This document discusses how companies can embed innovation in their DNA by adopting a grassroots innovation approach. Grassroots innovation involves empowering employees to come up with and develop innovative ideas. It is presented as an alternative to disruption from external forces. Three key success factors of grassroots innovation are discussed: autonomy, where employees have freedom and control over their work; ability enhancement, where the collective abilities of employees are greater than any individual; and attachment, where social bonds form between team members. Case studies and research findings are presented to support how grassroots innovation can be successfully implemented.

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Wiring Innovation in Firms’ DNA
Prof.dr. Stefan Stremersch
26.March.2015

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Innovation disrupts
established business models
at an unparalleled pace and scope

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AirBnB: From Renting Airbeds to $10B in 6 Years
Founding Year:
Number of Hotels:
2008
0
Founding Year:
Number of Hotels:
1946
183 hotels
and resorts
Market Value:
$10 Billion
Market Value:
$8 Billion

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…not an isolated case

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Innovation needs to be embedded
in the company’s DNA
But where do we find
a company’s DNA?

6. Employee Base: Heart and Collective Brain of the Organization!

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a process where the “employee crowd”
comes up with innovative ideas and
develops them into marketed products,
making innovation everyone`s responsibility
grassroots innovation
unlocks the employee crowd

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High Employee Autonomy
Teams Self-Assemble
All-Inclusive & Embraces Diversity
Learning On the Job
Enabling Control by Leaders
New Ingredients

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Newness Confirmed…
Merck Innospire wins Innovationspreis 2015

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What are the key success factors
of grassroots innovation?

11. success driver #1:
autonomy

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Powerful CEOs and bosses
egocentrically discount other
people’s opinions
i.e. they do not listen to their
employees
I will do the thinking for you…
Too Little Autonomy: Illusion of Control of Boss…

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Stardom and Worship
…Consequences Among Employees!
Disengagement

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Some firms experience
the beauty of autonomy

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More Focus on Customer  Higher Customer Satisfaction
Creativity, Higher Energy, Self-Control
and Willpower

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Can managers handle
high employee autonomy?

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From Coercive to Enabling Control

18. success driver #2:
ability enhancement

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What may be
impossible for one
employee, may be
possible for many
employees
Why Trust the Ability of Employees

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the collective intelligence of a large group
of people beats the intelligence of any of
the group members, even the experts…
wisdom of crowds
• Budescu and Chen, Management Science (2015), “Identifying expertise to extract wisdom of crowds”
• Davis-Stober, Budescu, Dana and Broomell, Decision (2014), “When is a crowd wise?”

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Sir Francis Galton (1822-1911)
Sir Francis Galton’s Vox Populi
West of England Fat Stock and Poultry Exhibition
Plymouth (1906)

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The Wisdom of the Plymouth Crowd
weight of the slaughtered and dressed ox =
(real weight)
543.40 Kg
(1,198 lbs)
weight of the slaughtered and dressed ox =
(crowd estimate; N = 787)
542.95 Kg
(1,197 lbs)

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Why is the Crowd Smarter?
LAW OF LARGE NUMBERS
DIVERSITY TRUMPS ABILITY THEOREM
CROWD KNOWS FEW CONSTRAINTS

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Develop Competences of Grassroots
Innovators
Even Among the Best, Ability Shows Gaps…

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3.1
3.96
3.323.35
4.23
3.65
Usefulness Originality Customer Appeal
Control Group Skills Training Group
In Fact, Creativity Itself Can Be Taught!
Source: Darren Dahl, Amitava Chattopadhyay and Gerald J. Gorn (1999), “The Use of Visual Mental Imagery in New Product Design,” Journal of Marketing Research, 36 (Feb), 18-28,

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Open Innovation in Grassroots: External
Intelligence
Start-UpsUniversities

27. success driver #3:
attachment

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Two Forms of Attachment in Grassroots Teams
Social Status
“Band of Brothers”
Social Learning
“Classmates”
Evidence in consumer innovation:
• Van den Bulte, C., S. Stremersch (2004), Marketing Science.

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The Band of Angry Birds
Source: Anna Vital / Funders & Founders

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The Band of Angry Birds
Source: Anna Vital / Funders & Founders

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Large-Scale Cross-National Study
Asia
China
India
Indonesia
Philippines
survey design in native language following best
practices in cross-national survey research
Americas
US
Brazil
Mexico
Europe
UK
Germany
Italy
Spain
Belgium
Netherlands
Over 2000 Companies Already Participated

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Large-Scale Cross-National Study

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Panel Discussion on March 26th:
How do grassroots principles challenge the economic
foundations of companies and society?

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What would you like to do?
Can I help?
From Coercive to Enabling People
Management
This is what you have
to do!

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TGIF
From Work-Life Balance to Meaningful
Working Life

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F
E
MR
S
Sales
Finance
Engineering
Marketing & BDResearch &
Development
From Functional Silos over Cross-Functional
Teams to Cross-Functional Competences

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From Sequential Learning to Dual Learning
studying working retirement
studying
working
retirement
dual learning

38. stefan.stremersch@mti2.eu
@StStremersch
www.mti2.eu
grassroots innovation:
from the job of the few
to the responsibility of many