 6 12 2006 0.00 0.00 with a project team may be needed from the veryFG-INC-IN- beginning of an innovation while at the same time,Hypothesis 7 4 1597 0.08 0.08 innovative thinking as often comes from system or process architects or people with high degrees ofPT-INC-IN- professionalization who are also needed for the life of theHypothesis 8 7 798 0.53 0.58 innovation in order to bring the proper amount of variation (centrifugal forces) to ensure that sufficient degrees of radical innovation are achieved TABLE 3 Summary of relationships established This study does not indicate the proper staffing levels required to achieve this blend. Qualitative interviews suggest that larger staffs with a centripetal nature areType of Initiation phase Implementation needed when compared to the centrifugal forces asinnovatio phase variation can happen with only a few key innovativen contributors while the organizational energy needed toRadical Centrifugal is positive. Centripetal is achieve reduced variation and “a consensus on the plan” positive. is much larger. Centripetal is positive. Centrifugal is Implications for Incremental Innovations positive. What this study can conclude about incrementalIncrement Centripetal is positive. Centripetal is innovations is that centripetal forces are neededal Centrifugal is positive positive. throughout the lifecycle of the innovation project. It is (weak). Centrifugal is also clear in the case of incremental innovations that undetermined. centrifugal forces are needed only selectively and perhaps only sparingly to ensure that centripetal forces fully leveraged. While Sheremata [114] did not deal with the IV. DISCUSSION case of incremental innovations, Damanpour [35] did, and the results of this study contradict Damanpour’s While the need for more innovation has become ever conclusions that “type of innovation is not a highlymore apparent in today’s economy, the ability to innovate effective moderator for determinants-innovationby most major corporations has become severely relations” [35].diminished by the need to reduce structural costs and toenable sustained profitability in a time of significantly Incremental innovations seem to benefit least from the useshrinking economic growth. No doubt, innovation will be of centrifugal forces and, based on this research, shouldthe key to the next productivity “bubble” ahead, just as be avoided at least at the implementation stage ofthe last productivity growth spurt was motivated by innovation.significant innovations in the areas of informationtechnology, supply chain optimization and manufacturing.What has been shown in this analysis, is thatorganizations need to achieve the right balance of forces V. CONCLUSIONthroughout the life of a project and must create processesthat enable these forces to stay in balance as clearly this Damanpour’s [35] vision of a contingency theory ofstudy has shown that no force or type of force will innovation has been significantly progressed by this work.dominate the innovation process. Radical types of By using the centrifugal/centripetal delineation, this studyinnovations typically require a cross-functional, business makes clear that centripetal forces are always applicablefocused, customer-oriented, team-like environment to to positively affect the initiation and implementation of
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